SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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Sears, Roebuck and Co.
(Exact name of registrant as specified in its charter)
New York
(State of Incorporation)
36-1750680
(I.R.S. Employer Identification No.)
3333 Beverly Road
Hoffman Estates, Illinois 60179-0002
(847) 286-2500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Michael D. Levin, Esq.
Senior Vice President, General Counsel and Secretary
Sears, Roebuck and Co.
3333 Beverly Road, Hoffman Estates, Illinois 60179-0002
(847) 286-2500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
copy to:
Venrice R. Palmer, Esq.
Senior Counsel
Sears, Roebuck and Co.
3333 Beverly Road, Hoffman Estates, Illinois 60179-0002
(847) 286-9238
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, please check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering.
[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus
contained herein is a combined prospectus that also relates to 1,619,426
common shares registered on Registration No. 33-23793 that have not yet
been offered for sale.
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities To Be Registered: Common Shares, par value $.75 per
share
Amount to be Registered: 3,380,574
Proposed Maximum Offering
Price Per Unit $45.00(1)
Proposed Maximum Aggregate
Offering Price 152,125,830
Amount of Registration Fee $52,457(2,3)
(1) Estimated solely for purposes of determining the amount of the
registration fee, in accordance with Rule 457(c) on the basis of the
average of the high and low prices of Sears common shares on the New
York Stock Exchange Composite Tape for July 12, 1996.
(2) A registration fee of $35,880 was paid with respect to the earlier
registration of 5,000,000 common shares pursuant to Registration No. 33-
23793, of which $11,595.09 represented the proportionate amount of the
fee associated with the common shares which have not yet been sold.
(3) The filing fee has been calculated pursuant to Rule 457(c) based
on the average of the high and low prices for Sears common shares on
July 12, 1996 of $45.00.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
SEARS (logo)
________________, 1996
Prospectus
SEARS, ROEBUCK AND CO.
DIRECT PURCHASE STOCK PLAN
(5,000,000 Common Shares,
par value $.75 per share)
The Direct Purchase Stock Plan of Sears, Roebuck and Co. ("Sears" or the
"Company") is designed to provide investors with a convenient way to
purchase Sears common shares, par value $.75 per share ("Sears common
shares" or "Sears shares") and to reinvest their cash dividends. This
Plan replaces the Dividend Reinvestment and Share Purchase Plan and
participants in that plan automatically continue in this Plan unless
they elect not to do so. As a result of the new fee structure described
in this Prospectus, participants in the former Dividend Reinvestment and
Share Purchase Plan who hold less than 5 whole Sears shares will have
insufficient remaining dividends to be reinvested once expenses of their
Plan accounts are deducted from their cash dividends. (See " TRANSACTION
FEES" on page _____). At any time, a participant may terminate his or
her account and withdraw shares in the account, subject to the terms
outlined in this Prospectus.
- --Persons who are not shareholders may enroll either by investing at
least $500 or by authorizing automatic withdrawals of at least $100 a
month for five consecutive months.
- --Cash dividends may be automatically reinvested in additional Sears
shares.
- --Once enrolled, participants may make additional investments of $50 or
more up to $150,000 per year.
- --Shareholders may deposit their Sears share certificates with the Plan
Administrator.
- --Participants may establish an Individual Retirement Account ("IRA")
which invests in Sears shares through the Plan.
- --Participants will be required to pay certain fees in connection with
the Plan.
First Chicago Trust Company of New York has been appointed Plan
Administrator for the Plan (the "Plan Administrator"). All Plan
purchases will be made at market prices for Sears common shares,
calculated as described herein, either in the open market or from the
Company.
This Prospectus contains a summary of the material provisions of the
Plan and, therefore, should be retained for future reference. The
following discussion is qualified in its entirety by the text of the
Plan, which is filed as an exhibit to the Registration Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
No person is authorized by Sears to give any information or to make any
representation other than those contained in this Prospectus in
connection with the offering described herein, and if given or made,
such information or representations must not be relied upon as having
been authorized by Sears. This Prospectus does not constitute an offer
of any securities other than those to which it relates or an offer to
sell, or a solicitation of an offer to buy, the securities to which it
relates in any jurisdiction to any person to whom it is not lawful to
make any such offer or solicitation in such jurisdiction.
<PAGE>
TABLE OF CONTENTS
Available Information
Incorporation of Certain Documents by Reference
The Company
Summary of the Plan
Plan Administration
Eligibility
Enrollment Procedures
Direct Purchase of Sears Shares
Dividend Reinvestment
Direct Deposit of Dividends
Purchase of Sears Common Shares
Sale of Shares
Withdrawal from the Plan
Certificate Safekeeping
Gifts and Transfers of Shares
Transaction Fees
Reports to Participants
Federal Income Tax Consequences
Miscellaneous
Use of Proceeds
Experts
AVAILABLE INFORMATION
Sears is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission ("Commission"). Such reports, proxy
statements and other information can be inspected and copied at the
Public Reference facilities of the Commission, at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549; 7 World Trade Center, Suite 1300,
New York, New York 10048; and Suite 1400, Citicorp Center, 500 W.
Madison Street, Chicago, Illinois 60661-2551; and copies of such
material can be obtained from the Public Reference Section of the
Commission, Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission (http://www.sec.gov). Reports, proxy
statements and other information concerning Sears can also be inspected
at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005, the Chicago Stock Exchange, Incorporated, 440
South LaSalle Street, Chicago, Illinois 60605, and the Pacific Stock
Exchange, Inc., 301 Pine Street, San Francisco, California 94104.
Additional information regarding Sears and its consolidated subsidiaries
and the Plan is contained in the Registration Statement and the exhibits
relating thereto, filed with the Commission under the Securities Act of
1933, as amended (the "Act"). For further information pertaining to
Sears and its consolidated subsidiaries and the Plan, reference is made
to the Registration Statement, and the exhibits thereto, which may be
inspected without charge at the office of the Commission at 450 Fifth
Street N.W., Washington, D.C. 20549, and copies thereof may be obtained
from the Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K for the fiscal year ended December 30,
1995, the Quarterly Report on Form 10-Q for the quarterly period ended
March 30, 1996, the Current Report on Form 8-K dated February 7, 1996,
and the description of Sears common shares in Item 5 on pages 18-19 of
Sears annual report on Form 10-K for the fiscal year ended December 30,
1995, filed by Sears with the Commission pursuant to Section 13 of the
Exchange Act, are incorporated in and made a part of this Prospectus by
reference.
All documents filed by Sears with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of this offering under the
Plan (other than those portions of such documents described in
paragraphs (i), (k) and (l) of Item 402 of Regulation S-K promulgated by
the Commission) shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such
documents.
Sears will provide without charge to each person to whom a copy of this
Prospectus is delivered, on the written or oral request of any such
person, a copy of any or all of the documents incorporated herein by
reference (not including exhibits to such documents unless such exhibits
are specifically incorporated by reference in such documents). Written
or telephone requests for such copies should be directed to Sears,
Roebuck and Co., 3333 Beverly Road, Hoffman Estates, Illinois 60179-0002
Attention: Shareholder Services (1/800-SEARS80).
THE COMPANY
Sears originated from an enterprise established in 1886. It was
incorporated under the laws of New York in 1906. Its principal executive
offices are located at 3333 Beverly Road, Hoffman Estates, Illinois
60179-0002 (847/286-2500). Sears and its consolidated subsidiaries
conduct Domestic and International merchandising and credit operations.
The Company, a multi-line retailer, is among the largest retailers in
the world on the basis of sales of merchandise and services.
Domestic operations includes the Company's merchandising and credit
operations in the United States and Puerto Rico. The Domestic credit
operations primarily relate to the Sears Card, the largest proprietary
credit card in the United States, which is used to pay for purchases of
goods and services from the Company's Retail Store, Home Services and
Direct Response Marketing businesses.
International operations consist of merchandising and credit operations
conducted through majority-owned subsidiaries in Canada and Mexico.
The Company's continuing operations employ approximately 320,000 people
worldwide.
Purpose
The purpose of the Plan is to promote long-term ownership among
investors who are committed to investing a minimum amount in Sears
common shares and building share ownership over time, by:
- --providing an opportunity to purchase and sell Sears common shares at
a reduced brokerage commission;
- --permitting the use of cash dividends on Sears shares and cash
investments to purchase additional shares;
- --permitting participants to deposit Sears share certificates with
the Plan Administrator for safekeeping, to minimize the risk of loss;
- --providing an opportunity to transfer Sears common shares between Plan
accounts at no charge; and
- --allowing participants to establish individual retirement accounts
("IRAs") and invest in Sears shares.
Features of the Plan
Direct Purchase. Investors who are not currently Sears shareholders
may make an initial cash investment of $500 or more, or, at the Plan
Administrator's discretion, authorize automatic withdrawals for a
minimum of five (5) consecutive months of at least $100 per month from a
designated bank account for the purchase of Sears shares. Participants
may make additional investments of at least $50 each up to a maximum of
$150,000 per calendar year (including the initial investment), by check
or money order as often as weekly. Investments made through automatic
deduction from a bank account may be made as often as twice a month. A
transaction fee and brokerage commission will be deducted from each
amount invested.
Dividend Reinvestment. Shareholders who hold Sears common shares in
their own name may participate in the dividend reinvestment feature.
Others may do so by first investing at least $500 through the direct
purchase feature. Proportionate cash dividends on whole and fractional
shares in the participant's account may be used to purchase additional
whole and fractional shares.
Certificate Safekeeping. Investors may deposit Sears common share
certificates with the Plan Administrator free of charge. The Plan
Administrator will hold these shares on the shareholders' behalf.
Transfers. Participants may make transfers or gifts of Sears common
shares in their accounts at no charge. When a participant transfers or
gives shares to another person, a Plan account will be opened for the
recipient unless the recipient already has a Plan account.
IRAs. Participants may establish an Individual Retirement Account
("IRA"), which invests in Sears shares. A participant will be able to
roll over an existing IRA or other qualified plan distribution into an
IRA established under the Plan. Participants will be charged an annual
account maintenance fee by the Plan Administrator.
Sales. Participants may sell Sears shares through the Plan. Sales will
be made daily and a transaction fee and brokerage commission will be
deducted from the proceeds.
Reports to Participants. Participants will receive periodic reports and
notices from the Plan Administrator with respect to transactions under
the Plan and the status of their accounts. (See " REPORTS TO
PARTICIPANTS" at page _________.)
TRANSACTION FEES
Participants will pay the following fees. Brokerage commissions
represent compensation to the broker or bank for executing open market
transactions. Fees paid to the Plan Administrator represent
compensation for administering the Plan and partial compensation for
maintaining records for Plan participants as transfer agent and
registrar of Sears common shares. IRA annual fees represent
compensation paid to the administrator for maintaining and administering
the IRA account. At its sole option and without further notice to
participants, Sears may elect to pay some or all of these charges
(except for the annual IRA fee). As a result of the new fee structure
described below, participants in the former Dividend Reinvestment and
Share Purchase Plan who hold less than 5 whole Sears shares will have
insufficient remaining dividends to be reinvested once expenses of their
Plan accounts are deducted from their cash dividends.
Feature, Fees and Charges
Direct Purchase
Initial Purchase
A fee of $10.00 paid to the Plan Administrator
plus, for open market purchases only, brokerage commission of
$0.03 per share
Additional Purchases
via check or money order
A fee of 5% of the amount of each investment up to a maximum
of $7.50 paid to the Plan Administrator plus, for open market
purchases only, a brokerage commission of $0.03 per share.
via automatic investments
Same fee and brokerage commission as "Additional Purchases via
check or money order" plus $1.00 per transaction paid to the
Plan Administrator
Dividend Reinvestment
A fee of 5% of each dividend paid, with a minimum fee of $1.00
up to a maximum of $3.00 per dividend, paid to the Plan
Administrator plus, for open market purchases only, a brokerage
commission of $0.03 per share
Dividends Paid by Direct Deposit
No fee, however, participants will be responsible for any fees
charged by their banks for arranging to accept direct deposits
Safekeeping of Certificates
No fee
Sales of Sears common shares
A fee of $15.00 paid to the Plan Administrator plus brokerage
commission of $0.12 per share plus any applicable taxes for sales
Transfer of Shares
No fee
Withdrawal of Shares
No fee unless shares are sold
IRA
Annual IRA administration fee of $35.00 paid to the administrator
of the IRA, plus the above fees for purchases and sales of
Sears common shares
Returned checks and failed automatic withdrawals
$20
PLAN ADMINISTRATION
First Chicago Trust Company of New York, Sears transfer agent, registrar
and dividend disbursing agent, or a successor Plan Administrator
selected by Sears in its sole discretion, will administer the Plan,
purchase and hold Sears common shares acquired under the Plan as well as
shares deposited for safekeeping, keep records, send statements of
account to participants, answer participants' questions and perform
other duties related to the Plan.
For additional information about the Plan or to enter transactions in
your Plan account, contact the Plan Administrator as follows:
Current Shareholders:
1-800-SEARS-80 (1-800-732-7780)
Normal hours:
8:00 a.m. - 10:00 p.m. Eastern time, each business day
8:00 a.m. - 3:30 p.m.Eastern time, Saturdays
Customer Service Representatives are available 9:00 a.m. to 5:00 p.m.
Eastern time, each business day.
New Account Information:
1-888-SEARS-88 (1-888-732-7788)
Normal hours:
Available 24 hours a day, every day of the year
Internet: Messages forwarded to the Plan Administrator on the Internet
will be responded to within 24 hours each business day. The Plan
Administrator's address is http://www.fctc.com
TDD: 201/222-4955 Telecommunications Device for the hearing impaired.
or write to:
SEARS DIRECT PURCHASE STOCK PLAN
c/o First Chicago Trust Company of New York
Suite 4505
8th Floor
14 Wall Street
New York, NY 10005-2175
Cash investments, by check or money order, payable to "First Chicago-
Sears," in U.S. dollars, should be mailed to:
Sears
c/o First Chicago Trust Company of New York
Direct Services Investment Payments
Suite 4680
14 Wall Street
New York, NY 10005-2175
Registered shareholders should include their account number and social
security number on all correspondence, together with a telephone number
where they can be reached during business hours.
ELIGIBILITY
Any person, whether or not a record holder of Sears common shares, is
eligible to participate, provided the person fulfills the requirements
listed below under " ENROLLMENT PROCEDURES" and in the case of citizens
or residents of a country other than the United States, its territories
and possessions, participation would not violate local laws.
Current Participants in Sears Dividend Reinvestment and Share Purchase
Plan
Investors who currently participate in Sears Dividend Reinvestment and
Share Purchase Plan, which is being replaced by the Sears Direct
Purchase Stock Plan, are automatically participants in the Plan. Those
who wish to change investment elections, or to take advantage of Plan
features not available under the old plan, must complete a new
enrollment form, specifying the changes desired.
Other Shareholders
Other shareholders who hold Sears shares in their own names may
participate in the Plan by completing and returning an enrollment form.
Investors may participate with some or all Sears shares held by a bank,
broker or trustee by instructing the holder to have some or all of the
shares transferred into the investor's name in certificate form.
Non-Shareholders
All others must become shareholders of record in order to participate by
purchasing Sears shares either outside the Plan, or through the Plan's
direct purchase feature. To use direct purchase, investors must make an
initial investment of at least $500 and submit a completed enrollment
form and any other documentation required by the Plan Administrator. At
the Plan Administrator's discretion, a person may fulfill the $500
minimum by authorizing automatic investments of at least $100 per month
for a minimum of five consecutive months. Automatic withdrawals will
continue indefinitely, beyond the five month minimum, until the
participant notifies the Plan Administrator in writing to the contrary.
IRAs
Individuals may establish an IRA which invests in Sears common shares
through the Plan, by returning a completed IRA enrollment form and
making an initial investment of at least $500. Or, investors may
transfer funds with a fair market value of at least $500 on the
enrollment date, from an existing IRA account, and complete an
enrollment form and an IRA funds transfer form. These forms, and
additional information on the IRA feature, are available from the Plan
Administrator.
Foreign Participation
Citizens or residents of a country other than the United States, its
territories and possessions may participate only if it does not violate
local laws. Any such person may be asked to make a written
representation respecting compliance with such laws.
Minimum Share Ownership
A participant, including a shareholder who participated in the former
Dividend Reinvestment and Share Purchase Plan, must continue to own at
least five Sears shares or the account will be closed and the shares in
the account will be sold at Sears expense. Participants may fulfill
this requirement by purchasing shares through the direct purchase
feature or through a bank or broker and holding these shares in their
accounts in the Plan. This requirement may be waived in appropriate
cases by the Plan Administrator.
General
Once enrolled, additional purchases under the direct purchase feature
may be made in an amount of at least $50 each. The annual limit is
$150,000 (including the initial investment). No interest will be paid
on amounts held pending investment. Cash investments should be received
by the Plan Administrator prior to a weekly Investment Date (as defined
below under "PURCHASE OF SEARS COMMON SHARES--Timing of Purchases") in
order to be invested on that date. Any cash investment not previously
invested will be refunded upon written request received by the Plan
Administrator at least 48 hours prior to the weekly Investment Date.
Cash Investment
Investments may be made by enclosing a check or money order for at least
$50 (payable to "First Chicago-Sears" in U.S. dollars), with a completed
investment stub which is attached to each statement of account and
transaction notice. Do not send cash. A $20 fee will be assessed to a
participant whose check or automatic withdrawal is returned for
insufficient funds.
Automatic Investment from a Bank Account
Participants may make automatic investments of $50 or more through a
U.S. bank account. The participant should return a completed automatic
deduction form which will be processed and become effective as soon as
practicable. Allow 4 - 6 weeks for the first investment to be
initiated. At the Plan Administrator's discretion, a participant may
make an initial direct purchase by authorizing automatic investments of
at least $100 per month for a minimum of five consecutive months.
Once automatic deduction is begun, funds will be withdrawn from the
participant's bank account on either the first or 15th of each month, or
both (as chosen by the participant), or the next business day if either
the first or the 15th is not a business day, and will be invested on the
next Investment Date.
Participants may vary or terminate automatic investments by notifying
the Plan Administrator in writing received at least six business days
prior to the date of the next automatic investment.
Any person may participate in the Plan's dividend reinvestment feature
by returning a completed form authorizing the reinvestment in additional
Sears shares of any portion or all cash dividends on Sears common shares
registered in the person's name. The form will also authorize the Plan
Administrator to deduct from cash dividends the related investment fees
(See " TRANSACTION FEES" on page ___________).
Participants may reinvest dividends on any Sears common shares
registered in his or her name, whether the shares were purchased outside
the Plan or under the Plan through direct purchase or reinvested
dividends, or were deposited for safekeeping.
Reinvestment levels may be changed by submitting a new election form.
To be effective with respect to a particular dividend, the new form must
be received by the Plan Administrator on or before the record date for
the dividend.
A participant may have any cash dividends not being reinvested paid by
direct deposit to a U.S. bank account by returning a completed
authorization form, which will be processed as promptly as practicable.
Participants may change the designated account or discontinue this
feature by giving written instructions to the Plan Administrator.
A participant's choice to receive dividend payments either by direct
deposit or by check will apply to dividends paid on all shares on which
dividends are not being reinvested, whether held under the Plan or
outside the Plan.
PURCHASE OF SEARS COMMON SHARES
Timing of Purchases
Purchases normally will be made on dates ("Investment Dates") that occur
at least once every five business days. Purchases may be processed
daily when practicable and will be made as soon as practicable after an
investment is received. Funds will be returned if not invested within
35 days of receipt.
Dividends will be invested promptly after receipt by the Plan
Administrator and within 30 days after receipt, except where necessary
to comply with federal securities laws. The Plan Administrator may make
open market purchases prior to the dividend payment date in order to
minimize the delay between payment of dividends and settlement of
purchases.
Purchases will be made at least once a week, but may be made more
frequently. If any designated purchase date is a day on which the New
York Stock Exchange is not open, purchases will be made on the next
business day.
Cost of Sears Shares
The cost to each participant of shares purchased in the open market will
be the weighted average purchase price of the shares (including
brokerage commission, if applicable) purchased for that Investment Date
or dividend payment date. For purchases from Sears, the cost will be
the average of the high and low prices of Sears shares on the related
Investment Date or dividend payment date, based on the reported prices
as shown in a summary of composite transactions in stocks listed on the
New York Stock Exchange.
Number of Shares Allocated to Participants' Accounts
The number of shares to be purchased from Sears or in the open market
will depend on the amount of any dividend or cash payment, the cost per
share and any applicable fees. The account of each participant will be
credited with the number of shares equal to the amount of the
participant's dividend or cash payment minus any fees paid by the
participant and any relevant taxes, divided by the cost per share.
All fractional shares may be rounded to three decimal places and are
credited to the participant's account in the same manner as whole
shares.
Source of Shares Purchased
Sears may determine that shares to be purchased will be original issue
shares, treasury shares held by Sears and/or shares purchased in the
open market (on an exchange or in negotiated transactions). Sears
cannot change its determination that shares purchased for the Plan will
be treasury or original issue shares, versus shares purchased on the
open market, more than once in any three-month period, unless otherwise
permitted by applicable rules and interpretations of the Commission.
Such changes will be based upon a need to raise additional capital or
other valid reason.
Purchases in the open market will be made by or at the direction of the
Plan Administrator. Open market purchases may be made on any securities
exchange where Sears shares are traded or in negotiated transactions.
Price, delivery and other terms will be satisfactory to the Plan
Administrator. Neither Sears nor any participant may direct the time or
price at which shares may be purchased, or the selection of brokers or
dealers to handle transactions.
Participants may sell any number of shares held in the participant's
account by calling or writing the Plan Administrator. A request to sell
all shares in the account will be treated as a complete withdrawal from
the Plan.
The Plan Administrator will send the participant the proceeds of the
sale, less any related brokerage commission, fee and any other costs of
sale. Proceeds will be sent by check only. The Plan Administrator will
attempt to sell shares on the day of receipt if reasonably practicable,
if the sale request is received no later than 1:00 p.m. Eastern Time on
a day on which the Plan Administrator and the securities markets are
open for business. The sales price for shares sold for a participant
will be the average price per share of all shares sold on that day.
Also, participants may request that certificates be sent to them, which
they may then sell through their own bank or broker.
Sales will be made in the open market through an agent designated by the
Plan Administrator.
A participant may continue to reinvest cash dividends on remaining
shares even though some have been sold or transferred, regardless of
whether the shares are held under the Plan, by the participant in
certificate form, or both.
Participants may withdraw from the Plan by writing or calling the Plan
Administrator, or by completing and returning the appropriate section of
the statement of account or transaction notice.
Complete Withdrawal
Upon complete withdrawal, a certificate for the whole shares held for a
participant (and/or a check, if the participant requests the sale of
some or all of such shares) will be sent to the participant with a check
in payment of any fraction of a share. Fractions of shares will be
valued at the sale price for the fractional shares less any applicable
brokerage commission, fee and other costs of sale.
Partial Withdrawal
A participant may withdraw a portion of his or her whole Sears common
shares by writing or calling the Plan Administrator. A certificate for
the shares will be sent to the participant.
Withdrawal by Sale
Upon request, the Plan Administrator will sell some or all of the shares
held in a participant's shares and send the proceeds to the participant,
less any related brokerage commission, fee and any other costs of sale.
Certificates for Sears Common Shares
Upon withdrawal, certificates will be issued in the name or names in
which the account is registered, unless the participant gives different
instructions. If another name is to be used, the signature(s) on the
instructions or stock power must be Medallion Guaranteed by a financial
institution participating in the Medallion Guarantee program, and the
participant must submit any additional documentation requested by the
Plan Administrator. The Medallion Guarantee program is designed to
ensure that the individual is in fact the registered owner of the shares
being transferred. No certificates will be issued for fractional
shares.
If a notice of withdrawal is received on or after a dividend record date
but before the related dividend payment date, the withdrawal will be
processed as described above. If the participant was reinvesting
dividends on the shares withdrawn, a dividend check instead will be
mailed to the participant. Thereafter, dividends will continue to be
paid in cash on such shares.
CERTIFICATE SAFEKEEPING
General
Any person who holds certificates for Sears common shares may have the
Plan Administrator hold them for safekeeping. Certificates must be
registered in the same name as the participant's account and should be
accompanied by instructions directing the deposit of the certificates
for safekeeping. Once deposited, these shares will be held along with
any other shares in the participant's account, and may be sold and/or
withdrawn. For those who participate in dividend reinvestment, dividends
on deposited shares will be reinvested according to the account
instructions, unless contrary instructions are received.
CERTIFICATES SHOULD NOT BE ENDORSED. The participant bears the risk of
loss in sending stock certificates. If a shareholder does not use the
pre-addressed envelopes mentioned below under "Mail Insurance," it is
recommended that certificates be sent by registered mail, return receipt
requested, properly insured. Whenever certificates are issued upon
request of the participant or upon termination of participation, new,
differently numbered certificates will be issued.
Mail Insurance
To insure against loss resulting from mailing certificates to the Plan
Administrator, the Plan provides for mail insurance free, of charge, for
certificates with current market value of up to $25,000. To be eligible
for mail insurance, certificates must be mailed in first-class, brown,
pre-addressed, return envelopes available from the Plan Administrator.
The Plan Administrator must be notified of any claim within 30 calendar
days of the date the certificates were mailed. To submit a claim, an
individual must be a current participant or the individual's loss must
be incurred in connection with becoming a participant. In the latter
case, the claimant must enroll in the program at the time the insurance
claim is processed. The maximum insurance protection provided is
$25,000 and coverage is available only when the certificate(s) are sent
to the Plan Administrator in accordance with the guidelines described
above. Insurance covers the replacement of shares, but in no way
protects against any loss resulting from fluctuations in the value of
shares.
The participant will receive a notice confirming each deposit of
certificates.
Any participant may transfer a whole number of Sears common shares or
the participant's entire account balance, including fractional shares,
to another person's account, whether by gift, private sale or
otherwise, without charge, by following the instructions of the Plan
Administrator and providing the documentation requested by the Plan
Administrator.
The transferring participant will cease to be credited with dividends as
of any dividend record date on or after which the transfer is made by
the Plan Administrator. Dividends will be treated according to the
transferee's instructions covering his or her Plan account. If the
transferee is not already a participant, the Plan Administrator will
open an account in the name of the transferee according to the
instructions of the transferor and will send the transferee a
Prospectus. A transferee who did not previously have an account may not
enter transactions or otherwise have access to the account until the
transferee has been sent a Prospectus.
After each transfer, the transferee will receive a notice from the Plan
Administrator advising of the transfer and reflecting the number of
shares transferred.
Each Plan participant will receive an annual account statement and each
participant who reinvests dividends will receive a quarterly account
statement. Participants will receive a notice after each cash
investment, deposit of certificates, sale or transfer which should be
retained in order to establish the cost basis of shares purchased under
the Plan for tax and other purposes.
Copies of communications sent to Sears shareholders, including annual
reports and proxy material, will be sent addressed to the participant's
current address on file with the Plan Administrator. Participants
should promptly notify the Plan Administrator of any change of address.
In the opinion of Sears, the federal income tax consequences for Plan
participants are as follows:
(1) Dividends--Dividends are taxed in the same amount and in the same
manner as though the dividends were received by the participant in cash.
Dividends are reported to the participant by the Plan Administrator on
Form 1099-DIV at year-end.
(2) Plan Administrator's Fee--When paid by the participant, this
charge may be deductible in the year in which paid if the participant
itemizes deductions. Such charges are miscellaneous deductions and are
subject to the 2% adjusted gross income limit. The amount of such
charge will be found on the statements and transaction notices sent to
participants. Participants are advised to retain statements and notices
as they are the only record of the fee they will receive. Should Sears
pay the fee, there is no tax consequence to the participant.
(3) Brokerage Commission For Open Market Purchases--When paid by the
participant, the amount of commission is included in the price per share
and there is no direct tax consequence to the participant. When paid by
Sears, commissions are considered taxable income and are reported at
year-end on Form 1099-DIV, along with total dividends received.
(4) Sale of Shares--Any participant who sells full or fractional
shares through the Plan will realize gain or loss measured by the
difference between the amount of the cash received (after payment of the
fee, brokerage commissions, transfer taxes and any other costs of sale)
and the participant's basis in such shares. At year-end, the
participant will receive a Form 1099-B from the Plan Administrator,
showing the proceeds of the sale and any federal income taxes withheld.
Such gain or loss will be capital in character, if the shares are a
capital asset in the hands of the participant. Capital gains currently
are taxed at ordinary income rates for shares sold within one year of
purchase, and at a rate of 28% for shares held for more than one year.
The capital gains holding period for shares held by the Plan will begin
the day after the date the shares are acquired.
(6) Cost or Tax Basis of Plan Shares--The cost or tax basis of shares
purchased under the Plan will be equal to the cost of the shares plus
any brokerage commissions, if such commissions are paid by Sears.
Brokerage commissions are already included in the price if they are paid
by the participant.
(7) Withdrawal of Certificates--A participant will not realize any
taxable income upon the participant's request for certificates for some
or all shares or upon termination of participation in the Plan or upon
termination of the Plan by Sears.
(8) Backup Withholding--Federal law requires that federal income tax
be withheld (commonly called "backup withholding") from dividends and
proceeds from the sale of fractional and full shares payable to
participants who fail to provide the Plan Administrator with their
social security or other tax identification number in the manner
required by law or where the Internal Revenue Service (the "IRS")
notifies the Plan Administrator that backup withholding is required from
the participant. Backup withholding by the Plan Administrator cannot be
refunded. To avoid backup withholding, a participant must provide the
Plan Administrator with a completed copy of substitute Form W-9
containing the participant's social security or other tax identification
number. A participant may obtain a substitute Form W-9 by requesting
one from the Plan Administrator. Any dividend paid to such participant
subsequent to the receipt of the substitute Form W-9 will not be subject
to backup withholding unless the IRS notifies the Plan Administrator to
the contrary.
(9) IRAs--Where a participant acquires Sears shares through an IRA,
dividends received with respect to the shares are generally not taxable
and gains or losses on sales of the shares are generally not recognized
for federal income tax purposes. However, distributions from IRAs are
generally taxable as ordinary income to the recipient. Sears will not
establish, maintain or contribute to IRA accounts of Plan participants.
Sears will not pay brokerage commissions or the fees of the Plan
Administrator for Sears shares purchased or sold by participants through
IRA accounts established through the Plan.
(10) Participation by Non-U.S. Person--Where a participant is a Non-
U.S. Person, federal income tax law requires the Plan Administrator to
withhold federal income tax from any dividend payable to such person,
subject to reduction or elimination of the withholding requirements
pursuant to treaties. A Non-U.S. Person is a non-resident alien
individual, a non-resident fiduciary of an estate or trust, a foreign
partnership or a foreign corporation, as to the United States of
America, its territories or possessions. In the case where a
participant is a Non-U.S. Person whose dividends are subject to United
States income tax withholding, the amount of tax withheld, after taking
into account any reductions pursuant to treaties, will be deducted from
the dividends.
Any information reported to a participant on Form 1099-DIV and/or Form
1099-B is also reported to the IRS.
Participants are urged to consult with their tax advisors to determine
the particular tax consequences applicable to them, including the
application and effect of foreign, state and local income and other tax
laws.
Stock Dividends, Stock Splits and Other Distributions on Sears Common
Shares
Any Sears common shares distributed as a stock dividend or stock split
on shares held in a participant's account will be added to the account.
Participants will receive by mail certificates for any stock dividends
or split shares distributed on shares held outside the Plan. All
fractional shares resulting from stock dividends or splits on shares
held under the Plan, whether held by the participant in certificate form
or by the Plan Administrator, will be added to the participant's
account.
Any other property distributed by Sears as a special dividend to
shareholders will be distributed pro rata directly to participants.
Certificates for Plan Shares
Certificates for Sears shares purchased or deposited under the Plan will
be held by the Plan Administrator. Certificates for any number of
whole shares will be delivered to a participant upon request. After a
certificate is issued, any remaining full or fractional shares will
remain in the account. Certificates for fractions of shares will not be
issued. Unless a participant advises the Plan Administrator to the
contrary, dividends will continue to be reinvested on shares withdrawn
in certificate form, if dividends were being reinvested on such shares
while in the account.
Voting of Proxies
Whole shares held under the Plan may be voted in person at a meeting of
shareholders or by proxy. Proxies will be solicited from Plan
participants by Sears Board for any whole Sears common shares held under
the Plan.
Effect of Sale of Transfer of Sears Common Shares
A participant may continue to receive in cash or reinvest dividends on
his or her remaining shares even though some have been sold or
transferred.
Limitation of Liability
Sears and the Plan Administrator, in administering the Plan and in
making purchases and sales of Sears common shares in the open market or
in making purchases from Sears pursuant to the Plan, will not be liable
for any act done in good faith or for any good faith omission to act,
including, without limitation, any claim of liability arising from: (i)
failure to terminate a Plan participant's account upon such
participant's death prior to receipt of written notice of such death;
(ii) the times and prices at which Sears common shares are purchased or
sold for a participant's account; or (iii) fluctuations in the market
price of Sears common shares. Participants should recognize that
neither Sears nor the Plan Administrator can assure them of a profit or
protect them against a loss or depreciation on the shares purchased by
them under the Plan. The payment of dividends will depend upon future
earnings of Sears, the financial condition of Sears and other factors,
will be declared solely in the discretion of Sears Board of Directors.
The amount and timing of dividends may be changed at any time without
notice.
Suspension, Modification or Termination of Plan
Sears may suspend, modify or terminate the Plan at any time and notice
of such action will be sent to all Plan participants. Upon termination
of the Plan, a certificate for the whole shares (or cash, if the
participant requests a sale) will be sent to the participant, with a
cash payment for any fraction of a share. Fractions of shares will be
valued at the sale price for fractional shares less any applicable
brokerage commission, fee and other costs of sale.
Administration and Interpretations
Sears or the Plan Administrator may, in its discretion, prescribe such
provisions and interpretations not inconsistent herewith as it shall
deem necessary or advisable for carrying out the purposes of the Plan,
including (but not limited to) provisions or interpretations necessary
to avoid abusive investment practices.
Transfers Void
Except as specified above, a participant's interest in his or her Plan
account cannot be transferred, alienated, sold, assigned, pledged,
encumbered or changed, and any attempt to do so shall be void.
Profit Sharing Fund
The Savings and Profit Sharing Fund of Sears Employees, which held
42,999,756 Sears common shares on May 31, 1996, will not participate in
the Plan. The Sears, Roebuck and Co. Employee Stock Ownership Plan,
which held 16,545,195 Sears common shares on May 31, 1996, also will not
participate in the Plan.
To the extent that Sears common shares are sold from authorized but
previously unissued shares, or treasury shares, the net proceeds to be
received by Sears from such sales will be added to its general funds and
initially will be used to effect a reduction of short-term borrowings.
It is anticipated that funds in addition to the net proceeds from such
sales will be required from time to time to continue expansion of the
business of Sears and its subsidiaries, refinance short-term debt and
refund portions of existing long-term debt. Substantial funds for these
purposes are expected to be generated from operations, with the balance
from various means of external financing. It is anticipated that Sears
and its subsidiaries will continue their practice of short-term
borrowing and will, from time to time, incur additional long-term debt.
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference have been audited to the
extent and for the periods indicated by Deloitte & Touche LLP,
independent auditors, as stated in their reports, which are incorporated
herein by reference, and have been so incorporated in reliance upon the
reports of such firm given upon their authority as experts in accounting
and auditing. The validity of the Sears common shares issuable under
the Plan has been passed upon for Sears by Venrice R. Palmer, Esq.,
Senior Counsel, Law Department, of Sears. Mr. Palmer owns Sears common
shares as a participant in an employee benefit plan of the Company, has
options granted under Sears employee stock plans, and is eligible to
participate in the Plan.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Registration Fee . . . . . . . . . . . . . . . . . $ 52,457
*Blue Sky expenses. . . . . . . . . .. . . . . . . 4,000
*Printing expenses. . . . . . . . . . . . . . . . . 157,850
*Legal fees and expenses. . . . . . . . . . . . . . 30,000
*Miscellaneous expenses . . . . . . . . . . . . . . 255,693
Total expenses. . . . . . . . . .. . . . . . . . . $500,000
===========
- ---------------
* Estimated
Item 15. Indemnification of Directors and Officers.
Article V of the By-Laws of Sears, relating to indemnification of
directors and officers, is incorporated herein by reference to Exhibit
3(ii) hereto. Article 7 of the Restated Certificate of Incorporation of
Sears, relating to limitation of personal liability of a director, is
incorporated herein by reference to Exhibit 3(i) hereto.
Sections 721 to 724 of the New York Business Corporation Law
authorize indemnification of directors and officers of Sears for certain
liabilities and expenses. Section 726 of said Law authorizes the
purchase of indemnification insurance. Section 402(b) of said Law
authorizes the limitation, in certain circumstances, of personal
liability of directors to the corporation or its shareholders for
damages for breach of duty in such capacity.
Sears has in effect insurance policies in the amount of $100
million covering all of its directors and officers in certain instances
where by law they may not be indemnified by Sears.
Item 16. Exhibits
An Exhibit List has been filed on page E-1 hereof.
Item 17. 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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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 Registration's annual report pursuant to Section 13(a) or Section
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
The Registrant. 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-3 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 July 15, 1996.
SEARS, ROEBUCK AND CO.
By Alice M. Peterson*
Alice M. Peterson
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Date: July 15, 1996
Title
Arthur C. Martinez*
Director, Chairman of the
Board of Directors and Chief
Executive Officer
(Principal Executive Officer)
Alan J. Lacy*
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
James A. Blanda*
Vice President and Controller
(Principal Accounting Officer)
Hall Adams, Jr.*
Director
Warren L. Batts*
Director
James A. Cozad*
Director
Michael A. Miles*
Director
Richard C. Notebaert*
Director
Nancy C. Reynolds*
Director
Clarence B. Rogers, Jr.*
Director
Donald H. Rumsfeld*
Director
Dorothy A. Terrell*
Director
*By /s/ ALICE M. PETERSON Individually and as
Alice M. Peterson Attorney-in-fact
<PAGE>
EXHIBIT LIST
Exhibit Number
3(a) Restated Certificate of Incorporation of Sears, Roebuck and
Co. as in effect on March 13, 1996.*
3(b) By-Laws of Sears, Roebuck and Co. as amended to February 6,
1995. Incorporated by reference to Exhibit 3(ii) to Sears Annual Report
on Form 10-K for the year ended December 30, 1995 (SEC File No. 1-416).
4. Text of the Sears, Roebuck and Co. Direct Purchase Stock
Plan.*
5 Opinion of Venrice R. Palmer.*
15 Acknowledgement of Deloitte & Touche regarding unaudited
interim information*
23(a) Consent of Deloitte & Touche LLP.*
23(b) Consent of Venrice R. Palmer (included in Exhibit 5).*
24 Power of Attorney of certain officers and directors.*
* Filed herewith
Restated Certificate of Incorporation
of
Sears, Roebuck and Co., as amended to
May 13, 1996
1. NAME
The name of the Corporation is Sears, Roebuck and Co.
2. PURPOSES
The purposes of the Corporation are:
2.1 To manufacture, buy, sell, import, export, distribute and deal in
goods, wares, merchandise and related services of every kind, and any
and all materials or articles for, or used or useful in connection with
all or any of the objects aforesaid.
2.2 To engage in any activity which may promote the interests of the
Corporation, or enhance the value of its property, to the fullest extent
permitted by law.
3. SHARES
3.1 Authorized Shares. The total number of shares which the Corporation
may issue is 1,050,000,000, of which 1,000,000,000 shall be common
shares of a par value of $0.75 each and 50,000,000 shall be preferred
shares of a par value of $1.00 each.
3.2 Preferred Shares. The preferred shares may be issued from time to
time in series. The board of directors is authorized to establish and
designate series and to fix the number of shares and the relative
rights, preferences and limitations as between series, subject to such
limitations as may be prescribed by law. In particular, the board of
directors may establish, designate and fix the following with respect to
each series of preferred shares: establish and specify a designation of
such series; fix the dividend rights of holders of shares of each such
series; fix the terms on which shares of each such series may be
redeemed if the shares of such series are to be redeemable; fix the
rights of the holders of shares of each such series upon dissolution or
any distribution of assets; fix the terms or amount of the sinking fund,
if any, to be provided for the purchase or redemption of shares of each
such series; fix the terms upon which the shares of each such series may
be converted into or exchanged for shares of any other class or classes
or of any one or more series of preferred shares if the shares of such
series are to be convertible or exchangeable; fix the voting rights, if
any, of the shares of each such series; and any other relative rights,
preferences, or limitations of shares of the series consistent herewith
and applicable law.
3.2.1 8.88% Preferred Shares, First Series.
(1)Designation. An aggregate of 3,250,000 preferred shares, par value
$1.00 per share, of the Company are hereby constituted as a series of
preferred shares designated as "8.88% Preferred Shares, First Series"
(hereinafter called "First Series Preferred Shares").
(2)Dividends. (a) The holders of First Series Preferred Shares shall be
entitled to receive a cash dividend per share (payable as set forth
below), out of funds legally available for the purpose, computed as
follows (rounded to the nearest cent):
(i)for the Initial Dividend Period (as hereinafter defined), the product
of (A) 8.88% times (B) a fraction the numerator of which is the number
of days from (and including) the date of the original issue of the First
Series Preferred Shares to (but not including) December 31, 1991, on the
basis of 30-day months, and the denominator of which is 360 times (C)
$100; and
(ii)for each Quarterly Dividend Period thereafter, the product of (A)
8.88% times (B) .25 times (C) $100.
Such dividends shall be cumulative from the date of original issue of
such shares and shall be payable in arrears, when and as declared by the
Board of Directors, on February 1, May 1, August 1 and November 1 of
each year, commencing on February 1, 1992. Each such dividend shall be
paid to the holders of record of the First Series Preferred Shares as
their names shall appear on the share register of the Company on such
record date, not exceeding 50 days preceding the payment date thereof,
as shall be fixed by the Board of Directors of the Company. Dividends
on account of arrears for any past Dividend Periods (as hereinafter
defined) may be declared and paid at any time, without reference to any
regular dividend payment date, to holders of record on such date, not
exceeding 50 days preceding the payment date thereof, as may be fixed by
the Board of Directors of the Company.
(b)The term:
(i)"Dividend Period" shall mean the Initial Dividend Period or any
Quarterly Dividend Period (collectively referred to as "Dividend
Periods");
(ii)"Initial Dividend Period" shall mean the period from the date of the
original issue of the First Series Preferred Shares through December 31,
1991; and
(iii)"Quarterly Dividend Period" shall mean each of the periods
commencing on January 1, April 1, July 1 and October 1 in each year and
ending on (and including) the day next preceding the first day of the
next Quarterly Dividend Period, beginning on January 1, 1992.
(c)So long as any of the First Series Preferred Shares are outstanding,
no dividend (other than dividends or distributions paid in common
shares, or in options, warrants or rights to subscribe for or purchase
common shares or another stock ranking junior to the First Series
Preferred Shares as to dividends and other than as provided in paragraph
(d) of this Section (2)) shall be declared or paid or set aside for
payment or other distribution declared or made upon the common shares or
upon any other stock ranking junior to or on a parity with the First
Series Preferred Shares as to dividends, nor shall any common shares or
any other stock of the Company ranking junior to or on a parity with the
First Series Preferred Shares as to dividends be redeemed, purchased or
otherwise acquired for any consideration (or any monies be paid to or
made available for a sinking fund for the redemption of any shares of
any such stock) by the Company (except by conversion into or exchange
for stock of the Company ranking junior to the First Series Preferred
Shares as to dividends) unless, in each case, the full cumulative
dividends on the outstanding First Series Preferred Shares shall have
been paid or set apart for payment for all Dividend Periods terminating
on or prior to the date of such payment or action, as the case may be.
(d)When dividends are not paid in full, as aforesaid, on the First
Series Preferred Shares and on any other preferred shares ranking on a
parity as to dividends with the First Series Preferred Shares, all
dividends declared on the First Series Preferred Shares and any other
preferred shares ranking on a parity as to dividends with the First
Series Preferred Shares shall be declared ratably in accordance with the
respective dividends which would be payable on the First Series
Preferred Shares and such other preferred shares if all accrued and
unpaid dividends thereon were paid in full. Holders of First Series
Preferred Shares shall not be entitled to any dividends, whether payable
in cash, property or stock, in excess of full cumulative dividends, as
herein provided, on the First Series Preferred Shares. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on the First Series Preferred Shares which
may be in arrears.
(3)Dissolution Preference. (a) In the event of any liquidation,
dissolution, or winding up (hereinafter "Dissolution") of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or
surplus) shall be made to or set apart for the holders of any series or
class or classes of stock of the Company ranking junior to the First
Series Preferred Shares upon Dissolution, the holders of the First
Series Preferred Shares shall be entitled to receive for each share $100
plus an amount equal to all dividends (whether or not earned or
declared) accrued and unpaid thereon to the date of final distribution
to such holders (subject to the right of the holders of record of any
First Series Preferred Shares on a record date for payment of dividends
thereon to receive a dividend payable on the date of final
distribution), determined by adding (i) dividends accrued and unpaid for
any Dividend Period preceding the Dividend Period in which the date of
final distribution falls plus (ii) the product of (A) 8.88% times (B) a
fraction, the numerator of which is the number of days elapsed from (and
including) the first day of the Dividend Period in which the date of
final distribution falls, to (but not including) the date of final
distribution, on the basis of 30-day months, and the denominator of
which is 360 times (C) $100; but such holders shall not be entitled to
any further payment. If, upon any Dissolution of the Company, the
assets of the Company, or proceeds thereof, distributable among the
holders of the First Series Preferred Shares and any other preferred
shares ranking as to Dissolution on a parity with the First Series
Preferred Shares shall be insufficient to pay in full the preferential
amount aforesaid and Dissolution payments on any other such other
preferred shares, then such assets, or the proceeds thereof, shall be
distributed among the holders of First Series Preferred Shares and any
such other preferred shares ratably in accordance with the respective
amounts which would be payable on such First Series Preferred Shares and
any such other preferred shares if all amounts payable thereon were paid
in full. For the purposes of this Section (3), a sale, lease, exchange
or other disposition of all or substantially all of the property and
assets of the Company, or a consolidation or merger of the Company with
one or more corporations shall not be deemed to be a Dissolution,
voluntary or involuntary.
(b)Subject to the rights of the holders of shares of any series or class
or classes of stock ranking on a parity with or prior to the First
Series Preferred Shares upon Dissolution, upon any Dissolution of the
Company, after payment shall have been made in full to the First Series
Preferred Shares as provided in this Section (3), but not prior thereto,
any other series or class or classes of stock ranking junior to the
First Series Preferred Shares upon Dissolution shall, subject to the
respective terms and provisions (if any) applying thereto, be entitled
to receive any and all assets remaining to be paid or distributed, and
the First Series Preferred Shares shall not be entitled to share
therein.
(4)Redemption. (a) Except as provided in paragraph (b) of this Section
4, the First Series Preferred Shares may not be redeemed prior to
November 9, 1996. Thereafter, the Company, at its option, may redeem
the First Series Preferred Shares, as a whole or in part, at any time or
from time to time at redemption prices which shall be $100 per share,
plus accrued and unpaid dividends thereon to the date fixed for
redemption (subject to the right of the holders of record of any First
Series Preferred Shares on a record date for payment of dividends
thereon to receive a dividend payable on the date of redemption),
determined by adding (i) dividends accrued and unpaid for any Dividend
Period preceding the Dividend Period in which the date of redemption
falls, plus (ii) the product of (A) 8.88% times (B) a fraction, the
numerator of which is the number of days elapsed from (and including)
the first day of the Dividend Period in which the date of redemption
falls to (but not including) the date of redemption, on the basis of 30-
day months, and the denominator of which is 360 times (C) $100.
(b)Prior to November 9, 1996, the Company at its option may redeem all,
but not less than all, of the outstanding First Series Preferred Shares
if the holders of the First Series Preferred Shares shall be entitled to
vote upon or consent to a merger or consolidation of the Company as
provided in Section (7) and all of the following conditions have been
satisfied: (i) the Company shall have requested the vote or consent of
the holders of the First Series Preferred Shares to the consummation of
such merger or consolidation, stating in such request that failing the
requisite favorable vote or consent the Company will have the option to
redeem the First Series Preferred Shares, (ii) the Company shall not
have received the favorable vote or consent requisite to the
consummation of the transaction within 60 days after making such written
request (which shall be deemed to have been made upon the mailing of the
notice of any meeting of holders of the First Series Preferred Shares to
vote upon granting such consent), and (iii) such transaction shall be
consummated on the date fixed for such redemption, which date shall be
no more than one year after such request is made. Any such redemption
shall be on notice as aforesaid (and on an additional notice in
accordance with paragraph (c) of this Section (4), which may be
contemporaneous with, or included in, the notice provided for by this
paragraph (b)) at the redemption price of (i) $100 per share, plus (ii)
accrued and unpaid dividends thereon to the date fixed for redemption
(subject to the right of the holders of record of any First Series
Preferred Shares on a record date for payment of dividends thereon to
receive a dividend payable on the date of redemption), determined by
adding (i) dividends accrued and unpaid for any Dividend Period
preceding the Dividend Period in which the date of redemption falls,
plus (ii) the product of (A) 8.88% times (B) a fraction, the numerator
of which is the number of days elapsed from (and including) the first
day of the Dividend Period in which the date of redemption falls, to
(but not including) the date of redemption, on the basis of 30-day
months, and the denominator of which is 360 times (C) $100.
(c)In the event the Company shall redeem any First Series Preferred
Shares, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to
the redemption date, to each holder of record of the shares to be
redeemed, at such holder's address as the same appears on the share
register of the Company. Each such notice shall state: (1) the
redemption date; (2) the number of shares to be redeemed and, if less
than all the shares held by such holder are to be redeemed, the number
of such shares to be redeemed from such holder; (3) the redemption
price; (4) the place or places where certificates for such shares are to
be surrendered for payment of the redemption price; and (5) that
dividends on the shares to be redeemed will cease to accrue on such
redemption date. Notice having been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Company in
providing money for the payment of the redemption price) dividends on
the First Series Preferred Shares so called for redemption shall cease
to accrue, and said shares shall no longer be deemed to be outstanding,
and all rights of the holders thereof as shareholders of the Company
(except the right to receive from the Company the redemption price)
shall cease. The Company's obligation to provide monies in accordance
with the preceding sentence shall be deemed fulfilled if, on or before
the redemption date, the Company shall deposit with a bank or trust
company (which may be an affiliate of the Company) having an office in
the Borough of Manhattan, The City of New York, and having a capital and
surplus of at least $50,000,000, funds necessary for such redemption, in
trust, with irrevocable instructions that such funds be applied to the
redemption of the First Series Preferred Shares so called for
redemption. Any interest accrued on such funds shall be paid to the
Company from time to time.
(d)Upon surrender in accordance with said notice of the certificates for
any shares so redeemed (properly endorsed or assigned for transfer, if
the Board of Directors of the Company shall so require and the notice
shall so state), such shares shall be redeemed by the Company at the
redemption price aforesaid. If less than all the outstanding First
Series Preferred Shares are to be redeemed, shares to be redeemed shall
be selected by the Company from outstanding shares not previously called
for redemption by lot or pro rata (as nearly as may be possible) or by
any other method determined by the Company in its sole discretion to be
equitable, except that in any redemption of fewer than all the
outstanding First Series Preferred Shares the Company may redeem all
First Series Preferred Shares held by all holders of a number of shares
not to exceed 100 as may be specified by the Company.
(e)In no event shall the Company redeem less than all the outstanding
First Series Preferred Shares unless full cumulative dividends shall
have been paid or declared and set apart for payment upon all
outstanding First Series Preferred Shares for all Dividend Periods
terminating on or prior to the date fixed for redemption.
(5)Shares to be Retired. All First Series Preferred Shares redeemed or
purchased by the Company shall be retired and cancelled and shall be
restored to the status of authorized but unissued preferred shares,
without designation as to series, and may thereafter be issued, but not
as First Series Preferred Shares.
(6)Conversion or Exchange. The holders of First Series Preferred Shares
shall not have any rights herein to convert such shares into or exchange
such shares for shares of any other class or classes or of any other
series of any class or classes of capital stock (or any other security)
of the Company.
(7)Voting. (a) Except as hereinafter in this Section (7) expressly
provided or as otherwise from time to time required by law, the First
Series Preferred Shares shall have no voting rights. Whenever, at any
time or times, dividends payable on the First Series Preferred Shares
shall be in arrears in an amount equal to at least the dividends payable
for six Quarterly Dividend Periods on the First Series Preferred Shares
at the time outstanding, the holders of the outstanding First Series
Preferred Shares shall have the exclusive right, voting separately as a
class with holders of any one or more other series of preferred shares
ranking on a parity with the First Series Preferred Shares either as to
dividends or the distribution of assets upon Dissolution and upon which
like voting rights have been conferred and are exercisable, to elect two
directors of the Company at the Company's next annual meeting of
shareholders and at each subsequent annual meeting of shareholders.
Such directors shall be elected for terms expiring at the next
succeeding annual meeting of shareholders or until their respective
successors are elected and qualified, unless such terms are sooner
terminated as provided in this paragraph (a) of this Section (7). At
elections for such directors, each holder of First Series Preferred
Shares shall be entitled to vote cumulatively in accordance with Article
3.5 of the Restated Certificate of Incorporation of the Company as to
the directors to be elected by such holders voting as a class (the
holders of any other series of preferred shares ranking on a parity
being entitled to such number of votes, if any, for each share held as
may be granted to them). The right of the holders of the First Series
Preferred Shares, voting separately as a class, to elect (either alone
or together with the holders of any one or more other series of
preferred shares ranking on a parity) members of the Board of Directors
of the Company as aforesaid shall continue until such time as all
dividends accumulated on the First Series Preferred Shares shall have
been paid in full or set aside for payment by the Company, at which time
such right shall terminate, except as herein or by law expressly
provided, subject to revesting in the event of each and every subsequent
failure to pay dividends in the aggregate amount specified above. Any
such director may be removed from office, with or without cause, only by
vote of holders of the First Series Preferred Shares voting as a class
with holders of any one or more other series of preferred shares ranking
on a parity with the First Series Preferred Shares either as to
dividends or the distribution of assets upon Dissolution and upon which
like voting rights have been conferred and are exercisable, and by such
vote as may be required by law.
(b)Upon any termination of the right of the holders of the First Series
Preferred Shares as a class to vote for directors as herein provided,
the term of office of all directors then in office elected by the First
Series Preferred Shares voting as a class shall terminate immediately.
If the office of any director elected by the holders of the First Series
Preferred Shares voting as a class as herein provided becomes vacant by
reason of death, resignation, retirement, disqualification, removal from
office, or otherwise, the remaining director elected by the holders of
the First Series Preferred Shares voting as a class as herein provided
may choose a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred.
(c)So long as any First Series Preferred Shares remain outstanding, the
consent of the holders of at least two-thirds of the First Series
Preferred Shares outstanding at the time (voting separately as a class
together with all other series of preferred shares ranking on a parity
with First Series Preferred Shares either as to dividends or the
distribution of assets upon Dissolution and upon which like voting
rights have been conferred and are exercisable) given in person or by
proxy, either in writing or at any special or annual meeting called for
the purpose, shall be necessary to permit, effect or validate any one or
more of the following:
(i)the authorization, creation or issuance, or any increase in the
authorized or issued amount, of any class or series of shares (including
any class or series of preferred shares) ranking prior (as that term is
defined in paragraph (e) of this Section (7)) to the First Series
Preferred Shares; or
(ii)the amendment, alteration or repeal of any of the provisions of the
Restated Certificate of Incorporation in any manner which would
materially and adversely affect any right, preference, privilege or
voting power of the First Series Preferred Shares or of the holders
thereof; provided, however, that any increase in the amount of
authorized preferred shares or the creation and issuance of other series
of preferred shares, in each case ranking on a parity with or junior to
the First Series Preferred Shares with respect to the payment of
dividends and the distribution of assets upon Dissolution shall not be
deemed to materially and adversely affect such rights, preferences,
privileges or voting powers; provided, further, that the creation of a
class or series of shares entitled to vote as a class together with the
First Series Preferred Shares on the matters stated herein and having a
voting power greater than one vote for each $100 of liquidation
preference (exclusive of accrued and unpaid dividends), shall be deemed
to materially and adversely affect the voting power of the Preferred
Shares.
(d)So long as any First Series Preferred Shares remain outstanding, the
consent of the holders of at least a majority of the First Series
Preferred Shares outstanding at the time (voting separately as a class
together with all other series of preferred shares ranking on a parity
with First Series Preferred Shares either as to dividends or the
distribution of assets upon Dissolution and upon which like voting
rights have been conferred and are exercisable) given in person or by
proxy, either in writing or at any special or annual meeting called for
the purpose, shall be necessary to effect the merger or consolidation of
the Company with or into any other corporation, if and only if the plan
of merger or consolidation contains any provision which, if contained in
an amendment to the Company's Restated Certificate of Incorporation,
would entitle the holders of shares of such class or series to vote as a
class thereon.
(e)The foregoing voting provisions shall not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of the First Series
Preferred Shares shall have been redeemed or sufficient funds shall have
been deposited in trust to effect such redemption.
(f)Any class or classes of shares of the Company shall be deemed to
rank:
(i)prior to the First Series Preferred Shares as to dividends or as to
distribution of assets upon Dissolution if the holders of such class
shall be entitled to the receipt of dividends or of amounts
distributable upon Dissolution in preference or priority to the holders
of the First Series Preferred Shares; and
(ii)on a parity with the First Series Preferred Shares as to dividends
or as to distribution of assets upon Dissolution whether or not the
dividend rates, dividend payment dates, or redemption or Dissolution
prices per share thereof be different from those of the First Series
Preferred Shares, if the holders of such class of shares and the First
Series Preferred Shares shall be entitled to the receipt of dividends or
of amounts distributable upon Dissolution in proportion to their
respective dividend rates or Dissolution prices, without preference or
priority one over the other.
3.3 Common Shares. The holders of common shares, subject to law and to
the rights of the preferred shares, shall have the exclusive right to
vote for the election of directors and on all other matters requiring
shareholder action, each common share being entitled to one vote.
3.4 Preemptive Rights. The holders of shares of the Corporation shall
have no preemptive rights to purchase any shares or any other securities
of the Corporation.
3.5 Cumulative Voting. At all elections for directors of the
Corporation, each shareholder entitled to vote for the election of
directors shall be entitled to as many votes as shall equal the number
of shares owned by said shareholder multiplied by the number of
directors to be elected. A shareholder may cast all of such votes for a
single director or may distribute them among the number to be voted for
or any two or more of them.
3.6 Share Distributions. The board of directors may from time to time
authorize the distribution of shares of any class or series to the
holders of the same or of any other class or series of shares.
4. BYLAWS
The board of directors may adopt, amend or repeal the bylaws of the
Corporation.
5. DIRECTORS
5.1 Number of Directors. The number of directors of the Corporation
shall be fixed and may from time to time be increased or decreased by
the board of directors, but in no event shall the number of directors be
less than 9 or more than 30.
5.2 Classified Directors. Notwithstanding anything to the contrary in
the by-laws, the directors shall be classified with respect to the time
for which they severally hold office into three classes, as nearly equal
in number as possible, with each director in each class to hold office
until his or her successor is elected and qualified. At the annual
meeting held in 1988, the three classes of directors shall be elected to
serve terms expiring in 1989, 1990 and 1991, respectively. At each
annual meeting of shareholders beginning with the meeting to be held in
1989, the successors of the class of directors whose term expires at
that meeting shall be elected to hold office for a term expiring at the
annual meeting of shareholders to be held in the third year following
the year of their election, with each director in each such class to
hold office until his or her successor is elected and qualified. Any
newly created directorship or any decrease in directorships shall be so
apportioned among the classes as to make all classes as nearly equal in
number as possible. When the number of directors is increased by the
board and any newly created directorships are filled by the board, there
shall be no classification of the additional directors until the next
annual meeting of shareholders.
5.3 Vacancies. Any vacancies on the board of directors may be filled by
the affirmative vote of a majority of the remaining directors then in
office, even though less than a quorum of the board of directors. No
decrease in the number of directors constituting the board of directors
shall shorten the term of any incumbent director.
5.4 Removal. Any director may be removed from office only for cause and
only by the affirmative vote of at least 75% of the shares entitled to
vote.
5.5 Preferred Shares. Notwithstanding the foregoing, whenever the
holders of any one or more series of preferred shares issued by the
Corporation shall have the right to vote separately by series to elect
directors at an annual or special meeting of shareholders, the election,
terms of office, filling of vacancies and other features of such
directorships shall be governed by the terms of this Restated
Certificate of Incorporation applicable thereto, and such directors so
elected shall not be divided into classes pursuant to this Article 5
unless expressly provided by such terms.
5.6 Required Vote. Notwithstanding anything contained in this
certificate to the contrary, the affirmative vote of a least 75% of the
shares entitled to vote shall be required to alter, amend or repeal, or
adopt any provision inconsistent with, this Article 5, or to fix
(including by increase or decrease) the number of directors of the
Corporation by vote of the Corporation's shareholders.
6. MISCELLANEOUS
6.1 Office. The office of the Company it to be located in the County of
Westchester of the State of New York.
6.2 Service of Process. The Secretary of State of New York is
designated as an agent of the Company upon whom process against the
Company may be served in any action or proceeding against it within the
State of New York. The post office address to which the Secretary of
State shall mail a copy of any process against the Company served upon
him or her is Sears, Roebuck and Co., 3333 Beverly Road, Hoffman
Estates, Illinois 60179-0002, Attention: Secretary.
7. LIMITATION
A director shall not be personally liable to the Corporation or its
shareholders for damages for any breach of duty in such capacity, unless
a judgement or other final adjudication adverse to him or her
establishes that his or her acts or omissions were in bad faith or
involved intentional misconduct or a knowing violation of law, or that
he or she personally gained in fact a financial profit or other
advantage to which he or she was not legally entitled, or that his or
her acts violated Section 719 of the New York Business Corporation Law.
The foregoing sentence shall not eliminate or limit the liability of any
director for any act or omission occurring prior to the adoption of this
Article 7. If the New York Business Corporation Law is amended after
adoption of this Article by the shareholders to authorize corporations
to further limit director liability, this Article shall be construed to
limit director liability to the fullest extent permitted by the New York
Business Corporation Law as so amended. No amendment to or repeal of
this Article 7, and no modification to its provisions, shall apply to,
or have any effect upon, the liability or alleged liability of any
director with respect to any acts or omissions of such director prior to
such amendment, repeal or modification.
Exhibit 5
SEARS, ROEBUCK AND CO.
3333 BEVERLY ROAD
HOFFMAN ESTATES, ILLINOIS 60179
VENRICE R. PALMER
LAW DEPARTMENT
Senior Counsel
847/286-9238
847/286-0959 (facsimile)
VIA EDGAR
July 15, 1996
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, IL 60179
RE: Sears, Roebuck and Co. (the "Company")
Direct Purchase Stock Plan
Registration Statement on Form S-3
Ladies and Gentlemen:
I have examined the Registration Statement of the Company on Form
S-3 relating to the Sears Direct Purchase Stock Plan the "Registration
Statement") to be filed with the Securities and Exchange Commission on
or about July 15, 1996 in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), for an offering to be
made on a continuous or delayed basis pursuant to the provisions of Rule
415 under the Act, of 3,380,574 common shares, par value $.75 per share,
of the Company (the "Common Shares"). I am familar with the proceedings
heretofore taken, and with the additional proceedings proposed to be
taken, by the Company in connection with the authorization,
registration, issuance and sale of the Common Shares. I call to your
attention the fact that the Common Shares that may be acquired pursuant
to the Plan may include Common Shares to be issued in the future,
including Common Shares not presently contemplated to be issued, and
that the opinions included herein are necessarily limited to Common
Shares heretofore issued and Common Shares which may be issued in the
future as presently contemplated.
Based on the foregoing and subject to the proposed additional
proceedings being taken as now contemplated prior to the issuance of the
Common Shares, the issuance and sale thereof in the manner referred to
in the Registration Statement, and the terms of the Common Shares being
otherwise in compliance with then applicable law, I am of the opinion
that:
1) the execution, issuance and delivery by the Company of the Common
Shares has been duly authorized by all necessary corporate action on the
part of the Company;
2) upon full payment therefore, the Common Shares will be validly
issued, fully paid and nonassessable; and
3) except for statutory claims by laborers, servants, or employees
for unpaid debts, wages or salaries, chargeable against certain of the
principal shareholders only in the event of termination of listing and
public trading in the Company's shares, no personal liability for
obligations of the Company will attach to any holder of such Common
Shares under existing statutes of the State of New York.
I consent to the use of this opinion as an exhibit to the Registration
Statement and to the references to me in the Prospectus which is part of
the Registration Statement.
Sincerely,
/s/ VENRICE R. PALMER
Venrice R. Palmer
Senior Counsel
Exhibit 15
Deloitte & Touche LLP Telephone: (312) 946-3000
Two Prudential Plaza Facsimile: (312) 946-2600
180 North Stetson Avenue
Chicago, Illinois 60601-6779
July 15, 1996
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, IL 60179
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 March 30, 1996 and April 1, 1995, as indicated in our report dated
May 9, 1996; because we did not perform an audit, we expressed no
opinion on that information.
We are aware that our report referred to above, which was included in
your Quarterly Report on Form 10-Q for the quarter ended March 30, 1996,
is being used in this Registration Statement.
We are also aware that the aforementioned report, pursuant to Rule
436(c) under the Securities Act of 1933, is 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
Tohmatsu
International
Exhibit 23
Deloitte & Touche LLP Telephone: (312) 946-3000
Two Prudential Plaza Facsimile: (312) 946-2600
180 North Stetson Avenue
Chicago, Illinois 60604-6779
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Sears, Roebuck and Co. on Form S-3 of our reports dated
February 15, 1996, appearing in, and incorporated by reference in, the
Annual Report on Form 10-K of Sears, Roebuck and Co. for the year ended
December 30, 1995 and to the reference to us under the heading "Experts"
in the Prospectus, which is a part of this Registration Statement.
/s/Deloitte & Touche LLP
July 15, 1996
Deloitte Touche
Tohmatsu
International
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, ALAN J. LACY, MICHAEL D. LEVIN, ALICE M. PETERSON and JAMES
A. BLANDA, 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 common shares of the
Company subject to the SEARS, ROEBUCK AND CO. DIRECT PURCHASE STOCK
PLAN, including specifically, but without limitation of the general
authority hereby granted, the power and authority to sign his or her
name as director or officer, or both, of the Company, as indicated below
opposite his or her signature, to (i) the registration statements, or
any amendment, post-effective amendment, or papers supplemental thereto
to be filed in respect to said common shares of the Company; (ii) the
prospectus or any amendment, supplement or revision thereof to be filed
with said registration statements or any prior registration statement of
the Company; and (iii) any amendment or post-effective amendment to any
prior registration statement of the Company; 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 his or her
name, this 15th day of July, 1996.
NAME TITLE
__________________________
ARTHUR C. MARTINEZ
Director, Chairman of the Board of Directors,
President and Chief Executive Officer
(Principal Executive Officer)
__________________________
ALAN J. LACY
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
___________________________
JAMES A. BLANDA
Vice President and Controller
(Principal Accounting Officer)
___________________________
HALL ADAMS, JR.
Director
___________________________
WARREN L. BATTS
Director
___________________________
JAMES W. COZAD
Director
___________________________
MICHAEL A. MILES
Director
___________________________
RICHARD C. NOTEBAERT
Director
___________________________
NANCY C. REYNOLDS
Director
___________________________
CLARENCE B. ROGERS, JR.
Director
___________________________
DONALD H. RUMSFELD
Director
___________________________
DOROTHY A. TERRELL
Director
Exhibit 4
SEARS, ROEBUCK AND CO.
DIRECT PURCHASE STOCK PLAN
EFFECTIVE ON ___________________
The Sears, Roebuck and Co. Dividend Reinvestment and Share Purchase
Plan, as in effect on January 15, 1990 (the "Prior Plan") is hereby
amended and restated to read in its entirety as follows:
1. Title and Purpose. The name of the plan is the Sears, Roebuck
and Co. Direct Purchase Stock Plan (the "Plan").
The purpose of the Plan is to promote long-term ownership among
investors who are committed to investing a minimum amount in Sears,
Roebuck and Co. ("Sears") common shares (par value $.75 per share) and
building share ownership over time, by:
(a) providing interested persons with the opportunity to purchase
Sears common shares through Sears, whether or not they are already Sears
shareholders, at a reduced brokerage commission;
(b) permitting eligible shareholders of Sears to use all or part of
their cash dividends on Sears common shares, as paid, and cash
investments to purchase additional common shares of Sears;
(c) permitting Plan participants to deposit certificates for Sears
common shares with the Plan Administrator for safekeeping, thereby
avoiding the risk of loss if maintained by the participants themselves;
(d) providing Plan participants with an opportunity to sell Sears
common shares at a reduced commission rate;
(e) providing Plan participants with an opportunity to transfer Sears
common shares from their Plan accounts to Plan accounts for other
persons at no charge; and
(f) permitting interested investors to establish an individual
retirement account ("IRA") with a separate institution serving as
administrator of the IRA, to invest in Sears common shares.
Funds from reinvested dividends and cash payments will be used by the
Plan Administrator (as defined below) to purchase Sears common shares in
the open market for Plan participants or from Sears directly.
2. Fees and Charges. Participants in the Plan will pay (or
Sears, at its option, may pay) the following fees:
(a) Direct Purchase of Sears Common Shares.
(i) Initial Purchase. Persons who are not Sears shareholders who
participate in the direct purchase feature of the Plan will pay to the
Plan Administrator a service charge of $10.00 plus, in the case of open
market purchases, a brokerage commission of $0.03 per share for all
initial purchases of Sears common shares. The minimum purchase amount
is $500. At the Plan Administrator's discretion, a person may fulfill
the $500 minimum by authorizing automatic investments of at least $100
for a minimum of five consecutive months;
(ii) Additional Purchases. Participants who already own Sears common
shares, either through direct purchase or dividend reinvestment under
the Plan or through purchases outside of the Plan, will pay to the Plan
Administrator a fee of 5% of each additional cash purchase amount up to
a maximum of $7.50 plus, in the case of open market purchases, a
brokerage commission of $0.03 per share. Additional purchases may be
made as frequently as weekly. The minimum amount for additional
purchases is $50.00;
(b) Automatic Investments. Participants will pay a $1.00 processing
charge for each purchase through the automatic investment feature, in
addition to the fee and brokerage commission, if any, specified above;
(c) Dividend Reinvestment. Persons who participate in the dividend
reinvestment feature of the Plan will pay a fee of 5% of each dividend
paid on their Sears common shares, with a minimum fee of $1.00 up to a
maximum of $3.00 per dividend plus, in the case of open market
purchases, a brokerage commission of $0.03 per share;
(d) Dividend Payments by Direct Deposit. Participants in the Plan
who wish to receive some or all of their dividends in cash may either
receive a check or elect to have their cash dividends deposited directly
into their bank accounts. There is no fee for this service; however,
participants will be responsible for any fees charged by their bank for
arranging to accept direct deposits;
(e) Safekeeping of Certificates. There will be no fee or other
charge for the safekeeping of Sears common share certificates on behalf
of participants;
(f) Sales of Sears Common Shares. Participants in the Plan will pay
the Plan Administrator a service charge of $15.00 plus a brokerage
commission of $0.12 per share plus any applicable taxes for sales of
Sears common shares under the Plan;
(g) Transfer of Shares. There will be no fee or other charge for
transferring Sears common shares held in a participant's account to an
account for another person. However, any applicable taxes will be the
responsibility of the transferor or the transferee, as may be provided
by law;
(h) Withdrawal of Shares. There will be no fee or other charge for
withdrawing Sears common shares in certificate form; and
(i) IRA.Participants who establish an IRA under the Plan will be
charged an annual IRA administration fee of $35.00 by the administrator
of the IRA.
(j) Returned Checks and Failed Automatic Withdrawals. Participants
will pay a fee to the Plan Administrator of $20.00 for each returned
check and each automatic withdrawal which is refused by the
participant's bank.
3. Advantages. Dividends may be reinvested on some or all Sears
common shares held by the participant outside the Plan in certificate
form, as well as some or all Sears common shares held in the
participant's Plan account. Also, the purchase of fractional shares, as
well as full shares, is permitted and cash dividends on full and
fractional shares may be reinvested in additional Sears common shares.
Participants may avoid the necessity of safekeeping certificates for
Sears common shares acquired under the Plan through direct purchase or
dividend reinvestment. A Plan participant also may mail to the Plan
Administrator certificates for Sears common shares in his or her
possession, and registered in the same name under which the
participant's Plan account is maintained, for deposit into the
participant's Plan account for safekeeping at no extra charge. Such
deposited shares will be held along with the shares purchased under this
Plan, and may be sold and/or withdrawn at any time in accordance with
the provisions of this Plan. Dividends may be reinvested on some or all
of such deposited shares, at the participant's option. Shares held in a
participant's account may be transferred to accounts of other persons by
private sale, gift or otherwise, at no charge, other than any applicable
taxes.
4. Plan Administrator. Sears will appoint an independent agent as
plan administrator (the "Plan Administrator"), who will administer the
Plan for participants, keep records, send statements of account to
participants and perform other duties related to the Plan.
5. Eligibility. Any interested person is eligible to participate
in the Plan, provided that (i) such person fulfills the prerequisites
for participation described below under "Enrollment Procedures" and (ii)
in the case of citizens or residents of a country other than the United
States, its territories and possessions, such participation would not
violate local laws. Any such participant specified in clause (ii) of the
foregoing sentence may be asked to make a written representation
respecting compliance with such laws. After enrolling in the Plan, a
participant must maintain ownership of at least five whole Sears common
shares in order to continue to participate in the Plan. Failure to
comply with the share ownership requirement will result in a
participant's account being closed and the Sears common shares held in
the participant's account being sold by the Plan Administrator at Sears
expense. This share ownership requirement may be waived in appropriate
cases by the Plan Administrator.]
6. Effective Date. The Plan will become effective on
__________________.
7. Enrollment Procedures.
(a) Continued Participation of Prior Plan Participants. Each
participant in the Prior Plan shall continue to participate in the Plan
through and after the Effective Date without further action on the
participant's part. However, if a participant in the Prior Plan intends
to make any changes in his or her account elections, or intends to take
advantage of Plan features not available under the Prior Plan, the
participant must complete a new enrollment form, available from the Plan
Administrator, specifying the changes desired.
(b) Other Participants. All other interested persons must return a
completed enrollment form to the Plan Administrator. Investors who own
Sears common shares held on their behalf by a bank, broker or trustee
may participate with some or all of such shares by instructing the
holder to have some or all of the shares transferred into the investor's
name. In order to enroll using the direct purchase feature, investors
must make an initial investment of at least $500 and complete and submit
any forms required by the Plan Administrator. At the Plan
Administrator's discretion, a person may fulfill the $500 minimum by
authorizing automatic investments of at least $100 per month for a
minimum of five consecutive months.
(c) IRA's. Investors may establish an IRA, with an institution
selected by the Plan Administrator serving as administrator of the IRA,
which invests in Sears common shares through the Plan, by returning a
completed IRA enrollment form and making an initial investment in the
IRA of at least $500. Or, such persons may transfer funds having a fair
market value of $500 on the enrollment date from an existing IRA
account, and complete an IRA enrollment form and an IRA transfer form.
These forms are available from the Plan Administrator. Sears will not
establish, maintain or contribute to IRA accounts of Plan participants.
(d) Payroll Deduction. In the discretion of Sears, interested
investors who are employees of Sears or certain of its subsidiaries or
affiliates as Sears may direct, may make purchases by payroll deduction.
Such persons are required to follow such procedures as may be set forth
from time to time by Sears and the Plan Administrator in making such
purchases.
8. Direct Purchase.
(a) Any person, whether or not currently a holder of Sears common
shares, may participate in the Plan's direct purchase feature at any
time by requesting from, and completing, signing and returning, to the
Plan Administrator, an authorization form, along with a check or money
order in the amount of at least $500 and not more than $150,000.
Dividends on Sears common shares purchased in this manner may be
reinvested in whole or in part, at the participant's option, but are not
required to be reinvested. Participants may make automatic investments
of a specified amount (not less than $50 per purchase nor more than
$150,000 per year) by electronic funds transfer from a predesignated
account with a bank located in the United States, its territories or
possessions and by following such procedures and filing such forms as
may be specified by the Plan Administrator. Investors who are not Sears
shareholders who use the automatic investment option to make their
initial purchase of Sears common shares are required to make an initial
investment of at least $500 or, at the Plan Administrator's discretion,
authorize automatic investments of at least $100 per month for a minimum
of five consecutive months. Additional purchases may be made as often
as weekly, and must be in a minimum amount of $50.00.
(b) No interest will be paid on funds received and held for the
purchase of Sears common shares under the Plan.
(c) The number of Sears common shares to be purchased from Sears or in
the open market upon investment of any cash payments will depend on the
amount of any such cash payment, the cost per share and any applicable
brokerage commission and service charge and fee (unless Sears elects to
pay some or all of such amounts). The account of each Plan participant
making a cash payment will be credited with the number of shares,
including fractions (computed to three decimal places), equal to:
(i) the amount of such participant's payment minus any brokerage
commission, service charge and fee paid by the participant and any
relevant taxes,
divided by:
(ii) the cost per share as determined pursuant to Section 15 of the
Plan.
(d) Any cash payments made by the participant must be returned to the
participant if Sears common shares have not been purchased within 35
days of receipt.
(e) The Plan Administrator will not accept more than $150,000 per year
from a participant for the purchase of Sears common shares under the
Plan (exclusive of shares purchased with the reinvestment of dividends).
9. Dividend Reinvestment and Direct Deposit of Dividends.
(a) Dividend Reinvestment. Any person may participate in the
Plan's dividend reinvestment feature at any time by requesting from, and
completing, signing and returning to, the Plan Administrator an
enrollment form, which authorizes:
(i) the reinvestment of some or all of the cash dividends on Sears
common shares registered in a participant's name outside of the Plan, or
on Sears common shares held for safekeeping under the Plan, or both,
toward the purchase of additional Sears common shares; and
(ii) the deduction by the Plan Administrator from all of the cash
dividends to be reinvested, or any cash payments to be invested, of an
amount equal to the charges attributable to purchases of Sears common
shares for the account of such participant.
Reinvestment levels may be changed from time to time by submitting a new
election form to the Plan Administrator. To be effective with respect
to a particular dividend, any such change must be received by the Plan
Administrator on or before the record date for such dividend.
(b) Direct Deposit.Participants may direct that some or all of the
cash dividends on Sears common shares be paid to them by direct deposit
to a bank account in their name, by submitting a properly completed and
signed authorization form to the Plan Administrator. Such forms will be
processed and will become effective as promptly as practicable following
receipt by the Plan Administrator. A participant's choice to receive
dividend payments either by direct deposit or by check will apply to
dividends paid on shares held under the Plan, as well as shares
registered in the participant's name and held outside the Plan.
(c) Non-Shareholders. Persons who are not already Sears common
shareholders may participate in the dividend reinvestment feature by
first becoming a shareholder of record by purchasing and holding in
their own name at least five Sears common shares, either through the
Plan's direct purchase feature or outside of the Plan through a bank or
broker. If the authorization form is received after the record date for
a dividend, reinvestment of cash dividends will begin with the following
dividend.
(d) Partial or Full Reinvestment. Participants may have some or all
of the dividends paid on Sears common shares held in the Plan reinvested
in additional Sears common shares, regardless of whether the shares were
purchased outside the Plan, purchased under the Plan through the direct
purchase feature, purchased with reinvested dividends or deposited into
the Plan for safekeeping.
(e) Number of Shares and Effective Time of Dividend Reinvestments. The
number of Sears common shares to be purchased from Sears or in the open
market upon reinvestment of cash dividends will depend on the amount of
a participant's dividend, the cost per share and the applicable
brokerage commission and fee (unless Sears elects to pay some or all of
such amounts). Each participant's account will be credited with the
number of shares, including fractions (computed to three decimal
places), equal to:
(i) the amount of a participant's dividend minus any brokerage
commission, any fee paid by the participant and any relevant taxes,
divided by:
(ii) the cost per share as determined pursuant to Section 15 of the
Plan.
(f) Dividends will be invested promptly after receipt by the Plan
Administrator and within 30 days after such receipt, except where
necessary to comply with federal securities laws. The Plan
Administrator may initiate open market purchase transactions for the
reinvestment of dividends prior to the dividend payment date in order to
minimize, to the extent possible, the delay between the payment of
dividends and the settlement of purchase transactions.
10. Share Certificate Safekeeping.Any person who is or becomes a
registered holder of Sears common shares may have the Plan Administrator
retain for safekeeping Sears common share certificates.
(a) Certificates, which must be registered in the same name as the
participant's Plan account, should be mailed to the Plan Administrator
for deposit into the participant's account accompanied by a letter
directing the deposit of such certificates for safekeeping. Shares so
deposited will be held along with any Sears common shares purchased
under the Plan, and may be sold and/or withdrawn at any time in
accordance with the provisions of this Plan. For those who participate
in dividend reinvestment, dividends on deposited shares will be
reinvested according to the account instructions, unless contrary
instructions are received.
(b) Dividends on Sears common shares held in safekeeping may be
reinvested in whole or in part, at the participant's option, but are not
required to be reinvested.
(c) To insure against loss resulting from mailing certificates
to the Plan Administrator, the Plan provides for mail insurance free, of
charge, for certificates with current market value of up to $25,000. To
be eligible for mail insurance, certificates must be mailed in first-
class, brown, pre-addressed, return envelopes available from the Plan
Administrator. The Plan Administrator must be notified of any claim
within 30 calendar days of the date the certificates were mailed. To
submit a claim, an individual must be a current participant or the
individual's loss must be incurred in connection with becoming a
participant. In the latter case, the claimant must enroll in the
program at the time the insurance claim is processed. The maximum
insurance protection provided is $25,000 and coverage is available only
when the certificate(s) are sent to the Plan Administrator in accordance
with the guidelines described above. Insurance covers the replacement
of shares, but in no way protects against any loss resulting from
fluctuations in the value of shares.
11. Sale of Shares. Any participant may sell through the Plan, Sears
common shares:
(a) purchased outside of the Plan through a bank or broker, if the
certificates are sent to the Plan Administrator prior to the sale;
(b) purchased within the Plan through reinvestment of dividends;
(c) purchased within the Plan through cash investments; or
(d) deposited into the Plan for safekeeping.
If a participant so requests, in writing or by telephone, the Plan
Administrator will sell all or a portion of any Sears common shares
credited to a participant's account and remit the proceeds to the
participant, less any related brokerage commission, fee and any other
costs of sale (unless Sears, at its option, elects to pay such
commission and costs). Proceeds will be sent by check only. If
requests for the sale of Sears common shares are received by the Plan
Administrator no later than 1:00 p.m. Eastern Time on a day on which the
Plan Administrator and the securities markets are open for business, the
Plan Administrator will attempt to sell the shares on the day of receipt
of the participant's request, if reasonably practicable. The sales
price for shares sold for a participant will be the average price per
share of all shares sold on that day. In addition, participants may
request that the Plan Administrator issue certificates for Sears common
shares held under the Plan on behalf of the participant and forward such
certificates to the participant, who may then sell the shares through a
bank or broker.
12. Transfer of Shares to Another Participant. Any participant may
transfer a whole number of Sears common shares or the participant's
entire account balance, including fractional shares, to an account for
another person, whether by gift, private sale or otherwise, without
charge, by giving appropriate instructions to the Plan Administrator. A
participant who wishes to effect such a transfer should request the
appropriate documentation from the Plan Administrator.
(a) The Plan Administrator will transfer the shares within three
business days of receipt of properly completed documentation from the
transferring participant. The transferring participant will cease to be
credited with dividends as of any dividend record date on or after which
such transfer is made by the Plan Administrator.
(b) Dividends on shares transferred from one participant to another
will be treated according to the transferee's instructions covering his
or her Plan account. If the transferee is not already a Plan
participant as of the effective date of the transfer, the Plan
Administrator shall open a Plan account in the name of the transferee
using the instructions provided by and reflecting the Plan features
requested by the transferor, and shall send the transferee a Plan
prospectus as soon as reasonably practicable. A transferee participant
who did not already have an existing account in the Plan at the time of
the transfer may not enter transactions or otherwise have access to his
or her account until the transferee has been sent a Plan prospectus by
the Plan Administrator.
(c) After each transfer, the transferee will receive a notice from the
Plan Administrator advising of the transfer and reflecting the number of
shares transferred and held in the transferee's account.
13. Investment Dates. The Plan Administrator will process
participants' cash investments promptly. The Plan's "Investment Dates"
occur at least once every five business days. Purchases may be
processed daily when practicable. A participant's investment will be
invested within five business days from the day of receipt, except in
certain circumstances involving open market purchases (see "Direct
Purchase" above).
14. Source of Shares to be Purchased.
(a) Sears may determine that Sears common shares to be purchased under
the Plan through direct purchase or through the reinvestment of
dividends, will be either original issue shares, treasury shares held by
Sears or shares purchased for Plan participants in the open market (on
an exchange or in negotiated transactions), or a combination of the
foregoing. Sears cannot change its determination that shares purchased
for the Plan will be treasury or original issue shares, versus shares
purchased on the open market, more than once in any three-month period,
unless otherwise permitted by applicable rules and interpretations of
the Securities and Exchange Commission. Such determination shall be
made by the Board of Directors or, pursuant to a resolution of the Board
of Directors, the Executive Vice President and Chief Financial Officer
of Sears, based, in the case of a determination that Sears common shares
to be purchased will be treasury or original issue shares, upon a prior
determination that Sears has a need to raise additional capital or that
there is another valid reason for such change.
(b) Purchases of Sears common shares in the open market will be made
by or at the direction of the Plan Administrator. Open market purchases
may be made on any securities exchange where Sears common shares are
traded or by negotiated transactions on such terms with respect to
price, delivery and otherwise as are satisfactory to the Plan
Administrator. Neither Sears nor any Plan participant shall have any
authority or power to direct the time or price at which shares may be
purchased, or the selection of the broker or dealer through or from whom
purchases are to be made.
15. Cost of Sears Common Shares Purchased under the Plan.
(a) Purchases in the Open Market.The cost to each Plan
participant of shares purchased in the open market under the Plan will
be the weighted average purchase price of Sears common shares (including
brokerage commissions, if applicable) purchased for the Plan in respect
of the related Investment Date or dividend payment date.
(b) Purchases from Sears. In the case of purchases from Sears of
authorized but unissued, or treasury, shares, the cost of shares
purchased for Plan participants will be the average of the high and low
prices of Sears common shares on the related Investment Date or dividend
payment date, based on the reported prices as shown in a summary of
composite transactions in stocks listed on the New York Stock Exchange.
(c) The Plan Administrator may commingle participants' funds with
those of other participants for the purpose of executing purchases.
16. Taxation. In the case of a participant who is, as to the United
States of America or its territories or possessions, a non-resident
alien individual, a non-resident fiduciary of an estate or trust, a
foreign partnership or a foreign corporation whose dividends are subject
to United States income tax withholding, the amount of dividends
payable will be reduced by the amount of taxes required to be withheld.
In the case of a participant who fails to provide the Plan Administrator
with a social security or other tax identification number in the manner
required by law, or as to whom the Internal Revenue Service notifies the
Plan Administrator or Sears that backup withholding is required from the
participant, the amount of dividends payable will be reduced by the
amount of taxes required to be withheld.
17. Commencement of Dividend and Voting Rights on Shares Purchased
Under the Plan. As of the date Sears common shares purchased under the
Plan are credited to a Plan participant's account by the Plan
Administrator, dividend rights will commence with respect to such
shares, and voting rights will commence with respect to the whole shares
credited to such participant's account under the Plan. Deposited shares
retain the same dividend rights which pertained to such shares before
they were deposited.
18. Account Statements and Other Communications.
(a) Annual Statement. Each Plan participant will receive an annual
statement of account activity.
(b) Quarterly Statement. Each Plan participant who reinvests
dividends will receive a detailed quarterly statement of year-to-date
account activity.
(c) Notices. The Plan Administrator will send to each participant a
notice after each cash investment, deposit of certificates, sale or
transfer.
(d) Plan Prospectus; Shareholder Reports. In addition, each
participant will receive, from time to time, a current prospectus for
the Plan and copies of the same communications sent to all other
shareholders of record.
19. Certificates for Plan Shares. Certificates for Sears common shares
purchased from Sears or in the open market or deposited under the Plan
will be held in safekeeping by the Plan Administrator as agent for the
participants in the Plan. These certificates will be issued in the name
of the Plan Administrator or its nominee. Certificates for any number
of whole shares credited to an account will be delivered to a Plan
participant upon request. Participants may request that certificates be
issued after every purchase, unless the Plan Administrator can
demonstrate that such requests would be unduly burdensome
administratively. Any full or fractional shares remaining after a
certificate is issued will continue to be credited to the participant's
account. Certificates for fractions of shares will not be issued.
Unless the participant advises the Plan Administrator to the contrary,
dividends will continue to be reinvested as to shares withdrawn from the
Plan in certificate form, if dividends were being reinvested on such
shares while they were being held in the participant's Plan account.
20. Partial and Complete Withdrawals from the Plan and Plan
Termination.
(a) In order to make complete or partial withdrawal from the Plan, a
Plan participant must notify the Plan Administrator in writing or by
telephone.
(b) Upon complete withdrawal from the Plan (or upon termination of the
Plan by Sears), a certificate for the whole shares held for a Plan
participant (or cash, if such participant requests the sale of such
shares as provided below) will be sent to such participant with a cash
payment for any fraction of a share being withdrawn. Fractions of
shares for which cash payment is to be made to a withdrawing Plan
participant will be valued at the sale price for such fractional shares
less any applicable brokerage commission, fee and other costs of sale
(unless Sears, at its option, elects to pay such costs).
(c) A Plan participant may also elect to withdraw a portion of the
Sears common shares held in such participant's account under the Plan by
written or telephone notice to the Plan Administrator specifying the
number of shares to be withdrawn. Delivery of certificate(s) for whole
Sears common shares (or cash, if such participant requests the sale of
any of such shares, as provided below), and a cash payment for any
fraction of a share being withdrawn, shall be made pursuant to the
foregoing provisions relating to a withdrawing participant.
(d) If a participant so requests, the Plan Administrator will sell all
or a portion of any whole Sears common shares credited to such
participant's account under the Plan and remit the proceeds to such
participant, less any related brokerage commission, fee any other costs
applicable to such sale (unless Sears, at its option, elects to pay such
charges).
21. Refund of Cash Payments. Any cash payment not previously
invested will be refunded upon a Plan participant's written request
received by the Plan Administrator at least 48 hours prior to the weekly
Investment Date .
22. Effect of Sale of Sears Common Shares. A Plan participant may
continue to receive in cash or reinvest cash dividends on his or her
remaining Sears common shares even though some shares have been sold or
transferred, regardless of whether the shares are held under the Plan,
by the participant in certificate form, or both.
23. Effect of Stock Split or Stock Dividend or Other Distribution on
Plan Shares. Any Sears common shares distributed as a result of a
stock split or stock dividend on shares credited to a Plan participant's
account will be added to the balance of that account. Stock dividends
or split shares distributed on Sears common shares for which the
participant holds certificates will be mailed directly to the
participant. Any other property distributed by Sears as a special
dividend to holders of Sears common shares will be distributed pro rata
to Plan participants.
24. Voting of Sears Common Shares Held in the Plan. Whole Sears
common shares held under the Plan may be voted in person at a meeting of
shareholders or by proxy. Proxies will be solicited from Plan
participants by Sears for any whole Sears common shares held under the
Plan.
25. Limitation of Liability. Sears and its designated Plan
Administrator, in administering the Plan and in making purchases and
sales of Sears common shares in the open market or in making purchases
from Sears pursuant to the Plan, will not be liable for any act done in
good faith or for any good faith omission to act, including, without
limitation, any claim of liability arising from: (i) failure to
terminate a Plan participant's account upon such participant's death
prior to receipt of written notice of such death; (ii) the times and
prices at which Sears common shares are purchased or sold for a
participant's account; or (iii) fluctuations in the market price of
Sears common shares.
26. Suspension, Modification or Termination. Sears may suspend,
modify or terminate the Plan at any time and notice of such action will
be sent to all Plan participants. If the Plan is terminated, fractional
shares will be valued at the sale price for such fractional shares less
any applicable brokerage commissions and related costs of sale, and a
certificate for the whole Sears common shares held for a Plan
participant will be sent to such participant with a cash payment for any
fraction of a share being held for such participant.
27. Administration. Sears or the Plan Administrator may, in its
discretion, prescribe such provisions and interpretations not
inconsistent herewith as it shall deem necessary or advisable for
carrying out the purposes of the Plan, including (but not limited to)
provisions or interpretations necessary to avoid abusive investment practices.
28. Absence of Guarantee. Neither Sears nor the Plan Administrator
in any way guarantees participants in the Plan against loss or
depreciation or guarantees the payment or amount of any future dividends
on Sears common shares.
29. Nonalienability. Except as specified above, a participant's
interest in his or her Plan account cannot be transferred, alienated,
sold, assigned, pledged, encumbered or changed, and any attempt to do so
shall be void.
30. Governing Law. The Plan will be governed by and interpreted in
accordance with the internal law of the State of New York, without
reference to that State's conflict of laws principles.
