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To: pallmer who wrote (5031)	1/22/2003 10:12:35 AM
From: pallmer	Respond to of 29601

-- Kmart CEO to Get $1M Post-Bankrupt Bonus -- CHICAGO (Reuters) - Kmart Corp. <KMRTQ.PK> will pay Julian Day, its newly named chief executive, a base salary of $1 million plus a $1 million bonus when it exits bankruptcy, the retailer said in a regulatory filing on Wednesday. Kmart said former CEO and current Chairman James Adamson will receive $3.6 million when he steps down, as planned, after the company emerges from bankruptcy. Day's employment contract, which runs through Jan. 31, 2006, includes perks such as use of a company jet and a 10-year option for 1.5 percent of the equity in the reorganized company once it exits bankruptcy, Kmart said in a filing with the U.S. Securities and Exchange Commission. Kmart, based in Troy, Michigan, filed for Chapter 11 bankruptcy protection a year ago, battered by fierce competition in a discount sector dominated by Wal-Mart Stores Inc. <WMT.N>. It hopes to emerge from bankruptcy by the end of April and is expected to file its plan of reorganization with the bankruptcy court in Chicago by Friday. Kmart named Day to the additional post of CEO on Sunday, replacing Adamson, a turnaround specialist who will continue to serve as chairman through the final stages of Kmart's reorganization. Day's pay package calls for a bonus of up to four times his base salary if Kmart beats performance targets that will be spelled out in its business plan. For the current year, any bonus will be at the discretion of a post-emergence compensation committee. For fiscal 2004, the performance target is $400 million in earnings before interest, taxes, depreciation and amortization, Kmart said in the filing. If Kmart hits 75 percent of that target, Day would receive a bonus worth half of his salary. If it reaches that goal, the bonus grows to 100 percent of base salary, and if it doubles that mark, the bonus would by 200 percent. If it reaches 300 percent or more of the earnings target, the bonus would be four times annual salary. Day's contract allows for use of company aircraft for business purposes and personal use if necessary for "security," according to the SEC filing. (C) Reuters 2003. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world. Symbols: US;KMRT US;KM US;WMT CA;WMT 22-Jan-2003 15:07:15 GMT Source RTRS - Reuters News