JACOBSON STORES INC
SEVERANCE PAY AND RETENTION BONUS PLAN
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<TYPE>EX-10.(D)
<SEQUENCE>8
<FILENAME>k69213ex10-d.txt
<DESCRIPTION>SEVERANCE PAY AND RETENTION BONUS PLAN
<TEXT>
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                                                                   EXHIBIT 10(d)


                          JACOBSON STORES INC., et al.

                     SEVERANCE PAY AND RETENTION BONUS PLAN
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I.    INTRODUCTION

      Jacobson Stores Inc., et al., debtors and debtors in possession (the
      "Company") hereby establishes the Company Severance Pay and Retention
      Bonus Plan (the "Plan") to provide severance benefits and retention
      bonuses to certain Employees of the Company who remain in the employ of
      the Company and continue to provide substantial services to the Company
      (collectively, the "Key Employees"). The benefits under the Plan are
      intended to provide an incentive for the Key Employees to remain with the
      Company and to help alleviate financial hardships which may be experienced
      by certain Employees whose employment is terminated. Nothing in the Plan
      will be construed to give any Employee the right to continue in the
      employment of the Company. The Plan is not intended to be an "employee
      pension benefit plan" or "pension plan" as those terms are defined in
      section 3(2) of ERISA. Rather, the Plan is intended to constitute a
      severance pay plan under ERISA and a bonus plan. This Plan supersedes any
      and all prior plans and agreements concerning severance and retention
      benefits.

II.   DEFINITIONS(1)

      1.    "BASE SALARY" means the base salary (exclusive of bonuses or any
            other extraordinary renumeration) earned by the Employee on a
            weekly, monthly or annual basis (as applicable) for service with the
            Company, including any base salary the payment of which is deferred
            pursuant to a salary reduction or deferral agreement, plan or
            arrangement (including an arrangement described in section 401(k) or
            125 of the Code).

      2.    "BOARD" means the Board of Directors of the Company or its delegate.
            References in the Plan and the Appendices to the "Board" shall mean
            the Board or the person or committee to whom the Board has delegated
            its authority under the Plan.

      3.    "CAUSE" means (i) the Employee's continued failure either to (1)
            devote substantially all of his or her business time to his or her
            employment duties (except because of Employee's illness or
            Disability) or (2) make a good faith effort to perform Employee's
            employment duties; (ii) any other willful act or omission which
            Employee knew, or had reason to know, would materially injure the
            Company; or (iii) Employee's conviction of a felony involving
            dishonesty or fraud.

      4.    "CHANGE OF CONTROL" means (i) any "person" as such term is used in
            Sections 13(d) and 14(d) of the Exchange Act (other than Company,
            any trustee or other fiduciary holding securities under an employee
            benefit plan of the Company, or any company owned directly or
            indirectly, by the share owners of


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(1) With regard to the members of the Executive Committee, to the extent the
following terms are otherwise defined in the Severance Compensation Agreement,
such terms shall have the meanings ascribed thereto in the Severance
Compensation Agreement.


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            the Company in substantially the same proportions as their ownership
            of stock in the Company) is or becomes the "beneficial owner" (as
            defined in Rule 13d-3 under the Exchange Act), directly or
            indirectly (through a plan of reorganization or otherwise), of
            securities of the Company representing 50% or more of the combined
            voting power of the Company's then outstanding securities; (ii) the
            share owners of the Company approve (or, if share owner approval is
            not required, the consummation of ) a merger or consolidation of the
            Company with any other company, other than (1) merger or
            consolidation which would result in the voting securities of the
            Company outstanding immediately prior thereto continuing to
            represent (either by remaining outstanding or by being converted
            into voting securities of the surviving entity) more than 50% of the
            combined voting power of the voting securities of the company or
            such surviving entity outstanding immediately after such merger or
            consolidation, or (2) a merger or consolidation effected to
            implement a recapitalization of the Company (or similar transaction)
            in which no "person" (as defined in (i) above) acquires more than
            50% of the combined voting power of the Company's then outstanding
            securities; or (iii) the share owners of the Company approve (or, if
            share owner approval is not required, the consummation of) a plan of
            liquidation of the Company or a sale or disposition by the Company
            of all or substantially all of the Company's assets.

            5. "COBRA" means the Consolidated Omnibus Budget Reconciliation Act
            of 1985, as amended.

            6. "CODE" means the Internal Revenue Code of 1986, as amended.

            7. "COMPANY" means the Jacobson Stores Inc., et. al.

            8. "COMPARABLE EMPLOYMENT" means, upon a Change of Control,
            employment with a Successor Company in a position (i) with Base
            Salary not less than the Employee's Base Salary in effect
            immediately before the Change of Control, (ii) with a title and/or
            responsibilities similar to that in effect immediately before the
            Change of Control, (iii) with employment benefits similar to those
            benefits received by employees in positions comparable to the
            position offered to the Employee by the Successor Company, and (iv)
            in which the Employee is not required to relocate or required to
            move his or her principal business location more than 30 miles from
            that which was the case immediately preceding the Change of Control.

            9. "DISABILITY" means (i) if the Employee is covered by a
            Company-provided disability insurance policy, the definition of
            disability contained in, and entitling the Employee to benefits
            under, that policy, or (ii) if the Employee is not covered by such a
            policy, the Employee's inability to perform fully the duties and
            responsibilities of the Employee's employment with the Company by
            reason of illness, injury or incapacity for a period of 26
            consecutive weeks, with or without reasonable accommodation.


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            10. "EFFECTIVE DATE" of the Plan means March 26, 2002. --

            11. "EMPLOYEE" means any regular full-time employee of the Company,
            excluding any employee who is (1) covered by a collective bargaining
            agreement (unless the bargaining agreement provides for
            participation in the Plan); or (2) regularly scheduled to work less
            than 30 hours per week. For purposes of this Plan, the term
            "Employee" also will not include any individual who is (1) a casual
            or temporary employee (i.e. hired for a specific job of limited
            duration); or (2) characterized as an independent contractor by the
            Company (no matter how such individual is characterized by the
            Internal Revenue Service, other government agency or a court). In
            addition, any change of characterization of an individual's status
            will take effect on the actual date of such change without regard to
            any retroactive recharacterization.

            12. "EMPLOYMENT COMMENCEMENT DATE" means the first day on which an
            individual becomes an Employee. If an Employee terminates employment
            with the Company and is later rehired by the Company, then the
            Employee's Employment Commencement Date means the day on which the
            individual again becomes an Employee after such rehire.

            13. "ERISA" means the Employee Retirement Income Security Act of
            1974, as amended.

            14. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
            amended

            15. "EXECUTIVE COMMITTEE" means Carol Williams, Paul Gilbert and
            James Rodefeld.

            16. "INVOLUNTARY TERMINATION" means a termination from employment
            with the Company that is initiated by the Company for reasons other
            than Cause, death or Disability on or after the Effective Date of
            the Plan.

            17. "PLAN" means this Severance Pay and Retention Bonus Plan, dated
            as of March 26 2002.

            18. "PLAN ADMINISTRATOR" means James Delaney, Vice President of
            Human Resources at the Company or such other entity or person who is
            appointed by the Board to administer the Plan.

            19. "VOLUNTARY RESIGNATION" means a voluntary, permanent separation
            from employment, initiated by the Employee.

            20. "SUCCESSOR COMPANY" means upon a Change of Control, a successor
            to the Company as a result of the acquisition of securities, a
            merger, liquidation, reorganization, consolidation or sale of assets
            of the Company, or otherwise a successor to the Company as a result
            of the Change of Control.


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            21. "YEARS OF SERVICE" shall mean an Employee's total completed
            years of service with the Company (including completed years of
            service with predecessor companies of affiliates) commencing on the
            Employee's Employment Commencement Date and ending on the date the
            Employee's employment with the Company terminates.

III.  SEVERANCE BENEFITS

            A.    A Key Employee shall be entitled to receive severance benefits
                  under the Plan if (i) the Key Employee's employment is
                  terminated by the Company on account of an Involuntary
                  Termination and (ii) the Key Employee executes and does not
                  revoke a written release (as described below) upon such
                  Involuntary Termination. Notwithstanding the foregoing, if a
                  Change of Control occurs, a Key Employee shall not be entitled
                  to receive severance benefits under the Plan if either (i) the
                  Successor Company offers the Key Employee Comparable
                  Employment or (ii) the Key Employee accepts the Successor
                  Company's offer of employment (without regard to the terms of
                  the offer). A Key Employee who meets the requirements of this
                  paragraph (A) and who is identified by the Company as a
                  severance recipient (each a "Severance Recipient") shall
                  receive severance benefits as described in paragraph (B)
                  below.

            B.    The severance benefits for Severance Recipients, other than
                  members of the Executive Committee shall equal: (i) for
                  Officers, one (1) week Base Salary for every year of service,
                  with a minimum of four (4) weeks and a maximum of twenty-six
                  (26) weeks; and (ii) for all other Severance Recipients (other
                  than members of the Executive Committee), one (1) week Base
                  Salary for every year of service, with a minimum of four (4)
                  weeks and a maximum of twelve (12) weeks. Excluding the
                  Executive Committee, there are 118 Severance Recipients.

            C.    Members of the Executive Committee shall receive severance
                  benefits in accordance with the provisions of their executed
                  severance compensation agreements with the Debtors, which
                  agreements will supercede any entitlements to severance or
                  termination benefits under their respective pre-petition
                  employment agreements.

            D.    Key Employees who receive severance benefits under this Plan
                  shall not be entitled to receive severance benefits under any
                  other severance plan, arrangement or agreement of the Company,
                  and this Plan supersedes and replaces any other severance
                  plans, arrangement and agreements for Employees.


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            E.    The release described in paragraph (A) shall be in a form
                  prescribed by the Company and shall release the Company and
                  all related parties of any and all claims against the Company
                  and all related parties with respect to all matters arising
                  out of the Key Employee's employment with the Company and
                  related entities (other than any entitlements under the terms
                  of this Plan or under any other plans or programs of the
                  Company in which the Key Employee participated and accrued a
                  benefit) or the termination thereof, including, but not
                  limited to, any claims or entitlements arising under the
                  Worker Adjustment and Retraining Notification Act, 29 U.S.C.
                  Sections 2101, et seq.

            F.    This Plan and the provisions of benefits hereunder shall not
                  give Key Employees a right to continued employment with the
                  Company or any rights to continued accrual of retirement plan
                  or other benefits, nor shall the Key Employees accrue vacation
                  days, paid holidays, or any other benefits normally associated
                  with employment for any part of the period during or in
                  respect of which severance benefits are payable. All Key
                  Employees shall remain subject to discharge to the same extent
                  as if this Plan had never been implemented.

            G.    Severance benefits will not be provided under the Plan for any
                  Key Employee (other than members of the Executive Committee)
                  whose employment is terminated due to (1) Voluntary
                  Resignation (with or without notice); (2) death; (3) the
                  expiration of a leave of absence; (4) Disability; (5) a Change
                  of Control where the Key Employee has been offered Comparable
                  Employment with the Successor Company; or (6) a Change of
                  Control where the Key Employee accepts employment with the
                  Successor Company (regardless of the terms of such
                  employment). In addition, benefits will not be provided under
                  the Plan for any Key Employee whose employment is terminated
                  for Cause.

IV.   RETENTION BONUS

            A.    Each Key Employee identified by the Company as a retention
                  recipient (each a "Retention Recipient") shall be entitled to
                  a retention bonus in the amount set forth on Appendix A,
                  identified as a percentage of Base Salary, if the Key Employee
                  is employed by the Company on the date such bonus is earned in
                  accordance with the following schedule(2):


            Date Earned             % of Bonus        Date Payable

            June 1, 2002            20%               August 15, 2002



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(2) The schedule will apply to all Retention Recipients other than High
Production Sales Professionals, who will be entitled to retention bonuses of
$8,000 each, payable in quarterly installments ($2,000), so long as the Company
is operating and so long as such Key Employee is still employed by the Company
on the date such bonus is earned.


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            September 1, 2002       30%               10 days after
                                                      Confirmation(3)

            Going Concern Sale(4)   50%               Closing of Going
                                                      Concern Sale

      B.    A Retention Recipient shall be entitled to a pro rata portion of the
            next installment of his/her retention bonus provided for in
            paragraph (A) above if they are terminated by the Company, without
            Cause, after June 1, 2002 but prior to the September 1, 2002.

      C.    In addition to the retention bonuses provided for in paragraph (A)
            above, the Company may, in its sole discretion, pay to any Employee
            a bonus in such amounts as the Company deems appropriate
            ("Discretionary Bonus"); provided however, the aggregate amount of
            such Discretionary Bonuses shall not exceed $625,000 (the
            "Discretionary Pool"); provided however, members of the Executive
            Committee shall not receive Discretionary Bonuses from the
            Discretionary Pool. The Company will utilize a portion of the
            Discretionary Pool in order to provide Retention Recipients who are
            Buyers or Store Managers the opportunity to earn up to 10% of their
            Base Salaries in the form of Discretionary Bonuses provided that
            certain performance targets (which targets shall be agreed to by and
            between the Company and the Official Committee of Unsecured
            Creditors) are met.

      D.    Key Employees who receive retention bonuses and/or Discretionary
            Bonuses under this Plan shall not be entitled to receive retention
            bonuses under any other retention bonus plan or program maintained
            by the Company, and this Plan supersedes and replaces any other
            retention bonus arrangements for such Key Employees.

      E.    The entitlement or receipt of a retention bonus and/or a
            Discretionary Bonus as provided for herein shall in no way effect an
            Key Employee's entitlement to receive compensation in accordance
            with the Company's ordinary course, pre-petition incentive pay
            programs.


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(3) Confirmation shall mean the date on which the Bankruptcy Court enters an
order confirming a plan of reorganization or liquidation. Provided however, that
in order for the Employee to receive such bonus, he or she be employed by the
Company on the payment date, unless previously terminated by the Company without
Cause.

(4) The last fifty percent (50%) of the of the retention bonus shall be earned
by those Key Employees who are in the Debtor's employ on the date that the
Bankruptcy Court enters an Order either (i) approving the sale of substantially
all of the Debtors' assets as a going concern business ("Going Concern Sale"),
with such amounts being payable to such Key Employees who are entitled thereto
within ten (10) days after the Closing Date of such Going Concern Sale, or (ii)
confirming a plan of reorganization (which plan shall not provide for the
liquidation of all or substantially all of the Debtors' assets other than as a
going concern) with such amounts being payable to such Key Employees who are
entitled thereto within ten (10) days after the entry of the confirmation order.


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V.    PAYMENT OF BENEFITS

      A.    Severance benefits will be paid, at the Company's option, either (i)
            in a lump sum within 10 days of termination, or (ii) on a bi-weekly
            basis from available cash flow, commencing with the first payroll
            after such Severance Recipient is terminated and continuing until
            such Severance Recipient's severance entitlement is paid in full;
            provided however, in the event that the Company has insufficient
            cash flow to pay such severance benefits or a portion thereof as
            provided for herein, then such unpaid severance benefits shall be
            entitled to administrative expense status pursuant to Section 503 of
            the Bankruptcy Code.

      B.    All payments made under the Plan shall be subject to withholding of
            applicable federal, state and local taxes.

      C.    Payments to a terminated Key Employee will cease upon the Company's
            determination that the Key Employee was terminated for Cause,
            regardless of whether this determination occurs before or after the
            Key Employee's termination date.

VI.   AMENDMENT AND TERMINATION OF THE PLAN

The Board reserves the right to amend, suspend or terminate the Plan in whole or
in part, at any time and for any reason, by a written formal action. Any
amendment to, or termination of, the Plan may discontinue any further payments
to a terminated Key Employee, unless the Key Employee has signed a release of
claims against the Company. However, no amendment, suspension, or termination of
the Plan will give the Company the right to recover any amounts already paid to
a terminated Key Employee before the date of such amendment.

VII.  RECORDS, REPORTS AND DISCLOSURE

The Plan Administrator will keep a copy of all individual and group records
relating to Employees and former Employees and all other records necessary for
the proper operation of the Plan. Such records shall be made available to each
Key Employee for examination during regular business hour, except that an Key
Employee may examine only such records as pertain exclusively to the examining
Key Employee and to the Plan. The Plan Administrator will prepare and will file
and/or distribute as required by law or regulation all reports, forms, documents
and other items required by ERISA, the Code, and every other relevant statute,
each as amended, and all regulations thereunder, including all forms relating to
withholding of income or wage taxes, social security taxes, and other amounts
which may be similarly reportable.


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VIII. MISCELLANEOUS INFORMATION

      A.    Nonalienation of Benefits. None of the payments, benefits or rights
            of any Key Employee will be subject to any claim of any creditor of
            the Key Employee and, in particular, to the fullest extent permitted
            by law, all such payment, benefits and rights will be free from
            attachment, garnishment, trustee's process, or any other legal or
            equitable process available to any creditor of such Key Employee. No
            Key Employee will have the right to alienate, anticipate, commute,
            plead, encumber or assign any of the benefits or payments which he
            or she may expect to receive, contingently or otherwise, under the
            Plan.

      B.    No Contract of Employment. Neither the establishment of the Plan,
            nor any modification thereof, nor the creation of any fund, trust or
            account, nor the payment of any benefits will be construed as giving
            any Key Employee, or any person whosoever, the right to be retained
            in the service of the Company, and all Key Employees remain subject
            to discharge to the same extent as if the Plan had never been
            adopted.

      C.    Severability of Provisions. If any provision of this Plan is held
            invalid or unenforceable, such invalidity or unenforceability shall
            not affect any other provisions hereof, and this Plan will be
            construed and enforced as if such provisions had not been included.

      D.    Heirs, Assigns, and Personal Representative. This Plan will be
            binding upon the heirs, executors, administrators, successors and
            assigns of the parties, including each Key Employee; provided,
            however, that no successor to the Company will be considered a Plan
            sponsor, and termination of employment by a Successor Company will
            not entitle Key Employees to benefits under this Plan, unless that
            successor expressly adopts this Plan.

      E.    Headings and Captions. The headings and captions in this Plan are
            provided for reference and convenience only, will not be considered
            part of the Plan, and will not be employed in the construction of
            the Plan.

      F.    Unfunded Plan. Benefits under this Plan will not be prefunded, but
            will be payable by the Company as and when due as provided herein.

      G.    Payments to Incompetent Persons, Beneficiaries, Etc. Any benefit
            payable to or for the benefit of a minor, an incompetent person or
            other person incapable of receipting therefor will be deemed paid
            when paid to such person's guardian or to the party providing for
            the care of such person. Any benefits due to a deceased Key Employee
            will be paid to the Key Employee's estate. In either event, any such
            payment will fully discharge


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            the Company and the Plan Administrator and all other parties with
            respect thereto.

      H.    Lost Payees. A benefit will be deemed forfeited if the Plan
            Administrator is unable to locate a Key Employee to whom a benefit
            is due. Such benefit will be reinstated if application is made by
            the Key Employee for the forfeited benefit while this Plan is in
            operation.

      I.    Controlling Law. This Plan will be construed and enforced according
            to the laws of the State of Michigan, without regard to any conflict
            of laws provisions, to the extent not superseded by federal law.



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                                   APPENDIX A


<TABLE>
<CAPTION>
Position                      Retention Bonus Amount        No. of Participants
--------                      ----------------------        -------------------
<S>                           <C>                           <C>
Executive Committee           One (1) year Base Salary                   3
Officers                      40% of Base Salary                        21
Buyers                        15% of Base Salary                        38
Exempt Professionals          20% of Base Salary                        35
Key Support                   15% of Base Salary                        11
Store Management              20% of Base Salary                        18
High Production Sales         $8,000                                    59
</TABLE>




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