Sears 2008 Annual Report Download - page 87

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
NOTE 16—RELATED PARTY DISCLOSURE
Our Board of Directors has delegated authority to direct investment of our surplus cash to Edward S.
Lampert, subject to various limitations that have been or may be from time to time adopted by the Board of
Directors and/or the Finance Committee of the Board of Directors. Mr. Lampert is Chairman of our Board of
Directors and Finance Committee and is the Chairman and Chief Executive Officer of ESL. Neither Mr. Lampert
nor ESL will receive compensation for any such investment activities undertaken on our behalf. ESL beneficially
owned 54.1% of our outstanding common stock as of January 31, 2009.
Further, to clarify the expectations that the Board of Directors has with respect to the investment of our
surplus cash, the Board has renounced, in accordance with Delaware law, any interest or expectancy of the
Company associated with any investment opportunities in securities that may come to the attention of
Mr. Lampert or any employee, officer, director or advisor to ESL and its affiliated investment entities who also
serves as an officer or director of the Company (each, a “Covered Party”) other than (a) investment opportunities
that come to such Covered Party’s attention directly and exclusively in such Covered Party’s capacity as a
director, officer or employee of the Company, (b) control investments in companies in the mass merchandising,
retailing, commercial appliance distribution, product protection agreements, residential and commercial product
installation and repair services and automotive repair and maintenance industries and (c) investment
opportunities in companies or assets with a significant role in our retailing business, including investment in real
estate currently leased by the Company or in suppliers for which the Company is a substantial customer
representing over 10% of such companies’ revenues, but excluding investments of ESL as of May 23, 2005.
Holdings employs certain employees of ESL. William C. Crowley is a director and our Executive Vice
President, Chief Administrative Officer while continuing his role as President and Chief Operating Officer of
ESL. Our Senior Vice President of Real Estate is also employed by ESL.
On January 18, 2007, Sears made a payment to plaintiffs in the case of In re: Sears, Roebuck and Co.
Securities Litigation of approximately $215 million pursuant to the terms of a settlement dated September 14,
2006. Certain affiliates of ESL owned shares of common stock of Sears before, during and after the class period
and were included in the class certified by the Court. Accordingly, these affiliates of ESL received their
proportionate share of the net settlement proceeds (approximately $12.9 million) in connection with the
settlement.
NOTE 17—SUPPLEMENTAL FINANCIAL INFORMATION
Other current liabilities as of January 31, 2009 and February 2, 2008 consisted of the following:
millions
January 31,
2009
February 2,
2008
Payroll and benefits payable ...................................... $ 339 $ 367
Outstanding checks in excess of funds on deposit ..................... 228 405
Current portion of self-insurance reserves ........................... 364 377
Customer deposits .............................................. 362 371
Accrued expenses and other current liabilities ........................ 1,933 2,451
Total .................................................... $3,226 $3,971
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