Document:

Supplemental Indenture related to the 2013 Convertible Notes

 Exhibit 4.32 
 First Supplemental Indenture 
 7.5% Convertible Notes
due 2013 
 Dated as of January 31, 2010 
 This is a First Supplemental Indenture (this “Supplemental Indenture”) among Saks Incorporated, a Tennessee
corporation (the “Company”), the Subsidiary Guarantors that are signatories hereto, as Guarantors, The Bank of New York Mellon, as Trustee (the “Trustee”), and Saks Direct, LLC, a Delaware limited
liability company (the “New Guarantor”). 
 Preliminary Statements 
 A. In accordance with Section 8.01 of the Indenture dated as of May 27, 2009, among the Company, the Subsidiary Guarantors named
therein, and the Trustee (the “Indenture”), relating to the 7.5% Convertible Notes due 2013 of the Company, the Trustee, the Company, and the Guarantors (as defined in the Indenture) have agreed to amend the
Indenture as of the date hereof to provide for the addition of an additional Guarantor pursuant to the requirements of Section 3.08 of the Indenture and to evidence a corporate reorganization pursuant to Section 8.01(h) of the Indenture.

 B. All things necessary to make this Supplemental Indenture a valid and legally binding supplement to the Indenture according
to its terms have been done. 
 Terms and Conditions 
 The parties to this Supplemental Indenture agree as follows: 
 SECTION 1. Certain Terms Defined in the Indenture. All capitalized terms used herein without definition herein shall have the meanings ascribed thereto in the Indenture. 
 SECTION 2. Addition of New Guarantor. In accordance with Section 3.08 of the Indenture, the Indenture is hereby supplemented as
permitted by Section 12.03 of the Indenture by adding the New Guarantor as a “Guarantor” thereunder. Accordingly, by its execution of this Supplemental Indenture, the New Guarantor acknowledges and agrees that it is a
“Guarantor” under the Indenture and is bound by and subject to all of the terms of the Indenture applicable to a Guarantor, including without limitation, the applicable provisions of Article Twelve of the Indenture. 
 SECTION 3. Corporate Reorganization. Pursuant to Section 8.01(h) of the Indenture, as part of an internal corporate
reorganization, (a) Jackson Leasing, LLC, a Guarantor, merged with and into Jackson Office Properties, Inc., a Guarantor; (b) SFAILA, LLC, a Guarantor, merged with and into Saks Fifth Avenue, Inc., a Guarantor; (c) Jackson Office
Properties, Inc., a Guarantor, merged with and into Saks Fifth Avenue, Inc., a Guarantor; (d) Saks Fifth Avenue Distribution Company, a Guarantor, merged with and into Saks & Company, a Guarantor; (e) Saks Direct, Inc., a
Guarantor, merged with and into the New Guarantor; (f) SCIL Store Holdings, Inc., a Guarantor, merged with and into SCCA Store Holdings, Inc., a Guarantor; (g) SCIL, LLC, a Guarantor, merged with and into SCCA Store Holdings, Inc., a
Guarantor; (h) SCCA, LLC, a Guarantor, merged with and into SCCA Store Holdings, Inc., a Guarantor; and (i) New York City Saks, LLC, a Guarantor, merged with and into Saks & Company, a Guarantor. Saks Fifth Avenue, Inc., by its
execution of this Supplemental Indenture, assumes all of the covenants in the Indenture and in the Note Guarantee of SFAILA, LLC, Jackson Office Properties, Inc. and Jackson Leasing, LLC. Saks & Company, by its execution of this
Supplemental Indenture, assumes all of the covenants in the Indenture and in the Note Guarantee of Saks Fifth Avenue Distribution Company and New York City Saks, LLC. The New Guarantor, by its execution of this Supplemental Indenture, assumes all of
the covenants in the Indenture and in the Note Guarantee of Saks Direct, Inc. SCCA Store Holdings, Inc., by its execution of this Supplemental Indenture, assumes all of the covenants in the Indenture and in the Note Guarantee of SCIL Store Holdings,
Inc., SCIL, LLC and SCCA, LLC. 

 SECTION 4. Governing Law. This Supplemental Indenture shall be governed by the laws
of the State of New York. 
 SECTION 5. Counterparts. This Supplemental Indenture may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 
 SECTION 6. Severability. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby. 
 SECTION 7. Ratification. Except as expressly amended hereby, each
provision of the Indenture shall remain in full force and effect and, as amended hereby, the Indenture is in all respects agreed to, ratified and confirmed by each of the parties hereto. 
 SECTION 8. Trustee. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture. The
recitals and statements herein are deemed to be those of the Company and the Guarantors and not those of the Trustee. 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be
duly executed as of the date first written above. 
  

			
	SAKS INCORPORATED
		
	By:	 	 /s/ Kevin G. Wills

	Name:	 	Kevin G. Wills
	Title:	 	Executive Vice President and Chief Financial Officer

  

	
	GUARANTORS:
	
	CLUB LIBBY LU, INC.
	MERCHANDISE CREDIT, LLC
	SAKS DIRECT, LLC
	SAKS FIFTH AVENUE, INC.
	SAKS FIFTH AVENUE OF TEXAS, INC.
	 SAKS FIFTH AVENUE TEXAS LLC
 SAKS HOLDINGS, INC.

	SCCA STORE HOLDINGS, INC.
	TEX SFA, INC.

  

			
	By:	 	 /s/ Kevin G. Wills

	Name:	 	Kevin G. Wills
	Title:	 	President and Assistant Secretary

  

			
	SAKS & COMPANY
		
	By:	 	 /s/ Kevin G. Wills

	Name:	 	Kevin G. Wills
	Title:	 	Executive Vice President and Assistant Secretary

  

			
	THE BANK OF NEW YORK MELLON, as Trustee
		
	By:	 	 /s/ Franca FerreraExecutive Incentive Compensation Plan

 Exhibit 10.15 
 FEDERAL HOME LOAN BANK OF CHICAGO 
 EXECUTIVE
INCENTIVE COMPENSATION PLAN 
  

	I.	PURPOSE 

 Members of the
Bank’s Executive Team (excluding the President & CEO) are eligible to participate in the Federal Home Loan Bank of Chicago Executive Incentive Compensation Plan (“Plan”). The purpose of the Plan is to give a select group of
management and highly compensated employees strong incentives to make difficult decisions and to expend exceptional efforts to enhance the financial performance of the Bank. 
 Incentive compensation is to be awarded by the President & CEO with approval of the Personnel & Compensation Committee of
the Board of Directors (the “Board”) in accordance with the terms and conditions in this Plan. 
  

	II.	ELIGIBILITY FOR AWARD 

 To
receive an award under the Plan, the following eligibility conditions must be satisfied: 
 A. The recipient is a member of the
Bank’s Executive Team (excluding the President & CEO) during the Plan year or is a senior officer designated by the President & CEO to participate in the Plan; 
 B. The recipient has defined and satisfied personal goals and other performance expectations, as established and approved by the
President & CEO, and the recipient has achieved specific levels of job performance for the Plan year; and 
 C. The
recipient displays, in the judgment of the President & CEO, a commitment to the Bank as a whole and team spirit. 
  

	III.	PLAN CRITERIA AND MAXIMUM AWARD PERCENTAGE 

 A. Plan Criteria 
 The Plan criteria consist of a series of corporate goals
established annually (“Bank Criteria”) based upon the

 
approved Business Plan for the Plan year. The Bank Criteria will be communicated within the first three (3) months of each Plan year and will specify: 
  

	 	(i)	Bank Criteria description; 

  

	 	(ii)	Plan Year Performance Target for each of the Bank Criteria; and 

  

	 	(iii)	Target Value or weighting attributed to each of the Bank Criteria. 

 The Bank Criteria, Performance Targets and Target Values for a Plan year shall be established by the Personnel & Compensation Committee. 
  

	 	B.	Plan Administration 

 The
Maximum Award Percentage is calculated by calculating the actual Plan year performance as a percent of target for each of the Bank Criteria separately, multiplying the results for each criterion by its associated Target Value and adding the
resulting totals to calculate the Award Coefficient Factor. 
 The total Award Coefficient Factor is applied to the Award Formula
Table to determine the Maximum Award Percentage. The Maximum Award Percentage and the Award Formula Table are established for each Plan year and communicated as part of the Plan Worksheet for that Plan year. 
 After the Maximum Award Percentage is calculated for a Plan year, the President & CEO shall establish an award pool for this Plan
and determine the award to be made to each recipient, in his sole discretion. Individual awards will be approved by the Personnel & Compensation Committee of the Board of Directors. 
  

	 	C.	Discretionary Awards  

 In
any Plan year, the President & CEO may establish a discretionary bonus pool which may be used to grant individual Discretionary Awards as set forth in this Section III.C. The amount of such bonus pool shall be determined at the discretion
of the President & CEO up to a percentage of the aggregate incentive award opportunity (base salary x Maximum Award Percentage) for all eligible recipients in a Plan year, as approved by the Personnel & Compensation Committee.

  

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 If the President & CEO has established a discretionary bonus pool for a Plan year,
the President & CEO shall have the authority to grant an additional incentive award (“Discretionary Award”) to recipients who are otherwise eligible to receive an incentive award under this Plan for the Plan year. The
determination of the recipients of a Discretionary Award and the amount of such Discretionary Award for each such recipient shall be in the sole discretion of the President & CEO, provided that the aggregate amount of Discretionary Awards
granted in any Plan year shall not exceed the amount of the discretionary bonus pool previously determined by the President & CEO for such year. A Discretionary Award is made to a recipient in addition to the incentive award made to such
recipient pursuant to Section III.B of this Plan and need not be related to the recipient’s base compensation. The President shall not be required to distribute the full amount of any discretionary bonus pool. All Discretionary Awards shall be
deemed to be an “award” for all purposes under this Plan. 
 The Personnel & Compensation Committee shall
receive a report in a Plan year where Discretionary Awards are granted. 
  

	IV.	FORM AND TIME OF PAYMENT 

  

	 	A.	Form 

 Payment shall be
made in cash. 
  

	 	B.	Time 

  

	 	(i)	Fifty percent (50%) of an award shall be payable no later than two and one-half months after the Plan award year end as long as the recipient is employed as of
such Plan year end. 

  

	 	(ii)	Twenty-five percent (25%) of an award shall be payable no later than two and one-half months after the anniversary of the Plan year end to which the award relates,
as long as there were not material inaccuracies relating to financial reporting or award performance metric criteria for the Plan award year or the succeeding Plan year as determined by the Board. 

  

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	 	(iii)	Twenty-five percent (25%) of an award shall be payable no later than two and one-half months after the second anniversary of the Plan year end to which the award
relates, as long as there were not material inaccuracies relating to financial reporting or award performance metric criteria for the Plan award year or either of the two (2) succeeding Plan years as determined by the Board.

  

	 	(iv)	Notwithstanding the foregoing, 

  

	 	(1)	The entire award balance of any award recipient who dies while still employed at the Bank shall be payable to such decedent’s beneficiary, heirs or legatees, as
provided by law, within sixty (60) days of such event. 

  

	 	(2)	The entire award balance of any award recipient who (i) becomes Disabled, or (ii) attains age 60 and retires (for purposes of the Financial Institutions
Retirement Fund) from active employment at the Bank, shall be payable to the award recipient within sixty (60) days of such event. 

  

	 	(3)	In the event of: (i) a Change of Control; or (ii) a termination of the award recipient’s employment for Good Reason, the award shall be payable to the
award recipient within sixty (60) days of such event. 

  

	 	(4)	Should any income tax become due based on payments to the recipient, such amount of tax shall become immediately available for withdrawal. 

  

	 	(v)	The retained award balance of a recipient shall be credited as of the end of each calendar quarter with interest at the same rate as the 90-day FHLB note rate during
each corresponding quarter. In lieu of such rate, the Committee may designate, from time to time, such other indices of investment performance or investment funds as the measure of investment performance. 

  

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	 	C.	Payment Deferral 

 An
award recipient may elect to defer the receipt of all or any amount of any award under the Plan and to have such amount credited to an account under and paid according to the terms of the Federal Home Loan Bank of Chicago Benefit Equalization Plan.
Election of such deferral shall be subject to the following rules: 
  

	 	(i)	An election to defer all or any portion of an award that may be made pursuant to Section III.B of this Plan must be made no later than June 30 of the award Plan
year; and 

  

	 	(ii)	An election to defer all or any portion of a discretionary award that may be made pursuant to Section III.C of this Plan must be made prior to January 1 of the
award Plan year; provided, however, that with respect to the 2010 Plan year only, a deferral election with respect to a discretionary award that may be made pursuant to Section III.C for the 2010 Plan year must be made no later than March 1,
2010. 

  

	V.	MISCELLANEOUS 

 Base pay
may be adjusted annually by merit increases, but is not affected by any incentive award. 
 The Bank shall during each Plan year
give the Personnel & Compensation Committee a mid-year status report on progress toward performance targets established hereunder. 
 The Plan and any awards hereunder are subject to Federal Housing Finance Agency regulations and policies. 
  

	VI.	OTHER TERMS AND CONDITIONS 

  

	 	A.	Discretionary Authority 

 The Bank, with the approval of the Personnel & Compensation Committee, may make adjustments in the criteria established herein for any award period whether before or after the end of the award period and, to the extent it deems
appropriate

  

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in its sole discretion which shall be conclusive and binding upon all parties concerned, make awards or adjust awards to compensate for or reflect any significant changes which may have occurred
during the award period which alter the basis upon which such performance targets were determined or otherwise. The Bank, with the approval of the Personnel & Compensation Committee, may, in its discretion, make additional awards in such
amounts as it deems appropriate in consideration of extraordinary performance by the Bank. 
  

	 	B.	Other Conditions 

  

	 	(1)	No person shall have any claim to be granted an award under the Plan and there is no obligation for uniformity of treatment of eligible employees under the Plan. Except
as otherwise required by law, awards under the Plan may not be assigned. 

  

	 	(2)	Neither the Plan nor any action taken hereunder shall be construed as giving to any employee the right to be retained in the employ of the Bank.

  

	 	(3)	The Bank shall have the right to deduct from any award to be paid under the Plan any Federal, state or local taxes required by law to be withheld with respect to such
payment. 

  

	 	(4)	No award shall be paid to an employee for the current Plan year if such employee’s employment ceases prior to the end of the Plan year, whether by resignation,
termination or otherwise. 

  

	 	(5)	Any award hereunder may be reduced pro rata in the event that an award recipient (i) commences employment with the Bank during the Plan year or (ii) is
absent from the Bank (other than regular vacation) during the Plan year whether through approved leave or otherwise, including but not limited to: short or long term disability, leave under the Family and Medical Leave Act, a personal leave of
absence or military leave. 

  

	 	C.	Plan Administration 

  

	 	(1)	The Bank shall have full power to administer and interpret the Plan and to establish rules for its administration. The levels of financial and 

 

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	 	(2)	individual performance, established pursuant to this Plan, achieved for each award period shall be conclusively determined by the Bank. Any determinations or actions
required or permitted to be made by the Bank may be made by the President & CEO. The Bank and President & CEO of the Bank in making any determinations under or referred to in the Plan shall be entitled to rely on opinions, reports
or statements of officers or employees of the Bank and of counsel, public accountants and other professional or expert persons. 

  

	 	(3)	The Plan shall be governed by applicable Federal law. 

  

	 	(4)	The Plan shall be construed in a manner consistent with the applicable requirements of Section 409A of the Code, and the Personnel & Compensation
Committee, in its sole discretion and without the consent of any recipient or beneficiary may amend the provisions of the Plan if and to the extent that the Personnel & Compensation Committee determines that such amendment is necessary or
appropriate to comply with the applicable requirements of Section 409A of the Code. 

  

	 	(5)	This Plan supersedes the prior Management Incentive Compensation Plan for the Plan year commencing on January 1, 2010. 

  

	 	D.	Definitions 

 For purposes
of the Plan: 
  

	 	(i)	“Beneficiary” shall mean the beneficiary or beneficiaries of the recipient who are designated in writing by the recipient on a form provided by, filed
with and accepted by the Bank, or in the absence of any such designation, to the beneficiary or beneficiaries of the recipient who are entitled to receive the benefits of the recipient which are payable under the qualified defined benefit pension
plan sponsored by the Bank or its successor plan. 

  

	 	(ii)	“Change of Control” of the Bank shall mean the occurrence at any time of any of the following events: 

  

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	 	(1)	any person, more than one person acting as a “group” (as defined in section 1.409A-3(i) (5) of the Income Tax Regulations), acquires ownership of equity
securities of the Bank that, together with equity securities held by such person or group, constitutes more than 50% of the total voting power of the equity securities of the Bank; provided, however, that if any person or group, is considered to own
more than 50% of the total voting power of the equity securities of the Bank, the acquisition of additional equity securities by the same person or group will not be considered a Change of Control under the Plan. An increase in the percentage of
equity securities of the Bank owned by any person or group as a result of a transaction in which the Bank acquires its own equity securities in exchange for property will be treated as an acquisition of equity securities of the Bank for purposes of
this paragraph; or 

  

	 	(2)	during any period of twelve (12) consecutive months, individuals who at the beginning of such period constituted the Board (together with (a) any new or
replacement directors whose election by the Board, or (b) whose nomination for election by the Bank’s shareholders, was approved by a vote of at least a majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors then in office; or 

  

	 	(3)	the Bank sells or transfers 95% or more of its business and/or assets to another bank or other entity. 

  

	 	(iii)	 “Disability” shall mean a recipient: (1) is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (2) is, by reason of any medically determinable physical or
mental impairment which can be expected to result

  

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in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months
under an accident and health plan covering employees of the Bank. 

  

	 	(iv)	“Good Reason” shall mean either of the following: 

  

	 	(1)	a material reduction by the Bank in the recipient’s base salary, unless such reduction: (i) is associated with a “General Reduction” in compensation
among employees in the same job grade or employees who are similarly situated and such reduction is in response to adverse or declining economic conditions; and (ii) does not exceed 5% of the recipients’ base salary amount in effect at the
time of the reduction; or 

  

	 	(2)	the relocation of the recipient’s principal office assignment to a location more than fifty (50) miles from its location on the date immediately preceding
such assignment. 

  

	 	E.	Modification or Termination of Plan 

 The Bank may modify or terminate the Plan at any time to be effective at such date as the Bank may determine. A modification may affect present and future awards and eligible employees. 
  

	 	F.	Effective Date. 

 The Plan
shall be effective January 1, 2010. 
 APPROVED BY THE BOARD OF 
 DIRECTORS ON THE 26TH DAY 
 OF JANUARY, 2010. 
  

	
	 /s/ Peter E. Gutzmer

	Its Corporate Secretary

  

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