RESTRICTED STOCK AGREEMENT





                                                                                                                                                        Exhibit
10.1


 


 

 


PERFORMANCE RESTRICTED STOCK UNIT AGREEMENT


 


 


This
AGREEMENT (the “Agreement”) made as of March 20, 2009 (the “Date of Grant”) by
and between MACY'S, INC., a Delaware corporation (the “Company”), and ______
(the “Grantee”).


 


1.     
Grant of Performance Restricted
Stock Unit.  Subject to and upon the
terms, conditions, and restrictions set forth in this Agreement and in the
Company's [1995 Executive Equity Incentive Plan/1994 Stock Incentive Plan] (the
“Plan”), as amended from time to time, the Company hereby grants to the Grantee
as of the Date of Grant ______ Performance Restricted Stock Units (the “Performance
Units”). Each Performance Unit represents the right to receive one share of common
stock of the Company (“Common Stock”), subject to the terms and conditions as
set forth below.  


 


2.     
Limitations on Transfer of Performance
Units; Performance Period.  


 


            (a)        During
the Performance Period hereinafter described, the Performance Units may not be
transferred, sold, pledged, exchanged, assigned or otherwise encumbered or
disposed of by the Grantee, except to the Company, until they become
nonforfeitable (“vest”) in accordance with Section 3; provided, however, that
the Grantee's interest in the Performance Units may be transferred at any time
by will or the laws of descent and distribution.


 


            (b)        The Performance
Period shall commence on February 1, 2009 (the “Commencement Date”) and, except
as otherwise provided in this Agreement, will expire in full on January 28,
2012.


 


3.     
Vesting of Performance
Units.  


 


Subject to Section 4 below, the Performance Units
granted pursuant to this Agreement shall have performance criteria based on relative
Total Shareholder Return (TSR) and shall vest at the end of the Performance
Period as follows:


 


•    If the Company's TSR for the Performance
Period is equal to or below the 50th percentile of the TSR for the
peer group (“Peer Group”) identified in Schedule A attached hereto for the
Performance Period, then 0% of the Performance Units will be earned.  


 


•    If the Company's TSR for the Performance
Period is greater than the 50th percentile but equal to or below the
66th percentile of the TSR for the Peer Group for the Performance
Period, then 75% of the Performance Units will be earned.  


 


•    If the Company's TSR for the Performance
Period is above the 66th percentile of the TSR for the Peer Group
for the Performance Period, then 100% of the Performance Units will be earned. 



 


 


No restrictions shall lapse on any Performance Unit
until the Compensation and Management Development (“CMD”) Committee of the
Board certifies in writing that the performance criteria associated with those
Performance Units has been satisfied.


 


For purposes of this Agreement, TSR shall mean the
change in the value of the applicable common stock over the Performance Period,
taking into account both stock price appreciation and the reinvestment of
dividends.  The beginning and ending stock prices will be based on a 20-day
average closing stock price.  TSR will be calculated on a compound annualized
basis over the Performance Period.  Relative TSR shall mean the percentile rank
of the Company's TSR compared to the TSR of the Peer Group, excluding Macy's
results from the data array, over the Performance Period.  Peer Group companies
that are no longer publicly-traded at the end of the Performance Period will be
removed from the relative TSR calculation.


 


4.   Forfeiture of Performance Units.   Notwithstanding
the provisions of Section 3 above all unvested Performance Units shall be
forfeited if the Grantee ceases to be continuously employed by the Company at
any time prior to the end of the Performance Period for any reason, unless the
Grantee’s employment ceases following a Change in Control (as described below),
because of Grantee’s death or permanent and total disability while in the
employ of the Company, or because of Grantee's retirement on or after age 55
with at least 10 years of service:  


 


(i)    In the event that Grantee retires on or after
age 55 with at least 10 years of service, dies or becomes permanently and
totally disabled during the Performance Period, the Grantee (or his or her
estate, as appropriate) will receive at the end of the Performance Period the
percentage of Performance Units determined under Section 3 above, pro rated from
the Commencement Date through the date of such retirement, death or disability
based on the number of completed months of service during the Performance
Period divided by 36.


 


(ii)    In the event of a Change in Control,
Performance Units will convert to time-based restricted stock units without
pro-ration for the percentage of the Performance Period that has elapsed since
the Commencement Date, as follows:


 


•   If
the Change in Control occurs prior to the 18-month anniversary of the
Commencement Date, then 100% of the Performance Units will convert to
time-based restricted stock units;


•   If
the Change in Control occurs after the 18-month anniversary of the Commencement
Date, the conversion of Performance Units to time-based restricted stock units will
be based on the Company's TSR with respect to the Peer Group from the
Commencement Date to the date of the Change in Control;


•   The
vesting of the time-based restricted stock units as so converted 


o    will
be accelerated if the Grantee is terminated by the Company or the continuing entity
without Cause or if the Grantee voluntarily terminates employment with Good
Reason within the 18-month period following the Change in Control; 


o    will
be accelerated at the Change in Control if awards are not assumed or replaced
by the acquirer/continuing entity on terms deemed by the CMD Committee to be
appropriate; and


o    will
occur January 28, 2012 if vesting has not been accelerated as provided above.


 


For purposes of this
Agreement, “Cause” shall mean that the Grantee has committed prior to
termination of employment any of the following acts:

 


a)      an intentional act of fraud,
embezzlement, theft, or any other material violation of law in connection with
the Grantee's duties or in the course of the Grantee's employment;


b)      intentional wrongful damage to
material assets of the Company;


c)      intention wrongful disclosure of
material confidential information of the Company;


d)      intentional wrongful engagement in
any competitive activity that would constitute a material breach of the duty of
loyalty; or


e)      intentional breach of any stated
material employment policy of the Company.


 


For purposes of this
Agreement, “Good Reason” shall mean:


 


1)    the failure to elect or reelect
the Grantee in the office or position, or a substantially equivalent office or
position, of or with the Company and/or any subsidiary, as the case may be,
which the Grantee held immediately prior to a Change in Control;


2)    a significant adverse change in
the nature or scope of the authorities, powers, functions, responsibilities, or
duties attached to the position with the Company and/or any subsidiary which
the Grantee held immediately prior to the Change in Control, a reduction in the
aggregate amount of the Grantee's combined base pay and incentive pay
receivable from the Company and its subsidiaries , taken as a whole, or the
termination or denial of the Grantee's rights to employee benefits or a
reduction in the scope or value thereof, except for any such termination or
denial, or reduction in the scope or value, of any employee benefits applicable
generally to all recipients of or participants in such employee benefits;


3)    a determination by the Grantee
(which determination will be conclusive and binding upon the parties hereto
provided it has been made in good faith and in all events will be presumed to
have been made in good faith unless otherwise shown by the Company by clear and
convincing evidence) that a change in circumstances has occurred following a
Change in Control, including without limitation a change in the scope of the
business or other activities for which the Grantee was responsible immediately
prior to the Change in Control, which has rendered the Grantee substantially
unable to carry out, has substantially hindered the Grantee's performance of,
or has caused the Grantee to suffer a substantial reduction in, any of the
authorities, powers, functions, responsibilities, or duties attached to the
position held by the Grantee immediately prior to the Change In Control, which
situation is not remedied within 10 calendar days after written notice to the Company
from the Grantee;


4)    the liquidation, dissolution,
merger, consolidation or reorganization of the Company or transfer of all or
substantially all of its business and/or assets, unless the successor shall
have assumed all duties and obligations of the Company under the Agreement; or


5)    the Company requires the Grantee
to change the Grantee's principal location of work to any location which is in
excess of 25 miles from the location thereof immediately prior to the Change in
Control or requires the Grantee to travel away from the Grantee's office in the
course of discharging the Grantee's responsibilities or duties at least 20%
more than was required in any of the three full calendar years immediately
prior to the Change in Control.


 


5.     
Dividend, Voting and Other
Rights.  Except as otherwise provided
herein, the Grantee shall have none of the rights of a shareholder, including
the right to vote any or all of the Performance Units, prior to the vesting of
awards as set forth in Sections 3 and 4.  An amount representing dividends
payable on shares of Common Stock equal in number to the Performance Units held
by the Grantee on a dividend record date shall be deemed reinvested in Common
Stock and credited as restricted stock units as of the dividend payment date. 
Any such restricted stock units will be subject to the terms and restrictions
defined in this Agreement.  If there is any change in the outstanding Common
Stock by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, separation or other corporate reorganization
of the Company, the CMD Committee shall determine the appropriate adjustment to
the Performance Units, if any, needed to reflect such change.


 


6.     
Settlement of Performance
Units.  As soon as administratively
feasible following the end of the Performance Period and certification in
writing by the CMD Committee as to the level of satisfaction of the performance
goals, but in no event later than two and a half months after the end of the Performance
Period, the Company shall cause to be paid to the Grantee 


 


(i)    a number of shares of Common Stock equal to the
number of Performance Units to which the Grantee is entitled, with a cash
component representing fractional shares, if any, plus 


(ii)    a number of shares of Common Stock equal to
the number of restricted stock units attributed to earned dividend equivalents
on those Performance Units, with a cash component representing fractional
shares, if any.  


 


In the event Performance
Units are not earned, those Performance Units, and the related restricted stock
units attributed to dividend equivalents on those Performance Units, shall be
forfeited.  


 


7.     
Clawback.   In the event the Company restates its financial
results with respect to the Company's performance during the Performance Period
to correct a material error that the CMD Committee determines is the result of
fraud or intentional misconduct, then Grantee shall repay to the Company all
income, if any, derived from the Performance Units.


 


8.     
No Employment Contract. Nothing contained in this Agreement shall confer
upon the Grantee any right with respect to continuance of employment by the
Company, nor limit or affect in any manner the right of the Company to
terminate the employment or adjust the compensation of the Grantee.


 


9.     
Taxes and Withholding.  If the Company shall be required to withhold any
federal, state, local or foreign tax in connection with the vesting of the
Performance Units or the issuance of any unrestricted Common Shares or other
securities following vesting pursuant to this Agreement, it shall be a
condition to such vesting or issuance that the Grantee pay the tax or make
provisions that are satisfactory to the Company for the payment thereof.
Unless the Grantee makes alternative arrangements satisfactory to the Company
prior to the vesting of the Performance Units or the issuance of unrestricted
Common Shares, as the case may be, the Grantee will satisfy the minimum
statutory tax withholding obligations by surrendering to the Company a portion
of the nonforfeitable and unrestricted Common Shares that are issued or
transferred to the Grantee hereunder following the vesting of the Performance
Units, and the Common Shares so surrendered by the Grantee shall be credited
against any such withholding obligation at the Market Value per Share of such
shares on the date of the issuance of such Common Shares.


 


10.  Compliance with Law.  The Company shall make reasonable efforts to comply with all
applicable federal and state securities laws; provided, however, notwithstanding
any other provision of this Agreement, the Company shall not be obligated to
issue any Performance Units or unrestricted Common Shares or other securities
pursuant to this Agreement if the issuance thereof would result in a violation
of any such law.


 


11.    Relation to Other Benefits.  Any economic or other benefit to the Grantee under
this Agreement shall not be taken into account in determining any benefits to
which the Grantee may be entitled under any profit-sharing, retirement or other
benefit or compensation plan maintained by the Company and shall not affect the
amount of any life insurance coverage available to any beneficiary under any
life insurance plan covering employees of the Company. 


 


12.    Amendments. 
Any amendment to the Plan shall be deemed to be an amendment to this Agreement
to the extent that the amendment is applicable hereto; provided, however, that
no amendment shall adversely affect the rights of the Grantee under this
Agreement without the Grantee's consent.


 


13.    Severability. 
In the event that one or more of the provisions of this Agreement shall be
invalidated for any reason by a court of competent jurisdiction, any provision
so invalidated shall be deemed to be separable from the other provisions
hereof, and the remaining provisions hereof shall continue to be valid and
fully enforceable.


 


14.    Relation to Plan; Miscellaneous.  This Agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistent provisions between
this Agreement and the Plan, the Plan shall govern.  Capitalized terms used
herein without definition shall have the meanings assigned to them in the
Plan. All references in this Agreement to the Company shall be deemed to
include, unless the context in which it is used suggests otherwise, its
subsidiaries, divisions and affiliates.


 


15.  Successors and Assigns.  Subject to Section 2 hereof, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the successors,
administrators, heirs, legal representatives and assigns of the Grantee, and
the successors and assigns of the Company; provided, however, that a transferee
shall not further transfer shares of Performance Units other than by will or by
the laws of descent and distribution unless the Company consents in writing to
such transfer.


 


16.  Governing Law. 
The interpretation, performance, and enforcement of this Agreement shall be
governed by the laws of the State of Delaware.


 


            


IN WITNESS WHEREOF, the
Company has caused this Agreement to be executed on its behalf by its duly
authorized officer, and Grantee has also executed this Agreement in duplicate,
as of the day and year first above written.


 


 


 



MACY'S,
INC.


 


 


By:
___________________________________


 


Title: __________________________________


 


 


 


_______________________________________


[                           
], Grantee


 






Schedule A


Peer Group


 

Dillard's


GAP


J.C. Penney


Kohl's


Limited
Brands


Nordstrom


Sears
Holdings


Target


TJX Companies


Walmart