EXHIBIT 10.1
BELK, INC.
Revised Executive Long Term Incentive Plan
Participation Certificate
This CERTIFICATE and the attached Exhibit A set forth the terms and conditions
under which Belk will issue shares of Belk, Inc. Class B common stock (“Stock”)
to Executive based on the extent to which Belk meets or exceeds the Performance
Goals for each Performance Period of the Revised Executive Long-Term Incentive
Plan (“LTI Plan”) as set forth in Exhibit A. Notwithstanding any provision to
the contrary, no shares will be issued under this Certificate to any Executive
who is a “covered employee” under §162(m) of the Internal Revenue Code unless
and until the shareholders of Belk approve the material terms of the performance
goals under the LTI Plan. All of the terms used in this CERTIFICATE and in
Exhibit A that begin with a capital letter are either defined in this
CERTIFICATE, in Exhibit A or in the Belk Inc. 2000 Incentive Stock Plan, which
is incorporated by reference.

     
Executive:
   
 
   
Performance Period:
   
 
   
Executive’s Number of Shares:
   
 
   
50% of available shares based on EBIT % performance;
   
50% of available shares based on Sales $performance
   
 
   
Months Eligible:
   
 
   
 
   
Performance Goals
   
 
   
          Sales Goal (mil)
   
 
   
          EBIT % Goal
   
 
   
          ROIC Goal
   
 
   
Signature Required:
   

Participant ________________________
Date ______________________________

 

--------------------------------------------------------------------------------

 

EXHIBIT A
Revised Executive Long Term Incentive Plan
§ 1. Establishment of Plan and Effective Date. This Exhibit A shall constitute
the LTI Plan as effective beginning with Belk’s 2009 fiscal year.
§ 2. Eligibility. The Committee in its discretion may designate one or more
Executives to participate in the LTI Plan for a Performance Period within the
first 90 days of such Performance Period. The Committee shall have the right in
its discretion to add or remove Executives from participation in the LTI Plan
for a given Performance Period.
§ 3. Definitions.
     3.1 Business Criteria. The term “Business Criteria” for purposes of this
Program means (1) Belk’s cumulative sales, (2) Belk’s normalized earnings before
interest and taxes, and (3) Belk’s return on invested capital.
     3.2 Committee. The term “Committee” means the Compensation Committee of the
Board of Directors of Belk, or, if all the members of such Committee fail to
satisfy the requirements to be an “outside director” under § 162(m) of the Code,
a sub-committee of such committee which consists solely of members who satisfy
such requirements.
     3.3 Delayed Issuance Date. The term “Delayed Issuance Date” means, for each
Performance Period, as soon as is practical, and in any event no later than 21/2

-2-

--------------------------------------------------------------------------------

 

months, after the end of Belk’s fiscal year that immediately follows the
Performance Period.
     3.4 Executive. The term “Executive” means, for each Performance Period, the
Belk senior executive who has been selected by the Committee in its discretion
to participate in the LTI Plan for such Performance Period.
     3.5 LTI Plan. The term “LTI Plan” means this Revised Executive Long-Term
Incentive Plan, as set forth in this Exhibit A.
     3.6 Performance Period. The term “Performance Period” means the fiscal year
for Belk that is shown opposite such term on the CERTIFICATE.
     3.7 Target Number of Shares. The term “Target Number of Shares” means the
number of shares of Stock shown opposite such term on the CERTIFICATE.
§ 4. Performance Goals.
     4.1 General. The Committee shall set forth in writing the Performance Goals
for each Participant for a Performance Period no later than 90 days after the
beginning of such Performance Period based on such Business Criteria as the
Committee deems appropriate under the circumstances. The Committee shall have
the right to use different Business Criteria for different Participants, and the
Committee shall have the right to set different Performance Goals for
Participants whose goals look to the same Business Criteria. The Business
Criteria for each Participant may be based on company-wide performance,
division-specific performance, department-specific performance, personal
performance or on any combination of such criteria. No later than 90 days after
the beginning of the Performance Period, the Committee shall

-3-

--------------------------------------------------------------------------------

 

establish the general, objective rules which the Committee will use to determine
the extent, if any, that a Participant’s Performance Goals have been met and the
specific, objective rules, if any, regarding any exceptions to the use of such
general rules. Further, in determining whether the Performance Goals for the
Performance Period have been satisfied, the Committee may look at the
performance of Belk as constituted on the first day of the Performance Period,
the last day of the Performance Period, or either such date, if there is a
material acquisition, disposition, or other unusual corporate transaction
involving Belk during such Performance Period.
     4.2 Specific Performance Goals. The Performance Goals for a Performance
Period shall be based on a Cumulative Sales Goal, an EBIT Goal, and/or a ROIC
Goal.
     4.3 Cumulative Sales Goal.
     (a) Goal and Goal Adjustments. The term “Cumulative Sales Goal” means the
cumulative sales goal for Belk for the Performance Period shown opposite such
term on the CERTIFICATE.
     (b) Shares Subject to Goal. Fifty percent (50%) of the Target Number of
Shares of Stock shall be subject to the condition that Belk reach the Cumulative
Sales Goal for the Performance Period, and Executive shall forfeit his right to
such shares for the Performance Period under this § 4.3 if Belk’s cumulative
sales for the Performance Period are less than 95% of the Cumulative Sales Goal
for such period.
     (c) Percentage of Target Number of Shares to be Issued. If Belk’s
cumulative sales for the Performance Period equal or exceed 95% of the
Cumulative Sales Goal for such period, then the percentage of the

-4-

--------------------------------------------------------------------------------

 

Target Number of Shares of Stock issuable (subject to § 5 and § 6) under this §
4.3 to Executive shall be based on the percentage of the Cumulative Sales Goal
which Belk reaches as follows:

          Percentage of Sales Goal Reached   Percentage of Target Shares
Issuable  
95%
      40%
96%
      45%
97%
      55%
98%
      67%
99%
      82%
100%
    100%
101%
    115%
102%
    127%
103%
    137%
104%
    144%
105% or higher
    150%

     4.4 EBIT Goal.
     (a) Goal and Goal Adjustments. The term “EBIT Goal” means the earnings
before interest and taxes goal as a percentage of sales (excluding leased
department sales) for Belk for the Performance Period shown opposite such term
on the CERTIFICATE.
     (b) Shares Subject to Goal. Fifty percent (50%) of the Target Number of
Shares of Stock shall be subject to the condition that Belk reach the EBIT Goal,
and Executive shall forfeit his right to such shares for the Performance Period
under this §4.4 if Belk’s earnings before interest and taxes for the Performance
Period is less than 65% of the EBIT Goal for such period.
     (c) Percentage of Target Number of Shares to be Issued. If Belk’s earnings
before interest and taxes as a percentage of sales

-5-

--------------------------------------------------------------------------------

 

(excluding leased department sales) for the Performance Period equal or exceeds
65% of the EBIT Goal for such period, then the percentage of the Target Number
of Shares of Stock issuable (subject to § 5 and § 6) under this § 4.4 to
Executive shall be based on the percentage of the EBIT Goal which Belk reaches
as follows:

          Percentage EBIT Goal Reached   Percentage of Target Shares Issuable  
Less than 65%
        0%
65% or higher but less than 90%
      20%
90%
      40%
91%
      41%
92%
      42%
93%
      44%
94%
      47%
95%
      51%
96%
      56%
97%
      63%
98%
      73%
99%
      85%
100%
    100%
101%
    114%
102%
    125%
103%
    133%
104%
    138%
105%
    142%
106%
    145%
107%
    147%
108%
    148%
109%
    149%
110% or higher
    150%

     4.5 ROIC Goal and Adjustments. The term “ROIC Goal” means the return on
invested capital goal for Belk for the Performance Period shown opposite such
term on the CERTIFICATE. If the return on invested capital for Belk for the
Performance Period is at least 95% of the ROIC Goal, the percentage of the
Target Number of Shares to be issued to a Participant for the Performance Period
shall increase by the multiplier shown

-6-

--------------------------------------------------------------------------------

 

in this § 4.5; provided, however, the multiplier in this § 4.5 shall not apply
to any shares issued pursuant to § 4.4(c) based solely on Belk achieving less
than 90% of the EBIT Goal for such Performance Period.

          Percentage of ROIC Goal   Multiplier  
95%
    101.0%
96%
    101.5%
97%
    102.0%
98%
    102.5%
99%
    103.0%
100%
    105.0%
101%
    107.0%
102%
    109.0%
103%
    111.0%
104%
    113.0%
105%
    115.0%

     4.6 Rounding and Interpolation. All percentage figures computed under this
§ 4 shall be rounded to the nearest one tenth (1/10th) of a percent, all dollar
figures computed under this § 4 shall be rounded to the nearest dollar, the
number of shares of Stock issuable under § 4.3, § 4.4 and § 4.5 shall be rounded
up to the nearest whole share and the Committee shall (wherever the Committee
deems appropriate) interpolate between the percentages shown in § 4.3, § 4.4 and
§ 4.5 to determine the number of whole shares of Stock to be issued to
Executive.
     4.7 Certification. The Committee at the end of each Performance Period
shall certify the extent, if any, to which the Performance Goals set for each
Participant for such Performance Period have been met and shall determine the
number of whole shares of Stock issuable to a Participant based on the extent,
if any, to which he or she met his or her Performance Goals. However, the
Committee shall have the right to

-7-

--------------------------------------------------------------------------------

 

reduce (but not to increase) the number of whole shares of Stock determined
under this § 4 to the extent that the Committee acting in its discretion
determines that the Performance Goals set for a Participant for a Performance
Period no longer were appropriate for such Participant at the end of such
Performance Period. If the Committee certifies that shares of Stock are issuable
to a Participant for any Performance Period, 50% of the number of shares of
Stock issuable for such Performance Period shall be issued under the Belk Inc.
2000 Incentive Stock Plan as soon as practical after such certification has been
made and in any event no later than 21/2 months after the end of the Performance
Period provided the employment requirement under § 5 is satisfied, and the
remaining 50% of the number of shares of Stock issuable for such Performance
Period) shall be issued under the Belk Inc. 2000 Incentive Stock Plan on the
Delayed Issuance Date provided the employment requirement in § 5 is satisfied.
For the first year of this LTI Plan only (Belk fiscal year 2009), the number of
shares to be issued at the end of the Performance Period based upon the extent
to which the Performance Goals have been met (not including the number of shares
to be issued on the Delayed Issuance Date) shall be increased by 50% as a
special transition award.
     4.8 Maximum Shares of Stock. The maximum number of Shares of Stock issuable
under this § 4 to Executive for a Performance Period shall be 100,000.
§ 5. Employment Requirement.
     5.1 General Rule. Executive shall forfeit Executive’s right to the issuance
of any shares of Stock pursuant to § 4.3, § 4.4 or § 4.5 if Executive fails for
any reason

-8-

--------------------------------------------------------------------------------

 

whatsoever to remain employed by Belk, a Belk Affiliate or a Belk Subsidiary
from the start of the Performance Period through the date the shares are issued
to Executive, except to the extent provided in § 5.2.
     5.2 Exceptions.
     (a) Employed After Performance Period Started. No forfeiture shall be
effected under § 5.1 if Executive becomes employed by Belk, a Belk Affiliate or
a Belk Subsidiary after the start of the Performance Period (but before the
beginning of the fourth quarter of such period) and remained so employed through
the end of the Performance Period and through the date such shares of Stock are
issued to Executive, but the number of shares of Stock issuable to Executive, if
any, shall be determined under § 5.2(e).
     (b) Death. No forfeiture shall be effected under § 5.1 if Executive’s
employment by Belk, a Belk Affiliate or a Belk Subsidiary terminates after the
start of the Performance Period and before the date shares of Stock are issued
to Executive for such Performance Period as a result of Executive’s death, but
the number of shares of Stock issuable on behalf of Executive, if any, shall be
determined under § 5.2(e) and such shares shall be issued to Executive’s estate.
     (c) Disability. No forfeiture shall be effected under § 5.1 if Executive’s
employment by Belk, a Belk Affiliate or a Belk Subsidiary Belk, is terminated
after the start of the Performance Period and before the date shares of Stock
are issued to Executive for such Performance Period

-9-

--------------------------------------------------------------------------------

 

because the Board deems that Executive is no longer able even with reasonable
accommodation to perform the essential functions of Executive’s job as a result
of a physical or mental impairment, but the number of shares of Stock issuable
to Executive, if any, shall be determined under § 5.2(e).
     (d) Retirement. No forfeiture shall be effected under § 5.1 if, after
Executive reaches age 55 and completes 10 years of service (as determined under
the Belk 401(K) Savings Plan), Executive retires or otherwise separates from
employment under circumstances which the Committee determines should be treated
as the equivalent of retirement after the start of the Performance Period and
before the date shares of Stock are issued to Executive Performance Period and
Executive for the remainder of such time period refrains from engaging in any
employment related activities which the Committee deems inconsistent with
Executive’s status as a retired employee of Belk, a Belk Affiliate or a Belk
Subsidiary; but the number of shares of Stock issuable to Executive, if any,
shall be determined under § 5.2(e).

-10-

--------------------------------------------------------------------------------

 

     (e) One Fiscal Quarter Minimum and Pro-Ration Rules.
     (1) Executive shall forfeit Executive’s right to the issuance of any shares
of Stock pursuant to § 4.3, 4.4, § 4.5 and this § 5.2(e) unless Executive is
employed by Belk, a Belk Affiliate or a Belk Subsidiary for at least one full
fiscal quarter in the Performance Period.
     (2) If Executive was employed by Belk, a Belk Affiliate or a Belk
Subsidiary for at least one full fiscal quarter in the Performance Period, the
number of shares of Stock otherwise issuable to or on behalf of Executive shall
be reduced by the Committee pursuant to this § 5.2(e) to reflect the fact that
Executive was so employed for less than the full Performance Period. The
Committee shall determine the reduced number of shares of Stock to be issued
under the Plan to Executive by multiplying the number of shares of Stock
otherwise issuable to Executive pursuant to § 4 by a fraction, the numerator of
which shall be the number of full months (rounding down any partial months to
the next lowest number of months) that Executive was employed by Belk, a Belk
Affiliate or a Belk Subsidiary in such Performance Period and the denominator of
which shall be twelve (12), and then rounding up to the nearest whole share of
Stock.
§ 6. Stock Issuance and Minimum Tax Withholding. The Committee as soon as
practicable after the end of the Performance Period shall determine the number
of

-11-

--------------------------------------------------------------------------------

 

whole shares of Stock, if any, to be issued to Executive. For each issuance of
shares of Stock to Executive, the Committee shall notify Executive of the number
of shares to be issued by Belk and Executive’s deadline for making a decision
regarding payment of withholding. If Executive fails to make such decision, and
any required payment, by such deadline, Belk shall reduce the total number of
whole shares of Stock to be issued to or on behalf of Executive at such time by
a number sufficient for Belk to pay the minimum income tax withholding due on
all such shares of Stock based on the value assigned by Belk to such shares of
Stock and shall then issue the reduced number of shares of Stock to or on behalf
of Executive. If Executive makes such payment, there will be no reduction in the
total number of shares of Stock issued to Executive pursuant to this § 6, and
the total number of shares of Stock due shall be issued to or on behalf of
Executive.
§ 7. 2000 Incentive Stock Plan. Any Shares of Stock issued to or on behalf of
Executive pursuant to the CERTIFICATE and this Exhibit A shall be issued subject
to the terms and conditions set forth in the 2000 Incentive Stock Plan.
§ 8. Reference. All references in this Exhibit A or the Certificate to sections
(§) shall be to sections (§) of this Exhibit A.
§ 9. Administration, Amendment and Termination. The Committee shall have the
power to interpret and administer this Program as the Committee in its absolute
discretion deems in the best interest of Belk and the Committee to the extent
practicable

-12-

--------------------------------------------------------------------------------

 

shall do so to protect Belk’s right to deduct, in light of § 162(m) of the
Internal Revenue Code, any shares of Stock issuable under the LTI Plan to any
participant who is Belk’s chief executive officer or one of its four other
executive officers who are treated under § 162(m) of the Internal Revenue Code
as a “covered employee”. The Committee shall have the power to amend this
program from time to time as the Committee deems necessary or appropriate and to
terminate this program if the Committee deems such termination in the best
interest of Belk.

-13-