As filed with the Securities and Exchange Commission on December 6, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SEARS, ROEBUCK AND CO.
(Exact name of Registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation or organization)
36-1750680
(I.R.S. employer identification no.)
3333 Beverly Road
Hoffman Estates, Illinois 60179
708/286-2500
(Address of principal executive offices)
Sears, Roebuck and Co. Deferred Compensation Plan
(Full title of the Plan)
David Shute, Esq.
Senior Vice President, Law, and Corporate Secretary
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, IL 60179
(708) 286-2500
(Name and address, including zip code, and telephone number, including
area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of securities to be registered: Deferred Compensation Obligations
Amount to be registered (1): $15,000,000
Proposed Maximum offering price per unit: (1)
Proposed maximum aggregate offering price: $15,000,000
Amount of registration fee: $5,172.42(2)
(1) The Deferred Compensation Obligations are unsecured obligations of
Sears, Roebuck and Co. to pay deferred compensation in the future in
accordance with the terms of the Sears, Roebuck and Co. Deferred
Compensation Plan. The Deferred Compensation Obligations being
registered represent the maximum amount of compensation deferrals which,
it is anticipated, may be made by Participants in the Plan during the
approximate 12 month period following the initial offering date under
this Registration Statement and the filing fee has been calculated
pursuant to Rule 457(h) based thereon.
(2) Computed in accordance with Rule 457(h) under the Securities Act of
1933, as amended (the "Securities Act"), solely for the purpose of
calculating the registration fee.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participating employees as specified by
Rule 428(b)(1) under the Securities Act of 1933, as amended (the
"Securities Act"). These documents and the documents incorporated by
reference into this registration statement pursuant to Item 3 of Part II
of this registration statement, taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Sears, Roebuck and Co. ("Sears") with
the Securities and Exchange Commission ("Commission") are incorporated
in and made a part of this Registration Statement by reference, except
to the extent that any statement or information therein is modified,
superseded or replaced by a statement or information contained in any
other subsequently filed document incorporated herein by reference: (1)
Sears annual report on Form 10-K for the fiscal year ended December 31,
1994; (2) Sears Current Reports on Form 8-K for January 17, February
7, April 20, April 25, May 15 (as amended by Amendment No. 1), June
1, June 20 and November 8, 1995; (3) Sears Quarterly Reports on Form
10-Q for the quarters ended April 1, July 1 and September 30, 1995;
and (4) from the date of filing of such documents, all documents filed
by Sears with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 ("Exchange Act") subsequent
to the date of this Registration Statement and prior to the filing of a
post-effective amendment to the Registration Statement which indicates
that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold.
Item 4. Description of Securities.
The following description of the Sears, Roebuck and Co. Deferred
Compensation Plan (the "Plan") is qualified by reference to the exhibits
that are a part of this Registration Statement. Capitalized terms used
in this Registration Statement and not otherwise defined herein are
defined in the Plan.
Under the Plan, Sears will provide eligible employees of Sears and its
affiliates with the opportunity to elect to defer a specified percentage
of their future cash compensation. The Deferred Compensation
Obligations of Sears under the Plan (the "Obligations") will be
unsecured general obligations of Sears to pay the compensation deferred
in accordance with the terms of the Plan, and will rank equally with
other unsecured and unsubordinated indebtedness of Sears from time to
time outstanding payable from the general assets of Sears. Because
Sears has subsidiary companies, the right of Sears, and hence the right
of creditors of Sears (including participants in the Plan), to
participate in a distribution of the assets of a subsidiary upon its
liquidation or reorganization or otherwise, necessarily is subject to
the prior claims of creditors of the subsidiary, except to the extent
that claims of Sears itself as a creditor may be recognized.
The amount of compensation to be deferred by each participant (the
"Deferral Account") will be determined in accordance with the Plan based
on elections by the participant. Each Deferral Account generally will
be payable upon termination of employment or on a date selected by the
participant in accordance with the terms of the Plan. The Deferral
Account will be indexed to one or more investment indices (which, among
others, include an index that tracks the market performance of and
dividends declared on Sears common shares, par value $.75 per share)
chosen by each participant from a list of such investment indices. Each
Deferral Account will be adjusted to reflect the investment experience
of the selected investment index or indices, including any appreciation
or depreciation. The Obligations will be denominated and payable in
United States dollars. The Plan is unfunded, and amounts credited to
Deferral Accounts are part of the general funds of Sears, are subject to
all the risks of Sears business, and may be deposited, invested or
expended in any manner whatsoever by Sears.
Benefits under the Plan are not subject to assignment, transfer, pledge
or other encumbrance or attachment other than by operation of law. A
Participant may designate persons or entities to receive any balance in
his/her Deferral Account and interest thereon, payable in the event of
death.
The Obligations are not subject to redemption, in whole or in part,
prior to the individual payment dates specified by the participant, at
the option of Sears, or through operation of a mandatory or optional
sinking fund or analogous provision, although the Obligations could be
redeemed in the case of termination of the Plan. Sears reserves the
right to amend or terminate the Plan at any time, except that no such
amendment or termination shall reduce the amount of compensation
deferred or any interest thereon up to and including the end of the
month in which such action is taken. Generally, the Obligations will be
paid in cash upon the participant's separation from service with Sears
or its affiliates except in case of hardship or an optional, one-time
in-service withdrawal if elected by the participant.
The Obligations are not convertible into another security of Sears. The
Obligations will not have the benefit of a negative pledge or any other
affirmative or negative covenant on the part of Sears. No trustee has
been appointed having the authority to take action with respect to the
Obligations, and each participant will be responsible for acting
independently with respect to, among other things, the giving of
notices, responding to any request for consents, waivers, or amendments
pertaining to the Obligations, enforcing covenants, and taking action
upon a default.
Item 5. Interests of Named Experts and Counsel.
The validity of the Obligations issuable under the Plan has been passed
upon for Sears by Venrice R. Palmer, Esq., Senior Counsel, Corporate Law
Department, of Sears. At October 31, 1995, Mr. Palmer owned 235 Sears
common shares credited to his account in The Savings and Profit Sharing
Fund of Sears Employees and had options granted under Sears employee
stock plans relating to 3545 common shares.
Item 6. Indemnification of Directors and Officers.
The New York Business Corporation Law ("BCL") and the By-Laws of Sears
generally provide for the indemnification of any director or officer of
Sears who is or is threatened to be made a party to any action because
such person is or was a director or officer of Sears, or because such
person served another enterprise (including the Plan) at the request of
Sears, against judgments, fines, amounts paid in settlement and expenses
(including attorneys' fees) in connection with such action, as limited
by the BCL and the By-Laws in certain circumstances depending upon the
type of conduct involved and the nature of the action.
The BCL authorizes Sears to purchase indemnification insurance. Sears
has in effect insurance policies with total coverage of $100,000,000
(subject to a deductible) which insure directors and officers of Sears
and of certain other entities against certain claims which are not
indemnifiable by Sears.
Sears also has in effect insurance policies with total coverage of
$75,000,000 (subject to a deductible) which provide for the payment by
the insurer of amounts, excluding certain fines and penalties which are
legally uninsurable and certain other matters, which Sears, certain
other entities or their officers, directors or employees become
obligated to pay by reason of any claim based upon an act or omission in
the management or administration of certain employee benefit plans
(including the Plan sponsored by Sears and certain subsidiaries of
Sears.
Item 8. Exhibits.
The exhibits to this Registration Statement are listed in the Exhibit
Index on page E-1, which Exhibit Index is hereby incorporated herein by
reference.
Item 9. Undertakings.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in the periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new
Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Hoffman Estates, State of
Illinois, on this 6th day of December, 1995.
SEARS, ROEBUCK AND CO.
By: /s/ DAVID SHUTE
David Shute
Senior Vice President, Law, and Corporate Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registrant Statement has been signed by the following persons in the
capacities and on the date indicated.
Name Title
/s/ ARTHUR C. MARTINEZ
Arthur C. Martinez
Director, Chairman of the Board of Directors and Chief Executive Officer
(Principal Executive Officer)
/s/ ALAN J. LACY
Alan J. Lacy
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
/S/ JAMES A. BLANDA
James A. Blanda
Vice President and Controller (Principal Accounting Officer)
/S/ HALL ADAMS, JR.
Hall Adams, Jr.
Director
/S/ WARREN L. BATTS
Warren L. Batts
Director
/S/ JAMES W. COZAD
James W. Cozad
Director
/S/ WILLIAM E. LAMOTHE
William E. LaMothe
Director
/S/ MICHAEL A. MILES
Michael A. Miles
Director
/S/ NANCY C. REYNOLDS
Nancy C. Reynolds
Director
/S/ CLARENCE B. ROGERS, JR.
Clarence B. Rogers, Jr.
Director
/S/ DONALD H. RUMSFELD
Donald H. Rumsfeld
Director
Date: December 6, 1995
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Document
4.1 Sears, Roebuck and Co. Deferred Compensation Plan, as amended
and restated on December 4, 1995
4.2 Sears, Roebuck and Co. Deferred Compensation Plan election forms
for 1996.
5 Opinion of Venrice R. Palmer, Esq.
15 Acknowledgment of Deloitte & Touche LLP concerning unaudited
interim financial information
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Venrice R. Palmer, Esq. (included in the opinion
filed as Exhibit No. 5).
24.1 Power of Attorney of certain directors and officers of the
Registrant.
24.2 Power of Attorney of principal financial officer of the
Registrant.
28 Information from reports furnished to state insurance
authorities [Incorporated by reference to Exhibit 28 to Annual Report on
Form 10-K of The Allstate Corporation for the fiscal year ended December
31, 1994 (SEC File No. 1-11840)]
<PAGE>
EXHIBIT 5
SEARS, ROEBUCK AND CO.
3333 BEVERLY ROAD
HOFFMAN ESTATES, ILLINOIS 60179
Venrice R. Palmer
Corporate Law Department
Senior Counsel
708/286-9238
Facsimile 708/286-0959
December 6, 1995
Board of Directors
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, Illinois 60179
Ladies and Gentlemen:
I have acted as counsel for Sears, Roebuck and Co. (the "Company") in
connection with the registration on Form S-8 (the "Registration
Statement") of $15,000,000 of the Company's deferred compensation
obligations (the "Obligations"), which are issuable under the Sears,
Roebuck and Co. Deferred Compensation Plan (the "Plan"), as amended and
restated on December 4, 1995.
On the basis of such investigation as I deemed necessary, I am of the
opinion that:
(1) the Company has been duly incorporated and is validly existing under
the laws of the State of New York; and
(2) the Obligations have been duly authorized and, when issued in
accordance with the terms and conditions set forth in the Plan, will be
validly issued.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement.
Very truly yours,
/s/VENRICE R. PALMER
Venrice R. Palmer
Senior Counsel
<PAGE>
Exhibit 15
Deloitte & Touche LLP Telephone: (312) 946-3000
Two Prudential Plaza Facsimile: (312) 946-2600
180 North Stetson Avenue
Chicago, Illinois 60601-6779
December 4, 1995
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, Illinois
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited
interim financial information of Sears, Roebuck and Co. for the periods
ended April 1, 1995 and April 2, 1994, July 1, 1995 and July 2, 1994,
and September 30, 1995 and October 1, 1994, as indicated in our reports
dated May 15, 1995, August 14, 1995, and November 9, 1995, respectively;
because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our reports referred to above, which were included in
your Quarterly Reports on Form 10-Q for the quarters ended April 1,
1995, July 1, 1995 and September 30, 1995, are being used in this
Registration Statement.
We are also aware that the aforementioned reports, pursuant to Rule
436(c) under the Securities Act of 1933, are not considered a part of
the Registration Statement prepared or certified by an accountant within
the meaning of Sections 7 and 11 of that Act.
/s/DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Deloitte Touche
Tohmatsu
International
<PAGE>
Exhibit 23
Deloitte & Touche LLP Telephone: (312) 946-3000
Two Prudential Plaza Facsimile: (312) 946-2600
180 North Stetson Avenue
Chicago, Illinois 60601-6779
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of the Sears, Roebuck and Co. Deferred Compensation Plan on
Form S-8 of our report dated February 24, 1995 (May 10, 1995 as to Note
4), which expresses an unqualified opinion and includes an explanatory
paragraph relating to the Company changing its accounting for
postretirement benefits in 1992, appearing in the Current Report on Form
8-K of Sears, Roebuck and Co. dated May 15, 1995. We also consent to
the reference to us under the heading "Experts" in the Prospectus, which
is a part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
December 4, 1995
Deloitte Touche
Tohmatsu
International
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, being a
director or officer, or both, of SEARS, ROEBUCK AND CO., a New York
corporation (the "Company"), does hereby constitute and appoint ARTHUR
C. MARTINEZ, RUSSELL S. DAVIS, DAVID SHUTE, JAMES A. BLANDA and ALICE M.
PETERSON, with full power to each of them to act alone, as the true and
lawful attorneys and agents of the undersigned, with full power of
substitution and resubstitution to each of said attorneys, to execute,
file or deliver any and all instruments and to do any and all acts and
things which said attorneys and agents, or any of them, deem advisable
to enable the Company to comply with the Securities Act of 1933, as
amended (the "Securities Act"), and any requirements or regulations of
the Securities and Exchange Commission in respect thereto, in connection
with the registration under said Securities Act of the estimated dollar
amount of deferrals under the Sears, Roebuck and Co. Deferred
Compensation Plan (the "Plan") which may be made by participants in the
Plan during the period from the effective date of said registration
statement to the effective date of the next registration statement
relating to deferrals under the Plan; including specifically, but
without limitation of the general authority hereby granted, the power
and authority to sign his or her name as a director or officer, or both,
of the Company, as indicated below opposite his or her signature, to the
registration statement, or any amendment, post-effective amendment or
papers supplemental thereto, to be filed in respect of said deferrals
and to the prospectus or any amendment, supplement or revision thereof,
which is a part of said registration statement or any amendment or post-
effective amendment to said registration statement, and each of the
undersigned does hereby fully ratify and confirm all that said attorneys
and agents, or any of them, or the substitute of any of them, shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed these
presents, this 11th day of August, 1995.
NAME TITLE
/s/ ARTHUR C. MARTINEZ
Arthur C. Martinez
Director, Chairman of the Board of Directors and Chief Executive Officer
(Principal Executive Officer)
/S/ JAMES A. BLANDA
James A. Blanda
Vice President and Controller (Principal Accounting Officer)
/S/ HALL ADAMS, JR.
Hall Adams, Jr.
Director
/S/ WARREN L. BATTS
Warren L. Batts
Director
/S/ JAMES W. COZAD
James W. Cozad
Director
/S/ WILLIAM E. LAMOTHE
William E. LaMothe
Director
/S/ MICHAEL A. MILES
Michael A. Miles
Director
/S/ NANCY C. REYNOLDS
Nancy C. Reynolds
Director
/S/ CLARENCE B. ROGERS, JR.
Clarence B. Rogers, Jr.
Director
/S/ DONALD H. RUMSFELD
Donald H. Rumsfeld
Director
<PAGE>
Exhibit 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer of SEARS,
ROEBUCK AND CO., a New York corporation (the "Company"), does hereby
constitute and appoint ARTHUR C. MARTINEZ, RUSSELL S. DAVIS, DAVID
SHUTE, JAMES A. BLANDA and ALICE M. PETERSON, with full power to each of
them to act alone, as the true and lawful attorneys and agents of the
undersigned, with full power of substitution and resubstitution to each
of said attorneys, to execute, file or deliver any and all instruments
and to do any and all acts and things which said attorneys and agents,
or any of them, deem advisable to enable the Company to comply with the
Securities Act of 1933, as amended (the "Securities Act"), and any
requirements or regulations of the Securities and Exchange Commission in
respect thereto, in connection with the registration under said
Securities Act of the estimated dollar amount of deferrals under the
Sears, Roebuck and Co. Deferred Compensation Plan (the "Plan") which may
be made by participants in the Plan during the period from the effective
date of said registration statement to the effective date of the next
registration statement relating to deferrals under the Plan; including
specifically, but without limitation of the general authority hereby
granted, the power and authority to sign his name as an officer of the
Company to the registration statement, or any amendment, post-effective
amendment or papers supplemental thereto, to be filed in respect of said
deferrals and to the prospectus or any amendment, supplement or revision
thereof, which is a part of said registration statement or any amendment
or post-effective amendment to said registration statement, and the
undersigned does hereby fully ratify and confirm all that said attorneys
and agents, or any of them, or the substitute of any of them, shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents, this
26th day of September, 1995.
Name TITLE
/S/ ALAN J. LACY
Alan J. Lacy
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
SEARS, ROEBUCK AND CO.
DEFERRED COMPENSATION PLAN
AS AMENDED AND RESTATED TO
DECEMBER 4, 1995
ARTICLE I
DESIGNATION OF PLAN AND DEFINITIONS
1.1 Title
This Plan shall be known as the "Sears, Roebuck and Co. Deferred
Compensation Plan" and shall become effective for Compensation received
on and after January 1, 1987.
1.2 Definitions
The following definitions will apply:
(a) "Accounts" shall mean Deferred Compensation Accounts.
(b) "Beneficiary" or "Contingent Beneficiary" (collectively,
"Beneficiary" or "Beneficiaries"), shall mean the person or persons last
designated in writing by the Participant to the Committee, in accordance
with Section 8.5 of this Plan.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Compensation" shall mean salary, bonuses, LTIP awards and any
other compensation payable in cash or common shares with respect to
services rendered in any one Plan Year, by a
Participating Employer to an Eligible Employee.
(e) "Committee" shall mean the Committee appointed by the Board of
Directors pursuant to Article VI of this Plan.
(f) "Company" shall mean Sears, Roebuck and Co. and all consolidated
subsidiaries thereof.
(g) "Deferred Compensation Account" shall mean the balance of all
Compensation deferred by a Participant, plus all interest accrued
pursuant to Article IV of the Plan.
(h) "Eligible Employee" shall mean any Employee who is eligible to
be selected as a Participant under Article II of this Plan.
(i) "Employee" shall mean any regular, full-time employee of the
Company.
(j) "Hardship" shall mean severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident
of the Participant or of a dependent (as defined in Section 152(a) of
the Internal Revenue Code of 1986, as amended) of the Participant, loss
of the Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. The circumstances that
will constitute an unforeseeable emergency will depend upon the facts of
each case, but, in any case, payment may not be made to the extent that
such hardship is or may be relieved--
1) through reimbursement or compensation by insurance or
otherwise,
2) by liquidation of the Participant's assets, to the
extent the liquidation of such assets would not itself cause severe
financial hardship, or
3) by cessation of deferrals under the Plan.
Examples of what are not considered to be unforeseeable emergencies
include the need to send a Participant's child to college or the desire
to purchase a home.
(k) "LTIP" shall mean the Sears, Roebuck and Co. Long-Term Incentive
Compensation Plan or any similar plan of the Company providing
Compensation intended to serve as incentive for performance to occur
over a period longer than one fiscal year.
(l) "Participant" shall mean an Eligible Employee participating in
the Plan in accordance with Article II hereof.
(m) "Participating Employer" shall mean the Company, or any
Subsidiary which adopts this Plan in accordance with Section 2.2 hereof.
(n) "Plan" shall mean this Sears, Roebuck and Co. Deferred
Compensation Plan as set forth herein, and as amended from time to time
in accordance with Article VII hereof.
(o) "Plan Year" shall mean the calendar year.
(p) "Separation from Service" shall mean the termination of a
Participant's employment with the Company for any reason whatsoever,
including retirement, resignation, dismissal and death.
(q) "Subsidiary" shall mean any subsidiary of the Company.
(r) "Transfer" shall mean a change in a Participant's employment
from a Participating Employer to a Subsidiary which is not a
Participating Employer.
ARTICLE II
PARTICIPATION
2.1 Eligibility
All key officers and Employees as the Committee may approve who expect
to have Compensation and such other items of income as the Committee
shall determine, of over the amount fixed from time to time by the
Secretary of the Treasury pursuant to Section 401(a)(17) of the Internal
Revenue Code of 1986, as amended, for the next Plan Year, shall be
Eligible Employees and may be Participants for the next Plan Year. The
Committee may change the requirements in this Section 2.1 for
eligibility, provided, however, that the Committee shall not decrease
said income eligibility requirement.
2.2 Participating Employers
Any Subsidiary, with the approval of the Company, may adopt this Plan
for its Eligible Employees.
2.3 Notice of Eligibility
The Committee or its appointed representative shall notify each Eligible
Employee no later than 30 days prior to the first business day of any
Plan Year or as soon thereafter as practicable, that he/she is entitled
to become a Participant in the Plan for such Plan Year.
2.4 Participation Election
Each Eligible Employee shall give written notice to the Committee or its
representative, of his/her election to become a Participant in the Plan
for any Plan Year, no later than the last business day of the preceeding
Plan Year. Such notice shall specify the deferral percentages or amount
of Compensation expected to be earned and payable with respect to the
upcoming Plan Year to be deferred when such amounts would otherwise be
payable, as set forth in Section 3.1 of the Plan. If an Eligible
Employee fails to give such written notice of election, such failure
will be deemed an election not to become a Participant for such Plan
Year. No change may be made in deferral election for the plan year for
which a deferral election previously has been made. However, a
participant may at any time suspend participation in the Plan for the
remainder of a plan year as to deferrals of the salary component of
compensation, and deferrals of said salary under the Plan for that plan
year will discontinue, starting with salary earned in the month
following the receipt by the Committee or its appointed representative
of written notice of such suspension.
2.5 Participation Election Form
The Committee shall approve and distribute to all Eligible Employees a
form which shall be used by Eligible Employees to notify the Committee
of their election to participate in the Plan pursuant to Section 2.4
hereof. Such form shall clearly delineate the deferral alternatives
provided by the Plan, pursuant to Section 3.1 hereof.
ARTICLE III
DEFERRALS
3.1 Amount of Deferral
Pursuant to Section 2.4 hereof, a Participant may elect to defer in
whole number percentages or whole dollar terms, or a combination
thereof, up to all of the aggregate of that portion of a Participant's
base salary, annual bonus, LTIP awards and any other compensation
payable for services rendered during the Plan Year and such other
portion of such Participant's Compensation as may be designated by the
Committee, in excess of (i) the amount fixed from time to time by the
Secretary of the Treasury pursuant to Section 401(a)(17) of the Internal
Revenue Code of 1986, as amended, or (ii) any other higher limitation
expressly imposed by the Committee.
3.2 Effective Date of Deferral
Compensation deferred shall be credited to a Participant's Account as
set forth in Section 4.2.
3.3. Use of Amounts Deferred
Amounts credited to Deferred Compensation Accounts hereunder shall be a
part of the general funds of the Company, shall be subject to all the
risks of the Company's business, and may be deposited, invested or
expended in any manner whatsoever by the Company.
ARTICLE IV
DEFERRED COMPENSATION ACCOUNTS AND VESTING
4.1 Establishment of Account
The Committee shall establish, by bookkeeping entry on the books of the
Company, a Deferred Compensation Account for each Participant. Such
Account shall be established as of the first day of the Plan Year for
which the Eligible Employee first becomes a Participant.
4.2 Contributions to Account
The Committee shall cause deferred Compensation to be credited by
bookkeeping entry to each Participant's Account as of the date when such
Compensation otherwise would have been payable to the Participant.
4.3 Accrual of Interest on Compensation Deferred
To each Subaccount shall be credited, as applicable, Compensation
deferred, Dividend Equivalents on Common Shares, and interest. Payments
to the Participant or amounts transferred to another Subaccount under
the Plan shall be debited to the appropriate Subaccount.
(a) Subaccount #1 - Sears Roebuck Acceptance Corp. Commercial
Paper Rate. Compensation deferred into Subaccount #1 shall be credited
to the Subaccount on the same date when it would otherwise be payable to
the Participant. Compensation deferred shall earn interest from the
date of credit to the date of
payment. At the end of each calendar month, interest at a rate equal to
the monthly average per annum cost of commercial paper or the equivalent
issued by Sears Roebuck Acceptance Corp. ("SRAC") as reported in the
monthly report to the SRAC Board of Directors shall be credited to the
amounts previously accrued in each Subaccount for the period from the
date amounts were credited to such Subaccount to the end of such
calendar month.
(b) Subaccount #2 - Common Share Units. Compensation deferred
into Subaccount #2 shall be credited to the Subaccount on the same date
when it would otherwise be payable to the Participant. Such
Compensation shall be converted into a number of Common Share Units on
the date credited to the Subaccount by dividing the Compensation
deferred by the Fair Market Value on such date. If Common Share Units
exist in a Participant's Subaccount which are indexed under Subaccount
#2 on a dividend record date for the Company's common shares, Dividend
Equivalents shall be credited to the Participant's Subaccount on the
related dividend payment date, and shall be converted into the number of
Common Share Units which could be purchased with the amount of Dividend
Equivalents so credited.
In the event of any change in the Company's common shares
outstanding, by reason of any stock split or dividend, recapitalization,
merger, consolidation, combination or exchange of stock or similar
corporate change, the Committee shall make such equitable adjustments,
if any, by reason of any such change, deemed appropriate in the number
of Common Share Units credited to each Participant's Subaccount #. 2.
Subject to changes in the law, the Common Share Units will be
treated as derivative securities as defined in the rules promulgated
under Section 16 of the Securities Exchange Act of 1934. A Section
16(a) Participant may opt out of such treatment by irrevocably waiving
in writing the right to have amounts transferred out of this Subaccount,
except incident to Separation from Service, death or disability.
(c) Subaccount #3 - Equity Index Subaccount. Compensation
deferred into Subaccount #3 shall be credited to the Subaccount on the
same date when it would otherwise be payable to the Participant. On the
last day in the month the amounts in the Participant's Subaccount shall
be adjusted by a percentage factor based on the total return (including
dividends) of the Equity Index from the date the amount was credited to
the Subaccount for amounts credited during the month or from the last
day of the preceding month for amounts in the Subaccount on such day.
Similar adjustments shall also be made on any date the Subaccount is
debited by reason of any transfer of an amount to another Subaccount or
distribution to the Participant. In the event that the Equity Index is
not published for any date referred to above, the Equity Index for the
closest day preceding such date for which such Index is published shall
be used.
(d) Subaccount #4 - Fixed Income Index Subaccount.
Compensation deferred into Subaccount #4 shall be credited to the
Subaccount on the same date when it would otherwise be payable to the
Participant. Amounts credited to the Subaccount shall earn additional
amounts which will be credited to the Subaccount on the last business
day of each month based upon the performance of the Fixed Income Index.
(e) Subaccount #5 - Restricted Common Share Unit Account.
Compensation deferred into Subaccount #5 shall be credited to the
Subaccount on the same date when it would otherwise be payable to the
Participant. If a Participant has elected to defer all or any portion
of his or her annual bonus Compensation or LTIP Compensation under any
plan, contract, authorization or arrangement of the Company, then the
Participant may elect to invest such deferrals in restricted common
share units and the dollar amount of such Compensation will be allocated
to Subaccount #5 and to no other Subaccount, except as provided below.
Such amounts will be converted into Common Share Units on the
above-mentioned date and thereafter will be held in Subaccount #5 and
administered for all purposes in the same manner as Compensation
deferred into the Common Share Unit Account set forth in Section 4.3(c),
including but not limited to, the allocation of Dividend Equivalents.
Any event that would cause a forfeiture of restricted shares under any
of the above-mentioned plans or arrangements of the Company shall cause
a forfeiture of Common Share Units under Subaccount #5.
On the date on which all restrictions would lapse if a participant
had received restricted common shares pursuant to any of the above-
mentioned plans or arrangements, instead of restricted common share
units pursuant to this Plan, all Dividend Equivalents (except for
Dividend Equivalents accruing as of the close of business on such date)
will cease to accrue and all amounts in Subaccount #5 will automatically
be transferred into Subaccount #2 and thereafter will be subject to all
of the provisions of the Plan applicable to Subaccount #2, including
provisions relating to transfers of amounts between Subaccount #2 and
other Subaccounts and distribution.
Under no circumstances may a Participant who has received
restricted common shares of the Company pursuant to any plan or
arrangement be allowed to defer such shares into this Plan.
(f) Transfers between Subaccounts. Transfers among Subaccounts
#1, #3 and #4, and, except as otherwise provided below, Subaccount #2,
may be made once for each calendar month at the request of the
Participant upon application to the Committee, and shall be effective as
of the first day of the calendar month subsequent to the month in which
the Company receives such Participant's request to transfer. Except for
the mandatory transfer referred to in Section 4.3(e) above, no transfers
shall be allowed to or from Subaccount #5.
Section 16(a) Participants may transfer balances carried in
Subaccount #2 to another Subaccount, or from another Subaccount into
Subaccount #2, only upon application to and approval by the Secretary.
Such transfers may be made only during the ten business days commencing
on the third and ending on the twelfth business day following the
release of quarterly and annual summary statements of the Company's
sales and earnings. No more than four such transfers may be made in any
calendar year.
(g) The following definitions apply to this Section 4.3:
1) "Common Share Unit" shall mean an amount of
Compensation deferred which is converted into a unit or fraction of a
unit for purposes of the Plan by dividing a dollar amount by the Fair
Market Value of one of the Company's common shares.
2) "Common shares" shall mean the Company's common shares,
par value $.75 per share.
3) "Dividend Equivalent" shall mean an amount equal to the
cash dividend paid on one of the Company's common shares credited to a
Subaccount for each Common Share Unit credited to such Subaccount.
4) "Equity Index" shall mean the Standard & Poor's 500
Composite Stock Price Index which is a market value-weighted index
consisting of 500 common stocks of large U.S. domiciled companies
selected by Standard and Poor's Corporation ("S&P") through a detailed
screening process starting on a macro-economic level and working toward
a micro-economic level dealing with company specific information such as
market value, industry group classification, capitalization and trading
activity. S&P's primary objective for the S&P Index is to represent the
segment of the U.S. equity securities markets consisting of large market
capitalization stocks. However, companies are not selected by S&P for
inclusion because they are expected to have superior stock price
performance relative to the market in general or other stocks in
particular.
5) "Fair Market Value" shall mean the closing price of the
Company's common shares as reported by the Wall Street Journal or other
comparable source in a summary of composite transactions for stocks
listed on the New York Stock Exchange.
6) "Fixed Income Index" shall mean the Lehman Brothers
Aggregate Bond Index, which is made up of the Lehman
Government/Corporate Bond Index ("Bond Index"), the Lehman Mortgage-
Backed Securities Index ("Mortgage-Backed Securities Index"), and the
Lehman Asset-Backed Securities Index ("Asset-Backed Securities Index").
The Bond Index is a composite of all publicly issued, fixed rate,
nonconvertible, domestic bonds. The issues are rated investment grade
or higher by Moody's Investors Service, Inc., S&P, or Fitch Investors
Service, Inc., in that order, have a minimum outstanding principal of
$100 million for U.S. Government issues or $50 million for other bonds,
and have a maturity of at least one year. The index is capitalization-
weighted. The Mortgage-Backed Securities Index includes 15- and 30-year
fixed rate securities backed by mortgage pools of the Government
National Mortgage Association, the Federal Home Loan Mortgage
Corporation, and the Federal National Mortgage Association. Graduated
payment mortgages and balloon mortgages are included in the index;
buydown, manufactured homes and graduated equity mortgages are not. The
Asset-Backed Securities Index is composed of credit card, auto, and home
equity loans. Included in the index are pass-through, bullet
(noncallable), and controlled amortization structures; no subordination
tranches are included. All securities have an average life of at least
one year.
7) "Secretary" shall mean the duly elected Secretary of
the Company.
8) "Section 16(a) Participants" shall mean Participants
who are required to file reports under Section 16(a) of the Securities
Exchange Act of 1934, as amended.
9) "Subaccount" shall mean the portion of the balance in
an Account reflecting the Compensation deferred and indexed, as
specified by the Participant, against one of the indices set forth in
Sections 4.3(a), (b), (c), (d) or (e), and the interest amounts
credited thereto.
(h) Each Participant may vary the choice of indices against
which interest on Compensation is measured by executing and delivering a
notice to the Director of Compensation of the Company at any time. Such
election shall be applicable only to Compensation payable on or after
the first day of the month following the month in which such Notice of
Election is received.
(i) The Plan provisions contained in subsections 4.3(b), (e),
(g)(1), (g)(2), (g)(3), (g)(4), (g)(5), (g)(6), (g)(8), (h) and the
second paragraph of subsection 4.3(f) shall not be amended more than
once every six months, other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security Act of
1974, or the rules thereunder.
4.4 Vesting
A Participant shall be fully vested in his/her Deferred Compensation
Account at all times, subject to Sections 3.3 and 8.2.
4.5 Transfers
In the event of a Transfer, deferrals of Compensation under this Plan
shall be discontinued as of the first day of the pay period during which
the Transfer becomes effective, according to Company policy. The
Participant's Account shall continue to accrue interest in the same
manner as the Accounts of all other Participants, until such time as the
Account is distributable pursuant to Article V. In the event such an
Employee again becomes an Eligible Employee, he will be notified of his
eligibility to become a Participant again in accordance with the
procedure set forth in Section 2.3 and may elect to become a Participant
again in accordance with the procedure in Section 2.4.
ARTICLE V
PAYMENTS
5.1 Events Causing Accounts to Become Distributable
A Participant's Account becomes distributable on the date on which any
of the following occurs:
(a) Separation from Service;
(b) In a lump sum, one or two years subsequent to
Separation from Service, at the election of the Participant;
(c) Demonstration of Hardship by the Participant to the
Committee or its representative; and
(d) As to all or any portion of an Account attributable to
Compensation deferred and interest accrued thereon after the date on
which the Committee receives a Participant's election form under this
subsection 5.1(d) as shall be irrevocably specified by the Participant,
on a date certain occurring at any time subsequent to the fiscal year in
which the Participant first participates in the Plan. Any balance in
the Participant's Account remaining after any payment under this
paragraph (d) and any balance in the Account attributable to
participation in the Plan in any year subsequent to the year in which a
payout on such date certain occurs, shall be paid to the Participant as
provided in paragraphs (a), (b) or (c) above.
Notwithstanding any contrary election by a Participant, any payment
under this Section 5.1 which would be made at a time when a Participant
is a "covered employee" as defined in Section 162(m) of the Internal
Revenue Code of 1986, as amended, and which the Company would be
prohibited by said Section 162(m) from claiming as a deduction on any
tax return shall continue to be deferred hereunder until the first date
on which the Company can claim such deduction, unless further deferred
as provided in Section 5.1(b).
5.2 Notice of Account Payment and Commencement of Distribution
The Committee or its appointed representative shall notify a Participant
or Beneficiary, as the case may be, that he/she is entitled to receive
payment from an Account, no later than the first day of the month
succeeding the date on which the Account becomes distributable, or as
soon thereafter as practicable. Distribution of Account balances shall
commence on the first day of the month following the date on which the
Account becomes distributable, or as soon thereafter as practicable.
5.3 Form of Payment
(a) Except as provided in paragraphs (c) and (d) of this
Section 5.3 and Article VIII hereof, payments of Account balances to a
Participant shall be in the form of one lump sum payment or annual cash
installment payments over a period of from 1 to 10 years, at the
election of the Participant.
(b) The following formula shall be used to determine each
annual installment payment to a Participant who has elected to receive
installment payments:
remaining Account balance as of the current payment date
divided by
number of remaining payments, including the current one
Annual payments shall be made on the day payments commence pursuant to
Section 5.2 and on each annual anniversary date of such initial payment.
Interest shall continue to accrue on the entire unpaid Account balance,
as provided in Section 4.3.
(c) In the event of a Participant's death prior to full
distribution of his/her Account, the remaining Account balance shall be
paid in a lump-sum to the Beneficiary or Beneficiaries, according to the
designation made by the Participant, as soon as practicable after a
Participant's death, and shall accrue interest until the account is
completely distributed.
(d) Notwithstanding the provisions of paragraph (b) above, if
the remaining unpaid Account balance is $5,000 or less on any date an
annual installment payment is to be made to a Participant, the payment
shall be the remaining unpaid Account balance.
5.4 Distribution Election
(a) Each Participant shall give written notice of his/her
desired form of payment at the time of his/her participation election
set forth in Section 2.4.
(b) Except for distribution elections under Section 5.1(d),
each Participant may from time to time revise the terms of distribution
of the Participant's Account by submitting a revised written notice of
his/her desired form of payment, provided that (i) the revised written
notice of his/her desired form of payment shall be filed by the
Participant with the Committee or its representative no less than twelve
months prior to the date on which payment would commence to be made in
the absence of such revised written notice, but in any event no later
than the day before the date of the Participant's Separation from
Service and (ii) in any event, distribution of the Participant's Account
shall not commence earlier than twelve months after the Participant's
revised notice of his/her desired form of payment is filed with the
Committee or its representative.
5.5 Distribution Election Form
The Committee shall approve and distribute to all Participants a form
which shall be used by each Participant to notify the Committee of
his/her desired form of payment or to notify the Committee of any
revision to his/her desired form of payment. Such form shall clearly
delineate the payment alternatives provided pursuant to Section 5.4
hereof.
ARTICLE VI
ADMINISTRATION
6.1 General Administration; Rights and Duties
Subject to the express limitations of the Plan, the Committee, on behalf
of the Participants, shall be charged with the general administration of
the Plan and with the responsibility for carrying out its provisions,
and shall have all powers necessary to accomplish those purposes,
including, but not by way of limitation, the following:
(a) To construe and interpret the Plan;
(b) To compute the amount of benefits payable to Participants;
(c) To authorize all disbursements by the Company of Account
balances pursuant to the Plan;
(d) To maintain all the necessary records for the
administration of the Plan;
(e) To make and publish rules for the administration and
interpretation of the Plan and the transaction of its business;
(f) To inform each Participant as soon as practicable after
January 1 of each Plan Year, of the value of the Participant's Deferred
Compensation Account as of the end of the previous Plan Year; and
(g) To appoint (i) officers or Employees of the Company whom
the Committee believes to be reliable and competent; and (ii) legal
counsel (who may be Employees of the Company and Participants),
independent accountants and other persons to assist the Committee in
administering the Plan.
The determination of the Committee as to any disputed question or
controversy shall be conclusive.
Any member of the Committee may resign by delivering a written
resignation to the Board.
ARTICLE VII
PLAN AMENDMENTS AND TERMINATION
7.1 Amendments
The Company shall have the right to amend this Plan from time to time by
resolutions of the Board or by the Committee, and to amend or rescind
any such amendments; provided, however, that no action under this
Section 7.1 shall in any way reduce the amount of Compensation deferred
or any interest thereon, up to and including the end of the month in
which such action is taken. Interest will continue to accrue as
provided in Section 4.3. All such amendments shall be in writing and
shall be effective as provided by the Board or the Committee, as the
case may be, subject to the limitations in this Section 7.1. The
Committee shall inform each Participant as soon as practicable following
the enactment of any such amendment.
7.2 Termination of Plan
Although the Company expects that this Plan will continue indefinitely,
continuance of this Plan is not a contractual or other obligation of the
Company, and the Company expressly reserves its right to discontinue
this Plan at any time by resolutions of the Board, effective as provided
by the Board in such resolutions. However, no such action shall in any
way reduce the amount of Compensation deferred or any interest thereon,
up to and including the end of the month in which such action is taken.
Interest will continue to accrue as provided in Section 4.3.
ARTICLE VIII
MISCELLANEOUS
8.1 Notification to Committee
Any notification given by a Participant pursuant to this Plan shall be
made in writing to the Committee or to such representative of the
Committee as may be designated by it for such purpose, and shall be
deemed to have been made or given on the date received by the Committee
or such representative.
8.2 Participants' Employment
Participation in this Plan shall not give any Participant the right to
be retained in the Company's employ or any right or interest other than
as herein provided. No Participant or Employee shall have any right to
any payment or benefit hereunder except to the extent provided in this
Plan. The Company expressly reserves the right to dismiss any
Participant without any liability for any claim against the Company,
except to the extent expressly provided herein. This Plan shall create
only a contractual obligation on the part of the Company and shall not
be construed as creating a trust or other fiduciary relationship with
Participants. Participants will have only the rights of general
unsecured creditors of the Company with respect to Compensation deferred
and interest credited to their Accounts.
8.3 Other Plans
This Plan shall not affect the right of any Employee or Participant to
participate in and receive benefits under and in accordance with the
provisions of any other Company plans which are now or may hereafter be
in existence.
8.4 Beneficiaries and Contingent Beneficiaries
Each Participant shall, by written notice to the Committee, designate
one or more persons or entities (including a trust or trusts or his/her
estate) to receive any balance in his/her Deferred Compensation Account
and interest thereon, payable to him/her under this Plan in the event of
his/her death prior to full payment thereof. The Participant may also
designate a person or persons as a Contingent Beneficiary or Contingent
Beneficiaries who shall succeed to the rights of the person or persons
originally designated as Beneficiary or Beneficiaries, in case the
latter should die. He/she may from time to time change any designation
of Beneficiary or Contingent Beneficiary so made, and the last written
notice given by him/her to the Committee shall be controlling. In the
event a Participant designates a person other than his/her spouse as
Beneficiary of any interests under this Plan, the Participant's spouse
shall sign a statement specifically approving such designation and
authorizing the Committee to make payment of such interests in the
manner provided in such designation. In the absence of such designation
by the Participant, or in the absence of spousal approval and
authorization as hereinabove provided, or in the event of the death
prior to or simultaneous with the death of the Participant, of all
Beneficiaries or Contingent Beneficiaries, as the case may be, to whom
payments were to be made pursuant to a designation under this Section,
and failing any other valid designation by the Participant, such
payments or any balance thereof shall be paid to such Participant's
legal representatives. In the event of the death, subsequent to the
death of the Participant, of all Beneficiaries or Contingent
Beneficiaries, as the case may be, to whom such payments were to be made
or were being made pursuant to a designation under this section, such
payments or any balance thereof shall be paid to the legal
representatives of such Beneficiaries or Contingent Beneficiaries.
8.5 Taxes
To the extent permitted by law, if the whole or any part of a
Participant's Account shall become the subject of any estate,
inheritance, income or other tax which the Company shall legally be
required to withhold and/or pay, the Company shall have full power and
authority to pay such tax out of any monies or other property in its
hands and charge such amounts paid against the Account of the
Participant whose interest hereunder is subject to such taxes. Prior to
making any such tax payment, the Company may require such releases or
other documents from any lawful taxing authority as the Company shall
deem necessary.
8.6 Benefits Not Assignable; Obligations Binding Upon Successors
Benefits under this Plan and rights to receive the amounts credited to
the Account of a Participant shall not be assignable or transferable and
any purported transfer, assignment, pledge or other encumbrance or
attachment of any payments or benefits under this Plan, other than by
operation of law, shall not be permitted or recognized. Obligations of
the Company under this Plan shall be binding upon successors of the
Company.
8.7 Illinois Law Governs; Saving Clause
The validity of this Plan or any of its provisions shall be construed
and governed in all respects under and by the laws of the State of
Illinois. If any provisions of this Plan shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining
provisions hereof shall continue to be fully effective.
8.8 Headings Not Part of Plan
Headings and subheadings in this Plan are inserted for reference only,
and are not to be considered in the construction of the provisions
hereof.
8.9 Mid-Year Participants
Notwithstanding Article III and Sections 4.5, 5.4 and 5.5 of the Plan,
any person who shall be elected or appointed as an officer of a
Participating Employer and who expects to have Compensation over the
amount specified in Section 2.1 of the Plan for the Plan Year of his or
her election as an officer, and any person who becomes eligible to
participate in an LTIP ("Mid-Year Participants"), shall be an Eligible
Employee and may be a Participant, with respect to the portion of the
Plan Year beginning the day after the effective date of election or
appointment, or eligibility to participate in an LTIP. The Director of
Compensation of the Company is directed to notify all persons who become
Mid-Year Participants of their eligibility to participate in the Plan,
as soon as practicable after their election or appointment or after they
become eligible to participate in an LTIP. Each Mid-Year Participant
shall give written notice to the Committee or its representative, of his
or her election to become a Participant in the Plan for the remainder of
such Plan Year, on a form to be provided by the Company. If a Mid-
Year Participant fails to give such written notice of election within 30
days of being notified of his or her eligibility, such failure will be
deemed an election not to become a Participant for the remainder of such
Plan Year.
Sears, Roebuck and Co.
Deferred Compensation Plan
Plan Year 1996
Enrollment Form Table of Contents
Form - A Election to Defer Compensation Form
Form - B Sub-account Election Form
Form - C Beneficiary Designation Form
Form - D Account Distribution Election Form
Form - E In-Service Account Distribution Election Form
Form - F Sub-account Transfer Request Form
Form - G Dean Witter Sub-account Transfer Request Form
The above forms are included in this Tab Section.
Plan Year 1996 Instructions
If You Currently Are Not A Participant
If you plan to defer compensation, you must submit forms A through D by
December 31, 1995. If you are nearing retirement, complete form D with
extreme care.
If you plan to defer compensation and would like an In-service Account
Distribution, you must submit Forms A through E, by December 31, 1995.
If You Currently Are A Participant
If you plan to defer compensation, you must submit forms A and B by
December 31, 1995.
Submit forms C or D only if you wish to make a change from your previous
election. Submit form F at this time only if you wish to transfer your
balance among sub-accounts. Submit form G only if you wish to have your
Dean Witter sub-account balance transferred to sub-accounts other than
the Lehman Brothers sub-account. If you are nearing retirement, please
be aware that any change on form D must be submitted at least 12 months
prior to retirement.
<PAGE>
Sears, Roebuck and Co.
Deferred Compensation Plan
Plan Year 1996
Enrollment Form Checklist
Purpose: The purpose of this checklist is to provide general guidance
as to which forms must be completed and submitted for various deferred
compensation elections.
You Must
If You Are: And You Want To: Submit Form(s)
________________________________________________________________________
________________________________________________________________________
A new participant Elect to receive all A, B, C, D
who plans to defer distributions after
in 1996 retirement.
Elect an In-service A, B, C, D, E
Distribution prior
prior to your retirement.
________________________________________________________________________
________________________________________________________________________
An existing Leave your beneficiary A, B
participant and distribution
who plans to type as they are.
defer in 1996
Transfer your existing A, B, F
deferred compensation
sub-account balance.
Leave your beneficiary A, B, E
designation as it is,
and elect an In-Service
Distribution prior to
your retirement.
________________________________________________________________________
________________________________________________________________________
An existing Transfer your existing F
participant not deferred compensation
planning to balance to a different
defer in 1996 subaccount(s).
Leave your account as is. No forms to
submit
________________________________________________________________________
________________________________________________________________________
An existing Transfer your existing G
participant Dean Witter sub-account
with a balance balance to something
in the Dean Witter other than the
sub-account new Lehman Brothers
sub-account. (Failure to
submit form G will result
in automatic transfer of
your Dean Witter balance
to the Lehman Brothers
sub-account).
<PAGE>
Sears, Roebuck and Co.
Deferred Compensation Plan
Plan Year 1996
Form - A Election to Defer Compensation Form
Please use this form to make your election to defer one or more of the
following components of your total compensation. Only the amount of
total aggregate compensation in excess of $150,000 (IRS/Treasury amount
for 1996) may be deferred.
BASE SALARY: (select only one of the following)
$________ Dollar amount of base salary in excess of $150,000.
________% Percentage of the excess of my base salary above $150,000.
Note: The amount specified above will be withheld on a prorata basis
from each pay period during the year.
ANNUAL BONUS: (select only one of the following)
This election applies to any bonus you may earn during 1996 that would
be paid in 1997.
$________ Dollar amount from my 1996 annual bonus that would be paid
in 1997.
________% Percentage of my 1996 annual bonus that would be paid in
1997.
LONG-TERM INCENTIVE (if applicable): (select only one of the following)
This election applies to the 1996 portion of the 1996-97 Cycle
Performance Plan payout that you may earn and would be paid in 1998.
$________ Dollar amount from my 1996 Long-Term bonus that would be
paid in 1998.
________% Percentage of my 1996 Long-Term bonus that would be paid in
1998.
OTHER DEFERRALS: (select only one of the following)
This election applies to any special one-time bonuses you may earn
during 1996 that would be paid in 1996 or 1997.
$________ Dollar amount from any 1996 special bonuses that would be
paid in 1996 or 1997.
________% Percentage of any 1996 special bonuses that would be paid in
1996 or 1997.
Note: The amount you may defer in total, from one or more of your
elections above, is limited to your total compensation in excess of
$150,000.
________________________________________________________________________
By my signature below, I hereby acknowledge that I have read the
disclaimer on the back of this form.
________________________________________________________________________
______________________________ ________________
Participant Date
______________________________
Print Name
_________________________________________________________________
I hereby acknowledge:
1) that no change can be made in deferral election for the Plan Year
for which this notice form is being submitted. However, I may at any
time suspend participation in the Plan for the remainder of 1996 as to
deferrals of the salary component of compensation and deferrals of
salary under the Plan for that Plan Year will discontinue, starting with
salary earned in the month following the receipt by the committee or its
appointed representative of written notice of such suspension;
2) that this form must be submitted no later that the close of
business on December 31, 1995 for the requested deferral to be
effective; and
3) that I may obtain a copy of the documents incorporated into the
Prospectus relating to the Plan, upon oral or written request to the
Director of Investor Relations, Department 962.
___________________________________________________________________
<PAGE>
Sears, Roebuck and Co. Market Focus
Deferred Compensation Plan
Plan Year 1996
Form - A Election to Defer Compensation Form
Please use this form to make your election to defer one or more of the
following components of your total compensation. Only the amount of
total aggregate compensation in excess of $150,000 (IRS/Treasury amount
for 1996) may be deferred.
Regular Compensation:
Base Salary: (select only one of the following)
$________ Dollar amount of base salary in excess of $150,000.
________% Percentage of the excess of my base salary above $150,000.
Note: The amount specified above will be withheld on a prorata basis
from each pay period during the year.
Annual bonus: (select only one of the following)
This election applies to any bonus you may earn during 1996 that would
be paid in 1997.
$________ Dollar amount from my 1996 annual bonus that would be paid
in 1997.
________% Percentage of my 1996 annual bonus that would be paid in
1997.
Annual milestone award: (select only one of the following)
$________ Dollar amount from my 1996 Annual Milestone Award that would
be paid in 1997.
________% Percentage of my 1996 Annual Milestone Award that would be
paid in 1997.
Gainsharing Award: (select only one of the following)
This election applies to the 1996 portion of the Gainsharing Award that
may be earned and would be paid in 1997.
$________ Dollar amount from my 1996 Gainsharing Award that would be
paid in 1997.
________% Percentage of my 1996 Gainsharing Award that would be paid
in 1997.
Note: The amount you may defer in total, from one or more of your
elections above, is limited to your total compensation in excess of
$150,000.
Other Deferrals: (select only one of the following)
This election applies to any special one-time bonuses you may earn
during 1996 that would be paid in 1996 or 1997.
$________ Dollar amount from any 1996 special bonuses that would be
paid in 1996 or 1997.
________% Percentage of any 1996 special bonuses that would be paid in
1996 or 1997.
Note: The amount you may defer in total, from one or more of your
elections above, is limited to your total compensation in excess of
$150,000
_______________________________________________________________________
By my signature below, I hereby acknowledge:
1) that no change can be made in deferral election for the Plan Year
for which this notice form is being submitted. However, I may at any
time suspend participation in the Plan for the remainder of 1996 as to
deferrals of the salary component of compensation and deferrals of
salary under the Plan for that Plan Year will discontinue, starting with
salary earned in the month following the receipt by the committee or its
appointed representative of written notice of such suspension;
2) that this form must be submitted no later that the close of
business on December 31, 1995 for the requested deferral to be
effective; and
3) that I may obtain a copy of the documents incorporated into the
Prospectus relating to the Plan, upon oral or written request to the
Director of Investor Relations, Department 962.
________________________________________________________________________
______________________________ ________________
Participant Date
______________________________
Print Name
<PAGE>
Sears, Roebuck and Co.
Deferred Compensation Plan
Plan Year 1996
Form - B Sub-account Election Form
Please credit my Deferred amounts to the following sub-account(s). I
understand that the following allocation is for compensation deferred in
the 1996 Plan Year.
In making your selections you should refer to the package of documents
related to Sears that you received with this binder.
________% Interest Bearing - SRAC Commercial Paper Rate
________% Sears Common Share Unit
________% Standard & Poor's 500 Composite Stock Price Index
________% Lehman Brothers Aggregate Bond Index
100%
A short description (1) of each fund follows as of November, 1995:
Interest Bearing --Amounts credited to this account will earn interest
based on the Sears Roebuck Acceptance Corp. cost of commercial paper.
SRAC's cost of commercial paper has varied from 5.74% to 6.30% for 1995
to date.
Sears Common Share Unit--Amounts credited to this account shall be
converted to Common Share units based upon the Fair Market Value of
Sears shares on the date of deposit. Dividend equivalents will be
credited on the dividend payment date. Sears shares month-end closing
prices were in the following range during 1995 to date: $32.63 to $36.38
(post Allstate spinoff). (No investment in Sears stock is being made;
therefore, no stock certificates will be issued.)
Standard & Poor's 500 Index --Amounts credited to this account shall be
adjusted based on the percent change in the S&P 500 Index (including
dividends) during the month. The monthly percentage change in the Index
has varied from .27% to 4.20% during 1995 to date.
Lehman Brothers Aggregate Bond Index --Amounts credited to this account
shall be adjusted based on the percent change in this bond index during
the month. The average monthly yield has varied from -.24% to 3.84%
during 1995 to date.
1. Description is qualified in entirety by reference to the Plan
document.
________________________________________________________________________
By my signature below, I hereby acknowledge that I have read Article IV
of the Plan document.
_______________________________________________________________________
______________________________ ________________
Participant Date
______________________________
Print Name
<PAGE>
Sears, Roebuck and Co.
Deferred Compensation Plan
Form - C Beneficiary Designation Form
Primary Beneficiary Designation (If other than spouse, see waiver
below.):
Name
Relationship
Social
Security #
% of Account
Contingent Beneficiary Designation:
Name
Relationship
Social
Security #
% of Account
______________________________ ________________
Participant Date
______________________________
Print Name
Spousal Waiver
(Must be signed if named beneficiary is someone other than your spouse.)
I understand that all or part of my spouse's account balance will be
paid to the beneficiary(ies) other than myself as specified in my
spouse's Beneficiary Designation. I hereby voluntarily consent to my
spouse's designation of such beneficiary(ies).
I agree to release and discharge Sears, Roebuck and Co., and all its
directors, officers, employees and agents from liability for acting
pursuant to this consent. I realize that my consent is irrevocable
unless my spouse revokes the beneficiary designation.
______________________________ ________________
Spouse Date
<PAGE>
Sears, Roebuck and Co.
Deferred Compensation Plan
Form - D Account Distribution Election Form
Please elect only one of the following forms of distribution for your
Deferred Compensation Account. This election of account distribution
will remain in effect until such time that you request a change in your
election be made. A change in election for distribution may be made at
any time prior to separation from service but not later than 12 months
prior to your separation from service. (If you are nearing retirement,
complete this form with extreme care.)
________ Please distribute my Deferred Compensation Account as one
lump-sum payment at the date of my separation from service.
________ Please distribute my Deferred Compensation Account as one
lump-sum payment to be made _____ (1 or 2) year(s) following my
separation from service.
________ Please distribute my Deferred Compensation Account in ____
(from 1 to 10) annual installment payments.
________________________________________________________________________
By my signature below, I hereby acknowledge:
1) that I have read Article V of the Plan document; and
2) that I may file a revised election no less than 12 months prior to
the date of my separation from service.
________________________________________________________________________
______________________________ ________________
Participant Date
______________________________
Print Name
<PAGE>
Sears, Roebuck and Co.
Deferred Compensation Plan
Form - E In-Service Account Distribution Election Form
The Deferred Compensation Plan allows full or partial account
distributions while you are still employed by the Company. You may
specify a specific date in the future that you would like either all, or
a portion of your account distributed. THIS ELECTION MAY NOT BE REVOKED
OR AMENDED AND APPLIES TO ALL COMPENSATION DEFERRED UNTIL THE DATE
SPECIFIED BELOW. Amounts distributed will be taxable income in the year
the payment is received. Any distribution will be in the form of a lump-
sum payment (1).
This election applies only to amounts deferred beginning with Plan Year
1996. In addition, this election applies to all future deferrals through
the date of distribution specified below.
Percentage of Deferred Compensation
Account to be distributed in one lump-sum ________%
Maximum dollar amount to be distributed $________
Date on which distribution is to occur ________(MM/DD/YY)
1. See section 5.1(d) of the Plan.
________________________________________________________________________
By my signature below, I hereby acknowledge:
1) that I have read Article V of the Plan document; and
2) that this form must be submitted no later than the close of
business on December 31, 1995 for the request to be effective as to all
compensation deferred for 1996.
________________________________________________________________________
___________________________ ________________
Participant Date
______________________________
Print Name
<PAGE>
Sears, Roebuck and Co.
Deferred Compensation Plan
Form - F Request to Transfer Deferred Compensation Account Balance
and/or Change Investment Allocation Alternatives
Purpose: The Deferred Compensation Plan provides for four earnings
measurement vehicles. The purpose of this schedule is to offer existing
Plan participants an opportunity to transfer their Account Balances, or
any portion thereof, to one or more sub-accounts and/or to change their
deposit allocations (i.e., you may do either or both).
Account Balances:
Please Transfer The Following Percentage of Transfer
Percentage Of My Account: Into the Following
Account(s)
Sears/CSU S&P SRAC Lehman
Sears Common Share Unit (1)__% N/A
S&P__% N/A
SRAC__% N/A
Lehman Brothers__% N/A
Note: You need not transfer your entire account.
Deposit Allocations: (Remaining 1996 deposits, beginning with the
first deposit of the next month.)
Current
Sears S&P SRAC Lehman Brothers
Total 100%
Revised
Sears S&P SRAC Lehman Brothers
Total 100%
The effective date of this transfer will be on the first day of the
month following the date indicated below.
1. For Section 16(a) officers, transfers into and out of this account
are limited and must be approved by the Secretary.
_______________________________________________________________________
By my signature below, I hereby acknowledge that I have read Article IV
of the Plan document.
_______________________________________________________________________
______________________________ ________________
Participant Date
______________________________
Print Name
<PAGE>
Sears, Roebuck and Co.
Deferred Compensation Plan
Form - G Transfer of Existing Dean Witter Account Balance
Purpose: The Lehman Brothers Aggregate Bond Index sub-account has
replaced the Dean Witter Money Market sub-account. Your Dean Witter sub-
account balance will automatically be transferred to the Lehman Brothers
sub-account unless you return this form prior to December 31, 1995.
Dean Witter Account Balance:
Please Transfer My Dean Witter Account Balance Into the Following
Account(s):
Sears__% S&P__% SRAC__% Lehman Brothers__% Total 100%
The effective date of this transfer will be January 1, 1996
________________________________________________________________________
By my signature below, I hereby acknowledge that I have read Article IV
of the Plan document.
________________________________________________________________________
______________________________ ________________
Participant Date
______________________________
Print Name
