Exhibit 10.18
FIRST AMENDMENT
TO THE
SEARS HOLDINGS
CORPORATION
2007 EXECUTIVE LONG-TERM
INCENTIVE PROGRAM (LTIP)
WHEREAS , Sears Holdings Corporation
(“Company”) maintains the Sears Holdings Corporation
2007 Executive Long Term Incentive Plan (“LTIP”), which
is established under, and constitutes a part of, the Sears Holdings
Corporation Umbrella Incentive Program (the “UIP”),
which plan is also maintained by the Company;
WHEREAS , the UIP provides that the Compensation
Committee of the Board of Directors of the Company (the
“Committee”) may make an Award under the UIP to an
Eligible Employee (as defined in the UIP), or from time to time may
establish under the UIP annual and long term incentive plans for
specific performance periods for specified groups of Eligible
Employees, and make Awards under such plans, consistent with the
terms of the UIP;
WHEREAS , Section 3.1 of the UIP, as amended by the
First Amendment thereto, provides that an Award granted under the
UIP may be in the form of a “Cash Incentive Award” or a
“Stock Award.” A Cash Incentive Award is a grant of a
right to receive a payment of cash (or in the discretion of the
Committee, shares of Stock (as defined in the LTIP having a Fair
Market Value (as defined in the LTIP, as of the date of payment,
equivalent to the cash otherwise payable ) that is contingent upon
the achievement of performance goals for the applicable performance
period, as established by the Committee; Section 3.1 provides
that a Stock Award is a grant of shares of Stock, which grant shall
be subject to a substantial risk of forfeiture or other
restrictions that will lapse upon the achievement of the
performance goals for the applicable performance period, as
established by the Committee;
WHEREAS , Section 3.1 of the LTIP provides for the
issuance of “Target Incentive Awards” that consist of
“Stock Awards” as defined under the First Amendment to
the UIP and the Committee has granted Target Incentive Awards under
the LTIP;
WHEREAS , the Committee has reserved under the LTIP, the
authority to amend the LTIP and the terms of any Award thereunder;
and
WHEREAS , the Committee, by a resolution dated
March 12, 2009, approved this amendment and the delegation of
authority to finalize and execute this First Amendment to the
Senior Vice President, Human Resources, General Counsel and
Corporate Secretary.
NOW, THEREFORE
, pursuant to the authority reserved
to the Committee under Section 8 of the LTIP and delegated as
described immediately above, the LTIP is hereby amended in the
following respects, effective as of March 12, 2009
(“Effective Date”):
1. Section 1 is amended
by adding a new Section 1.3 to the LTIP to read as
follows:
“1.3. Changes to
Awards . As of the Effective Date of the First Amendment to
the LTIP, each Award previously granted under the LTIP (referred to
as an “original Stock Award”) shall be converted from a
Stock Award to a Target Cash Incentive
First
Amendment
Award or Cash Incentive Award, as
the context may require, and as described in Section 3.1,
below, as amended by the First Amendment to the LTIP (a
“substituted Award”), which shall be satisfied through
cash payments, subject to Section 6.6, as amended by the First
Amendment. Each such Target Cash Incentive Award shall consist of a
number of “Units” (as defined in Section 3.1
below) equal to the number of shares of Stock covered by the
original Stock Award to which it corresponds. “Stock”
shall refer to the Company’s common stock. It is intended
that the amount distributed, if any, in connection with a
substituted Award shall be identical to the amount, if any, that
would have been distributed under the corresponding original Stock
Award had the First Amendment not been adopted, provided that such
substituted Award shall be satisfied by distribution in the form of
cash payments, subject to Section 6.6. For all purposes of the
LTIP, including without limitation those of Section 3.1, the
date of grant of each such substituted Award shall be deemed to be
the date of grant of the original Stock Award to which it
corresponds. It is intended that the Performance Period, Target
LTIP EBITDA, the Award Multiple, the limitations on individual
Awards, and the definition of EBITDA and all other economic terms
and conditions of the LTIP remain identical for substituted Awards
as for the original Stock Awards. Each outstanding original Stock
Award shall forfeit in its entirety as of the Effective Date of the
First Amendment and each Award Agreement entered into with respect
to a Stock Award shall be amended to reflect the terms of the First
Amendment.”
2. Section 3 is hereby
amended as follows:
(a) To add a new sentence at the end
of the introductory text of Section 3.1 (immediately prior to
subsection (a)) to read as follows:
“Notwithstanding the foregoing
as of the Effective Date of the First Amendment to the LTIP, the
Target Incentive Awards referred to herein shall be known as Target
Cash Incentive Awards.”
(b) Subsections (a) and
(b) are hereby deleted in their entirety and new subsections
(a) and (b) are inserted, as of the Effective Date of the
First Amendment, to the LTIP to read as follows:
“(a) A “Target Cash
Incentive Award” shall consist of a grant of a specified
number of “Units” (as defined herein) assigned to a
Participant, and shall constitute a commitment by the Company to
distribute, at the time specified in, and in accordance with the
provisions of, Section 4 below, as applicable, an amount equal
to (i) the number of the Participant’s Units,
multiplied by (ii) the applicable Award Multiple set
forth in Section 3.4, multiplied by (iii) the Fair
Market Value of a share of Stock on the business day immediately
preceding the date of distribution or, if the Stock is not traded
on that date, on the next preceding date on which the Stock was
traded, subject to approval of the final Award amount by the
Committee and to the provisions of Section 6.3 (the
“Cash Incentive Award”). The number of Units granted to
a Participant under a Target Cash Incentive Award shall be the
quotient of (1) and (2), where (1) is an amount equal to
two times an assigned percentage of the Participant’s rate of
pay at the time that the Award is granted, and (2) is the Fair
Market Value of a share of Stock as of the date of
grant.
-2-
First
Amendment
(b) A “Cash Incentive
Award” shall generally be satisfied by a distribution in cash
to the Participant, provided, however, that, at the discretion of
the Committee, the Company may elect, by such deadline as specified
under uniform and nondiscriminatory rules established by the
Committee, to satisfy such Cash I
