{"id":38747,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/deferred-compensation-plan-for-non-employee-directors-kmart.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"deferred-compensation-plan-for-non-employee-directors-kmart","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/deferred-compensation-plan-for-non-employee-directors-kmart.html","title":{"rendered":"Deferred Compensation Plan for Non-Employee Directors &#8211; Kmart Corp."},"content":{"rendered":"<pre>\n                                KMART CORPORATION\n\n              DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS\n              -----------------------------------------------------\n\n\n\n\nSECTION 1.        ELIGIBILITY\n\n      Each member of the Board of Directors (the 'Board') of Kmart Corporation\n(the 'Company') who is not an employee of the Company or any of its subsidiaries\n(an 'Eligible Director') is eligible to participate in the Kmart Corporation\nDeferred Compensation Plan for Non-Employee Directors (the 'Plan').\n\n\nSECTION 2.        PARTICIPATION\n\n      (a) Prior to the beginning of any calendar year, commencing with the\ncalendar year 1991, each Eligible Director may elect to participate in the Plan\nby directing that all or any part of the compensation otherwise payable in cash\nfor services as an Eligible Director (including services as non-executive\nChairman or Vice-Chairman of the Board) during such calendar year and subsequent\ncalendar years shall be credited to a deferred compensation account subject to\nthe terms of the Plan.\n\n      (b) An election to participate in the Plan shall be in the form of a\ndocument executed by the director and filed with the Secretary of the Company.\nAn election related to cash compensation otherwise payable currently in any\ncalendar year shall become irrevocable on the last day prior to the beginning of\nsuch calendar year. An election shall continue until the director ceases to be a\ndirector of the Company or until he or she terminates or modifies such election\nby written notice. Any such termination or modification shall become effective\nas of the end of the calendar year in which such notice is given with respect to\nall cash compensation otherwise payable in subsequent calendar years.\n\n      (c) A director who has filed a termination of election may thereafter\nagain file an election to participate for any calendar year or years subsequent\nto the filing of such election.\n\n\nSECTION 3.        DEFERRED CASH COMPENSATION ACCOUNTS\n\n      All deferred cash compensation shall be held in the general funds of the\nCompany and shall be credited to the director's account and shall bear interest\nfrom the date such cash compensation would otherwise be payable. The interest\ncredited to the account shall be compounded quarterly at the end of each\ncalendar quarter. For all amounts whenever credited, the rate of interest\ncredited thereon shall be equal to the average ten-year U.S. Treasury note rate\nfor the previous calendar quarter plus 5%.\n\n\n\n\n\n\n\n\nSECTION 4.        DISTRIBUTION\n\n      (a) At the time of election to participate in the Plan, a director shall\nalso make an election with respect to the distribution (during the director's\nlifetime or in the event of the director's death) of amounts deferred under the\nPlan plus accumulated interest. Such an election shall be contained in the\ndocument referred to in Section 2(b) hereof, executed by the director and filed\nwith the Secretary of the Company. Such an election related to cash compensation\notherwise payable currently in any calendar year shall become irrevocable on the\nlast day prior to the beginning of such calendar year.\n\n      (b) A director may elect to receive amounts credited to his or her account\nin one lump sum or in some other number of equal annual installments (not\nexceeding ten), with the first installment (or lump sum if the director has so\nelected) to be distributed on the tenth day of the calendar year immediately\nfollowing the year in which the director ceases to be a director of the Company.\n\n      (c) Notwithstanding an election pursuant to Section 4(b) hereof: (i) if,\nas determined by the Board in its sole discretion, the director (during or\nfollowing his or her membership on the Board) engaged in any activity or\nassociation in competition with or adverse or detrimental to the interest of the\nCompany, the entire balance of the director's deferred cash compensation\nhereunder, including interest, shall be distributed immediately in a lump sum\npayment; (ii) upon the occurrence of a Change in Control (as defined below), the\nentire balance of all deferred cash compensation hereunder, including interest,\nshall be distributed immediately in a lump sum payment.\n\n      A Change in Control shall have occurred if (i) the 'beneficial ownership'\n(as defined in Rule 13d-3 under the Securities Exchange Act of 1934 as amended\n(the 'Exchange Act')) of securities representing more than 50% of the combined\nvoting power of the Company is acquired by any 'person' as defined in Sections\n13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or\nother fiduciary holding securities under an employee benefit plan of the\nCompany, or any corporation owned, directly or indirectly, by the stockholders\nof the Company in substantially the same proportions as their ownership of stock\nof the Company), or (ii) the stockholders of the Company approve a definitive\nagreement to merge or consolidate the Company with or into another corporation\nor to sell or otherwise dispose of all or substantially all of its assets, or\nadopt a plan of liquidation, or (iii) during any period of two consecutive\nyears, individuals who at the beginning of such period were members of the Board\ncease for any reason to constitute at least a majority thereof (unless the\nelection or the nomination for election by the Company's stockholders of each\nnew director was approved by a vote of at least two-thirds of the directors then\nstill in office who were directors at the beginning of such period).\n\n      (d) Installments subsequent to the first installment to the director shall\nbe distributed on the tenth day of each succeeding calendar year until the\nentire amount credited to the director's deferred account shall have been\ndistributed. Deferred amounts held pending distribution shall continue to be\ncredited with interest, determined in accordance with Section 3 hereof.\n\n                                       2\n\n\n\n      (e) In the event the director should die before full distribution of all\namounts credited to the director's account, the balance of the deferred amounts\nshall be distributed in a lump sum payment to the beneficiary or beneficiaries\ndesignated in writing by the director, or if no designation has been made, to\nthe estate of the director.\n\n      (f) The Committee shall have the authority to alter the timing or manner\nof payment of deferred cash compensation in the event an Eligible Director\nestablishes, to the satisfaction of the Committee, severe financial or medical\nhardship. In such event, the Committee may, in its discretion:\n\n           (a)    Authorize the cessation of deferrals of cash compensation; \n                  and\/or\n\n           (b)    Provide that all, or a portion of such deferred cash\n                  compensation payable over a period of time shall immediately\n                  be paid in a lump sum; and\/or\n\n           (c)    Provide for such other payment schedule as deemed appropriate\n                  by the Committee under the circumstances.\n\n      However, any amount paid pursuant to this Section 4(f) shall not exceed\nthat amount which the Committee determines to be reasonably necessary for the\nEligible Director to meet the financial or medical hardship at the time of such\npayment. The severity of the financial or medical hardship shall be judged by\nthe Committee. Severe financial or medical hardship shall be deemed to exist in\nthe event of the Eligible Director's long and serious illness, impending\nbankruptcy or similar unforeseeable and extraordinary circumstances arising as a\nresult of events beyond the control of the Eligible Director. The Committee's\ndecision with respect to the severity of financial or medical hardship and the\nmanner which the distribution of deferred cash compensation to an Eligible\nDirector is altered shall be final, conclusive and not subject to appeal.\n\n\nSECTION 5.        MISCELLANEOUS\n\n      (a) The right of a director to any deferred cash compensation and\/or\ninterest thereon shall be non-assignable and shall not be subject in any manner\nto the debts or other obligations of the director or any other person.\n\n      (b) The Company shall not be required to reserve or otherwise set aside\nfunds to meet any obligations of the Plan.\n\n      (c) The Plan shall remain in effect until the earlier to occur of a Change\nin Control or the termination of the Plan by the Board; provided, however, that,\nexcept as provided in Section 4(c)(ii) hereof, distribution may be made pursuant\nto a deferral election after such date.\n\n      (d) The Plan may be amended or discontinued by the Board at any time in\nits sole judgment. In the event the Plan is terminated, amounts credited to\ndirectors' accounts shall be \n\n                                       3\n\n\ndistributed at such time and in such manner as the Board shall determine, no\nlater than they would have been made as elected under Section 4 hereof.\n\n      (e) Nothing in the Plan shall be construed as conferring any right upon\nany director to continuance as a member of the Board.\n\n      (f) The Plan and all rights hereunder shall be construed in accordance\nwith and governed by the laws of the State of Michigan.\n\n\n6.     RABBI TRUST\n\n       (a) Establishment of a Rabbi Trust. As soon as practicable following\nDecember 16, 1997, the Company shall establish an irrevocable Rabbi Trust,\ngoverned by a Rabbi Trust Agreement (which shall be a grantor trust within the\nmeaning of Code Sections 671-678) for the benefit of Eligible Directors and\nbeneficiaries of Eligible Directors, as appropriate and applicable. The Rabbi\nTrust shall have an independent Trustee (such Trustee to have a fiduciary duty\nto carry out the terms and conditions of the Trust) as selected by the Company,\nand shall have restrictions as to the Company's ability to amend the Trust or to\ncancel benefits provided thereunder.\n\n       Assets contained in the Rabbi Trust shall at all times be specifically\nsubject to the claims of the Company's general creditors in the event of\ninsolvency, which term shall be specifically defined within the provisions of\nthe Rabbi Trust, along with a required procedure for notifying the Trustee of\nany such insolvency.\n\n       All benefits hereunder, shall be paid first from the Rabbi Trust, to the\nextent assets exist in the Rabbi Trust and then, as necessary, by the Company\nfrom general assets.\n\n       (b) Funding of the Rabbi Trust. At the discretion of the Committee, the\nCompany may contribute cash and\/or cash equivalents to the Rabbi Trust, for the\nbenefit of Eligible Directors and beneficiaries of Eligible Directors as the\nCommittee deems appropriate. It is intended that the Rabbi Trust will be fully\nfunded at all times to cover the accrued obligations of the Company under the\nPlan. Upon a Change in Control (as defined in Section 4.c), the Company shall be\nrequired to make an immediate contribution to the Rabbi Trust to cause all such\naccrued obligations to be fully or overfunded as of that date.\n\n      The Committee reserves the right to invest the Trust assets in any\ninvestment deemed appropriate by the Committee.\n\n\n\n\nDated:  December 18, 1990  (Amended as of December 16, 1991, March 28, 1995,\n           September 19, 1995, December 16, 1997 and March 16, 1999)\n\n                                       4\n\n\n\n\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":[9539,9542],"class_list":["post-38747","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__deferred"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38747","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=38747"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38747"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38747"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38747"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}