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EXHIBIT 10 J
Dear:
This letter will confirm our understanding concerning your employment with
Kmart Corporation (the "Company").
1. If your employment with the Company is terminated by the Company other than
for Cause or Disability or if you terminate your employment with the Company
for Good Reason, the Company will pay to you:
(a) Your base salary through the month during which termination
occurred, plus any other amount due you at the time of
termination under any bonus plan of the Company; and
(b) Monthly severance payments equal to (i) your monthly base salary
at the time of termination, plus (ii) 1/12th of the "on plan"
bonus amount targeted for you for the fiscal year in which
termination occurred.
Such monthly severance payments shall commence in the month following
termination (to be paid on or about the 15th day of the month) and shall
continue for twelve months. Provided, however, that you agree to make
reasonable efforts to seek (and to immediately notify the Company of) other
employment, and to the extent you receive compensation from other employment,
the severance payments provided herein shall be correspondingly reduced.
No payments shall be due if your employment with the Company is terminated
because of your retirement or death or is terminated by the Company for Cause
or Disability or by you other than for Good Reason (except for any benefits
which may be due you in normal course under any employee benefit plan of the
Company which provides benefits after termination of employment).
All payments hereunder shall be subject to applicable withholding and
deductions.
2. Termination by the Company for "Cause" means termination based on (i)
conduct which is a material violation of Company policy or which is fraudulent
or unlawful or which materially interferes with your ability to perform your
duties, (ii) misconduct which damages or injures the Company or substantially
damages the Company's reputation, or (iii) gross negligence in the performance
of, or wilful failure to perform, your duties and responsibilities.
3. Termination by the Company for "Disability" means termination based on
inability to perform your duties and responsibilities by reason of illness or
incapacity for a total of 180 days in any twelve-month period.
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4. Termination by you for "Good Reason" means termination based on the
occurrence without your express consent of any of the following: (i) a
significant diminuition by the Company of your role with the Company or a
significant detrimental change in the nature and/or scope of your status with
the Company, other than for Cause or Disability or (ii) a reduction in your
base salary, other than for Cause or Disability and other than as part of an
across-the-board salary reduction generally imposed on executives of the
Company.
5. The severance payments hereunder may not be transferred, assigned or
encumbered in any manner, either voluntarily or involuntarily. In the event of
your death, any payments then or thereafter due hereunder will be made to your
estate.
6. The payments provided hereunder shall constitute the exclusive payments due
you from, and the exclusive obligation of, the Company in the event of any
termination of your employment, except for any benefits which may be due you in
normal course under any employee benefit plan of the Company which provides
benefits after termination of employment and except as provided in paragraph 10
hereof.
The obligation to make the payments hereunder is conditioned upon your
execution and delivery to the Company of a release, in form satisfactory to the
Company, of any claims you may have as a result of your employment or
termination of employment under any federal, state or local law, excluding any
claim for benefits which may be due you in normal course under any employee
benefit plan of the Company which provides benefits after termination of
employment. The obligation to make the payments hereunder is further
conditioned upon the terms set forth in paragraph 7 hereof.
7. You agree that any right to receive severance payments hereunder will cease
if during the one-year period following your termination of employment you
directly or indirectly become an employee, director, advisor of, or otherwise
affiliated with, any other entity or enterprise whose business is in
competition with the business of the Company.
8. Notwithstanding anything herein to the contrary, your employment with the
Company is terminable at will with or without cause; provided, however, that a
termination of your employment shall be governed in accordance with the terms
hereof except as provided in paragraph 10.
9. If a dispute arises concerning any provisions of this agreement, it shall
be resolved by arbitration in Troy, Michigan in accordance with the rules of
the American Arbitration Association. Judgment on the award rendered may be
entered in any court having jurisdiction and enforced accordingly.
10. This agreement sets forth the entire understanding with respect to the
subject matter hereof and supersedes all prior agreements, written or oral or
express or implied, between you and the Company as to such subject matter.
Provided, however, that this agreement shall not supersede
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the agreement dated ************* between you and the Company concerning
severance benefits which may be payable in the event of a change in control of
the Company ("Change in Control Agreement"). Such Change in Control Agreement
shall, during its term, govern in the event of a termination of your employment
following a change in control of the Company (as defined therein). In no event
are you to receive severance benefits under both this agreement and the Change
in Control Agreement in the event of a termination of employment. This
agreement may not be amended, nor may any provision hereof be modified or
waived, except by an instrument in writing duly signed by you and the Company.
11. If any provision of this agreement, or any application thereof to any
circumstances, is invalid, in whole or in part, such provision or application
shall to that extent be severable and shall not affect other provisions or
applications of this agreement.
Please indicate your agreement by signing below and retain one copy for your
records.
Sincerely,
KMART CORPORATION
By:__________________________
Agreed:
_______________________
Date:__________________