Kohl's 2012 Annual Report Download - page 95

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4
(e) Termination by Resignation. Subject to Section 3.2, below, Executive's
employment and the Company's obligations under this Agreement shall terminate automatically, effective
immediately upon Executive's provision of written notice to the Company of Executive's resignation from
employment with the Company or at such other time as may be mutually agreed between the Parties
following the provision of such notice.
(f) Separation of Service. A termination of employment under this Agreement shall
only occur to the extent Executive has a “separation from service” from Company in accordance with
Section 409A of the Code. Under Section 409A, a “separation from service” occurs when Executive and
the Company reasonably anticipate that no further services will be performed by Executive after a certain
date or that the level of bona fide services Executive would perform after such date (whether as an
employee or as a consultant) would permanently decrease to no more than 20 percent of the average level
of bona fide services performed by Executive over the immediately preceding 36-month period.
3.2 Rights Upon Termination.
(a) Termination By Company for Cause, By Executive Other Than For Good Reason or
By Executive's Non-Renewal. If Executive's employment is terminated by the Company pursuant to
Section 3.1(b), above, by Executive pursuant to Section 3.1(e), above, or due to non-renewal by Executive
pursuant to Section 1.1, above, Executive shall have no further rights against the Company hereunder,
except for the right to receive (i) any unpaid Base Salary with respect to the period prior to the effective
date of termination together with payment of any vacation that Executive has accrued but not used
through the date of termination; (ii) reimbursement of expenses to which Executive is entitled
under Section 2.2, above; and (iii) Executive's unpaid bonus, if any, attributable to any complete fiscal
year of the Company ended before the date of termination (in the aggregate, the “Accrued Benefits”).
Any such bonus payment shall be made at the same time as any such bonus is paid to other similarly
situated executives of the Company. Furthermore, under this Section 3.2(a), vesting of any Company
stock options granted to Executive ceases on the effective date of termination, and any unvested stock
options lapse and are forfeited immediately upon the effective date of termination.
(b) Termination By Company's Non-Renewal or Due to Executive's Death. If
Executive's employment is terminated due to non-renewal by the Company pursuant to Section 1.1,
above, Executive shall have no further rights against the Company hereunder, except for the right to
receive (i) Accrued Benefits; (ii) Health Insurance Continuation (defined below); and (iii) the Pro Rata
Bonus (as defined in Section 3.2(d)(i), below). If Executive's employment is terminated due to
Executive's death pursuant to Section 3.1(d), above, Executive shall have no further rights against the
Company hereunder, except for the right to receive (i) Accrued Benefits; (ii) Health Insurance
Continuation (defined below); and (iii) a share of any bonus attributable to the fiscal year of the Company
during which the effective date of termination occurs determined as follows: the product of (x) the
average bonuses paid or payable, including any amounts that were deferred in respect of the three (3)
fiscal years immediately preceding the fiscal year in which the effective date of termination occurs and (y)
a fraction, the numerator of which is the number of days completed in the fiscal year in which the
effective date of termination occurs through the effective date of termination and the denominator of
which is three hundred sixty-five (365) (the “Historic Pro Rata Bonus”). The Pro Rata Bonus or the
Historic Pro Rata Bonus shall be paid at the same time as any such bonuses are paid to other similarly
situated executives of the Company. Upon termination due to either non-renewal by the Company or the
Executive's death, Executive shall also be entitled to a severance payment equal to fifty percent (50%) of
Executive's Base Salary payable for one (1) year following the effective date of termination pursuant to
normal payroll practices. Furthermore, under this Section 3.2(b), vesting of any Company stock options
granted to Executive shall cease on the effective date of termination, and any unvested stock options shall