{"id":38792,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/directors-stock-plan-kmart-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"directors-stock-plan-kmart-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/directors-stock-plan-kmart-corp.html","title":{"rendered":"Directors Stock Plan &#8211; Kmart Corp."},"content":{"rendered":"<pre>\n                                KMART CORPORATION\n                              AMENDED AND RESTATED\n                              DIRECTORS STOCK PLAN\n                              --------------------\n\n\n1.  PURPOSE\n\n      1.1 The Kmart Corporation Directors Stock Plan (the 'Plan') is intended to\nincrease the proprietary interest of nonemployee members of the Board of\nDirectors (the 'Board') of Kmart Corporation (the 'Company') by providing\nfurther opportunity for ownership of the Company's common stock ('Stock'), and\nto increase their incentive to contribute to the success of the Company's\nbusiness.\n\n      1.2 The Plan is intended to comply with Rule 16b-3 under the Securities\nExchange Act of 1934 as amended (the 'Exchange Act'), as such Rule may be\namended from time to time ('Rule 16b-3') and shall be construed to so comply.\n\n\n2.  ADMINISTRATION\n\n      2.1 The Plan shall be administered by the Compensation and Incentives\nCommittee (the 'Committee') of the Board.\n\n      2.2 The Committee may make such rules and establish such procedures for\nthe administration of the Plan as it deems appropriate to carry out the purpose\nof the Plan. The interpretation and application of the Plan or of any rule or\nprocedure, and any other matter relating to or necessary to the administration\nof the Plan, shall be determined by the Committee, and any such determination\nshall be final and binding on all persons.\n\n\n3.  SHARES OF STOCK\n\n      3.1 Shares Reserved. Shares of Stock which may be issued under the Plan\nmay either be authorized and unissued shares or issued shares which have been\nreacquired by the Company, provided that the total amount of Stock which may be\nissued under the Plan shall not exceed 400,000 shares.\n\n      3.2 Capital Adjustments. In the event of a change in the number or class\nof shares of Stock as a result of reorganization, recapitalization, stock split,\nstock dividend, combination of shares, merger, consolidation or a similar\ncorporate transaction, the maximum number or class of shares available under the\nPlan, and the number or class of shares of Stock to be delivered hereunder shall\nbe proportionately adjusted to reflect any such change.\n\n\n4.  STOCK IN LIEU OF CASH COMPENSATION\n\n      4.1 Mandatory Portion. For each calendar year commencing with the calendar\nyear beginning January 1, 1996, each member of the Board who is not an employee\nof the Company or any of its subsidiaries (an 'Eligible Director') shall receive\na whole number of shares of Stock equal in value to 50% of any cash compensation\npayable for services as an Eligible Director (including services as\nnon-executive Chairman or Vice-Chairman of the Board) during each such calendar\nyear in lieu of payment of such percentage of such cash compensation. Such\nshares shall be delivered to each such director, in substantially equal\ninstallments, on the last \n\n\n\n\nbusiness day of each calendar quarter of each such calendar year (the 'Normal\nStock Payment Date'), except to the extent that a Deferral Election (as defined\nin Section 4.3 hereof) shall be in effect with respect to such shares or that\nSection 4.6 hereof applies.\n\n      Each such share shall be valued at the closing price per share of Stock as\nreported on the Composite Transactions reporting system, or if not so reported,\nas reported by the New York Stock Exchange (the 'Closing Price') on the last\nbusiness day preceding each Normal Stock Payment Date (the 'Share Value Price').\nThe value of fractional shares shall be paid to the director in cash.\n\n      4.2 Elective Portion. In addition to the shares of stock received pursuant\nto Section 4.1 hereof, for each calendar year commencing with the calendar year\nbeginning January 1, 1996, each Eligible Director may elect to receive a whole\nnumber of shares of Stock equal in value (based on the Share Value Price) to up\nto 50% of his or her cash compensation payable for services as an Eligible\nDirector (including services as non-executive Chairman or Vice Chairman of the\nBoard) during each such calendar year in lieu of payment of such percentage of\nsuch cash compensation. Such shares shall be delivered to each such director, in\nsubstantially equal installments, on the Normal Stock Payment Dates, except to\nthe extent that a Deferral Election (as defined in Section 4.3 hereof) shall be\nin effect with respect to such shares or that Section 4.6 hereof applies.\n\n      The value of fractional shares shall be paid to the director in cash.\n\n      4.3 Deferral Election. Each Eligible Director may elect to defer the\nreceipt (a 'Deferral Election') of all or a portion of the shares of Stock\notherwise deliverable on a Normal Stock Payment Date ('Deferred Shares').\n\n      The director shall elect that Deferred Shares be distributed in a lump sum\nor in equal annual installments (not exceeding ten), with the lump sum or first\ninstallment 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;\nprovided, however, that the foregoing shall be subject to Section 4.6 hereof.\nInstallments subsequent to the first installment shall be distributed on the\ntenth day of each succeeding calendar year until all of the director's Deferred\nShares shall have been distributed.\n\n      In the event the director should die before all of the director's Deferred\nShares have been distributed, the balance of the Deferred Shares shall be\ndistributed in a lump sum to the beneficiary or beneficiaries designated in\nwriting by the director, or if no designation has been made, to the estate of\nthe director.\n\n      4.4 Dividend Equivalents. Deferred Shares shall be credited with an amount\nequivalent to the dividends which would have been paid on an equal number of\noutstanding shares of Stock ('Dividend Equivalents'). Dividend Equivalents shall\nbe credited (i) as of the payment date of such dividends, and (ii) only with\nrespect to Deferred Shares which were otherwise deliverable as of a Normal Stock\nPayment Date, or into which Dividend Equivalents were converted pursuant to the\nsecond paragraph of this Section 4.4, prior to the record date of the dividend.\nDeferred Shares held pending distribution shall continue to be credited with\nDividend Equivalents.\n\n      Dividend Equivalents so credited shall be converted into an additional\nwhole number of Deferred Shares as of the payment date of the dividend (based on\nthe Closing Price on such payment date). Such Deferred Shares shall thereafter\nbe treated in the same manner as any other Deferred Shares under the Plan.\nDividend \n\n                                       2\n\n\nEquivalents resulting in fractional shares shall be held for the credit\nof the director until the next dividend payment date and shall be converted into\nDeferred Shares on such date. Any Dividend Equivalents not converted into\nDeferred Shares shall be paid in cash upon the final distribution of the\ndirector's Deferred Shares.\n\n      4.5     Timing and Form of Elections.  Any election described in Sections \n4.2 and 4.3 hereof:\n              \n              (a)    shall be in the form of a document executed by the director\n                     and filed with the Secretary of the Company,\n\n              (b)    shall be made before the first day of the calendar year in\n                     which the applicable cash compensation is earned and shall\n                     become irrevocable on the last day prior to the beginning\n                     of such calendar year, and\n\n              (c)    shall continue until a director ceases to be a director of\n                     the Company or until he or she terminates or modifies such\n                     election by written notice, any such termination or\n                     modification to be effective, except as otherwise provided\n                     in the second paragraph of paragraph 4.2 hereof, as of the\n                     end of the calendar year in which such notice is given with\n                     respect to cash compensation otherwise payable in\n                     subsequent calendar years.\n\n      4.6     Effect of Certain Events.  Notwithstanding an election pursuant to\nSection 4.2 or Section 4.3 hereof:\n\n              (a)    If, as determined by the Board in its sole discretion, the \n                     director (during or following his or her membership on the\n                     Board) engaged in any activity or association in\n                     competition with or adverse or detrimental to the interest\n                     of the Company (i) all of such director's Deferred Shares\n                     shall be distributed immediately in the form of shares of\n                     Stock, (ii) all of such director's Dividend Equivalents not\n                     yet converted into Deferred Shares shall be distributed\n                     immediately in cash, and (ii) all of such director's cash\n                     compensation earned and not yet converted into shares of\n                     Stock or Deferred Shares under the terms of this Plan shall\n                     be distributed in the form of shares of Stock as soon as\n                     practicable after the next Normal Stock Payment Date.\n\n              (b)    Upon the occurrence of a Change in Control (as defined\n                     below), (i) all Deferred Shares to the extent credited\n                     prior to the Change in Control shall be distributed\n                     immediately in the form of shares of Stock or their cash\n                     equivalent value, and (ii) all Dividend Equivalents not yet\n                     converted into Deferred Shares and all cash compensation\n                     earned and not yet converted into shares of Stock or\n                     Deferred Shares under the terms of this Plan shall be\n                     distributed immediately in cash.\n\n      A Change in Control shall have occurred if (i) the 'beneficial ownership'\n(as defined in Rule 13d-3 under the Exchange Act) of securities representing\nmore than 50% of the combined voting power of the Company is acquired by any\n'person' as defined in Sections 13(d) and 14(d) of the Exchange Act (other than\nthe Company, any trustee or other fiduciary holding securities under an employee\nbenefit plan of the Company, or any corporation owned, directly or indirectly,\nby the stockholders of the Company in substantially the same proportions as\ntheir ownership of stock of the Company), or (ii) the stockholders of the\nCompany \n\n                                       3\n\n\napprove a definitive agreement to merge or consolidate the Company with or into\nanother corporation or to sell or otherwise dispose of all or substantially all\nof its assets, or adopt a plan of liquidation, or (iii) during any period of two\nconsecutive years, individuals who at the beginning of such period were members\nof the Board cease for any reason to constitute at least a majority thereof\n(unless the election or the nomination for election by the Company's\nstockholders of each new director was approved by a vote of at least two-thirds\nof the directors then still in office who were directors at the beginning of\nsuch period).\n\n      The provisions of this Section 4.6 shall not apply to the extent\ninconsistent with the requirements of Rule 16b-3, as the same may be interpreted\nfrom time to time.\n\n\n5.  RESTRICTED STOCK UNITS\n\n      5.1 Awards. For each year beginning January 1, 1996, each Eligible\nDirector who as of such date is not entitled to receive benefits under the\nCompany's Directors Retirement Plan (the 'Retirement Plan') for a period of ten\nyears following retirement from the Board shall be credited with Restricted\nStock Units ('Units') equal in value to 50% of the annual Board retainer fee\nthen in effect for an Eligible Director. Such Units shall be credited to each\nsuch director, in substantially equal installments, on Normal Stock Payment\nDates. Each Unit shall be valued at the Share Value Price.\n\n      An Eligible Director shall be entitled to be credited with such Units (a)\nfor ten years, (b) until the period during which the director is credited with\nsuch Units when combined with the period for which the director is entitled to\nreceive benefits under the Retirement Plan is equal to ten years or (c) until\nthe director's retirement from the Board, whichever first occurs.\n\n      5.2 Committee Chairs. For each year beginning January 1, 1996 during which\nan Eligible Director serves as chair of a regular committee of the Board, such\ndirector shall be credited with Units equal in value to 10% of the annual Board\nretainer fee then in effect for an Eligible Director. Such Units shall be\ncredited to each such director, in substantially equal installments, on the\nNormal Stock Payment Dates. Each Unit shall be valued at the Share Value Price.\n\n      5.3 Distribution. Following the director's retirement from the Board, the\nvalue of the Units credited to the director shall be distributed to the director\nin shares of Stock pursuant to the election of the director.\n\n      The director shall elect that distribution be in a lump sum or in equal\nannual installments (not exceeding ten), with the lump sum or first installment\nto be distributed on the tenth day of the calendar year immediately following\nthe year in which the director ceases to be a director of the Company; provided,\nhowever, that the foregoing shall be subject to Section 5.6 hereof. Installments\nsubsequent to the first installment shall be distributed on the tenth day of\neach succeeding calendar year until all of the director's Units shall have been\ndistributed.\n\n      In the event the director should die before all of the director's Units\nhave been distributed, the balance of the Units shall be distributed in a lump\nsum to the beneficiary or beneficiaries designated in writing by the director,\nor if no designation has been made, to the estate of the director.\n\n                                       4\n\n\n      5.4 Dividend Equivalents. Units shall be credited with Dividend\nEquivalents. Dividend Equivalents shall be credited (i) as of the payment date\nof such dividends, and (ii) only with respect to Units which were credited as of\na Normal Stock Payment Date, or into which Dividend Equivalents were converted\npursuant to the second paragraph of this Section 5.4, prior to the record date\nof the dividend. Units held pending distribution shall continue to be credited\nwith any Dividend Equivalents.\n\n      Dividend Equivalents so credited shall be converted into an additional\nwhole number of Units as of the payment date of the dividend (based on the\nClosing Price on such payment date). Such Units shall thereafter be treated in\nthe same manner as any other Units under the Plan. Dividend Equivalents\nresulting in fractional shares shall be held for the credit of the Eligible\nDirector until the next dividend payment date and shall be converted into Units\non such date. Any Dividend Equivalents not converted into Units shall be paid in\ncash upon the final distribution of the director's Units.\n\n      5.5     Timing the Form of Elections.  The election described in Section\n5.3 hereof:\n\n              (a)    shall be in the form of a document executed by the director\n                     and filed with the Secretary of the Company,\n\n              (b)    shall be made no later than 12 months prior to the \n                     director's retirement from the Board, and\n\n              (c)    shall become irrevocable 12 months prior to the director's\n                     retirement from the Board.\n\n      If no election is made, the Units shall be distributed in a lump sum on\nthe tenth day of the calendar year immediately following the year in which the\ndirector ceases to be a director of the Company.\n\n      5.6     Effect of Certain Events.  Notwithstanding an election pursuant to\nSection 5.3 hereof:\n\n              (a)    If, as determined by the Board in its sole discretion, the\n                     director (during or following his or her membership on the\n                     Board) engaged in any activity or association in\n                     competition with or adverse or detrimental to the interest\n                     of the Company (i) all of such director's Units credited\n                     under Section 5.1 hereof, as well as Dividend Equivalents\n                     and other Units resulting from such Units, shall be\n                     immediately forfeited and (ii) all of such director's Units\n                     credited under Section 5.2 hereof, as well as Dividend\n                     Equivalents and other Units resulting from such Units,\n                     shall be distributed immediately in the form of shares of\n                     Stock or cash.\n\n              (b)    Upon the occurrence of a Change in Control, (i) all Units\n                     to the extent credited prior to the Change in Control shall\n                     be distributed immediately in the form of shares of Stock\n                     or their cash equivalent value, and (ii) all Dividend\n                     Equivalents not yet converted into Units shall be\n                     distributed immediately in cash.\n\n\n\n      The provisions of this Section 5.6 shall not apply to the extent\ninconsistent with the requirements of Rule 16b-3, as the same may be interpreted\nfrom time to time.\n\n                                       5\n\n\n       5.7 Financial or Medical Hardship. The Committee shall have the authority\nto alter the timing or manner of distribution of Deferred Shares and\/or\nRestricted Stock Units in the event that the Eligible Director establishes, to\nthe satisfaction of the Committee, severe financial or medical hardship. In such\nevent, the Committee may, in its discretion:\n\n               (a)    Authorize the cessation of the deferral of Deferred \n                      Shares; and\/or\n\n               (b)    Provide that all, or a portion, of the Deferred Shares\n                      distributable over a period of time shall instead be\n                      immediately distributed; and\/or\n\n               (c)    Provide that all, or a portion, of the Restricted Stock\n                      Units shall be immediately distributed; and\/or\n\n               (d)    Provide for such other distribution schedule as deemed\n                      appropriate by the Committee under the circumstances.\n\n      However, the Deferred Shares\/Restricted Stock Units distributed pursuant\nto this Section 5.7 shall not exceed that amount which the Committee determines\nto be reasonably necessary for the Eligible Director to meet the financial or\nmedical hardship at the time of such payment. The severity of the financial or\nmedical hardship shall be judged by the Committee. Severe financial or medical\nhardship shall be deemed to exist in the event of the Eligible Director's long\nand serious illness, impending bankruptcy or similar unforeseeable and\nextraordinary circumstances arising as a result of events beyond the control of\nthe Eligible Director. The Committee's decision with respect to the severity of\nfinancial or medical hardship and the manner which the distribution of Deferred\nShares and\/or Restricted Stock Units to an Eligible Director is altered shall be\nfinal, conclusive and not subject to appeal.\n\n\n6.  TERM OF PLAN\n\n      6.1 The Plan, as amended by the Board as of January 1, 1996, is subject to\napproval by the stockholders of the Company at the Company's 1996 annual meeting\nof stockholders; provided, however, that if the Plan as so amended is approved\nby stockholders, any election described in Sections 4.2, 4.3 and 5.3 hereof\nwhich was made prior to such approval shall be deemed to be effective as of the\ndate such election was made. In no event shall any delivery of shares of Stock\nbe made to any director or other person under the Plan as so amended until such\ntime as stockholder approval of the Plan as so amended is obtained.\n\n      6.2 The Plan shall remain in effect until the earlier to occur of a Change\nin Control or December 31, 2011, unless sooner terminated by the Board;\nprovided, however, that, except as provided in Sections 4.6(b) and 5.6(b)\nhereof, shares of Stock and Dividend Equivalents may be delivered after such\ndate pursuant to an election made prior to such date.\n\n\n7.  AMENDMENT; TERMINATION\n\n      7.1 The Board may at any time and from time to time alter, amend, suspend\nor terminate the Plan in whole or in part.\n\n                                       6\n\n\n      7.2 Except as provided in Sections 4.6 and 5.6 hereof, in the event the\nPlan is terminated, Deferred Shares, Units and Dividend Equivalents shall be\ndistributed at such time and in such manner as the Board shall determine, no\nlater than they would have been distributed pursuant to the election applicable\nthereto.\n\n\n8.  MISCELLANEOUS\n\n      8.1 The right of a director to Deferred Shares, Units and\/or Dividend\nEquivalents shall be non-assignable and shall not be subject in any manner to\nthe debts or other obligations of the director or any other person.\n\n      8.2 The Company shall not be required to reserve or otherwise set aside\nfunds to meet any obligations under this Plan.\n\n      8.3 Nothing in this Plan shall be construed as conferring any right upon\nany director to continuance as a member of the Board.\n\n      8.4 This Plan and all rights hereunder shall be construed in accordance\nwith and governed by the laws of the State of Michigan.\n\n\n9.  RABBI TRUST\n\n       9.1 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       9.2 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 4.6 hereof), the Company\nshall be required to make an immediate contribution to the Rabbi Trust to cause\nall such accrued 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\nDated:  December 16, 1991 (Amended as of March 28, 1995, January 1, 1996,\n        August 20, 1996, December 16, 1997 and March 16, 1999)\n\n\n\n                                       7\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":[9539,9543],"class_list":["post-38792","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__dsp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38792","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=38792"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38792"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38792"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}