Exhibit 10.1
KOHL’S
CORPORATION
2003 LONG–TERM COMPENSATION
PLAN
Amended and Restated Effective as
of August 12, 2008
1. Purpose
The purpose of the Plan is to allow
the Company to attract and retain key employees and directors of
the Company and its subsidiaries and to provide motivation to these
individuals to put forth maximum efforts toward the continued
growth, profitability, and success of the Company and its
Subsidiaries by providing incentives through the ownership and
performance of the Company’s Common Stock. Toward this
objective, the Committee may grant various equity-based Awards to
Participants on the terms and subject to the conditions set forth
in the Plan. These Awards will provide Participants with a
proprietary interest in the growth and performance of the
Company.
2. Definitions
2.1. “Award” means any
form of stock option, stock appreciation right, Stock Award,
performance unit, performance shares or other incentive award
granted under the Plan, whether singly, in combination, or in
tandem, to a Participant by the Committee pursuant to such terms,
conditions, restrictions, and/or limitations, if any, as the
Committee may establish by the Award Agreement or
otherwise.
2.2. “Award Agreement”
means a written agreement between the Company and a Participant
that establishes the terms, conditions, restrictions, and/or
limitations applicable to an Award in addition to those established
by this Plan and by the Committee’s exercise of its
administrative powers.
2.3. “Board” means the
Board of Directors of the Company.
2.4. “Cause” means
termination of employment or service as a director upon:
(1) a Participant’s repeated
failure to perform his or her duties in a competent, diligent and
satisfactory manner as determined by the Company’s Chief
Executive Officer in his reasonable judgment,
(2) insubordination, (3) a Participant’s commission
of any material act of dishonesty or disloyalty involving the
Company or a Subsidiary, (4) a Participant’s chronic
absence from work other than by reason of a serious health
condition, (5) a Participant’s commission of a crime
which substantially relates to the circumstances of his or her
position with the Company or a Subsidiary or which has material
adverse effect on the Company or a Subsidiary, or (6) the
willful engaging by a Participant in conduct which is demonstrably
and materially injurious to the Company or a Subsidiary.
2.5. “Change of Control”
shall have the meaning set forth in Paragraph 18 below.
2.6. “Code” means the
Internal Revenue Code of 1986, as amended from time to
time.
2.7. “Committee” means
the Compensation Committee of the Board, or such other committee of
directors designated by the Board, authorized to administer the
Plan under Paragraph 3 hereof. Membership of the Committee shall
consist of not less than two (2) independent directors and
shall otherwise comply with the requirements of the rules and
regulations of the Securities and Exchange Commission, the stock
exchange on which the Company’s Common Stock is traded, Rule
16b-3 of the Exchange Act and Code Section 162(m).
2.8. “Common Stock”
means $.01 par value common shares of the Company.
2.9. “Company” means
Kohl’s Corporation, a Wisconsin corporation.
2.10. “Disability” means
the inability of a Participant to perform his or her normal duties
as a full-time employee of the Company or a Subsidiary for a
continuous period of ninety (90) days by reason of physical or
mental illness or incapacity. If there is any dispute as to whether
the termination of the Participant’s employment
was due to his or her physical or mental illness
or incapacity, such question shall be submitted to a licensed
physician for the purpose of making such determination. An
examination of the Participant shall be made within thirty
(30) days after written notice by the Committee or the
Participant by a licensed physician selected by the Committee. The
Participant shall submit to such examination and provide such
information as such physician may request and the determination of
such physician as to the question of the Participant’s
physical or mental condition shall be binding and conclusive on all
parties concerned for purposes of this Plan. The disability shall
be deemed to be continuing unless the Participant performs his or
her regular duties for his or her employer for a continuous period
of ninety (90) days.
2.11. “Exchange Act”
means the Securities and Exchange Act of 1934, as
amended.
2.12. “Market Value” of
Common Stock shall mean the closing sale price of Common Stock on
the New York Stock Exchange – Composite Transactions, the
American Stock Exchange – Composite Transactions or other
national or regional exchange, or the mean of the closing bid and
asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers Automatic Quotation
System (“NASDAQ”).
2.13. “Participant”
means an employee or member of the Board of Directors of the
Company or a Subsidiary chosen by the Committee to receive an Award
under this Plan.
2.14. “Plan” means the
Kohl’s Corporation 2003 Long –Term Compensation Plan,
as amended.
2.15. “Retirement” means
a Participant’s termination of employment or service as a
director other than for Cause after the later to occur of
(a) attainment of age sixty (60); or (b) service with the
Company and/or a Subsidiary for a continuous period of ten
(10) years.
2.16. “Rule 16b-3” means
Rule 16b-3 promulgated by the Securities and Exchange Commission
under Section 16 of the Exchange Act, as it may be amended
from time to time, and any successor rule.
2.17. “Stock Award”
means an award granted pursuant to Paragraph 10 hereof in the form
of shares of Common Stock, restricted shares of Common Stock,
and/or Units of Common Stock.
2.18. “Subsidiary” means
a corporation or other business entity in which the Company
directly or indirectly has a significant ownership interest, as
determined by the Committee, in the Committee’s sole
discretion.
2.19. “Unit” means a
bookkeeping entry used by the Company to record and account for the
grant of the following Awards until such time as the Award is paid,
cancelled, forfeited or terminated, as the case may be: Units of
Common Stock, performance units, and performance shares which are
expressed in terms of Units of Common Stock.
3. Administration
The Plan shall be administered by
the Committee. Subject to the terms of the Plan, the Committee
shall have the authority to: (a) interpret the Plan;
(b) establish such rules and regulations as it deems necessary
for the proper operation and administration of the Plan;
(c) select Participants to receive Awards under the Plan;
(d) determine the form of an Award, whether a stock option,
stock appreciation right, Stock Award, performance unit,
performance share, or other incentive award established by the
Committee in accordance with the Plan, the number of shares or
Units subject to the Award, all the terms, conditions, restrictions
and/or limitations, if any, of an Award, including the time and
conditions of exercise or vesting, and the terms of any Award
Agreement; (e) determine whether Awards will be granted
singly, in combination or in tandem; (f) determine the
performance goals, if any, which will be applicable to the Award;
(g) grant waivers of Plan terms, conditions, restrictions, and
limitations; (h) accelerate the vesting, exercise, or payment
of an Award or the performance period of an Award when such action
or actions would be in the best interest of the Company; and
(i) take any and all other action it deems necessary or
advisable for the proper operation or administration of the Plan.
In addition, in order to enable Participants who are foreign
nationals or are employed outside the United States or both to
receive Awards under the Plan, the Committee may adopt such
amendments, procedures, regulations, subplans and the like as are
necessary or advisable, in the opinion of the Committee, to
effectuate the purposes of the Plan.
2
Subject to Section 23, the
Committee shall also have the authority to grant Awards in
replacement of Awards previously granted under this Plan or any
other executive compensation plan of the Company or a
Subsidiary.
All determinations of the Committee
shall be made by a majority of its members, and its determinations
shall be final, binding and conclusive on the Company, Participants
and any persons claiming an interest through a Participant. The
Committee, in its discretion, may delegate its authority and duties
under the Plan to the Chief Executive Officer and/or to other
senior officers of the Company under such conditions and/or
limitations as the Committee may establish; provided, however, that
only the Committee may select and grant Awards to Participants who
are subject to Section 16 of the Exchange Act.
4. Eligibility
Any employee or member of the Board
of Directors of the Company or a Subsidiary chosen by the Committee
shall be eligible to receive an Award.
5. Awards
Available
The aggregate number of shares of
Common Stock which may be issued under the Plan pursuant to the
exercise or grant of Awards shall not exceed 31,000,000 shares of
Common Stock, subject to adjustment as provided in Paragraph 20
hereof, all of which may be incentive stock options. Shares of
Common Stock issued hereunder may be treasury shares or authorized
but unissued shares, or a combination of the two. In no event
(a) shall the aggregate number of shares subject to Awards
granted under the Plan that are not stock options or stock
appreciation rights, as set forth in Paragraphs 8 and 9 hereof
respectively, exceed 3,000,000 shares (subject to adjustment as
provided in Paragraph 20 hereof), (b) shall any Participant be
eligible to receive options or SARs, as defined in Paragraph 9,
below, for more than 1,500,000 shares during any twelve-month
period (subject to adjustment as provided in Paragraph 20 hereof),
(c) shall any one Participant be eligible to receive an
aggregate amount of Awards, other than options, restricted shares
of Common Stock which vest based on the continued performance of
services (i.e., time-based vested restricted stock), SARs or
performance units, in an amount in excess of $2,500,000 (valuing
the shares of Common Stock at their Market Value and other Awards
at their fair market value as determined by the Committee in its
sole discretion, on the business day immediately preceding the date
of grant) during any twelve-month period or (d) shall any one
Participant be eligible to receive an aggregate amount of Awards of
performance units during any fiscal year with a maximum cash payout
in excess of $2,500,000. For purposes of determining the maximum
number of shares available for issuance under the Plan, any shares
which have been issued as Stock Awards or performance shares, as
set forth in Paragraph 12 hereof, which are forfeited to the
Company shall be treated, following such forfeiture, as shares
which have not been issued. Notwithstanding anything herein to the
contrary, any shares related to Awards which terminate by
expiration, forfeiture, cancellation, or otherwise without the
issuance of such shares, are settled in cash in lieu of shares, or
are exchanged with the Committee’s permission, prior to the
issuance of shares, for Awards not involving shares, shall be
available again for grant under this Plan. Shares subject to an
Award under the Plan may not again be made available for issuance
under the Plan if such shares: (x) were subject to a stock
option or a stock-settled stock appreciation right and were not
issued upon the net settlement or net exercise of such stock option
or stock appreciation right, (y) were delivered to or withheld
by the Company to pay the exercise price of a stock option or the
withholding taxes related to any Award, or (z) were
repurchased on the open market with the proceeds of a stock option
exercise.
6. Term
The Plan shall become effective as
of the date of its approval by the Company’s shareholders.
Awards shall not be granted pursuant to the Plan after
March 1, 2017.
7. Participation
The Committee shall select, from
time to time, those Participants who, in the opinion of the
Committee, can further the Plan’s purposes. Once a
Participant is so selected, the Committee shall determine the type
or types of Awards to be made to the Participant and shall
establish in the related Award Agreements the terms,
conditions,
3
restrictions and/or limitations, if any,
applicable to the Awards in addition to those set forth in this
Plan and the administrative rules and regulations issued by the
Committee. Notwithstanding the foregoing, the term of Awards
granted pursuant to the Plan before May 2, 2007 shall not
exceed fifteen (15) years, with the exception of incentive
stock options, where the term shall not exceed ten (10) years
(five (5) years in the case of a greater than 10% shareholder)
and the term of Awards granted pursuant to the Plan on or after
May 2, 2007, shall not exceed ten (10) years, with the
exception of incentive stock options, where the term shall not
exceed five (5) years in the case of a greater than 10%
shareholder.
8. Stock Options
(a) Grants . Awards
may be granted in the form of stock options. These stock options
may be incentive stock options within the meaning of
Section 422 of the Code or nonqualified stock options (i.e.,
stock options which are not incentive stock options), or a
combination of both.
(b) Terms and Conditions of
Options . An option shall be exercisable in whole or in
such installments and at such times as may be determined by the
Committee. The price at which a share of Common Stock may be
purchased upon exercise of a stock option shall be established by
the Committee, but shall be no less than 100% of the Market Value
of a share of Common Stock, as determined by the Committee, on the
date of grant. The exercise price of a stock option shall not be
reduced by the Committee other than pursuant to Paragraph 20
hereof, without the consent of the Company’s
shareholders.
(c) Restrictions Relating to
Incentive Stock Options . Stock options issued in the form
of incentive stock options shall, in addition to being subject to
all applicable terms, conditions, restrictions and/or limitations
established by the Committee, comply with Section 422 of the
Code. Further, the per share option price of an incentive stock
option shall not be less than 100% (or 110% in the case of a
greater than 10% shareholder) of the fair market value of a share
of Common Stock, as determined by the Committee, on the date of the
grant. Also, each option shall expire not later than ten years (or
five years in the case of a 10% or more shareholder) from its date
of grant. All or any portion of an option designated as an
incentive stock option which does not meet the requirements of
Section 422 of the Code, including those set forth herein,
will be treated as a nonqualified stock option.
(d) Additional Terms and
Conditions . The Committee may, by way of the Award
Agreement or otherwise, establish such other terms, conditions,
restrictions and/or limitations, if any, of any stock option Award,
provided they are not inconsistent with the Plan.
(e) Exercise Payment .
At the election of the Committee, upon exercise, the option price
of a stock option may be paid in cash, shares of Common Stock
either directly or by attestation, a combination of the foregoing,
or such other consideration as the Committee may deem appropriate.
The Committee shall establish appropriate methods for accepting
Common Stock and may impose such conditions as it deems appropriate
on the use of such Common Stock to exercise a stock
option.
9. Stock Appreciation
Rights
(a) Grants . Awards
may be granted in the form of stock appreciation rights
(“SARs”). A SAR may be granted in tandem with all or a
portion of a related stock option under the Plan (a “Tandem
SAR”), or may be granted separately (a “Freestanding
SAR”). A Tandem SAR may be granted either at the time of the
grant of the related stock option or any time thereafter during the
term of the stock option. SARs shall entitle the recipient to
receive a payment equal to the appreciation in Market Value of a
stated number of shares of Common Stock from the exercise price to
the Market Value on the date of exercise. In the case of SARs
granted in tandem with stock options granted prior to the grant of
such SARs, the appreciation in value is from the option price of
such related stock option to the Market Value on the date of
exercise.
(b) Terms and Conditions of
Tandem SARs . A Tandem SAR shall be exercisable to the
extent, and only to the extent, that the related stock option is
exercisable, and the “exercise price” of such a SAR
(the base from which the value of the SAR is measured at its
exercise) shall be the option price under the related stock option.
If a related stock option is exercised as to some or all of the
shares covered by the Award, the related Tandem SAR, if any, shall
be cancelled automatically to the extent of the number of shares
covered by the stock option exercise.
4
