{"id":39301,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-kmart-corp-and-charles-c-conaway2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-kmart-corp-and-charles-c-conaway2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-kmart-corp-and-charles-c-conaway2.html","title":{"rendered":"Employment Agreement &#8211; Kmart Corp. and Charles C. Conaway"},"content":{"rendered":"<pre>\n                             EMPLOYMENT AGREEMENT\n\n                   AGREEMENT, made and entered into by and between KMART\nCORPORATION, a Michigan corporation (together with its successors and assigns\npermitted under this Agreement, the \"Company\"), and CHARLES C. CONAWAY (the\n\"Executive\").\n\n                             W I T N E S S E T H :\n\n                   WHEREAS, the Company desires to employ the Executive and to\nenter into an agreement embodying the terms of such employment (this\n\"Agreement\") and the Executive desires to enter into this Agreement and to\naccept such employment, subject to the terms and provisions of this Agreement;\n\n\n                   NOW, THEREFORE, in consideration of the premises and mutual\ncovenants contained herein and for other good and valuable consideration, the\nreceipt of which is mutually acknowledged, the Company and the Executive\n(individually a \"Party\" and together the \"Parties\") agree as follows:\n\n         1.        Definitions.\n\n                   (a) \"Affiliate\" of a person or other entity shall mean a\nperson or other entity that directly or indirectly controls, is controlled by, \nor is under common control with the person or other entity specified.\n\n                   (b) \"Base Salary\" shall mean the salary provided for in\nSection 4 below or any increased salary granted to the Executive pursuant to\nSection 4.\n\n                   (c) \"Board\" shall mean the Board of Directors of the Company.\n\n                   (d) \"Cause\" shall mean:\n\n                         (i) the Executive is convicted of a felony involving\n         moral turpitude or any other felony if in the case of such other felony\n         the Executive is unable to show that he (A) acted in good faith and in\n         a manner he reasonably believed to be in or not opposed to the best\n         interests of the Company and (B) had no reasonable cause to believe his\n         conduct was unlawful; or\n\n                         (ii) the Executive engages in conduct that constitutes\n         willful gross neglect or willful gross misconduct in carrying out his\n         duties under this Agreement, resulting, in either case, in material\n         harm to the Company, unless the\n\n   2\n\n\n         Executive believed in good faith that such act or nonact was in or not\n         opposed to the best interests of the Company.\n\n                   (e) A \"Change in Control\" shall have the meaning set forth\nin Section 2.6 of the Company's 1997 Long-Term Equity Compensation Plan as in\neffect on the date hereof.\n\n                   (f) \"Committee\" shall mean the Compensation and Incentives\nCommittee of the Board or any other committee of the Board performing similar\nfunctions.\n\n                   (g) \"Constructive Termination\" shall mean a termination of\nthe Executive's employment at his initiative as provided in Section 11(d) below\nwithin one year following the occurrence, without the Executive's prior written\nconsent, of one or more of the following events:\n\n                         (i) any failure to make timely and full payment of\n         amounts required to be paid under this Agreement, or a reduction in the\n         Executive's then current Base Salary or Target Bonus or the termination\n         or material reduction of any employee benefit or perquisite enjoyed by\n         him (other than as part of an across the board reduction in employee\n         benefits applicable to all executive officers of the Company);\n\n                         (ii) the failure to elect or reelect or appoint the\n         Executive to any of the positions described in Section 3 below or\n         removal of him from any such position;\n\n                         (iii) a material reduction or material adverse change\n         in the Executive's responsibilities, duties, authority, or any\n         reduction in title, as provided herein, including, without limitation,\n         the appointment of any person to an executive position at the Company\n         that is co-equal with or senior to that of the Executive or any\n         transfer of material responsibilities of the Executive to a subsidiary\n         which has substantially the same effect as such an appointment, or\n         after the Effective Date, the failure to offer to appoint or continue\n         the Executive as Chairman and Chief Executive Officer of any company\n         which becomes a successor of the Company by reason of a Change in\n         Control, and as the Chairman and senior executive officer of the\n         ultimate parent company which is within the same controlled group of\n         corporations, within the meaning of Section 414 of the Internal Revenue\n         Code of 1986, as amended, and which directly or indirectly controls the\n         Company, or the assignment to the Executive of duties which are\n         materially inconsistent with his duties or which materially impair the\n         Executive's ability to function as the Chairman and Chief Executive\n         Officer of the Company;\n\n                         (iv) the relocation of the Company's principal office\n         to a location more than 35 miles from Troy, Michigan; or\n\n                                        2\n                                                   \n\n   3\n\n\n\n                         (v) the failure of the Company to obtain the assumption\n         in writing of its obligation to perform this Agreement by any successor\n         to all or substantially all of the assets of the Company on or prior to\n         a merger, consolidation, sale or similar transaction, as provided in\n         Section 17 below.\n\n                   (h) \"Disability\" shall mean the Executive's inability to\nsubstantially perform his duties and responsibilities under this Agreement\nby reason of any physical or mental incapacity for a period of 180 consecutive\ndays.\n\n                   (i) \"Effective Date\" shall mean the date the Executive\nexecutes this Agreement, as provided in Section 2 below.\n\n                   (j) \"Previous Employer\" shall mean CVS Corporation, a\nDelaware corporation.\n\n                   (k) \"Severance Period\" shall mean the period during which the\nExecutive is receiving severance payments (or in respect of which a lump-sum\nseverance payment is made) pursuant to Section 11 (d) below.\n\n                   (1) \"Stock\" shall mean the Common Stock of the Company.\n\n                   (m) \"Subsidiary\" shall mean any corporation of which the\nCompany owns, directly or indirectly, more than 50% of the outstanding,\nsecurities then entitled to vote.\n\n                   (n) \"Target Bonus\" shall mean the Executive's annual target\nbonus opportunity, as a percentage of Base Salary, as provided for in Section 5\nbelow, or any increased annual target bonus opportunity approved by the\nCommittee.\n\n                   (o) \"Term of Employment\" shall mean the period specified in\nSection 2 below.\n\n                  \n         2.        Term of Employment.\n\n                   The Company hereby employs the Executive, and the Executive\nhereby accepts such employment, for the period commencing on the date he\nexecutes this Agreement (the \"Effective Date\") and ending on the fifth\nanniversary of the Effective Date (the \"Term of Employment\"); provided, however,\nthat the Term of Employment shall be automatically extended for an additional\nyear on the fourth anniversary of the Effective Date and on each anniversary of\nthe Effective Date thereafter, unless written notice of non-extension is\nprovided by either Party to the other Party at least 180 days prior to the\napplicable succeeding anniversary date.\n\n         3.        Position, Duties and Responsibilities.\n                   \n                   (a) During the Term of Employment, the Executive shall be\nemployed and serve as the Chairman of the Board and Chief Executive Officer of\nthe Company (or such other position or positions as may be agreed upon in\nwriting by the Executive and the Company) and be responsible for the general\nmanagement of the affairs of the Company.\n\n                                        3\n\n\n   4\n\n\nThe Executive shall promptly be elected by the Board to be a member of the\nBoard. During the Term of Employment, the Company shall nominate the Executive\nfor re-election as a director at each annual meeting of shareholders coinciding\nwith the expiration of his term as a director and recommend him for re-election.\nIf elected by the shareholders, he shall serve as a member of the Board during\nthe Term of Employment. The Executive, in carrying out his duties under this\nAgreement, shall report to the Board.\n\n                   (b) The Executive shall perform such duties and carry out\nsuch responsibilities incident to his position as may be determined from time to\ntime by the Board, which shall be consistent with the duties and\nresponsibilities customarily performed by persons in a similar executive\ncapacity. The Executive shall devote substantially all of his business time,\nattention and skill to the performance of such duties and responsibilities, and\nshall use his best efforts to promote the interests of the Company. The\nExecutive shall have all authority commensurate with such position, including,\nwithout limitation, authority for decisions on hiring and terminations of \nCompany personnel. The Executive shall not, without the prior written approval\nof the Board, engage in any other business activity which is in violation of\npolicies established from time to time by the Company.\n\n                   (c) Anything herein to the contrary notwithstanding, nothing\nshall preclude the Executive from (i) serving on the boards of directors of a\nreasonable number of other corporations or the boards of a reasonable number of\ntrade associations and\/or charitable organizations (subject to the reasonable\napproval of the Board), (ii) engaging in charitable activities and community\naffairs, and (iii) managing his personal investments and affairs, provided that\nsuch activities do not materially interfere with the proper performance of his\nduties and responsibilities as the Company's Chairman and Chief Executive\nOfficer.\n\n          4.       Base Salary.                  \n\n                   During the Term of Employment, the Executive shall be paid an\nannualized Base Salary, payable in accordance with the regular payroll practices\nof the Company, of $1,400,000. The Base Salary shall be reviewed no less\nfrequently than annually for increase in the discretion of the Board and\/or the\nCommittee. The Base Salary, including any increase, shall not be decreased\nduring the Term of Employment. The Base Salary shall not be required to be\ndeferred by the Executive under any Company plan or program.\n\n          5.       Annual Incentive Awards.\n                   \n                   During the Term of Employment, the Executive shall have an\nannual target bonus opportunity of at least 125% of his then-current Base Salary\nunder the Company's Annual Incentive Bonus Plan or any successor plan (the\n\"Target Bonus\"), payable if the performance goals established by the Committee\nfor the relevant year are met. If performance goals established by the\nCommittee for a particular year are not met, the Executive shall receive a\nlesser amount as determined in accordance with guidelines established by\nthe Committee, consistent with the guidelines applicable to the Chief\n\n                                       4\n\n   5\n\n\nExecutive Officer as a senior executive of the Company. Notwithstanding the\nforegoing, the Executive shall receive a guaranteed bonus of $1,750,000 for the\nfiscal year beginning February 1, 2000 without proration for the partial year\nof service from the Effective Date through January 31, 2001. Payment of the\nannual bonus shall be made at the same time that other senior-level executives\nreceive their incentive awards. The Executive shall participate in the Company's\nManagement Stock Purchase Plan.\n\n         6.        Long-Term Incentive Programs.\n\n                   (a) General. During the Term of Employment, the Executive\nshall be eligible to participate in the long-term incentive programs of the\nCompany, with any awards under such programs to be in the sole discretion of the\nCommittee. In any event, he shall be entitled to the awards described in\nSections 6(b) below.\n\n                   (b) Stock Option Awards.\n\n                           (i) As of the Effective Date, the Company shall grant\n         the Executive a 10-year option to purchase an aggregate of 1,500,000\n         shares of Stock (the \"New Option\"), which may be granted under the\n         terms of the Company's stock option plans, or outside the terms of\n         such plans, with terms and conditions consistent in all respects with\n         the provisions of this Agreement and otherwise substantially the same\n         as those granted under the Company's stock option plans. The exercise\n         price per share of the New Option shall be equal to the closing price\n         on the New York Stock Exchange of the Stock on the last trading day\n         immediately preceding the Effective Date. The New Option shall become\n         vested and exercisable in two equal installments on the first and\n         second anniversaries of the Effective Date, provided the Executive is\n         employed by the Company on each such date, except as otherwise\n         provided in Section 11 hereof. Notwithstanding anything to the\n         contrary in this Section 6(b) or in the Company's stock option plans,\n         if the Executive violates the provisions of Section 12 below, the New\n         Option shall immediately terminate.\n\n                           (ii) The Company will recommend to the Board of\n         Directors of Bluelight.com, Inc. that the Executive be granted a\n         10-year option to purchase 250,000 shares of Bluelight.com common\n         stock, with an exercise price equal to the fair market value of a\n         share of Bluelight.com common stock on the date of grant and with\n         other terms comparable to the grants of options for Bluelight.com\n         common stock previously granted to other senior executives of the\n         Company under the Bluelight.com, Inc. 1999 Equity Incentive Plan. The\n         grant will be subject to the approval of the Bluelight.com., Inc.\n         Board of Directors.\n\n                           (iii) During the Term of Employment, the Executive\n         will have an annual opportunity to be granted an option (the \"Annual\n         Option\") for shares of Stock at a target level value of 400% of Base\n         Salary, based upon the achievement of performance goals established by\n         the Committee. The determination of the value of the Annual Option\n         will be determined using the valuation method\n\n                                        5\n                                                 \n   6\n\n\n\n\n         employed by the Committee generally with respect to annual option\n         grants to other senior executives of the Company.\n\n         7.        Employee Benefit Programs.\n\n                   During the Term of Employment, the Executive shall be\nentitled to participate in all employee pension and welfare benefit plans and\nprograms made available to the Company's senior-level executives or to its\nemployees generally, as such plans or programs may be in effect from time to\ntime, including, without limitation, pension, profit sharing, savings and other\nretirement plans or programs, medical, dental, hospitalization, short-term and\nlong-term disability and life insurance plans, accidental death and\ndismemberment protection, travel accident insurance, and any other pension or\nretirement plans or programs and any other employee welfare benefit plans or\nprograms that may be sponsored by the Company from time to time, including any\nplans that supplement the above-listed types of plans or programs,\nwhether funded or unfunded. Without limiting the generality of the foregoing,\nthe Executive shall be offered the opportunity to elect life insurance coverage\non terms substantially comparable to those offered under the Company's Estate\nEnhancement Program for Directors, subject to terms and conditions of such\nprogram.\n\n         8.        Reimbursement of Business and Other Expenses; Perquisites;\n                   Vacations.\n\n                   (a) The Executive is authorized to incur reasonable expenses\nin carrying out his duties and responsibilities under this Agreement and the\nCompany shall promptly reimburse him for all business expenses incurred in\nconnection with carrying out the business of the Company, subject to\ndocumentation in accordance with the Company's policy. The Company shall pay all\nreasonable legal and financial advisor expenses incurred in connection with the\npreparation of the Executive's employment arrangements with the Company.\n\n                   (b) During the Term of Employment, the Executive shall be\nentitled to participate in all of the Company's executive fringe benefits in\naccordance with the terms and conditions of such arrangements as are in effect\nfrom time to time for the Company's senior-level executives.\n\n                   (c) The Company acknowledges its obligation to provide the\nExecutive with transportation during the Employment Period that provides him\nwith security to address bona fide business-oriented security concerns, and\nshall, at Company expense (except as provided below), make available to the\nExecutive and his family Company or other private aircraft for\nbusiness and personal use at his discretion, provided that any such personal\nuse shall be limited to travel within the United States. The Executive shall pay\nthe Company the standard Company charges for personal use of such aircraft. It\nis recognized that the Executive's travel by Company aircraft is required for\nsecurity purposes and, as such, will constitute business use of the aircraft.\n\n                                        6\n                                               \n   7\n\n\n                   (d) The Executive shall relocate his permanent residence\nfrom Rhode Island to Michigan. The Executive shall be entitled to a\nreimbursement payment from the Company equal to his relocation expenses\n(determined in accordance with the Company's relocation policy) incurred in\nconnection with the Executive's relocation and to the extent not covered thereby\nwill reimburse him for any loss up to an aggregate of $1 million on the sale of\nhis East Greenwich, Rhode Island properties, subject to providing reasonable \ndocumentation thereof. The Company shall pay the Executive an\nadditional payment in an amount such that the net amount retained by the\nExecutive, after deduction for all federal, state and local income tax and any\nemployment tax on the reimbursement payments, shall equal the amount of the\nreimbursement payment.\n\n                   (e) The Executive shall be entitled to a reimbursement\npayment from the Company equal to any reasonable expenses incurred by the\nExecutive for temporary housing for the Executive and his family in the Troy,\nMichigan area for a period of up to six months following the Effective\nDate.\n                   (f) In all events, during the Term of Employment, the Company\nshall: \n                           (i) make available to the Executive a car and a\n         driver for his use in Michigan;\n\n                           (ii) reimburse the Executive for personal financial\n         (including tax) counseling (other than legal fees) by a firm or firms\n         to be chosen by the Executive, such reimbursement to be no more than\n         the amount authorized under Company policy in effect from time to time;\n         and\n\n                           (iii) provide the Executive with a residential\n         security system in his residence in the Detroit metropolitan area\n         and pay the maintenance of such system including the monthly service\n         charges.\n\n                   (g) The Executive shall be entitled to four weeks paid\nvacation per year.\n\n         9.        Sign-On Award. As of the Effective Date, the Executive\nshall be awarded as a sign-on award of 200,000 shares of Stock free of all\nrestrictions.\n\n         10.       Buy-Out Provisions\n\n                   The following payments and benefits are provided to the\nExecutive in consideration of his substantial loss of compensation rights from\nthe Previous Employer in connection with entering into this Agreement. Among\nsuch lost rights are those pursuant to the following plans and programs of the\nPrevious Employer: the Long Term Plan, the Long Term Preferred Plan, the Long\nTerm Incentive Plan, the Long Term Restricted Stock Plan, the Retention Bonus\nPlan and the Supplemental Executive Retirement Plan.\n\n                                       7\n\n   8\n\n\n\n\n                   (a) Cash Payment. In consideration of the Executive foregoing\npayments and benefits that would otherwise become due to him under the plans and\nprograms of the Previous Employer, the Executive will be entitled to a cash\npayment of $5,000,000, payable in installments as follows:\n\n                           (i)   The first installment, of $2,500,000, shall be\n         paid on the second day following the Effective Date.\n\n                           (ii)  The remaining $2,500,000 shall be payable in\n         four equal installments of $625,000 each on the second, third, fourth\n         and fifth anniversaries of the Effective Date, provided the Executive\n         is employed by the Company on each such date, except as otherwise\n         provided in Section 11 hereof.\n\n                   (b) Stock Award. In consideration of the Executive foregoing\npayments and benefits that would otherwise become due to him under the plans\nand programs of the Previous Employer, the Executive shall be awarded 303,000\nshares of Stock free of all restrictions as of the Effective Date.\n\n                   (c) Option Grant. In consideration of the Executive foregoing\ncertain rights to which he would otherwise be entitled under stock options\ngranted to him under the plans and programs of his Previous Employer, as of the\nEffective Date, the Company shall grant the Executive a 10-year option to\npurchase an aggregate of 2,500,000 shares of Stock (the \"Replacement Option\"),\nwhich may be granted under the terms of the Company's stock options plans, or\noutside the terms of such plans, in either event, on terms consistent with this\nAgreement and otherwise consistent with the provisions of the Company's Stock\nOption Plans. The exercise price per share of the Replacement Option shall be\nequal to the closing price on the New York Stock Exchange of the Stock on the\nlast trading day immediately preceding the Effective Date. The Replacement\nOption shall vest in four equal installments on the second, third, fourth and\nfifth anniversaries of the Effective Date, provided the Executive is employed by\nthe Company on each such date, except as otherwise provided in Section 11\nhereof. Notwithstanding anything to the contrary in this Section 10(c) or in the\nCompany's stock option plans, if the Executive violates the provisions of\nSection 12 hereof, the Replacement Option shall immediately terminate.\n\n                   (d) Restricted Stock Award. In consideration of the Executive\nforegoing certain rights to which he would otherwise be entitled under\nrestricted stock granted to him under the plans and programs of his Previous\nEmployer, as of the Effective Date, the Company shall grant the Executive\n615,000 restricted shares of Stock (the \"Restricted Stock\"). Shares of\nthe Restricted Stock shall become vested, and the forfeiture and transfer\nrestrictions thereon shall lapse, in two equal installments on the dates\nimmediately prior to the fourth and fifth anniversaries of the Effective Date,\nprovided the Executive is employed by the Company on each such date, except as\notherwise provided in Section 11 hereof. Notwithstanding anything to the\ncontrary in this Section 10(d), if the Executive violates the provisions of\nSection 12 hereof, all unvested shares of Restricted Stock shall be immediately\nforfeited.\n\n                                        8\n\n   9\n\n\n                   (e) Retention Bonuses. In consideration of the Executive\nforegoing certain payments and benefits that would otherwise become due to him\nunder the plans and programs of his Previous Employer, the Company shall provide\nthe Executive with a retention bonus arrangement providing for an aggregate\n$10,000,000 in retention bonus payments contingent upon the continued employment\nof the Executive by the Company, except as otherwise provided in Section 11\nhereof, to be paid on a pro-rata annual basis from the first through the fifth\nanniversary of the Effective Date, with such amounts payable in each\ninstallment 50% in cash and 50% in shares of Stock (valued at the fair market\nvalue on the date of payment (using the closing price on the immediately prior\ntrading date)), that will be free of restrictions on the date of payment.\n\n                   (f) SERP. In consideration of the Executive foregoing\nbenefits that would otherwise become due to him under the plans and programs\nof his Previous Employer, the Company shall provide the Executive with a\npension arrangement providing for the accrual of retirement benefits payable at\nage 55 that are substantially equivalent in the aggregate to the benefits the\nExecutive would have been entitled upon retirement at age 55 under the\nSupplemental Executive Retirement Plan of his Previous Employer, as in effect on\nthe date hereof, offset by the benefits payable under such plan of the Previous\nEmployer (including any underlying qualified plan), as well as under any\ncomparable supplemental or qualified plan established by the Company.\n\n                   (g) Offset and Reduction. Notwithstanding the provisions of\nSections 10(a)-(e) above, in the event that the Previous Employer accelerates\nthe vesting of any stock options, restricted stock, equity compensation,\nincentive compensation, retirement benefits or there is otherwise a material\nincrease in the payments, rights or benefits that were expected to be forfeited\nas a result of termination of employment with his Previous Employer prior to\nbecoming vested from those communicated to the Company by the Executive and his\nrepresentatives prior to the Effective Date, the Company shall be entitled to\noffset the value of such increase, on a benefit by benefit basis (e.g.,\nadjustment in the amount of retention bonus received from the Previous Employer\nshall result in an offset to the amount payable under Section 10(e) above), from\nthe benefits payable to the Executive under the provisions of Sections 10(a)-(e)\nabove (using the same methodology as employed by the Company in establishing\nsuch benefits); provided, however, that any such reduction shall not include the\nintrinsic value of stock options to the extent that such value is attributable\nto any time period to exercise stock options that is not made available to the\nExecutive by the Previous Employer. As a condition of the Executive's rights\nunder this Section 10, the Executive shall be required to provide (i) written\nevidence satisfactory to the Company of all rights and benefits of his Previous\nEmployer to which this Section 10 relates and (ii) a written representation\nsatisfactory to the Company that there has not been any increase as described\nabove, within 90 days following the Effective Date.\n\n                   (h) Forfeiture of Certain Payments. Notwithstanding any\nprovisions of this Agreement to the contrary, in the event that, prior to the\nfirst anniversary of the Effective Date, (i) the Executive shall give notice of\nhis voluntary termination of employment pursuant to Section 11(f) below (or\nshall so terminate without giving notice) or (ii) the Company shall terminate\nthe employment of the Executive for Cause, pursuant\n\n                                       9\n\n\n   10\n\n\n\n\nto Section 11(c) below, then the Executive shall immediately forfeit the\npayments and awards made pursuant to Sections, 9, 10(a) and 10(b) hereof. In\nthis regard, within 15 days of such termination, the Executive shall be required\nto (a) repay to the Company $2,500,000 in cash, together with interest accrued\nat an annual rate of 6.5% and (b) return to the Company 503,000 shares of Stock,\nor the cash equivalent of such shares of Stock based on the closing trading\nprice of the Stock on the New York Stock Exchange on the trading date\nimmediately prior to the date of repayment.\n\n         11.       Termination of Employment.\n\n                   (a) Termination Due to Death. In the event the Executive's\nemployment is terminated due to his death, his estate or his beneficiaries\nas the case may be, shall be entitled to:\n\n                           (i)   Base Salary through the date of death;\n\n                           (ii)  a pro rata annual bonus for the year in which \nthe Executive's death occurs, based on the Target Bonus for such year, payable\nin a single installment promptly after his death;\n\n                           (iii) the balance of any annual or long-term cash\nincentive awards (if any) earned (but not yet paid) pursuant to the terms of the\napplicable programs;\n\n                           (iv)  any restricted stock award outstanding at \nthe time of his death shall become fully vested and any forfeiture provisions\nset forth in the relevant restricted stock agreement based on the continued\nemployment of the Executive shall immediately lapse;\n\n                           (v)   any outstanding stock option or other equity\naward at the time of death shall become fully vested, and his estate shall have\nthe right to exercise any such award for the lesser of (a) 12 months from\nthe date of death or (b) the remainder of the full original term of the option\n(notwithstanding any contrary provision of any plan or agreement);\n\n                           (vi)  any amounts earned, accrued or owing to the\nExecutive but not yet paid under this Agreement, including, without limitation,\nany amounts not yet paid under Section 10(a)(ii) above; and\n\n                           (vii) other or additional benefits in accordance\nwith applicable plans and programs of the Company.\n\n                   (b) Termination Due to Disability. In the event the\nExecutive's employment is terminated due to his Disability, he shall be entitled\nin such case to the following:\n\n                           (i)   Base Salary through the date of termination;\n\n                                       10\n                                                                             \n\n   11\n\n\n\n\n                           (ii) through the Company's long-term disability plans\n         or otherwise, an amount equal to 60% of the Base Salary for the period\n         beginning on the date of termination through the Executive's attainment\n         of age 65;\n\n                           (iii) the annual bonus for the year in which\n         termination due to Disability occurs, based on the Target Bonus for\n         such year, payable in a single installment promptly following\n         termination due to Disability;\n\n                           (iv) any restricted stock award outstanding at the\n         time of his termination due to Disability shall become fully vested and\n         any forfeiture provisions set forth in the relevant restricted stock\n         agreement based on the continued employment of the Executive shall\n         immediately lapse;\n\n                           (v) the balance of any annual or long-term cash\n         incentive awards (if any) earned (but not yet paid) pursuant to the\n         terms of the applicable programs;\n\n                           (vi) any outstanding stock option or other equity\n         award at the time of termination due to Disability shall become fully\n         vested, and he shall have the right to exercise any such award for the\n         lesser of (a) 12 months from the date of Disability or (b) the\n         remainder of the full original term of the option (notwithstanding any\n         contrary provision of any plan or agreement);\n\n                           (vii) any amounts earned, accrued or owing to the \n         Executive but not yet paid under this Agreement, including, without \n         limitation, any amounts not yet paid under Section 10(a)(ii) above;\n\n                           (viii) continued participation to the extent provided\n         in medical, dental, hospitalization and life insurance coverage and in\n         all other employee welfare plans and programs in which he was\n         participating on the date of termination for the period of the\n         Disability or until he attains age 65, if earlier; and\n\n                           (ix) other or additional benefits in accordance with\n         applicable plans and programs of the Company.\n\n                   In no event shall a termination of the Executive's employment\nfor Disability occur unless the Party terminating his employment gives written\nnotice to the other Party in accordance with Section 24 below.\n\n                   (c) Termination by the Company for Cause.\n\n                           (i) A termination for Cause shall not take effect\n         unless the provisions of this paragraph (i) are complied with. The\n         Executive shall be given written notice by the Board of the intention\n         to terminate him for Cause, such notice (A) to state in detail the\n         particular act or acts or failure or failures to act that constitute\n         the grounds on which the proposed termination for Cause is based and\n         (B) to be given within six months of the Board learning of such act\n         or acts or\n\n                                       11\n\n                   \n   12\n\n\n\n\n         failure or failures to act. The Executive shall have 10 days after the\n         date that such written notice has been given to the Executive in which\n         to cure such conduct, to the extent such cure is possible. If he fails\n         to cure such conduct, the Executive shall then be entitled to a hearing\n         before the Board. Such hearing shall be held within 15 days of notice\n         to the Company by the Executive, provided he requests such hearing\n         within 10 days of the written notice from the Board of the intention to\n         terminate him for Cause. If, within five days following such hearing,\n         the Executive is furnished written notice by the Board confirming that,\n         the Board has determined, by majority vote at a meeting of the Board\n         duly called and held as to which termination of the Executive is an\n         agenda item, that grounds for Cause on the basis of the original notice\n         exist, he shall thereupon be terminated for Cause.\n\n                           (ii)   In the event the Company terminates the\n         Executive's employment for Cause, he shall be entitled to:\n\n                                  (A) Base Salary through the date of the\n                   termination of his employment for Cause;\n\n                                  (B) the balance of any annual or long-term\n                   cash incentive awards (if any) earned (but not yet paid)\n                   pursuant to the terms of the applicable programs; \n\n                                  (C) any amounts earned, accrued or owing to\n                   the Executive but not yet paid under this Agreement; and \n\n                                  (D) other or additional benefits in accordance\n                   with applicable plans or programs of the Company.\n\n                   (d) Termination Without Cause or Constructive Termination.\n\n                           (i) A Constructive Termination shall not take effect\n         unless the provisions of this paragraph (i) are complied with. The\n         Company shall be given written notice by the Executive of the intention\n         to terminate his employment on account of a Constructive Termination, \n         such notice (A) to state in detail the particular act or acts or     \n         failure or failures to act that constitute the grounds on which the \n         proposed Constructive Termination is based and (B) to be given within \n         six months of the Executive learning of such act or acts or failure or \n         failures to act. The Company shall have 30 days after the date that \n         such written notice has been given to the Company in which to cure such\n         conduct, to the extent such cure is possible.\n\n                           (ii) In the event the Executive's employment is\n         terminated by the Company without Cause, other than due to Disability\n         or death, or in the event there is a Constructive Termination, the\n         Executive shall be entitled to: \n\n                                  (A) Base Salary-through the date of\ntermination of the Executive's employment;\n\n                                       12\n                                                        \n   13\n                   (B) Base Salary, at the monthly rate in effect on the date of\ntermination of the Executive's employment (or in the event a reduction in Base\nSalary is the basis for a Constructive Termination, then the Base Salary in\neffect immediately prior to such reduction), payable each month for a period of\nthirty-six months following the date of termination (the \"Severance Period\");\nprovided that the Executive and the Company may agree that the Company shall pay\nhim the present value of such salary continuation payments in a lump sum (using\nas the discount rate the Applicable Federal Rate for short-term Treasury\nobligations as published by the Internal Revenue Service for the month in which\nsuch termination occurs);\n\n                   (C) pro-rata annual bonus for the year in which termination\noccurs, based on the Target Bonus for such year, payable in a single installment\npromptly following termination;\n\n                   (D) an amount equal to one-twelfth (1\/12) of the Target Bonus\namount for the year in which termination occurs, payable each month over the\nSeverance Period, provided that the Executive and the Company may agree that the\nCompany shall pay him the present value of such bonus amount in a lump sum\n(using the discount referred to in Section 11(d)(ii)(B) above);\n\n                   (F) the balance of any annual or long-term cash incentive\nawards earned (but not yet paid) pursuant to the terms of the applicable\nprograms;\n\n                   (G) any restricted stock award outstanding at the time of\nsuch termination of employment shall become fully vested, and any forfeiture\nprovisions set forth in the relevant restricted stock agreement based on the\ncontinued employment of the Executive shall immediately lapse;\n\n                   (H) any outstanding stock option or other equity award at the\ntime of termination shall become fully vested, and he shall have the right to\nexercise any such award for the remainder of the lessor of (a) 36 months from\nthe date of termination or (b) the full original term of the option\n(notwithstanding any contrary provision of any plan or agreement);\n\n                   (I) any amounts earned, accrued or owing to the Executive but\nnot yet paid under this Agreement, including, without limitation, any remaining\namounts not yet paid under Section 10(a)(ii) or 10(e) above;\n\n                  (J) continued participation in all medical, dental, \nhospitalization and life insurance coverage and in other employee welfare \nbenefit plans or programs in which he was participating on the date of the \ntermination of his employment until the end of the Severance Period; provided \nthat the Company's obligations under this clause (ix) shall be reduced to the \nextent that the Executive receives similar coverage and benefits under the plans\nand programs of a subsequent employer; and provided, further, that (x) if the \nExecutive is precluded from continuing his participation in any employee benefit\nplan or program as provided in this clause (ix) of this Section 11(d), he shall \nbe\n\n\n\n                                       13\n\n   14\n                                                                            \nprovided with the after-tax economic equivalent of the benefits provided under\nthe plan or program in which he is unable to participate for the period\nspecified in this clause (ix) of this Section 11(d), (y) the economic equivalent\nof any benefit foregone shall be deemed to be the lowest cost that would be\nincurred by the Executive in obtaining such benefit himself on an individual\nbasis, and (z) payment of such after-tax economic equivalent shall be made\nquarterly in advance; and\n\n                   (K) other or additional benefits in accordance with\napplicable plans and programs of the Company.\n\n         (e) Termination of Employment Following a Change in Control.\n\n         If, within two years following a Change in Control, the Executive's\nemployment is terminated without Cause or there is a Constructive Termination,\nthe Executive shall be entitled to the payments and benefits provided in Section\n11(d) above, provided that all cash payments provided therein shall be paid in a\nlump sum without any discount. In addition, immediately following a Change in\nControl, all accrued or earned amounts that are not otherwise vested, as well as\nall options, restricted stock and other equity-based awards in which he is not\nyet vested, shall become fully vested, including, without limitation, the\nExecutive's accrued benefits under any supplemental retirement plan maintained\nby the Company. All accrued benefits under such plans shall be paid as a\nlump-sum cash payment.\n\n         (f) Voluntary Termination.\n\n         In the event of a termination of employment by the Executive on his own\ninitiative, other than a termination due to death or Disability or a\nConstructive Termination, the Executive shall have the same entitlements as\nprovided in Section 11(c)(ii) above for a termination for Cause. A voluntary\ntermination under this Section 11(f) shall be effective upon 30 days' prior\nwritten notice to the Company and shall not be deemed a breach of this \nAgreement.\n\n         (g) Payment Following a Change in Control.\n\n         In the event that the termination of the Executive's employment is for\none of the reasons set forth in Section 11(e) above and the aggregate of all\npayments or benefits made or provided to the Executive under Section 11(e) above\nand under all other plans and programs of the Company (the \"Aggregate Payment\")\nis determined to constitute a Parachute Payment, as such term is defined in\nSection 280G(b)(2) of the Internal Revenue Code, the Company shall pay to the\nExecutive, prior to the time any excise tax imposed by Section 4999 of the\nInternal Revenue Code (\"Excise Tax\") is payable with respect to such Aggregate\nPayment, an additional amount which, after the imposition of all income and\nexcise taxes thereon, is equal to the Excise Tax on the Aggregate Payment. The\ndetermination of whether the Aggregate Payment constitutes a Parachute Payment\nand, if so, the amount to be paid to the Executive and the time of payment\npursuant to this Section 11(g) shall be made by an independent auditor (the\n\"Auditor\") jointly selected by the Company and the Executive and paid by the\nCompany.\n\n                                       14\n   15\n\n\nThe Auditor shall be a nationally recognized United States public accounting\nfirm which has not, during the two years preceding the date of its selection,\nacted in any way on behalf of the Company or any Affiliate thereof. If the\nExecutive and the Company cannot agree on the firm to serve as the Auditor, then\nthe Executive and the Company shall each select one accounting firm and those\ntwo firms shall jointly select the accounting firm to serve as the Auditor.\n\n         (h) No Mitigation; No Offset.\n\n         In the event of any termination of employment under this Section 11,\nthe Executive shall be under no obligation to seek other employment and there\nshall be no offset against amounts due the Executive under this Agreement on\naccount of (i) any remuneration attributable to any subsequent employment that\nhe may obtain except as specifically provided in this Section 11 or (ii) any\nclaims the Company may have against the Executive.\n\n         (i) Nature of Payments.\n\n         Any amounts due under this Section 11 are in the nature of severance\npayments considered to be reasonable by the Company and are not in the nature of\na penalty.\n\n         (j) Exclusivity of Severance Payments.\n\n         Upon termination of the Executive's employment during the Term of\nEmployment, he shall not be entitled to any severance payments or severance\nbenefits from the Company, other than as provided herein, or any payments by the\nCompany on account of any claim by him of wrongful termination, including claims\nunder any federal, state or local human and civil rights or labor laws, other\nthan the payments and benefits provided hereunder, except for any benefits which\nmay be due the Executive in normal course under any employee benefit plan of the\nCompany which provides benefits after termination of employment.\n\n         (k) Non-competition.\n\n         The Executive agrees that any right to receive the severance payments\nand benefits hereunder will cease if the Executive breaches the provisions of\nSection 12(a) below. The Executive agrees that any violation of the provisions\nof Section 12(a) below will result in the immediate forfeiture of any severance \npayments or benefits hereunder and any rights to exercise or receive stock \noptions or restricted stock. The foregoing is in addition to the rights of the \nCompany under Section 10(g) and 10(h) above.\n\n         (l) Release of Claims.\n\n         As a condition of the Executive's entitlement to any of the severance\nrights and benefits provided in this Section 11, the Executive shall be required\nto execute and honor a release of claims in the form set forth in Exhibit A\nhereto, subject to such\n\n                                       15\n   16\n\nchanges consistent with the intent of such release as may be necessary to\nreflect changes in law.\n\n         (m) Termination at Will.\n\n         Notwithstanding anything herein to the contrary, the Executive's\nemployment with the Company is terminable at will with or without Cause;\nprovided, however, that a termination of the Executive's employment shall be\ngoverned in accordance with the terms hereof.\n\n    12. Restrictive Covenants.\n\n         (a) Non-Compete. By and in consideration of the substantial\ncompensation and benefits to be provided by the Company hereunder, and further\nin consideration of the Executive's exposure to the proprietary information of\nthe Company, the Executive agrees that he shall not, during the Term of\nEmployment and for the duration of the Severance Period, but in any event for a\nperiod of at least eighteen months following termination of employment for any\nreason, directly or indirectly own, manage, operate, join, control, be employed\nby, or participate in the ownership, management, operation or control of or be\nconnected in any manner, including, but not limited to, holding the positions of\nofficer, director, shareholder, consultant, independent contractor, employee,\npartner, or investor, with any Competing Enterprise; provided, however, that the\nExecutive may invest in stocks, bonds, or other securities of any corporation or\nother entity (but without participating in the business thereof) if such stocks,\nbonds, or other securities are listed for trading on a national securities\nexchange or Nasdaq National Market and the Executive's investment does not\nexceed 1% of the issued and outstanding shares of capital stock, or in the case\nof bonds or other securities, 1% of the aggregate principal amount thereof\nissued and oustanding. \"Competing Enterprise\" shall mean and be limited to the\nfollowing entities, including successors thereto: Albertson's Inc., American\nRetail Group, Inc., American Stores Company, Carrefour sa, Kohl's Corporation,\nThe May Department Store Company, Montgomery Ward &amp; Co., Inc., J.C. Penny\nCompany, Royal Ahold, Safeway, Inc., Sears, Roebuck and Co., Service Merchandise\nCompany, ShopKo Stores, Inc., Supervalue Inc., Target Corp., The Home Depot,\nInc., Toys R Us Inc., TJX Companies, Inc., and Wal-Mart Stores, Inc. The Parties\nagree that the foregoing list of entities shall be amended (by written action\npursuant to Section 20 hereof) from time to time, if necessary, to include any\nadditional entity that, following the date hereof, becomes an owner and operator\nof retail stores selling general merchandise that is national or international\nin scope and is of a nature similar to the companies listed above.\n\n         (b) Nonsolicitation. By and in consideration of the substantial\ncompensation and benefits to be provided by the Company hereunder, and further\nin consideration of the Executive's exposure to the proprietary information of\nthe Company, the Executive agrees that he shall not, during the Term of\nEmployment and for the duration of the Severance Period, but in any event for a\nperiod of at least eighteen months following termination of employment for any\nreason, without the express prior written approval of the Company, (i) directly\nor indirectly, in one or a series of transactions,\n\n                                       16\n   17\nrecruit, solicit or otherwise induce or influence any proprietor, partner,\nstockholder, lender, director, officer, employee, sales agent, joint venturer,\ninvestor, lessor, supplier, customer, agent, representative or any other person\nwhich has a business relationship with the Company, or had a business\nrelationship with the Company within the 24 month period preceding the date of\nthe incident in question, to discontinue, reduce or modify such employment,\nagency or business relationship with the Company, or (ii) employ or seek to\nemploy or cause any Competing Enterprise to employ or seek to employ any person\nor agent who is then (or was at any time within six months prior to the date the\nExecutive or the Competing Enterprise employs or seeks to employ such person)\nemployed or retained by the Company.\n\n         (c) Confidential Information. During the Term of Employment and at all\ntimes thereafter, Executive agrees that he will not divulge to anyone (other\nthan the Company or any persons employed or designated by the Company) any\nknowledge or information of any type whatsoever whether of a confidential nature\nor otherwise relating to the business of the Company or any of its subsidiaries\nor affiliates, as well as any information of a confidential nature obtained from\ncustomers, clients or other third parties, including, without limitation, all\ntypes of trade secrets (unless readily ascertainable from public or published\ninformation or trade sources) and confidential commercial information, and the\nExecutive further agrees not to disclose, publish or make use of any such\nknowledge or information without the prior written consent of the Company.\n\n         (d) The Executive agrees that any breach of the terms of this Section\n12 would result in irreparable injury and damage to the Company for which the\nCompany would have no adequate remedy at law; the Executive therefore also\nagrees that in the event of said breach or any reasonable threat of breach, the\nCompany shall be entitled to an immediate injunction and restraining order to\nprevent such breach and\/or threatened breach and\/or continued breach by the\nExecutive and\/or any and all persons and\/or entities acting for and\/or with the\nExecutive. The terms of this paragraph shall not prevent the Company from\npursuing any other available remedies for any breach or threatened breach\nhereof, including, but not limited to, remedies available under this Agreement\nand the recovery of damages. The Executive and the Company further agree that\nthe provisions of the covenant not to compete are reasonable. Should a court or\narbitrator determine, however, that any provision of the covenant not to compete\nis unreasonable, either in period of time, geographical area, or otherwise, the\nparties hereto agree that the covenant shall be interpreted and enforced to the\nmaximum extent which such court or arbitrator deems reasonable.\n\n         (e) The provisions of this Section 12 shall survive any termination of\nthis Agreement and the Term of Employment, and the existence of any claim or\ncause of action by the Executive against the Company, whether predicated on this\nAgreement or otherwise, shall not constitute a defense to the enforcement by the\nCompany of the covenants and agreements of this Section.\n\n    13. Stock Ownership. At all times following the fifth anniversary of the \nEffective Date, the Executive agrees to use his reasonable best efforts to \nmaintain\n\n                                       17\n   18\n\n\n\n\nownership of Stock (including shares of restricted stock) with a fair market\nvalue (disregarding any restrictions) equal to at least 400% of his then-current\nBase Salary.\n\n    14. Registration Statements. As soon as practicable after the Effective Date\n(but in no event later than the applicable vesting or exercise dates), the\nCompany shall file and keep effective a registration statement on Form S-8 (or\nother applicable registration statement) with respect to the stock options,\nrestricted stock and awards of stock hereunder, except to the extent covered by\na comparable registration statement under the Company's stock incentive plans.\n\n    15. Indemnification.\n\n         (a) The Company agrees that if the Executive is made a party, or is\nthreatened to be made a party, to any action, suit or proceeding, whether civil,\ncriminal, administrative or investigative (a \"Proceeding\"), other than a\nProceeding brought on behalf of the Previous Employer relating to the\nExecutive's employment agreement with the Previous Employer, by reason of the\nfact that he is or was a director, officer or employee of the Company or is or\nwas serving at the request of the Company as a director, officer, member,\nemployee or agent of another corporation, partnership, joint venture, trust or\nother enterprise, including service with respect to employee benefit plans,\nwhether or not the basis of such Proceeding is the Executive's alleged action in\nan official capacity while serving as a director, officer, member, employee or\nagent, the Executive shall be indemnified and held harmless by the Company to\nthe fullest extent legally permitted or authorized by the Company's certificate\nof incorporation or bylaws or resolutions of the Company's Board of Directors\nor, if greater, by the laws of the State of Michigan against all cost, expense,\nliability and loss (including, without limitation, attorney's fees, judgments,\nfines, ERISA excise taxes or penalties and amounts paid or to be paid in\nsettlement) reasonably incurred or suffered by the Executive in connection\ntherewith, and such indemnification shall continue as to the Executive even if\nhe has ceased to be a director, officer, member, employee or agent of the\nCompany or other entity and shall inure to the benefit of the Executive's\nheirs, executors and administrators. The Company shall advance to the Executive\nall reasonable costs and expenses incurred by him in connection with a\nProceeding within 20 days after receipt by the Company of a written request for\nsuch advance. Such request shall include an undertaking by the Executive to\nrepay the amount of such advance if it shall ultimately be determined that he is\nnot entitled to be indemnified against such costs and expenses.\n\n         (b) Neither the failure of the Company (including its board of\ndirectors, independent legal counsel or stockholders) to have made a\ndetermination prior to the commencement of any Proceeding concerning payment of\namounts claimed by the Executive under Section 15(a) above that indemnification\nof the Executive is proper because he has met the applicable standard of\nconduct, nor a determination by the Company (including its board of directors,\nindependent legal counsel or stockholders) that the Executive has not met such\napplicable standard of conduct, shall create a presumption that the Executive\nhas not met the applicable standard of conduct.\n\n                                       18\n   19\n               (c) The Company agrees to continue and maintain a directors and\nofficers' liability insurance policy covering the Executive to the extent the\nCompany provides such coverage for its other executive officers or former\nofficers.\n\n          16.  Effect of Agreement on Other Benefits.\n          \n               Except as specifically provided in this Agreement, the existence \nof this Agreement shall not prohibit or restrict the Executive's entitlement to\nfull participation in the employee benefit and other plans or programs in which \nsenior executives of the Company are eligible to participate.\n\n          17.  Assignability; Binding Nature.\n                   \n          This Agreement shall be binding upon and inure to the benefit of the\nParties and their respective successors, heirs (in the case of the Executive)\nand assigns. No rights or obligations of the Company under this Agreement may be\nassigned or transferred by the Company except that such rights or obligations\nmay be assigned or transferred pursuant to a merger or consolidation in which \nthe Company is not the continuing entity, or the sale or liquidation of all or\nsubstantially all of the assets of the Company, provided that the assignee or\ntransferee is the successor to all or substantially all of the assets of the\nCompany and such assignee or transferee assumes the liabilities, obligations\nand duties of the Company, as contained in this Agreement, either contractually\nor as a matter of law. The Company further agrees that, in the event of a sale\nof reorganization transaction as described in the preceding sentence, it shall\ntake whatever action it legally can in order to cause such assignee or\ntransferee to expressly assume the liabilities, obligations and duties of the\nCompany hereunder. No rights or obligations of the Executive under this\nAgreement may be assigned or transferred by the Executive other than his rights\nto compensation and benefits, which may be transferred only by will or operation\nof law, except as provided in Section 23 below.\n\n          18.  Representations.\n            \n          The Company represents and warrants that it is fully authorized and\nempowered by action of the Board to enter into this Agreement and to deliver and\nhold open the accompanying offer letter, and that the performance of its\nobligations under this Agreement will not violate any agreement between it and\nany other person, firm or organization.\n\n          19.  Entire Agreement.\n          \n          This Agreement contains the entire understanding and agreement\nbetween the Parties concerning the subject matter hereof and supersedes all\nprior agreements, understandings, discussions, negotiations and undertakings,\nwhether written or oral, between the Parties with respect thereto; provided, \nhowever, that this Agreement shall not supersede any separate written \ncommitments by the Company with respect to indemnification.\n\n                                       19\n\n   20\n\n\n\n\n\n\n          20.  Amendment or Waiver.\n\n               No provision in this Agreement may be amended unless such\namendment is agreed to in writing and signed by the Executive and an authorized\nofficer of the Company. No waiver by either Party of any breach by the other\nParty of any condition or provision contained in this Agreement to be performed\nby such other Party shall be deemed a waiver of a similar or dissimilar\ncondition or provision at the same or any prior or subsequent time. Any waiver\nmust be in writing and signed by the Executive or an authorized officer of the\nCompany, as the case may be.\n\n          21.  Severability.\n\n               In the event that any provision or portion of this Agreement\nshall be determined to be invalid or unenforceable for any reason, in whole or\nin part, the remaining provisions of this Agreement shall be unaffected thereby\nand shall remain in full force and effect to the fullest extent permitted by\nlaw.\n\n          22.  Survival.\n                   \n               The respective rights and obligations of the Parties hereunder\nshall survive any termination of the Executive's employment to the extent\nnecessary to the intended preservation of such rights and obligations.\n\n          23.  Beneficiaries\/References.\n\n               The Executive shall be entitled, to the extent permitted under\nany applicable law, to select and change a beneficiary or beneficiaries to\nreceive any compensation or benefit payable hereunder following the Executive's\ndeath by giving the Company written notice thereof. In the event of the\nExecutive's death or a judicial determination of his incompetence, reference in\nthis Agreement to the Executive shall be deemed, where appropriate, to refer to\nhis beneficiary, estate or other legal representative.\n\n          24.  Governing Law\/Jurisdiction.\n                           \n               This Agreement shall be governed by and construed and interpreted\nin accordance with the laws of Michigan without reference to principles of\nconflict of laws.\n\n          25.  Resolution of Disputes.\n\n               Any disputes arising under or in connection with this Agreement\nshall, at the election of the Executive or the Company, be resolved by binding\narbitration, to be held in Detroit, Michigan in accordance with the rules and\nprocedures of the American Arbitration Association. Judgment upon the award\nrendered by the arbitrator(s) may be entered in any court having\njurisdiction thereof. All costs and expenses of any arbitration or court\nproceeding (including fees and disbursements of counsel) shall be borne by the\nrespective Party incurring such costs and expenses, but the Company shall\nreimburse the\n\n                                       20\n\n\n\n   21\n\n\n\n\nExecutive for such reasonable costs and expenses in the event he substantially\nprevails in such arbitration or court proceeding. Notwithstanding the\nforegoing, following a Change of Control, all reasonable costs and expenses\n(including fees and disbursements of counsel) incurred by the Executive pursuant\nto this Section 25 shall be paid on behalf of or reimbursed to the Executive\npromptly by the Company; provided, however, that no reimbursement shall be made\nof such expenses if and to the extent the arbitrator(s) or the court\ndetermine(s) that any of the Executive's litigation assertions or defenses were\nin bad faith or frivolous.\n\n          26.  Notices.\n               \n               Any notice given to a Party shall be in writing and shall be\ndeemed to have been given when delivered personally or sent by certified or\nregistered mail, postage prepaid, return receipt requested, duly addressed to\nthe Party concerned at the address indicated below or to such changed address as\nsuch Party may subsequently give such notice of:\n\n               If to the Company:       Kmart Corporation\n                                        3100 West Big Beaver Road\n                                        Troy, MI 48084-3163 \n\n                                        Attention: General Counsel\n\n               If to the Executive:     Charles C. Conaway \n                                        15 Signal Ridge Way\n                                        East Greenwich, RI 02818\n\n           27. Withholding.\n\n               All amounts required to be paid by the Company shall be subject\nto reduction in order to comply with applicable Federal, state and local tax\nwithholding requirements.\n\n           28. Headings.                   \n                 \n               The headings of the sections contained in this Agreement are for\nconvenience only and shall not be deemed to control or affect the meaning or\nconstruction of any provision of this Agreement.\n\n  \n\n                                     21\n\n\n   22\n\n\n\n\n           29.  Counterparts.\n               \n\n                This Agreement may be executed in two or more counterparts.\n\n\n\n                IN WITNESS WHEREOF, the undersigned have executed this\n Agreement on the dates provided below.\n\n\n                                     KMART CORPORATION\n\n\n\n                                     By: \/s\/ Warren F. Cooper\n                                        ------------------------------\n                                        Warren F. Cooper\n\n                                     May 25, 2000\n\n\n\n\n\n                                     EXECUTIVE\n\n\n                                     \/s\/ Charles C. Conaway\n                                     ---------------------------------   \n                                     Charles C. Conaway   \n\n\n                                     May 30, 2000\n\n\n\n\n\n\n\n                                       22\n\n\n   23\n\n\n\n\n                                                                       EXHIBIT A\n\n\n                             COVENANT NOT TO SUE AND\n                     FULL AND COMPLETE RELEASE OF LIABILITY\n\n1.  I, Charles C. Conaway (hereinafter referred to as the \"Executive\") in\n    exchange for the consideration contained in paragraph 2, does hereby release\n    and forever discharge Kmart Corporation and any related or affiliated\n    companies or divisions or their current or former directors, officers,\n    employees, or agents (hereinafter referred to as \"Kmart\") from any and all\n    actions, causes of action, suits, controversies, claims and demands\n    whatsoever, for or by reason of any matter, cause or thing whatsoever,\n    whether known or unknown including, but not limited to, all claims arising\n    under or in connection with the Michigan Elliott-Larsen Civil Rights Act, as\n    amended, Michigan Whistle Blowers' Protection Act, as amended, the Michigan\n    Persons With Disabilities Civil Rights Act, as amended, Age Discrimination\n    in Employment Act of 1967, as amended, Americans With Disabilities Act of\n    1990, as amended, Title VII of the Civil Rights Act of 1964, as amended,\n    Civil Rights Act of 1991, as amended, Employee Retirement Income Security\n    Act of 1974, as amended, Older Workers Benefit Protection Act of 1990, as\n    amended, the Fair Labor Standards Act, as amended, the Family &amp; Medical\n    Leave Act of 1993, as amended, the common law of the State of Michigan, for\n    tort, breach of express or implied employment contract, wrongful discharge,\n    intentional infliction of emotional distress, and defamation or injuries\n    incurred on the job or incurred as a result of loss of employment. This\n    Covenant Not To Sue and Full and Complete Release of Liability shall not\n    apply to any claim for benefits which may be due the Executive under the\n    Employment Agreement (as defined in paragraph 2 below) or any benefit plan\n    of Kmart which provides benefits after termination of employment. The\n    Executive represents that he has not filed against Kmart any complaints,\n    charges, or lawsuits arising out of his employment, or any other matter\n    arising on or prior to the date of this Covenant Not To Sue and Full and\n    Complete Release of Liability. The Executive covenants and agrees that he\n    will not seek recovery against Kmart arising out of any of the matters set\n    forth in this paragraph.\n\n2.  The Executive agrees to accept and Kmart agrees to provide the following   \n    consideration: All rights and benefits of the Executive upon termination of\n    employment under the Employment Agreement between Kmart and the Executive, \n    as in effect on the date hereof (the \"Employment Agreement\").\n\n3.  The Executive agrees that the acts done and evidenced hereby, and the\n    release granted hereunder, are done and granted to compromise any doubtful\n    and disputed claims and to avoid litigation, and are not an admission of\n    liability on the part of Kmart, by whom any liability is expressly denied.\n\n4.  The Executive acknowledges that he has no seniority, recall, reinstatement,\n    or rehire rights with Kmart in any capacity. The Executive also acknowledges\n    that, except as set forth herein and in the Employment Agreement, he is not\n    entitled to any compensation from Kmart.   \n\n\n   24\n\n\n\n\n5.  The Executive agrees that he will honor the restrictive covenants concerning\n    noncompetition, nonsolicitation and nondisclosure set forth in the\n    Employment Agreement.\n\n6.  The Executive agrees that the terms of this covenant not to sue and full and\n    Complete Release of Liability will not be made public and will not be\n    disclosed to anyone, unless compelled by law.\n\n7.  If any provision or paragraph of this Covenant Not To Sue and Full and\n    Complete Release of Liability is ever determined not enforceable,\n    the remaining provisions and paragraphs shall remain in full force and\n    effect.\n\n8.  The Executive acknowledges that he has been given 21 days within which to\n    consider this Covenant Not To Sue and Full and Complete Release of Liability\n    and that he has 7 days following his execution to revoke his signature. If\n    The Executive revokes his consent hereto prior to the expiration of such\n    7-day period, the Covenant Not To Sue and Full and Complete Release of\n    Liability shall not be effective, and Kmart shall have no obligations to\n    provide the Executive with the consideration set forth in paragraph 2 above.\n\n9.  This Covenant Not To Sue and Full and Complete Release of Liability\n    constitutes the entire agreement between The Executive and Kmart and\n    there are no oral or written agreements, understandings, or representations\n    that vary from the terms of this Covenant Not To Sue and Full and Complete\n    Release of Liability.\n\n10. The Executive acknowledges that this Covenant Not To Sue and Full and\n    Complete Release of Liability will be governed by and construed and enforced\n    in accordance with the internal laws of the State of Michigan. If a dispute\n    arises concerning any provisions of this Covenant Not To Sue and Full and\n    Complete Release of Liability, it shall be resolved by arbitration in Troy,\n    Michigan in accordance with the rules of the American Arbitration\n    Association.\n\n11. Nothing in this Covenant Not To Sue and Full and Complete Release of \n    Liability shall impair any indemnification rights The Executive may have as\n    an officer of Kmart.\n\n12. THE EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS COVENANT NOT TO SUE AND\n    FULL AND COMPLETE RELEASE OF LIABILITY, THAT HE HAS BEEN PROVIDED 21 DAYS TO\n    CONSIDER THIS COVENANT NOT TO SUE AND FULL AND COMPLETE RELEASE OF\n    LIABILITY, THAT HE HAS BEEN ADVISED THAT HE HAS 7 DAYS TO REVOKE HIS\n    SIGNATURE, THAT HE HAS BEEN ADVISED THAT HE SHOULD CONSULT WITH AN ATTORNEY\n    BEFORE HE EXECUTES THIS COVENANT NOT TO SUE AND FULL AND COMPLETE RELEASE\n    OF LIABILITY, AND THAT HE UNDERSTANDS ALL OF ITS TERMS AND EXECUTES IT\n    VOLUNTARILY\n\n                                       2\n\n\n\n   25\n\n\n\n\n                                                                                \n\nAND WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND THE CONSEQUENCES THEREOF.\n\n\n\n                                             -----------------------------------\n                                             Charles C. Conaway\n\n\n\n\n\n\n\n                                       3\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":[9539,9544],"class_list":["post-39301","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__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39301","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=39301"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39301"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39301"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}