{"id":38276,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1997-long-term-equity-compensation-plan-kmart-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1997-long-term-equity-compensation-plan-kmart-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1997-long-term-equity-compensation-plan-kmart-corp.html","title":{"rendered":"1997 Long-Term Equity Compensation Plan &#8211; Kmart Corp."},"content":{"rendered":"<pre>            KMART CORPORATION 1997 LONG-TERM EQUITY COMPENSATION PLAN\n\n\n\n\nARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION\n\n         1.1. Establishment of the Plan. Kmart Corporation, a Michigan\ncorporation (hereinafter referred to as the \"Company\"), hereby establishes an\nincentive compensation plan to be known as the \"Kmart Corporation 1997 Long-Term\nEquity Compensation Plan\" (hereinafter referred to as the \"Plan\"), as set forth\nin this document. The Plan permits the grant of Nonqualified Stock Options,\nIncentive Stock Options, Stock Appreciation Rights, Restricted Stock,\nUnrestricted Stock Performance Shares and Performance Units.\n\n         The Plan shall become effective as of March 18, 1997 (the \"Effective\nDate\") and shall remain in effect as provided in Section 1.3 herein. All grants\nto officers and directors and any grants of incentive stock options under the\nPlan shall be subject to stockholder approval of the Plan.\n\n         1.2. Objectives of the Plan. The objectives of the Plan are to optimize\nthe profitability and growth of the Company through incentives which are\nconsistent with the Company's goals and which link the personal interests of\nParticipants to those of the Company's stockholders; to provide Participants\nwith an incentive for excellence in individual performance; and to promote\nteamwork among Participants.\n\n         The Plan is further intended to provide flexibility to the Company in\nits ability to motivate, attract, and retain the services of Participants who\nmake significant contributions to the Company's success and to allow\nParticipants to share in the success of the Company.\n\n         1.3. Duration of the Plan. The Plan shall commence on the Effective\nDate set forth in Section 1.1 herein, and shall remain in effect, subject to the\nright of the Board of Directors to amend or terminate the Plan at any time\npursuant to Article 16 herein, until all Shares subject to it shall have been\npurchased or acquired according to the Plan's provisions. However, in no event\nmay an Award be granted under the Plan after March 17, 2007. Awards granted\nprior thereto, however, may extend beyond such date and the provisions of the\nPlan shall continue to apply thereto.\n\nARTICLE 2. DEFINITIONS\n\n         Whenever used in the Plan, the following terms shall have the meanings\nset forth below, and, when the meaning is intended, the initial letter of the\nword shall be capitalized:\n\n         2.1. \"Affiliate\" has the meaning ascribed to such term in Rule 12b-2 of\nthe General Rules and Regulations under the Exchange Act.\n\n         2.2. \"Award\" means, individually or collectively, a grant under the\nPlan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation\nRights, Restricted Stock, Unrestricted Stock Performance Shares or Performance\nUnits.\n\n         2.3. \"Award Agreement\" means an agreement evidencing and setting forth\nthe terms of an Award granted under the Plan, in such form as the Committee may,\nfrom time to time, approve.\n\n         2.4. \"Beneficial Owner\" or \"Beneficial Ownership\" has the meaning\nascribed to such term in Rule 13d-3 of the General Rules and Regulations under\nthe Exchange Act.\n\n         2.5. \"Board\" or \"Board of Directors\" means the Board of Directors of\nthe Company.\n\n\n\n   2\n\n         2.6. \"Change in Control\" of the Company is deemed to have occurred as\nof the first day that any one or more of the following conditions shall have\nbeen satisfied:\n\n                  (a) The \"Beneficial Ownership\" of securities representing more\n         than thirty-three percent (33%) of the combined voting power of the\n         Company is acquired by any \"person\" as defined in Sections 13(d) and\n         14(d) of the Exchange Act (other than the Company, any trustee or other\n         fiduciary holding securities under an employee benefit plan of the\n         Company, or any corporation owned, directly or indirectly, by the\n         stockholders of the Company in substantially the same proportions as\n         their ownership of stock of the Company); or\n\n                  (b) The stockholders of the Company approve a definitive\n         agreement to merge or consolidate the Company with or into another\n         corporation or to sell or otherwise dispose of all or substantially all\n         of its assets, or adopt a plan of liquidation; or\n\n                  (c) During any period of three consecutive years, individuals\n         who at the beginning of such period were members of the Board cease for\n         any reason to constitute at least a majority thereof (unless the\n         election, or the nomination for election by the Company's stockholders,\n         of each new director was approved by a vote of at least a majority of\n         the directors then still in office who were directors at the beginning\n         of such period or whose election or nomination was previously so\n         approved).\n\n         2.7. \"Code\" means the Internal Revenue Code of 1986, as amended from\ntime to time.\n\n         2.8. \"Committee\" means the Compensation and Incentives Committee of the\nBoard, unless and until another committee is appointed by the Board in its\ndiscretion to administer Awards to Employees, as described in Article 3 herein.\n\n         2.9. \"Employee\" means any non-officer employee of the Company or its\nSubsidiaries or Affiliates.\n\n         2.10. \"Director\" means any individual who is a member of the Board of\nDirectors of the Company; provided, however, that any Director who is employed\nby the Company shall be considered an Employee under the Plan.\n\n         2.11 \"Exchange Act\" means the Securities Exchange Act of 1934, as\namended from time to time, or any successor act thereto.\n\n         2.12. \"Fair Market Value\" is deemed to be the mean of the highest price\nand lowest price at which the Shares shall have been sold, regular way, on the\ndate in question or on the next preceding day on which there were such sales of\nShares if no such sales shall have been made on the date in question, as\nreported on the Composite Transactions reporting system.\n\n         2.13. \"Freestanding SAR\" means an SAR that is granted to a Participant\nindependently of any Option pursuant to Article 7 herein.\n\n         2.14. \"Incentive Stock Option\" or \"ISO\" means an option to purchase\nShares granted to a Participant pursuant to Article 6 herein and which is\ndesignated as an Incentive Stock Option and which is intended to meet the\nrequirements of Code Section 422.\n\n         2.15 \"Nonemployee Director\" means a Director who is not also an\nEmployee.\n\n         2.16. \"Nonqualified Stock Option\" or \"NQSO\" means an option to purchase\nShares granted to a Participant pursuant to Article 6 herein and which is not\nintended to meet the requirements of Code Section 422.\n\n         2.17. \"Option\" means an Incentive Stock Option granted to a Participant\npursuant to Article 6 herein.\n\n\n\n                                       2\n   3\n\n         2.18. \"Option Price\" means the price at which a Share may be purchased\nby a Participant pursuant to an Option.\n\n         2.19. \"Participant\" means an Employee or Director who has been selected\nto receive an Award or one who has an outstanding Award granted under the Plan.\n\n         2.20 \"Performance-Based Exception\" means the performance-based\nexception from the tax deductibility limitations of Code Section 162(m).\n\n         2.21. \"Performance Share\" means an Award granted to a Participant\npursuant to Article 10 herein.\n\n         2.22. \"Performance Unit\" means an Award granted to a Participant\npursuant to Article 10 herein.\n\n         2.23. \"Period of Restriction\" means the period during which the\ntransfer of Shares of Restricted Stock is limited in some way (based on the\npassage of time, the achievement of performance goals, or upon the occurrence of\nother events as determined by the Committee or its delegate, in its discretion),\nand the Shares are subject to a substantial risk of forfeiture, as provided in\nArticle 8 herein.\n\n         2.24. \"Restricted Stock\" means an Award granted to a Participant\npursuant to Article 8 herein.\n\n         2.25. \"Shares\" means the shares of common stock of the Company.\n\n         2.26. \"Stock Appreciation Right\" or \"SAR\" means an Award, granted to a\nParticipant alone or in connection with a related Option, designated as an SAR,\npursuant to Article 7 herein.\n\n         2.27. \"Subsidiary\" means any corporation, partnership, joint venture,\nor other entity in which the Company directly or indirectly has a majority\ninterest and\/or which the Company consolidates in its financial statements.\n\n         2.28. \"Tandem SAR\" means an SAR that is granted to a Participant in\nconnection with a related Option pursuant to Article 7 herein, the exercise of\nwhich shall require forfeiture of the right to purchase a Share under the\nrelated Option (and when a Share is purchased under the Option, the Tandem SAR\nshall similarly be canceled).\n\n         2.29. \"Unrestricted Stock\" means an Award granted to a Participant\npursuant to Article 9 herein.\n\nARTICLE 3. ADMINISTRATION\n\n         3.1. General. The Plan shall be administered by the Committee, or by\nany committee appointed by the Board; provided, however, that the Board shall\nadminister the Plan with respect to Awards granted to Directors. Any such\nCommittee shall be comprised entirely of Nonemployee Directors who meet the\napplicable requirements of a \"nonemployee director\" under Rule 16b-3 of the\nGeneral Rules and Regulations under the Exchange Act and of an \"outside\ndirector\" under Section 162(m) of the Code. The members of the Committee shall\nbe appointed from time to time by, and shall serve at the discretion of, the\nBoard of Directors. To the extent that the administration of the Plan remains\nwith the Board or any other committee designated by the Board, all applicable\nreferences to the Committee in the Plan shall be to the Board or other\ncommittee, as applicable. The Committee shall have the authority to delegate\nadministrative duties to officers of the Company.\n\n         3.2. Authority of the Committee. Except as limited by law or by the\nArticles of Incorporation or Bylaws of the Company, and subject to the\nprovisions herein, the Committee or \n\n\n\n                                       3\n   4\n\nits delegate, or the Board where applicable, shall have full power to select\nEmployees and Directors who shall participate in the Plan; determine the sizes\nand types of Awards; determine the terms and conditions of Awards in a manner\nconsistent with the Plan; construe and interpret the Plan and any agreement or\ninstrument entered into under the Plan; establish, amend, or waive rules and\nregulations for the Plan's administration; and amend the terms and conditions of\nany outstanding Award as provided in the Plan. Further, the Committee shall make\nall other determinations which may be necessary or advisable for the\nadministration of the Plan\n\n         3.3. Decisions Binding. All determinations and decisions made by the\nCommittee or its delegate pursuant to the provisions of the Plan and all related\norders and resolutions of the Committee or its delegate shall be final,\nconclusive, and binding on all persons, including the Company, its stockholders,\nEmployees, Participants, and their estates and beneficiaries.\n\nARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS\n\n         4.1. Number of Shares Available for Grants. Subject to adjustment as\nprovided in Section 4.2 herein, the number of Shares which may be issued to\nParticipants under the Plan shall be forty-eight million (48,000,000), of which\nno more than ten million (10,000,000) may be granted in the form of Restricted\nor Unrestricted Stock. Shares issued or subject to an Award under the Plan may\nbe either authorized and unissued Shares or issued Shares which have been\nreacquired by the Company. No Award may be granted under the Plan to an Employee\nor Director who owns more than five percent (5%) of the outstanding Shares. In\nthe event that any Award or portion thereof expires or is canceled, surrendered,\nforfeited, or terminated for any reason, such Shares shall again become\navailable for issue under the Plan.\n\n         The following rules shall apply to grants of such Awards under the\nPlan:\n\n                  (a) Stock Options: The maximum aggregate number of Shares that\n         may be granted in the form of Stock Options, pursuant to Awards granted\n         in any one fiscal year to any one Participant, shall be one million\n         (1,000,000).\n\n                  (b) SARs: The maximum aggregate number of Shares that may be\n         granted in the form of Stock Appreciation Rights, pursuant to Awards\n         granted in any one fiscal year to any one Participant, shall be one\n         million (1,000,000).\n\n                  (c) Restricted Stock: The maximum aggregate number of Shares\n         that may be granted in the form of Restricted Stock, pursuant to Awards\n         granted in any one fiscal year to any one Participant, shall be five\n         hundred thousand (500,000).\n\n                  (d) Unrestricted Stock: The maximum aggregate number of Shares\n         that may be granted in the form of Unrestricted Stock pursuant to\n         Awards granted in any one fiscal year to any one Participant shall be\n         five hundred thousand (500,000).\n\n                  (e) Performance Shares: The maximum aggregate number of Shares\n         that may be granted in the form of Performance Shares, pursuant to\n         Awards granted in any one fiscal year to any one Participant, shall be\n         five hundred thousand (500,000).\n\n                  (f) Performance Units: The maximum aggregate payout\n         (determined as of the end of the applicable Performance Period), with\n         respect to Awards of Performance Units granted in any one fiscal year\n         to any one Participant, shall be equal to the value of five hundred\n         thousand (500,000).\n\n         4.2. Adjustments in Authorized Shares. In the event of: any change in\ncorporate capitalization, such as a stock split; a corporate transaction, such\nas any merger, consolidation, separation, including a spin-off, or other\ndistribution of stock or property of the Company; any reorganization (whether or\nnot such reorganization comes within the definition of such term in Code Section\n368); or any partial or complete liquidation of the Company, such adjustment\nshall be made in the number and class of Shares which may be delivered under\nSection 4.1 herein, in \n\n\n\n                                       4\n   5\n\nthe number and class of and\/or price of Shares subject to outstanding Awards\ngranted under the Plan, and in the Award limits set forth in subsection 4.1(a)\nthrough (e) herein, as may be determined to be appropriate and equitable by the\nCommittee, in its discretion, to prevent dilution or enlargement of rights;\nprovided, however, that the number of Shares subject to any Award shall always\nbe a whole number.\n\nARTICLE 5. ELIGIBILITY AND PARTICIPATION\n\n         The Committee or its delegate may, from time to time, grant Awards\nunder the Plan to Participants. The Committee or its delegate shall determine in\nits discretion, in accordance with the provisions of the Plan, to whom an Award\nis granted and the terms and conditions of the Award. In making such\ndeterminations, the Committee or its delegate may consider the position and\nresponsibilities of the Participant, the nature and value to the Company of his\nor her services and accomplishments, his or her present and potential\ncontribution to the Company and such other factors as the Committee or its\ndelegate may deem relevant.\n\nARTICLE 6. STOCK OPTIONS\n\n         6.1. Grant of Options. Subject to the terms and conditions of the Plan,\nthe Committee or its delegate, at any time, and from time to time, may grant\nOptions to Participants in such amounts and upon such terms as the Committee or\nits delegate shall determine in its discretion. Options granted under the Plan\nshall be subject to and governed by the provisions of the Plan and by such other\nterms and conditions, not inconsistent with the Plan, as shall be determined by\nthe Committee or its delegate.\n\n         6.2. Option Agreement. Each Option grant shall be evidenced by an Award\nAgreement that shall specify the Option Price, the duration of the Option, the\nnumber of Shares to which the Option pertains, and such other provisions as the\nCommittee or its delegate shall determine. The Award Agreement also shall\nspecify whether the Option is an ISO or an NQSO.\n\n         6.3. Option Price. The Option Price for each grant of an Option under\nthe Plan shall be not less than the Fair Market Value of a Share on the date the\nOption is granted.\n\n         6.4. Duration of Options. An Option granted under the Plan may not be\nexercised after the earlier of (a) the date specified by the Committee or its\ndelegate, which shall be a maximum of ten years from the date of grant as to an\nISO and a maximum of ten years and two days from the date of grant as to an NQSO\nor (b) the applicable time limit specified in the second paragraph of Section\n6.5 herein. Any Option not exercised within these time periods shall\nautomatically terminate at the expiration of such period.\n\n         6.5. Exercise and Payment. Options granted pursuant to this Article 6\nshall be exercised by the delivery of a written notice of exercise to the\nCompany (in the form prescribed by the Company), setting forth the number of\nShares with respect to which the Option is to be exercised and by full payment\nfor the Shares.\n\n         The Option Price upon exercise of any Option shall be payable to the\nCompany in full either: (a) in cash or its equivalent (in U.S. dollars), or (b)\nby tendering previously acquired Shares having an aggregate Fair Market Value at\nthe time of exercise equal to the Option Price (provided that the Shares which\nare tendered must have been held by the Participant for at least six (6) months\nprior to exercise of the Option), or (c) by a combination of cash and Shares\nequal to the Option Price. Shares used in payment shall be valued as of the date\nnotice of exercise is received by the Company. Any Shares delivered in payment\nshall be in such form as is acceptable to the Company.\n\n         6.6. Exercisability of Options. Options granted pursuant to this\nArticle 6 shall be exercisable at such times and be subject to such restrictions\nand conditions as the Committee or its delegate shall in each instance approve,\nwhich need not be the same for each grant or for each Participant.\n\n\n\n                                       5\n   6\n\n         An Option may be exercised, prior to its expiration, by an optionee\nonly while such optionee is an Employee or Director or within three months\nthereafter (or such longer period thereafter as determined by the Committee or\nits delegate in its discretion or as provided in Section 15.1 herein), and only\nif the Option is otherwise exercisable prior to termination of employment or\nservice, provided, however, if at the date of termination of employment or\nservice of the Participant, the Participant has five or more years of full-time\nservice as an Employee or Director or if such termination results from death or\ntotal and permanent disability as defined in the Company's Long-Term Disability\nPlan, such three-month period shall be extended to five years or to the\nexpiration of the option, whichever occurs first. Except as otherwise provided\nby the Committee, any Option that is not exercisable at the date of termination\nshall be forfeited and reacquired by the Company and all rights of the\nParticipant shall terminate to the extent of the forfeiture without further\nobligation on the part of the Company.\n\n         An Option granted with a maximum exercise period of more than three\nyears may not be exercised earlier than in three equal annual installments\ncommencing on the first anniversary of the date of grant (or such other period\nas determined by the Committee or its delegate in its discretion); provided,\nhowever, this limitation shall be removed if termination of employment or\nservice of the Participant results from death or total and permanent disability\nas defined in the Company's Long-Term Disability Plan, or if termination of\nemployment or service of the Participant occurs at or after age 55 and the\nParticipant has five or more years of full-time service as an Employee or\nDirector, or if and to the extent the Committee or its delegate may so determine\nin its discretion, or as provided in Section 15.1 herein. An Option granted with\na maximum exercise period of three years or less is not subject to the\nlimitation contained in the preceding sentence.\n\n         6.7. Other Restrictions. The Committee or its delegate may impose such\nconditions and\/or restrictions on any Shares acquired pursuant to the exercise\nof an Option granted pursuant to this Article 6 as it may deem advisable,\nincluding, without limitation, restrictions under applicable federal securities\nlaws, under the requirements of any stock exchange or market upon which such\nShares are then listed and\/or traded, and under any blue sky or state securities\nlaws applicable to such Shares.\n\n         6.8. Transferability. Except as otherwise determined by the Committee\nor its delegate in its discretion, no Option or any rights with respect thereto\nshall be subject to any debts or liabilities of a Participant. Options may,\nhowever, be transferred or assigned to charitable trusts, family members, or\nfamily trusts by the Participant's execution of such form and at such time as\nprescribed by the Committee or its delegate. Additionally, any shares issued to\na Participant hereunder may at the request of the Participant be issued in the\nname of the Participant and one other person, as joint tenants with right of\nsurvivorship and not as tenants in common, or in the name of a trust for the\nbenefit of the Participant or for the benefit of the Participant and others. An\nOption may, after the death or total and permanent disability, as defined in the\nCompany's Long-Term Disability Plan, of a Participant also be exercised pursuant\nto paragraph (iv) of Section 5B herein. In order to continue to meet the\nrequirements of Code Section 422, however, ISO's may not be assignable or\ntransferable except by will or the laws of descent and distribution, nor be\nexercisable during the Participant's lifetime other than by him or her, nor\nshall shares be issued to or in the name of one other than the Participant.\n\nARTICLE 7. STOCK APPRECIATION RIGHTS\n\n         7.1. Grant of SARs. Subject to the terms and conditions of the Plan,\nthe Committee or its delegate, at any time, and from time to time, may grant\nSARs to Participants in such amounts and upon such terms as the Committee shall\ndetermine in its discretion. The Committee may grant Freestanding SARs, Tandem\nSARs, or any combination of these forms of SARs. SARs granted under the Plan\nshall be subject to and governed by the provisions of the Plan and by such other\nterms and conditions, not inconsistent with the Plan, as shall be determined by\nthe Committee or its delegate.\n\n\n\n                                       6\n   7\n\n         The grant price of a Freestanding SAR shall equal the Fair Market Value\nof a Share on the date of grant of the SAR. The grant price of Tandem SARs shall\nequal the Option Price of the related Option.\n\n         7.2. SAR Agreement. Each SAR grant shall be evidenced by an Award\nAgreement that shall specify the grant price, the term of the SAR, the number of\nSARs, and such other provisions as the Committee or its delegate shall\ndetermine.\n\n         7.3. Payment of SAR Amount. Upon exercise of an SAR, a Participant\nshall be entitled to receive payment from the Company in an amount determined by\nmultiplying:\n\n                  (a) The difference between the Fair Market Value of a Share on\n         the date of exercise over the grant price; by\n\n                  (b) The number of Shares with respect to which the SAR is\n         exercised.\n\n         At the discretion of the Committee or its delegate, the payment upon\nexercise of an SAR may be in cash, in Shares of equivalent value or in some\ncombination thereof.\n\n         7.4. Term of SARs. The term of an SAR granted under the Plan shall be\ndetermined by the Committee or its delegate, in its discretion; provided,\nhowever, that such term shall not exceed ten (10) years.\n\n         7.5. Exercise of Tandem SARs. Tandem SARs may be exercised for all or\npart of the Shares subject to the related Option upon the surrender of the right\nto exercise the equivalent portion of the related Option. A Tandem SAR may be\nexercised only with respect to the Shares for which its related Option is then\nexercisable.\n\n         Notwithstanding any other provision of this Plan to the contrary, with\nrespect to any Tandem SAR granted in connection with an ISO: (i) the Tandem SAR\nwill expire no later than the expiration of the underlying ISO; (ii) the value\nof the payment with respect to the Tandem SAR may be no more than one hundred\npercent (100%) of the difference between the Option Price of the underlying ISO\nand the Fair Market Value of the Shares subject to the underlying ISO at the\ntime the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only\nwhen the Fair Market Value of the Shares subject to the ISO exceeds the Option\nPrice of the ISO.\n\n         7.6. Exercise of Freestanding SARs. Freestanding SARs may be exercised\nupon whatever terms and conditions the Committee or its delegate, in its\ndiscretion, imposes upon them.\n\n         7.7. Termination of Employment\/Directorship. Each SAR Award Agreement\nshall set forth the extent to which the Participant shall have the right to\nexercise the SAR following termination of the Participant as an Employee or\nDirector. Such provisions shall be determined in the discretion of the Committee\nor its delegate, shall be included in the Award Agreement entered into with the\nParticipant, need not be uniform among all SARs issued pursuant to this Article\n7, and may reflect distinctions based on the reasons for termination.\n\n         7.8. Other Restrictions. The Committee or its delegate may impose such\nconditions and\/or restrictions on any Shares issued pursuant to the exercise of\nany SAR granted pursuant to this Article 7 as it may deem advisable, including,\nwithout limitation, restrictions under applicable federal securities laws, under\nthe requirements of any stock exchange or market upon which such Shares are then\nlisted and\/or traded, and under any blue sky or state securities laws applicable\nto such Shares.\n\n         7.9. Nontransferability of SARs. Except as otherwise determined by the\nCommittee or its delegate in its discretion, no SAR or any rights with respect\nthereto shall be subject to any debts or liabilities of a Participant, nor be\nassignable or transferable except by will or the laws of descent and\ndistribution, nor be exercisable during the Participant's lifetime other than by\nhim or her, nor \n\n\n\n                                       7\n   8\n\nshall Shares be issued to or in the name of one other than the Participant;\nprovided, however, that any Shares issued to a Participant pursuant to an SAR\nhereunder may at the request of the Participant be issued in the name of the\nParticipant and one other person as joint tenants with right of survivorship and\nnot as tenants in common, or in the name of a trust for the benefit of the\nParticipant or for the benefit of the Participant and others.\n\nARTICLE 8. RESTRICTED STOCK\n\n         8.1. Grant of Restricted Stock. Subject to the terms and conditions of\nthe Plan, the Committee or its delegate, at any time, and from time to time, may\ngrant Restricted Stock to Participants in such amounts and upon such terms as\nthe Committee or its delegate shall determine in its discretion. Restricted\nStock granted under the Plan shall be subject to and governed by the provisions\nof the Plan and by such other terms and conditions, not inconsistent with the\nPlan, as shall be determined by the Committee or its delegate.\n\n         8.2. Restricted Stock Agreement. Each Restricted Stock grant shall be\nevidenced by an Award Agreement that shall specify the Period(s) of Restriction,\nthe number of Shares of Restricted Stock granted, and such other provisions as\nthe Committee or its delegate shall determine.\n\n         8.3. Termination of Employment\/Directorship. Except as otherwise\nprovided in the Plan or in the Award Agreement, unless and until the\nrestrictions and other terms and conditions applicable to a Restricted Stock\nAward expire or are terminated or otherwise satisfied, such Award and the Shares\nand any dividends or other rights applicable thereto shall be forfeited and\nreacquired by the Company if the Participant ceases to be an Employee or\nDirector, and all rights of the Employee or Director shall terminate to the\nextent of the forfeiture without further obligations on the part of the Company.\n\n         8.4. Other Restrictions. Subject to Article 11 herein, the Committee or\nits delegate may impose such conditions and\/or restrictions on any Shares of\nRestricted Stock granted pursuant to this Article 8 as it may deem advisable,\nincluding, without limitation, restrictions requiring the Participant's payment\nof a stipulated purchase price for each Share of Restricted Stock, restrictions\nbased upon the achievement of specific performance goals, time-based\nrestrictions on vesting, and\/or restrictions under federal or state securities\nlaws applicable to such Shares.\n\n         As soon as practicable following the grant of Shares of Restricted\nStock, either (i) a stock certificate or certificates representing such Shares\nshall be registered in the Participant's name and shall bear an appropriate\nlegend referring to the restrictions applicable thereto, which certificates may\nbe held in the custody of the Company or its designee for the account of the\nParticipant; or (ii) the Company's stock transfer agent or its designee shall\ncredit such Shares to the Participant's Restricted Stock Account, which Shares\nshall be subject to the restrictions applicable thereto.\n\n         If and to the extent that the restrictions and other terms and\nconditions applicable to a Restricted Stock Award are not satisfied, such Award\nand the Shares and any dividends or other rights applicable thereto shall be\nforfeited and reacquired by the Company, and all rights of the Participant shall\nterminate to the extent of the forfeiture without further obligation on the part\nof the Company.\n\n         The Committee or its delegate may in its discretion terminate, shorten,\nor accelerate any period of restriction or waive any terms or conditions\napplicable to all or any portion of a Restricted Stock Award.\n\n         Upon the expiration or termination of the restrictions and the\nsatisfaction of any other terms and conditions applicable to a Restricted Stock\nAward, a stock certificate or certificates representing Shares free from the\nrestrictions and any legend, except as may be imposed by law, shall be issued to\nthe Participant or to the Participant's beneficiary, estate or legal\nrepresentative, \n\n\n\n                                       8\n   9\n\nas the case may be, along with any dividends applicable thereto which have been\nwithheld by the Company.\n\n         8.5. Nontransferability of Restricted Stock. Except as otherwise\nprovided in this Article 8 or determined by the Committee or its delegate in its\ndiscretion, no Shares of Restricted Stock or any rights with respect thereto\nshall be subject to any debts or liabilities of a Participant, nor be assignable\nor transferable until the expiration or termination of the restrictions and the\nsatisfaction of any other terms and conditions applicable to the Award, nor\nshall any rights with respect to Restricted Stock be available during a\nParticipant's lifetime other than to him or her.\n\n         8.6. Shareholder Rights. Except as provided in the Plan or in the Award\nAgreement, a Participant to whom Restricted Stock is issued, shall generally\nhave the rights and privileges of a stockholder as to the Restricted Stock,\nincluding the right to vote such Shares.\n\n         At the discretion of the Committee or its delegate, dividends declared\nwith respect to Shares of Restricted Stock may either be paid to the Participant\nor withheld by the Company for the Participant's account, and interest may be\npaid on any dividends withheld at a rate determined by the Committee or its\ndelegate. The Committee or its delegate may apply any restrictions to the\ndividends that the Committee or its delegate deems appropriate. Without limiting\nthe generality of the preceding sentence, if the grant or vesting of Restricted\nShares is designed to comply with the requirements of the Performance-Based\nException, the Committee or its delegate may apply any restrictions it deems\nappropriate to the payment of dividends declared with respect to such Restricted\nShares, such that the dividends and\/or the Restricted Shares maintain\neligibility for the Performance-Based Exception.\n\nARTICLE 9. UNRESTRICTED STOCK\n\n         9.1. Grant of Unrestricted Stock. Subject to the terms and conditions\nof the Plan, the Committee or its delegate, at any time, and from time to time,\nmay grant Unrestricted Stock to Participants, in such amounts and upon such\nterms as the Committee or its delegate shall determine in its discretion. Such\nStock granted under the Plan shall be subject to and governed by the provisions\nof the Plan and by such other terms and conditions, not inconsistent with the\nPlan, as shall be determined by the Committee or its delegate.\n\n         9.2. Unrestricted Stock Agreement. Each Unrestricted Stock grant shall\nbe evidenced by an Award Agreement that shall specify the number of Shares of\nUnrestricted Stock granted, and such other provisions as the Committee or its\ndelegate shall determine.\n\n         9.3. Other Conditions. The Committee or its delegate may impose such\nconditions on any Shares of Unrestricted Stock granted pursuant to this Article\n9 as it may deem advisable.\n\n         As soon as practicable following the grant of Shares of Unrestricted\nStock, either (i) a stock certificate or certificates representing such Shares\nshall be registered in the Participant's name; or (ii) the Company's stock\ntransfer agent or its delegate shall credit such Shares to the Participant's\nStock Account.\n\n         The Committee or its delegate may in its discretion waive any terms or\nconditions applicable to all or any portion of an Unrestricted Stock Award.\n\nARTICLE 10. PERFORMANCE UNITS AND PERFORMANCE SHARES\n\n         10.1. Grant of Performance Units\/Shares. Subject to the terms and\nconditions of the Plan, the Committee or its delegate, at any time, and from\ntime to time, may grant Performance Units and\/or Performance Shares to\nParticipants in such amounts and upon such terms as the Committee or its\ndelegate shall determine in its discretion. Performance Units and Performance\nShares granted under the Plan shall be subject to and governed by the provisions\nof the Plan and by such other terms and conditions, not inconsistent with the\nPlan, as shall be determined by the Committee or its delegate.\n\n\n\n                                       9\n   10\n\n         10.2. Value of Performance Units\/Shares. Each Performance Unit shall\nhave an initial value that is established by the Committee or its delegate at\nthe time of grant. Each Performance Share shall have an initial value equal to\nthe Fair Market Value of a Share on the date of grant. Subject to Article 11\nherein, the Committee or its delegate shall set performance goals in its\ndiscretion which, depending on the extent to which they are met, shall determine\nthe number and\/or value of Performance Units\/Shares that shall be paid out to\nthe Participant. For purposes of this Article 10, the time period during which\nthe performance goals must be met shall be called a \"Performance Period.\"\n\n         10.3. Earning of Performance Units\/Shares. Subject to the terms of the\nPlan and the Award Agreement, after the applicable Performance Period has ended,\nthe holder of Performance Units\/Shares shall be entitled to receive a payout on\nthe number and value of Performance Units\/Shares earned by the Participant over\nthe Performance Period, to be determined as a function of the extent to which\nthe corresponding performance goals have been achieved.\n\n         10.4. Form and Timing of Payment of Performance Units\/Shares. Payment\nof earned Performance Units\/Shares shall be made at the close of the applicable\nPerformance Period or upon the attainment of the applicable performance goal.\nSubject to the terms of the Plan, the Committee or its delegate, in its\ndiscretion, may pay earned Performance Units\/Shares in the form of cash or in\nShares (or in a combination thereof) which have an aggregate Fair Market Value\nequal to the value of the earned Performance Units\/Shares at the close of the\napplicable Performance Period. Such Shares may be granted subject to any\nrestrictions deemed appropriate by the Committee or its delegate.\n\n         At the discretion of the Committee or its delegate, Participants may be\nentitled to receive any dividends declared with respect to Shares which have\nbeen earned in connection with grants of Performance Units and\/or Performance\nShares, but not yet distributed to Participants (such dividends shall be subject\nto the same accrual, forfeiture, and payout restrictions as apply to dividends\nearned with respect to Shares of Restricted Stock, as set forth in Section 8.6\nherein). In addition, Participants may, in the discretion of the Committee or\nits delegate, have the rights and privileges of a stockholder as to the Shares,\nincluding the right to vote such Shares.\n\n         10.5. Termination of Employment\/Directorship. Except as otherwise\nprovided in the Plan or in the Award Agreement, unless and until the terms and\nconditions applicable to an Award of Performance Units\/Shares are met, such\nAward and the Performance Units\/Shares and any dividends or other rights\napplicable thereto shall be forfeited to the Company if the Participant ceases\nto be an Employee or Director, and all rights of the Employee or Director shall\nterminate to the extent of the forfeiture without further obligation on the part\nof the Company; provided, however, that the Committee or its delegate may in its\ndiscretion waive any terms or conditions or permit a payout with respect to all\nor any portion of an Award of Performance Units\/Shares.\n\n         10.6. Other Restrictions. The Committee may impose such conditions\nand\/or restrictions on any Shares issued pursuant to this Article 10 as it may\ndeem advisable, including, without limitation, restrictions under applicable\nfederal securities laws, under the requirements of any stock exchange or market\nupon which such Shares are then listed and\/or traded, and under any blue sky law\nor state securities laws applicable to such Shares.\n\n         If and to the extent that no payout is earned with respect to an Award\nof Performance Units\/Shares in accordance with the terms and conditions of the\nAward, such Award and the Performance Units\/Shares and any dividends or other\nrights applicable thereto shall be forfeited to the Company, and all rights of\nthe Participant shall terminate to the extent of the forfeiture without further\nobligation on the part of the Company.\n\n         10.7. Nontransferability of Performance Units\/Shares. Except as\notherwise determined by the Committee in its discretion, no Performance\nUnits\/Shares or any rights with respect thereto shall be subject to any debts or\nliabilities of a Participant, nor be assignable or transferable except by will\nor the laws of descent and distribution, nor be exercisable during the\nParticipant's lifetime \n\n\n\n                                       10\n   11\n\nother than by him or her, nor shall Shares be issued to or in the name of one\nother than the Participant; provided, however, that any Shares issued to a\nParticipant hereunder may at the request of the Participant be issued in the\nname of the Participant and one other person, as joint tenants with right of\nsurvivorship and not as tenants in common, or in the name of a trust for the\nbenefit of the Participant or for the benefit of the Participant and others.\n\nARTICLE 11. PERFORMANCE MEASURES\n\n         The performance measure(s) to be used for purposes of granting\nperformance-based Awards shall be chosen from among the following, with respect\nto the Company, its Subsidiaries, its Affiliates, subdivisions thereof, or any\ncombination thereof:\n\n                  (a) Return on equity, assets, capital, sales, or investment;\n                  (b) Pretax or after-tax profit levels; \n                  (c) Expense reduction levels; \n                  (d) Implementation of processes or projects; \n                  (e) Changes in the market price of Shares; \n                  (f) Total shareholder return; and \n                  (g) Cash flow.\n\n         This measure may be expressed as a concrete goal, in terms of an\nincrease or decrease or in comparison to the Company's competitors, the\nindustry, or some other comparator group.\n\n         The Committee or its delegate shall have the authority to set a\nthreshold level of performance below which no payment shall be made, levels of\nperformance at which specified percentages of payment shall be made, and a\nmaximum level of performance above which no additional payment shall be made.\n\n         Following the determination of the level of performance, the Committee\nor its delegate may in its discretion adjust (upward or downward) the payment\nwhich would otherwise have been made; provided, however, no upward adjustment\nshall be authorized to the extent that it would disqualify the payment under the\nPerformance-Based Exception..\n\n         To the extent applicable, any such performance goal shall be determined\nin accordance with generally accepted accounting principles and reported upon by\nthe Company's independent accountants.\n\n         The Committee or its delegate may make adjustments in the terms and\nconditions of, and the criteria included in, Awards in recognition of unusual or\nnonrecurring events (including, without limitation, the events described in\nSection 4.2 herein) affecting the Company or the financial statements of the\nCompany or of changes in applicable laws, regulations, or accounting principles,\nwhenever the Committee or its delegate determines that such adjustments are\nappropriate in order to prevent dilution or enlargement of the benefits or\npotential benefits intended to be made available under the Awards; provided,\nhowever, that no such adjustment shall be authorized to the extent that it would\ndisqualify the Awards under the Performance-Based Exception.\n\nARTICLE 12. BENEFICIARY DESIGNATION\/LEGAL REPRESENTATIVE\n\n         In the event one who holds an outstanding Award dies, either before or\nafter termination of his or her status as Employee or Director, any Award which\nis otherwise exercisable or payable may be exercised by or paid to the person or\npersons whom the Participant shall have designated as beneficiary in writing on\nforms prescribed by and filed with the Company, or if no designation has been\nmade, by the person or persons entitled thereto through the Participant's\nestate. In the event of the total and permanent disability, as defined in the\nCompany's Long-Term Disability Plan, of a Participant, an Award which is\notherwise exercisable or payable may be exercised by or paid to the\nParticipant's legal representative or guardian. The Company may require an\nindemnity and\/or such evidence or other assurances as it may deem necessary in\nconnection with an \n\n\n\n                                       11\n   12\n\nexercise of an Award by or payment of an Award to a beneficiary, estate, heir,\nlegal representative, or guardian.\n\nARTICLE 13. DEFERRALS\n\n         The Committee or its delegate may permit or require a Participant to\ndefer such Participant's receipt of the payment of cash or the delivery of\nShares that would otherwise be due to such Participant by virtue of the exercise\nof an Option or SAR, the lapse or waiver of restrictions with respect to\nRestricted Stock, or the satisfaction of any requirements or goals with respect\nto Performance Units\/Shares. If any such deferral election is required or\npermitted, the Committee or its delegate shall, in its discretion, establish\nrules and procedures for such payment deferrals.\n\nARTICLE 14. EMPLOYMENT\/MISCONDUCT\n\n         14.1. Employment. No provision of the Plan, nor any term or condition\nof any Award, nor any action taken by the Committee, the Company, a Subsidiary,\nor an Affiliate pursuant to the Plan, shall give or be construed as giving a\nParticipant any right to be retained in the employ of or remain a director of\nthe Company, a Subsidiary, or an Affiliate, or affect or limit in any way the\nright of the Company, a Subsidiary, or an Affiliate to terminate his or her\nemployment or directorship. Employment with or directorship of a Subsidiary or\nan Affiliate shall be deemed terminated on the date such Subsidiary or Affiliate\nceases to be a Subsidiary or an Affiliate of the Company.\n\n         14.2. Participation. No Employee shall have the right to be selected to\nreceive an Award under this Plan, or, having been so selected, to be selected to\nreceive a future Award.\n\n         14.3. Misconduct. Notwithstanding anything contained in the Plan or in\nan Award Agreement to the contrary, all rights with respect to all Awards of a\nParticipant are subject to the conditions that the Participant not engage or\nhave engaged (i) in fraud, dishonesty, conduct in violation of Company policy,\nor any similar act at any time while an Employee or Director; or (ii) in\nactivity directly or indirectly in competition with any business of the Company,\na Subsidiary, or an Affiliate, or in other conduct inimical to the best\ninterests of the Company, a Subsidiary, or an Affiliate, during or following the\nParticipant's employment with the Company, a Subsidiary, or an Affiliate or\ndirectorship with the Company. If it is determined by the Committee or the\nCommittee's designee, either before or after termination of employment or\ndirectorship of a Participant, that there has been a failure of any such\ncondition, all Awards and all rights with respect to all Awards granted to such\nParticipant shall immediately terminate and be null and void.\n\nARTICLE 15. CHANGE IN CONTROL\n\n         15.1. Treatment of Outstanding Awards. Subject to Section 15.3 herein,\nupon the occurrence of a Change in Control:\n\n                  (a) Any and all Options and SARs granted hereunder shall\n         become immediately exercisable and shall remain exercisable throughout\n         their entire term;\n\n                  (b) Any restriction periods and restrictions imposed on\n         Restricted Shares which are not performance-based shall lapse;\n\n                  (c) The target payout opportunities attainable under all\n         outstanding Awards of performance-based Restricted Stock, Performance\n         Units, and Performance Shares shall be deemed to have been fully earned\n         for the entire Performance Period(s) as of the effective date of the\n         Change in Control. The vesting of all Awards denominated in Shares\n         shall be accelerated as of the effective date of the Change in Control,\n         and there shall be paid out to Participants within thirty (30) days\n         following the effective date of the Change in Control a pro rata number\n         of Shares (or their cash equivalents) based upon an assumed achievement\n         of all relevant targeted performance goals and upon the length of time\n         within \n\n\n\n                                       12\n   13\n\n         the Performance Period which has elapsed prior to the Change in\n         Control. Awards denominated in cash shall be paid pro rata to\n         participants in cash within thirty (30) days following the effective\n         date of the Change in Control, with the proration determined as a\n         function of the length of time within the Performance Period which has\n         elapsed prior to the Change in Control, and based on an assumed\n         achievement of all relevant targeted performance goals.\n\n         15.2. Termination, Amendment, and Modifications of Change-in-Control\nProvisions. Notwithstanding any other provision of the Plan or any Award\nAgreement provision, the provisions of this Article 15 may not be terminated,\namended, or modified on or after the date of an event which is likely to give\nrise to a Change in Control to affect adversely any Award theretofore granted\nunder the Plan without the prior written consent of the Participant with respect\nto said Participant's outstanding Awards.\n\n         15.3. Pooling of Interests Accounting. Notwithstanding anything\ncontained in the Plan to the contrary, in the event that the consummation of a\nChange in Control is contingent on using pooling of interests accounting\nmethodology, the Board may, in its discretion, take any action necessary to\npreserve the use of pooling of interests accounting.\n\nARTICLE 16. AMENDMENT, MODIFICATION, AND TERMINATION\n\n         Except as provided in Section 15.2 herein, the Committee may from time\nto time alter, amend, suspend, or terminate the Plan in whole or in part. Any\nsuch amendment may be effective in respect of all past and future Awards granted\nhereunder in the discretion of the Committee.\n\nARTICLE 17. WITHHOLDING\n\n         17.1. Tax Withholding. The Company shall have the power and the right\nto deduct or withhold, or require a Participant to remit to the Company, an\namount sufficient to satisfy federal, state, and local taxes, domestic or\nforeign, required by law or regulation to be withheld with respect to any\ntaxable event arising as a result of this Plan.\n\n         17.2. Share Withholding. With respect to withholding required upon the\nexercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,\nor upon any other taxable event arising as a result of Awards granted hereunder,\nthe Committee or its delegate may in its discretion permit a Participant to\nelect, in such form and at such time as the Committee or its delegate may\nprescribe, to satisfy the withholding requirement, in whole or in part, by\nelecting to (i) have the Company withhold whole Shares or (ii) deliver other\nwhole Shares owned by the Participant having a Fair Market Value equal to the\namount to be withheld; provided, however, that the amount to be withheld shall\nnot exceed the minimum Federal, State and local tax rates applicable to the\ntransaction.\n\nARTICLE 18. SUCCESSORS\n\n         All obligations to the Company under the Plan with respect to Awards\ngranted hereunder shall be binding on any successor to the Company, whether the\nexistence of such successor is the result of a direct or indirect purchase,\nmerger, consolidation, or otherwise of all or substantially all of the business\nand\/or assets of the Company.\n\nARTICLE 19. LEGAL CONSTRUCTION\n\n         19.1. Gender and Number. Except where otherwise indicated by the\ncontext, any masculine term used herein shall include the feminine; the plural\nshall include the singular; and the singular shall include the plural.\n\n         19.2. Severability. If any provision of the Plan, or any term or\ncondition of any Award or Award Agreement or form executed or to be executed\nthereunder, or any application thereof to any person or circumstance is invalid\nor would result in an ISO failing to meet the requirements of \n\n\n\n                                       13\n   14\n\nCode Section 422, such provision, term, condition or application shall to that\nextent be void, or, in the discretion of the Committee or its delegate, such\nprovision, term, or condition may be amended so as to avoid such invalidity or\nfailure, and shall not affect other provisions, terms, conditions, or\napplications thereof, and to this extent such provision, term, or condition is\nseverable.\n\n         19.3. Requirements of Law. The granting of Awards and the issuance of\nShares under the Plan shall be subject to all applicable laws, rules, and\nregulations, and to such approvals by any governmental agencies or national\nsecurities exchanges as may be required.\n\n         19.4. Securities Law Compliance. The Plan is intended to comply with\nall applicable conditions of Rule 16b-3 or its successors under the Exchange Act\nand shall be construed to so comply.\n\n         19.5. Governing Law. The Plan, and all agreements hereunder, shall be\nconstrued in accordance with and governed by the laws of the State of Michigan\nwithout reference to principles of conflict of laws.\n\n\nAdopted March 18, 1997. Amended as of May 16, 2000, July 18, 2000 and November\n21, 2000.\n\n\n\n                                       14\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":[9539,9546],"class_list":["post-38276","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__incentive"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38276","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=38276"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38276"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38276"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}