Sears 2012 Annual Report Download - page 122

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SEARS HOLDINGS CORPORATION
122
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Our management, with the participation of our principal executive and financial officers, conducted an
evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the
period covered by this report (the “Evaluation Date”). Based on this evaluation, the principal executive and financial
officers concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective in ensuring
that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is
recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and
(ii) is accumulated and communicated to our management, including our principal executive and financial officers,
as appropriate to allow timely decisions regarding required disclosure.
In addition, based on that evaluation, no changes in our internal control over financial reporting have occurred
during our last quarter that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
Item 9B. Other Information
On March 18, 2013, the Compensation Committee of Holdings' Board of Directors (the “Board”) and the
Board, with Edward S. Lampert recusing himself, approved the terms of an offer letter with Mr. Lampert under
which he will continue to serve as the Company's Chief Executive Officer. Under the offer letter, Mr. Lampert will
be paid an annual base salary of $1, effective as of February 1, 2013, the date on which Mr. Lampert began to serve
as our Chief Executive Officer. In addition, during each of the first three years of Mr. Lampert's service as our Chief
Executive Officer, Mr. Lampert will (1) participate in the Company's Annual Incentive Plan, with a target incentive
opportunity of $2,000,000, payouts under which (if any) may be paid, at Mr. Lampert's election, in cash or in
common stock of Holdings, and (2) receive Holdings common stock with value of $4,500,000 per annum, payable in
equal monthly installments subject to his continued service as Chief Executive Officer. The number of shares issued
to Mr. Lampert will be based on the value of Holdings' common stock on March 18, 2013 for shares issued through
January 31, 2014, and on the February 1st of each successive 12-month period of his employment. To the extent
there is not a sufficient number of shares available under the Company's equity plans to make any award
contemplated under Mr. Lampert's offer letter, Mr. Lampert will be entitled to receive compensation of substantially
equivalent economic value in such form as the Company and Mr. Lampert agree upon. Mr. Lampert's primary place
of employment will be located in the Miami, Florida metropolitan area. He is not eligible to participate in the
Company's long-term incentive programs. Mr. Lampert is not entitled to severance benefits if his employment with
the Company is terminated for any reason, and has not entered into a severance agreement with the Company.