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EXHIBIT 28(f)
NOTICE OF RETENTION BONUS STOCK AWARD
GRANTED MAY 30, 2000
("Grant Notice")
To Charles C. Conaway
Pursuant to Section 10(e) of the employment agreement dated May 30, 2000 between
Kmart Corporation (the "Company") and you (the "Employment Agreement"), you are
hereby granted the following award:
1. Grant of Award. The Company agrees to issue the following shares of the
Company's common stock (the "Stock"), upon each of the first through the fifth
annual anniversary dates of the date of grant (each, an "Anniversary Date"),
subject to the terms and conditions set forth herein:
$1,000,000 in Stock (valued at the fair market value on each
Anniversary Date, using the closing price of the Stock on the New York
Stock Exchange on the trading date immediately preceding each
Anniversary Date).
2. Issuance of Stock. As soon as practicable, following each Anniversary Date on
which you are employed by the Company, the Company will cause to be issued the
shares of Stock described in Paragraph 1 above. Subject to the terms and
conditions set forth herein, these shares shall be issued to you free of all
restriction.
3. Possible Offset and Reduction. This award of Stock is subject to the offset
and reduction provisions set forth in Section 10(g) of the Employment Agreement.
4. Change in Control. In the event of a Change in Control (as defined in the
Employment Agreement), except as otherwise provided herein, any unissued shares
of the Stock described in Paragraph 1 shall immediately become vested in full
and shall be issued to you free of all restriction as soon as practicable.
5. SEC Registration. As soon as practicable, the Company shall file a
registration statement on Form S-8 (or any successor form) with the SEC under
the Securities Act of 1933 covering the issuance of the shares of Stock issuable
hereunder and shall maintain the effectiveness of such registration statement
until you sell all of the shares of Stock issued hereunder or legal counsel
advises that you are free to sell such Stock without registration.
6. Withholding Tax. Notwithstanding anything to the contrary in this Grant
Notice, the obligations of the Company to issue
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shares of Stock hereunder shall be contingent upon your satisfaction of all
applicable withholding tax requirements. Such issuance shall be subject to the
reduction in the number of shares, if necessary, to comply with applicable
withholding tax obligations.
You may elect, in such form and at such time as the Company may
prescribe, to satisfy any tax required to be withheld under applicable federal,
state or local law upon issuance of the stock, in whole or in part, by either
having the Company withhold whole shares of Kmart Corporation Common Stock or by
delivering other whole shares of Kmart Corporation Common Stock owned by you for
at least six months, having a Fair Market Value (as such Capitalized Term is
defined in the Kmart Corporation 1997 Long-Term Equity Compensation Plan) equal
to the amount withheld.
7. General. The validity and construction of this Grant Notice shall be governed
by the Laws of the State of Michigan without reference to the principles of
conflicts of laws.
This grant is not made pursuant to the Kmart Corporation 1997 Long-Term
Equity Compensation Plan, however, except as expressly set forth herein or in
the Employment Agreement, this Grant Notice shall be governed by the terms of
such Plan; provided, however, that Section 13.3 of the Plan shall be expressly
disregarded for purposes of this Grant Notice. If there is any conflict between
such Plan and this Grant Notice, this Grant Notice shall govern. If there is any
conflict between the Employment Agreement and either the Grant Notice or the
Plan (including, but not limited to Section 13.3), the Employment Agreement
shall govern.
The obligation of the Company to issue and deliver shares of Stock
under this grant is specifically subject to all applicable laws, rules and
regulations and required governmental approvals. The Company shall use
reasonable best efforts to obtain such approvals as promptly as practicable.
Kmart Corporation
By: /s/ N.W. LaDuke
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Accepted and agreed:
/s/ Charles C. Conaway
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Charles C. Conaway
