This document constitutes part of a prospectus covering securities thathave beenregistered under the Securities Act of 1933.  
SEARS, ROEBUCK AND CO.
DEFERRED COMPENSATION PLAN
AS AMENDED AND RESTATED TO
December 13, 2000       
ARTICLE I
DESIGNATION OF PLAN AND DEFINITIONS

1.1 Title
This Plan shall be known as the "Sears, Roebuck and Co. Deferred CompensationPlan" and shall become effective for Compensation received on and afterJanuary 1, 1987. This document constitutes an amendment and restatementof the Plan, effective December 13, 2000.
1.2 Definitions
As used herein, the terms below shall have the following meanings. Anyof these terms, unless the context otherwise requires, may be used in thesingular or plural, depending upon the reference.
a.    "Accounts" shall mean Deferred Compensation Accounts.
b.    "Annual Bonus" shall mean an award payable underthe Sears, Roebuck and Co. Annual Incentive Plan.
c.    "Annual Bonus Election Date" shall mean, for anyFiscal Year, November 30 of such Fiscal Year (or such other date as selectedby the Committee or its appointed representative, provided that the Committeeor its appointed representative shall not select any such other date withrespect to a Fiscal Year unless the date, (1) is the same date for allEligible Employees and (2) is no later than the last day of the FiscalYear or such earlier date as the Committee or its appointed representativedetermines is necessary to be satisfied that, for income tax purposes,no Participant may be in constructive receipt of any Compensation deferredunder this Plan.
d.    "Base Salary" shall mean the base salary payableto an employee of a Participating Employer, by the Participating Employer,in cash.
e.    "Beneficiary" or "Contingent Beneficiary" (collectively,"Beneficiary" or "Beneficiaries") shall mean the person or persons lastdesignated in writing by the Participant to the Committee, in accordancewith Section 8.4 of this Plan.
f.    "Board" shall mean the Board of Directors of theCompany.
g.    "Code" shall mean the Internal Revenue Code of1986, as amended.
h.    "Committee" shall mean the Administrative Committeefor Sears Benefit Plans established by the Board of Directors on August14, 1996.
i.    "Common Shares" shall have the same meaning asset forth in Section 4.3(h).
j.    "Common Shares Vesting Date" shall mean, for anyVested Common Share Compensation, the date on which the Vested Common ShareCompensation arises because of the lapse of the Section 83 Restrictionson Restricted Common Shares.
k.    "Company" shall mean Sears, Roebuck and Co. andall consolidated subsidiaries thereof.
l.    "Company Stock Option" shall mean any option toacquire Common Shares granted under a stock plan of the Company by a ParticipatingEmployer to an Eligible Employee for services rendered, but only if (1)the Eligible Employee is (i) a member of the Corporate Strategic LeadershipTeam (or the successor to such group) or any other group designated bythe Committee for purposes of this definition or (ii) designated by theCommittee for purposes of this definition and (2) the stock option grantspecifically provides for option gain deferral under the terms of thisPlan.
m.    "Compensation" shall mean Base Salary, Annual Bonuses,LTIP Awards, Stock Option Gain Compensation, Vested Common Share Compensationand Other Compensation; provided, however, that notwithstanding any otherprovision of this Plan, (1) none of Base Salary, Annual Bonuses, LTIP Awards,Vested Common Share Compensation or Other Compensation may include anystock option, compensation paid in the form of one or more stock optionsor compensation related to a stock option and (2) Compensation shall onlyinclude any stock option, compensation paid in the form of one or morestock options or compensation related to a stock option if it is StockOption Gain Compensation.
n.    "Deferred Compensation Account" shall mean thebalance of all Compensation deferred by a Participant, plus all interest,Dividend Equivalents and other amounts accrued pursuant to Article IV ofthe Plan.
o.    "Dividend Equivalent" shall have the same meaningas set forth in Section 4.3(h) of this Plan.
p.    "Eligible Employee" shall mean any Employee who,at the time his/her election to defer is filed in accordance with the termsof the Plan, is eligible to be selected as a Participant under ArticleII of this Plan.
q.    "Employee" shall mean any regular employee of theCompany who is actively performing services for the Company on a full timebasis or is receiving short term or long term disability benefits.
r.    "Equity Swap" shall mean any plan, contract, authorizationor arrangement of the Company that allows an employee of the Company toelect to receive all or any portion of an Annual Bonus or LTIP Award (plus,in some situations, a premium) in Common Shares, a portion of which maybe Restricted Common Shares, subject to Section 83 Restrictions. "EquitySwap Common Shares" refers to the Common Shares received pursuant to anEquity Swap election (including any Restricted Common Shares received pursuantto such Equity Swap election). A "Deferred Equity Swap" refers to an electionto defer under Section 2.4 (e) of this Plan, as Common Share Units (describedat Section 4.3 (e)), the Equity Swap Common Shares the individual wouldhave otherwise received in the absence of a deferral election hereunder.
s.    "Exchange Act" shall mean the Securities ExchangeAct of 1934, as amended.
t.    "Fair Market Value" shall have the same meaningas set forth in Section 4.3(h).
u.    "Fiscal Year" shall mean the fiscal year of theCompany for accounting and federal income tax purposes.
v.    "Hardship" shall mean severe financial hardshipto the Participant resulting from a sudden and unexpected illness or accidentof the Participant or of a dependent (as defined in Section 152(a) of theInternal Revenue Code of 1986, as amended) of the Participant, loss ofthe Participant's property due to casualty, or other similar extraordinaryand unforeseeable circumstances arising as a result of events beyond thecontrol of the Participant. The circumstances that will constitute an unforeseeableemergency will depend upon the facts of each case, but, in any case, paymentmay not be made to the extent that such hardship is or may be relieved-
                       (i)    through reimbursement or compensation by insuranceor otherwise,
                       (ii)    by liquidation of the Participant's assets, to theextent the liquidation of such assets would not itself                               cause severe financial hardship, or
                       (iii)    by cessation of deferrals under the Plan.
Examples of what are not considered to be unforeseeable emergenciesinclude the need to send a Participant's child to college or the desireto purchase a home.
w.    "LTIP" shall mean the Sears, Roebuck and Co. Long-TermIncentive Compensation Plan.
x.    "LTIP Award" shall mean an award payable underthe LTIP (including Common Shares payable pursuant to the LTIP).
y.    "LTIP Award Election Date" shall mean, for anyLTIP cycle, November 30 of the last Fiscal Year of the LTIP cycle (or suchother date as selected by the Committee or its appointed representative,provided that the Committee or its appointed representative shall not selectany such other date with respect to any LTIP cycle unless the date, (1)is the same date for all Eligible Employees and (2) is no later than thelast day of the LTIP cycle or such earlier date as the Committee or itsappointed representative determines is necessary to be satisfied that,for income tax purposes, no Participant may be in constructive receiptof any Compensation deferred under this Plan).
z.    "Other Compensation" shall mean compensation thatis not Base Salary, an Annual Bonus, an LTIP Award, Stock Option Gain Compensationor Vested Common Share Compensation, but is (i) a special bonus or othercompensation, in each case payable in cash or equity securities of theCompany by a Participating Employer to an employee for services renderedor (ii) any other compensation payable for services rendered as may bedesignated by the Board, an Unaffiliated Director Committee or, as pertainingonly to Participants who are not Section 16(a) Participants, the Committee.
aa.    "Participant" shall mean an Eligible Employeeparticipating in the Plan in accordance with Article II hereof.
bb.    "Participating Employer" shall mean the Company,or any Subsidiary which adopts this Plan in accordance with Section 2.2hereof.
cc.    "Plan" shall mean this Sears, Roebuck and Co.Deferred Compensation Plan as set forth herein, and as amended from timeto time in accordance with Article VII hereof.
dd.    "Plan Year" shall mean the calendar year.
ee.    "Restricted Common Shares" shall mean Common Sharessubject to Section 83 Restrictions that have not yet lapsed and that arereceived by an Employee (1) as a special bonus or other compensation forservices rendered to the Participating Employer or (2) because of the Employee'sEquity Swap election with respect to an Annual Bonus or an LTIP Award.
ff.    "Section 16(a) Participants" shall mean Participantswho are required to file reports under Section 16(a) of the Exchange Act.
gg.    "Section 83 Restrictions" shall mean restrictionsthat (1) prevent the Common Shares to which they are attached from beingtransferable or (2) cause the Common Shares to which they are attachedto be subject to a substantial risk of forfeiture, in each case as definedby Section 83(c) of the Code.
hh.    "Separation from Service" shall mean the terminationof a Participant's employment with the Company for any reason whatsoever,including retirement, resignation, dismissal and death.
ii.    "Stock Option Gain Compensation" shall mean theexcess of the Fair Market Value on the exercise date of the Common Sharesacquired from the exercise of a Company Stock Option by an Eligible Employeeover the exercise price of the Company Stock Option. Notwithstanding anyother provision in this Plan, any stock option, compensation paid in theform of one or more stock options or compensation related to a stock option(1) shall only constitute Compensation if it is Stock Option Gain Compensationand (2) shall not constitute any other type of Compensation.
jj.    "Stock Option Gain Compensation Election Date"shall mean, with respect to any acquisition of Common Shares pursuant tothe exercise of a Company Stock Option, the date two calendar months priorto the date the Eligible Employee acquires the Common Shares by exercisingthe Company Stock Option (or such other date as selected by the Committeeor its appointed representative, provided that the Committee or its appointedrepresentative shall not select any such other date for acquisitions ofCommon Shares in a Plan Year unless the date, (1) is the same date forall Eligible Employees and (2) is, for any acquisition of Common Sharesin the Plan Year, no later than the date the Company Stock Option is exercisedwith respect to those Common Shares, or such earlier date as the Committeeor its appointed representative determines is necessary to be satisfiedthat, for income tax purposes, no Participant may be in constructive receiptof any Compensation deferred under this Plan).
kk.    "Subaccount" shall have the same meaning as setforth in Section 4.3(h) of this Plan.
ll.    "Subsidiary" shall mean any corporation, partnership,limited liability company or other entity at least 50 percent of the equitysecurities or voting power of which are owned directly or indirectly bythe Company.
mm.    "Transfer" shall mean a change in a Participant'semployment from a Participating Employer to a Subsidiary which is not aParticipating Employer.
nn.    "Unaffiliated Director Committee" shall mean acommittee of the Board that is composed solely of two or more non-employeedirectors, as that term is defined in Rule 16b-3 promulgated under theExchange Act.
oo.    "Vested Common Share Compensation" shall meancompensation that an Employee receives in the form of Common Shares when,and if, the Section 83 Restrictions on any Restricted Common Shares lapse(including Restricted Common Shares that are transferred to the Employeepursuant to an Equity Swap election, and excluding Restricted Common Sharesa Participant would have received but for a Deferred Equity Swap election).
pp.    "Vested Common Share Compensation Election Date"shall mean, with respect to any Vested Common Share Compensation, the datetwo months prior to the Common Shares Vesting Date (or such other dateas selected by the Committee or its appointed representative, providedthat the Committee or its appointed representative shall not select anysuch other date for Vested Common Share Compensation potentially to bereceived in a Plan Year unless the date, (1) is the same date for all EligibleEmployees and (2) is, for any Vested Common Share Compensation, no laterthan the Common Shares Vesting Date, or such earlier date as the Committeeor its appointed representative determines is necessary to be satisfiedthat, for income tax purposes, no Participant may be in constructive receiptof any Compensation deferred under this Plan).
ARTICLE II
PARTICIPATION

2.1 Eligibility
(a) All Employees who are designated by the Board from time to timeas "executive officers" for the purposes of Section 16 of the ExchangeAct, and the rules and regulations promulgated thereunder, shall be EligibleEmployees and may be Participants for the next Plan Year.
(b) Unless the Committee designates otherwise, all other key officersand Employees who are expected to have Compensation and such other itemsof income as the Committee shall determine, of over the amount fixed fromtime to time by the Secretary of the Treasury pursuant to Section 401(a)(17)of the Code, for services rendered in the next Plan Year (or, with respectto Compensation that is for services rendered in a Fiscal Year, in theFiscal Year that ends nearest to the end of the next Plan Year), shallbe Eligible Employees and may be Participants for the next Plan Year. TheCommittee may change the requirements in this Section 2.1 for eligibility,provided, however, that the Committee shall not decrease said income eligibilityrequirement.
2.2 Participating Employers
Any Subsidiary, with the approval of the Company, may adopt this Planfor its Eligible Employees.
2.3 Notice of Eligibility
The Committee or its appointed representative shall notify each EligibleEmployee no later than 30 days prior to the first business day of any PlanYear or as soon thereafter as practicable, that he/she is entitled to becomea Participant in the Plan for such Plan Year.
2.4 Participation Election
An Eligible Employee shall be a Participant in the Plan for any PlanYear if he/she elects to defer any Compensation for the Plan Year (or,with respect to Compensation that is for services rendered in a FiscalYear, the Fiscal Year that ends nearest to the end of the Plan Year) inaccordance with the procedures set forth in one or more of paragraphs (a)through (f) below (subject to the limitations and conditions set forthin this Section 2.4 and in Sections 2.6 and 3.1 hereof):
(a)    Base Salary. Each Eligible Employee shall givewritten notice to the Committee or its appointed representative of his/herelection to defer Base Salary expected to be earned by and otherwise payableto him/her in any Plan Year, no later than the last business day of thepreceding Plan Year. Such notice shall specify the deferral percentageto be deferred of the Base Salary which would be expected to be earnedby and otherwise payable to him/her in the upcoming Plan Year, as set forthin Section 3.1 of the Plan. If an Eligible Employee fails to give suchwritten notice of election by the last business day of the preceding PlanYear, such failure will be deemed an election not to defer Base Salaryearned by and payable to him/her in such upcoming Plan Year. A Participant(or Eligible Employee) may make changes in the deferral election for (orelection not to defer) Base Salary expected to be earned by or otherwisepayable to him/her for the remainder of a Plan Year starting with BaseSalary expected to be earned by and otherwise payable to him/her in thepay period following the receipt by the Committee or its appointed representativeof written notice of such change; provided, however, that notwithstandingthe foregoing, the Committee and its appointed representative shall onlyallow one change in Base Salary deferral election per Plan Year quarterfor each Participant, unless the Committee or its appointed representativenotifies Participants that more frequent changes are to be permitted.
(b)    Annual Bonus. Each Eligible Employee shall givewritten notice to the Committee or its appointed representative of his/herelection to defer all or any portion of the Annual Bonus expected to bepayable to him/her for services rendered in the Fiscal Year that ends nearestto the end of any Plan Year, no later than the Annual Bonus Election Date.Such notice shall specify the deferral percentage or amount to be deferredof the Annual Bonus which would otherwise be expected to be payable tohim/her for services rendered in the Fiscal Year, as set forth in Section3.1 of the Plan. If an Eligible Employee fails to give such written noticeof election by the Annual Bonus Election Date, such failure will be deemedan election not to defer any Annual Bonus payable to him/her for servicesrendered in the Fiscal Year. A Participant may make changes in his/herpreviously made deferral election for an Annual Bonus otherwise expectedto be payable to him/her for services rendered in the Fiscal Year up toand including the Annual Bonus Election Date.
(c)    LTIP Award. Each Eligible Employee shall givewritten notice to the Committee or its appointed representative of his/herelection to defer the LTIP Award (or portion of any LTIP Award) expectedto be payable to him/her for services rendered in the Fiscal Years of anLTIP cycle that end nearest to the end of each Plan Year in an LTIP cycle,no later than the LTIP Award Election Date. Such notice shall specify thedeferral percentage or amount to be deferred of the LTIP Award which wouldotherwise be expected to be payable to him/her for services rendered inthe LTIP cycle, as set forth in Section 3.1 of the Plan. If an EligibleEmployee fails to give such written notice of election by the LTIP AwardElection Date, such failure will be deemed an election not to defer anyLTIP Award payable to him/her for services rendered in the LTIP cycle.A Participant may make changes in his/her previously made deferral electionfor an LTIP Award otherwise expected to be payable to him/her for servicesrendered in an LTIP cycle up to and including the LTIP Award Election Date.Notwithstanding any of the foregoing, for LTIP cycles beginning with the1999-2001 cycle, any Eligible Employee's deferral election (or change indeferral election) with respect to an LTIP Award must be made for the entireLTIP cycle, except to the extent that the person is not an Eligible Employeefor the entire LTIP cycle. The deferral election (or change in deferralelection) of a person who is not an Eligible Employee for the entire LTIPcycle shall be effective only for the Fiscal Years of the LTIP cycle thatend nearest to the end of the Plan Years in which he/she is an EligibleEmployee.
(d)    Stock Option Gain Compensation. Each EligibleEmployee shall give written notice to the Committee or its appointed representativeof his/her election to defer his/her Stock Option Gain Compensation relatedto any Common Shares he/she may acquire pursuant to any Company Stock Optionno later than the Stock Option Gain Compensation Election Date for thatacquisition of Common Shares. Such notice shall specify the number of CommonShares and the Company Stock Option(s) to which it is applicable. If anEligible Employee fails to give such written notice of election by theStock Option Gain Compensation Election Date for any acquisition of CommonShares, such failure will be deemed an election not to defer the StockOption Gain Compensation related to those Common Shares. Any deferral electionwith respect to Stock Option Gain Compensation is irrevocable in the eventthat the Eligible Employee actually exercises the Company Stock Optionto which the election relates. If an Eligible Employee makes a deferralelection with respect to any Company Stock Option, he/she is prohibitedfrom exercising that Company Stock Option until the date two calendar monthsafter the election date (or such other date as selected by the Committeeor its appointed representative, the selection of which shall be subjectto the same proviso as set forth in the parenthetical of Section 1.2(jj)).
(e)    Deferred Equity Swap. Each Eligible Employee shallgive written notice to the Committee or its appointed representative ofhis/her election to defer (in the form of a Deferred Equity Swap) all orany portion of the Eligible Employee's Equity Swap Common Shares otherwisepayable to him/her for services rendered pursuant to an Equity Swap withrespect to an Annual Bonus or LTIP Award, no later than the Annual BonusElection Date or LTIP Award Election Date, as applicable. Such notice shallspecify the deferral percentage or amount of the Equity Swap Common Sharesto be deferred that would otherwise be expected to be payable to him/herfor services rendered in the Fiscal Year (or LTIP Cycle as applicable),as set forth in Section 3.1 of the Plan. If an Eligible Employee failsto give such written notice of election by the Annual Bonus Election Date,or LTIP Award Election Date as applicable, such failure will be deemedan election not to make a Deferred Equity Swap with respect to amountsotherwise payable to him for services rendered in such Fiscal year or LTIPCycle, as applicable. A Participant may make changes in his/her previouslymade Deferred Equity Swap election no later than the Annual Bonus ElectionDate or LTIP Award Election Date, as applicable.
(f)    Vested Common Share Compensation. Each EligibleEmployee shall give written notice to the Committee or its appointed representative,of his/her election to defer the Vested Common Share Compensation he/shemay receive no later than the Vested Common Share Compensation ElectionDate. Such notice shall specify the Restricted Common Shares and the CommonShares Vesting Date(s) that are related to the Vested Common Share Compensationto be deferred. If an Eligible Employee fails to give such written noticeof election by the Vested Common Share Compensation Election Date for anyVested Common Share Compensation, such failure will be deemed an electionnot to defer that Vested Common Share Compensation. Any deferral electionwith respect to Vested Common Share Compensation is irrevocable. It isunderstood that in the case of Restricted Common Shares received pursuantto an Equity Swap election made in connection with an Annual Bonus or anLTIP Award, an Eligible Employee may defer, in accordance with the provisionsof this Section 2.4(f), the Vested Common Share Compensation, if any thathe/she would otherwise receive with respect to those Restricted CommonShares.
(g)    Other Compensation. Each Eligible Employee shallgive written notice to the Committee or its appointed representative, ofhis/her election to defer all or any portion of any type of Other Compensationon or before the date that is 20 business days prior to the date on whichsuch Other Compensation would otherwise be payable to the Eligible Employee.Notwithstanding the foregoing, such notice of deferral election shall notbecome effective unless approved by the Committee or its appointed representativein a written notice to the Eligible Employee making the election, it beingunderstood that the Committee or its appointed representative may rejectthe Eligible Employee's notice of deferral election only if the Committeeor its appointed representative, in its sole discretion, determines that,for federal income tax purposes, the Eligible Employee may be in constructivereceipt of the Other Compensation otherwise payable if the deferral electionis approved. A Participant's deferral election shall specify the deferralpercentages or amount to be deferred and the type of Other Compensationto be deferred, as set forth in Section 3.1 of the Plan. If an EligibleEmployee fails to give such written notice of election or if the Committeeor its appointed representative rejects an Eligible Employee's notice ofelection with respect to any Other Compensation, such failure or rejectionwill be deemed an election not to defer such Other Compensation. A Participantmay not make changes in his/her previously made deferral election for anytype of Other Compensation without the prior approval of the Committeeor its appointed representative, which approval may be withheld if theCommittee or its appointed representative, in its sole discretion, determinesthat, for federal income tax purposes, the Eligible Employee or any otherParticipant may be in constructive receipt of Compensation deferred underthis Plan if the change in deferral election is approved.
2.5 Participation Election Forms
The Committee shall approve and make available to all Eligible Employeesthe forms (on paper and/or electronically) which shall be used by EligibleEmployees to notify the Committee of their elections pursuant to Section2.4 hereof to participate in the Plan. Such forms shall clearly delineatethe deferral alternatives provided by the Plan, pursuant to Section 3.1hereof.
2.6 Exercise of Company Stock Option
Notwithstanding any other provision of this Plan, the deferral of StockOption Gain Compensation with respect to any Company Stock Option is conditionedon the Eligible Employee's use of the reload feature of the Company StockOption and the attestation by the Eligible Employee of his/her currentownership of Company Common Shares having a Fair Market Value on the exercisedate equal to the exercise price of the Company Stock Option.
ARTICLE III
DEFERRALS

3.1 Amount of Deferral
(a)    Pursuant to Section 2.4 hereof, a Section 16(a)Participant may elect to defer in whole number percentages or whole dollarterms, or a combination thereof, up to all of such person's Compensationfor the Plan Year (or the Fiscal Year, as the case may be); provided, however,that a Participant may defer Base Salary only in whole number percentages;provided, further, that a Participant's deferral election with respectto any number of Common Shares related to a Company Stock Option shallapply to all of such person's Stock Option Gain Compensation with respectto that number of Common Shares first thereafter acquired pursuant to theexercise of such Company Stock Option; provided, further, that a Participant'sdeferral election with respect to the Vested Common Share Compensationrelated to any number of Restricted Common Shares and any Common SharesVesting Date shall apply to all the Vested Common Share Compensation relatedto both that number of Restricted Common Shares and that Common SharesVesting Date; provided, further, that any deferral election shall be subjectto the limitations and conditions set forth in Section 2.4 and Section2.6 hereof. Notwithstanding any other provision of this Plan, except inthe case of deferrals of Base Salary, no deferral election with respectto any Compensation shall take effect unless, on the date the Compensationotherwise would be deferred, the amount of such type of Compensation otherwiseto be deferred is at least $1000.
(b)    Any other Participant may, pursuant to Section2.4 hereof, elect to defer in whole number percentages or whole dollarterms, or a combination thereof, up to all of such Participant's Compensationfor the Plan Year (or the Fiscal Year, as the case may be); provided, however,that a Participant may defer Base Salary only in whole number percentages;provided, further, that a Participant's deferral election with respectto any number of Common Shares related to a Company Stock Option shallapply to all of such person's Stock Option Gain Compensation with respectto that number of Common Shares first thereafter acquired pursuant to theexercise of such Company Stock Option; provided, further, that a Participant'sdeferral election with respect to the Vested Common Share Compensationrelated to any number of Restricted Common Shares and any Common SharesVesting Date shall apply to all the Vested Common Share Compensation relatedto both that number of Restricted Common Shares and that Common SharesVesting Date; provided, further, that any deferral election shall be subjectto the limitations and conditions set forth in Section 2.4 and Section2.6 hereof.
3.2 Effective Date of Deferral
Compensation deferred shall be credited to a Participant's Account asset forth in Section 4.2.
3.3. Use of Amounts Deferred
Amounts credited to Deferred Compensation Accounts hereunder shall bea part of the general funds of the Company, shall be subject to all therisks of the Company's business, and may be deposited, invested or expendedin any manner whatsoever by the Company.
ARTICLE IV
DEFERRED COMPENSATION ACCOUNTS AND VESTING

4.1 Establishment of Account
The Committee shall establish, by bookkeeping entry on the books ofthe Company, a Deferred Compensation Account for each Participant. SuchAccount shall be established as of the first day of the Plan Year for whichthe Eligible Employee first becomes a Participant.
4.2 Contributions to Account
(a)    Timing. The Committee shall cause deferred Compensationto be credited by bookkeeping entry to each Participant's Account on thefollowing dates: (1) Base Salary deferred in accordance with Sections 2.4(a)and 3.1 shall be credited as of the first day of the month following themonth containing the date on which such Compensation otherwise would havebeen payable to the Participant; (2) Annual Bonuses, LTIP Awards and EquitySwap Common Shares deferred in accordance with Section 2.4(b), (c) or (e)and Section 3.1 shall be credited as of the date on which such Annual Bonus,LTIP Awards, or Equity Swap Common Shares to which such deferrals relateotherwise would have been payable to the Participant; (3) Stock OptionGain Compensation deferred in accordance with Sections 2.4(d), 2.6 and3.1 shall be fed as of the date the Participant exercises the Company StockOption with respect to the Common Shares to which it relates; (4) VestedCommon Share Compensation deferred in accordance with Sections 2.4(g) and3.1 shall be credited as of the Common Shares Vesting Date and (5) OtherCompensation deferred in accordance with Sections 2.4(g) and 3.1 shallbe credited as of the date on which such Other Compensation otherwise wouldhave been payable to the Participant.
(b)    Amount. The Committee shall cause deferred Compensationcredited by bookkeeping entry to each Participant's Account on the abovedates to be credited in the following amounts: (1) deferred Compensationthat would have otherwise been payable in cash shall be credited in theamount of the cash Compensation that would have otherwise been payable;(2) Compensation deferred pursuant to Section 2.4(e) shall be creditedin the amount of the Fair Market Value, on the date of credit, multipliedby the number of Equity Swap Common Shares deferred; (3) Compensation deferredpursuant to Section 2.4(f), shall be credited in the amount of the FairMarket Value, on the date of credit, multiplied by the number of RestrictedCommon Shares deferred; (4) deferred Compensation that would have beenpayable in equity securities of the Company that are not Common Sharesor Restricted Common Shares shall be credited in the amount of the fairmarket value, on the date of credit, of the equity securities, as determinedby the Committee or its appointed representative; and (5) Stock OptionGain Compensation that is deferred shall be credited in the amount of theStock Option Gain Compensation.
4.3  Accrual of Interest, Dividend Equivalents and Other Amountson Compensation Deferred
To each Subaccount shall be credited, as applicable, Compensation deferred,interest, Dividend Equivalents and other amounts as set forth in paragraphs(a) through (i) of this Section 4.3. Payments to the Participant shallbe debited from the appropriate Subaccount on the date of payment and amountstransferred a Subaccount under the Plan shall be debited from the appropriateSubaccount on the date the transfer is effective pursuant to Section 4.3(g).
(a)    Subaccount #1 - Sears Roebuck Acceptance Corp.Commercial Paper Rate. Compensation deferred into Subaccount #1 shall becredited to the Subaccount on the same date or dates and in the same amountor amounts as the Participant's Account is credited as set forth in Section4.2. Transfers to this Subaccount from another Subaccount shall be creditedto the Subaccount on the effective date of the transfer as set forth inSection 4.3(g). Amounts credited to this Subaccount shall earn interest,compounded daily from the date of credit to the date of debit, at a rateequal to the SRAC rate and credited in accordance with procedures establishedby the Committee, but no less frequently than monthly. The SRAC Rate foreach day in a month shall be equal to the previous month's monthly averageper annum cost of commercial paper or the equivalent issued and reportedby Sears Roebuck Acceptance Corp. ("SRAC") as converted into a daily rate.
(b)    Subaccount #2 - Common Share Units. Compensationdeferred into Subaccount #2 shall be credited to the Subaccount on thesame date or dates and in the same amount or amounts as the Participant'sAccount is credited as set forth in Section 4.2. Transfers to this Subaccountfrom another Subaccount shall be credited to the Subaccount on the effectivedate of the transfer as set forth in Section 4.3(g), except for mandatorytransfers from Subaccount #5, which shall be credited to the Subaccounton the same date as provided in Section 4.3(e). Amounts credited to thisSubaccount (other than Common Share Units transferred from Subaccount #5)shall be converted into a number of Common Share Units on the date creditedto the Subaccount by dividing the Compensation deferred or amount transferredfrom another Subaccount by the Fair Market Value on the day immediatelypreceding such date. If Common Share Units exist in a Participant's Subaccount[which are indexed under Subaccount #2] on a dividend record date for theCompany's Common Shares, Dividend Equivalents shall be credited to theParticipant's Subaccount on the related dividend payment date in an amountequal to the number of Common Share Units credited to Subaccount #2 onthe dividend record date, multiplied by the dividend per common share declaredon such record date, and shall be converted into the number of Common ShareUnits which could be purchased with the amount of Dividend Equivalentsso credited by dividing such Dividend Equivalents by the Fair Market Valueon the day immediately preceding the payment date of such dividends. Inthe case of a transfer from Subaccount #2 to another Subaccount the numberof Common Share Units debited shall equal the dollar amount to be transferred,divided by the Fair Market Value on the date immediately preceding thedate of transfer.
In the event of any change in the Company's Common Shares outstanding,by reason of any stock split or dividend, recapitalization, merger, consolidation,combination or exchange of stock or similar corporate change, the Committeeshall make such equitable adjustments, if any, by reason of any such change,deemed appropriate in the number of Common Share Units credited to eachParticipant's Subaccount #2.
(c)    Subaccount #3 - Equity Index Subaccount. Compensationdeferred into Subaccount #3 shall be credited to the Subaccount on thesame date or dates and in the same amount or amounts as the Participant'sAccount is credited as set forth in Section 4.2. Transfers to this Subaccountfrom another Subaccount shall be credited to the Subaccount on the effectivedate of the transfer, as set forth in Section 4.3(g). Amounts creditedto this Subaccount shall be adjusted, on each business day ("adjustmentdate"), from the date of credit to the date of debit, by a percentage factorbased on the return (including dividends) of the Equity Index for the daypreceding the applicable adjustment date. In the event that the EquityIndex is not published for any date referred to above, the Equity Indexfor the closest day preceding such date for which such Index is publishedshall be used.
(d)    Subaccount #4 - Fixed Income Index Subaccount.Compensation deferred into Subaccount #4 shall be credited to the Subaccounton the same date or dates and in the same amount or amounts as the Participant'sAccount is credited as set forth in Section 4.2. Transfers to this Subaccountfrom another Subaccount shall be credited to the Subaccount on the effectivedate of the transfer as set forth in Section 4.3(g). Amounts credited tothis Subaccount shall earn interest, compounded daily from the date ofcredit to the date of debit, at a rate equal to the Fixed Income IndexRate and credited in accordance with procedures established by the Committee,but no less frequently than monthly. The Fixed Income Index Rate for eachday in a month shall be equal to the previous month's month-end returnas converted into a daily rate.
(e)    Subaccount #5 - Deferred Equity Swap/Common ShareUnit Account. If a Participant has made a Deferred Equity Swap electionpursuant to Section 2.4(e), then the dollar amount of such Compensationshall be allocated to Subaccount #5 and to no other Subaccount, exceptas provided below. Compensation deferred into Subaccount #5 shall be creditedto the Subaccount on the same date or dates and in the same amount or amountsas the Participant's Account is credited as set forth in Section 4.2.
Such Compensation shall be converted into Common Share Units, in thesame manner as provided in Section 4.3(b), on the same date credited tothe Subaccount. Dividend Equivalents shall be credited to, and equitableadjustments shall be made to, Subaccount #5 in the same manner as to Subaccount#2 as set forth in Section 4.3(b).
(1)    Common Share Units assigned to Subaccount #5 pursuantto a Deferred Equity Swap election and attributable to amounts that, inthe absence of a deferral election, would otherwise have been payable asRestricted Common Shares shall be credited to Part A of Subaccount #5.Any event that would have caused a forfeiture of any such Restricted CommonShares shall cause a forfeiture of the Common Share Units under Subaccount#5 attributable to such Restricted Common Shares. On the date on whichall Section 83 Restrictions would have lapsed with respect to RestrictedCommons Shares to which Common Share Units are attributable, such CommonShare Units shall be transferred to Subaccount #2, and all Dividend Equivalents(except for Dividend Equivalents accruing as of the close of business onsuch date) will cease to accrue on such Common Share Units and shall automaticallybe transferred into Subaccount #2 and thereafter shall be subject to allof the provisions of the Plan applicable to Subaccount #2, including provisionsrelating to transfers of amounts between Subaccount #2 and other Subaccountsand distributions.
(2)    Common Share Units assigned to Subaccount #5 pursuantto a Deferred Equity Swap election and attributable to amounts that, inthe absence of a deferral election, would otherwise have been payable inEquity Swap Common Shares that are not Restricted Common Shares shall beassigned to Part B of Subaccount #5. On the date on which any such EquitySwap Common Shares would have become transferable by the Participant, theCommon Share Units attributable to such Equity Swap Common Shares shallbe transferred to Subaccount #2, and all Dividend Equivalents (except forDividend Equivalents accruing as of the close of business on such date)will cease to accrue on such Common Share Units and shall automaticallybe transferred into Subaccount #2 and thereafter shall be subject to allof the provisions of the Plan applicable to Subaccount #2, including provisionsrelating to transfers of amounts between Subaccount #2 and other Subaccountsand distributions.
(f)    Subaccount #6 - Nondiversifiable Common ShareSubaccount. Stock Option Gain Compensation and Vested Common Share Compensationdeferred into Subaccount #6 shall be credited to the Subaccount on thesame date or dates and in the same amount or amounts as the Participant'saccount is credited as set forth in Section 4.2. If a Participant has electedunder this Plan to defer Stock Option Gain Compensation and/or Vested CommonShare Compensation, then the dollar amount of such Compensation shall beallocated to Subaccount #6 and to no other Subaccount. The dollar amountof such Compensation shall be converted into Common Share Units on thedate credited to the Subaccount in the same manner as provided in Section4.3(b). Dividend Equivalents shall be credited to and equitable adjustmentsshall be made to Subaccount #6 in the same manner as to Subaccount #2 asset forth in Section 4.3(b).
(g)    Transfers between Subaccounts. Transfers amongSubaccounts #1, #2, #3 and #4 may be made once each calendar month at therequest of the Participant upon application to the Director of ExecutiveCompensation of the Company (or any person succeeding to the functionspreviously performed by the Director of Executive Compensation of the Company,regardless of title), and shall be effective as of the first day of thecalendar month subsequent to the month in which the Company receives suchParticipant's request to transfer. Notwithstanding the foregoing, (i) exceptfor the mandatory transfer referred to in Section 4.3(e) above, no transfersshall be allowed to or from Subaccount #5 and (ii) no transfers shall beallowed to or from Subaccount #6.
With respect to a Section 16(a) Participant, in the case of:(i) any election to transfer or withdraw from Subaccount #2 whichoccurs within six months after an election to transfer into Subaccount#2 or into another Equity Fund Account; and
(ii) any election to transfer into Subaccount #2 which occurs withinsix months after an election to transfer or withdraw from Subaccount #2or from another Equity Fund Account,the second election shall not be effective for any purpose under this Plan,and the account of any such Section 16(a) Participant shall continue toreflect all balances and accruals as if such election had not been made.The Company is authorized to make any adjustments to a Section 16(a) Participant'saccount as may be necessary to give effect to the foregoing provision.
(h) The following definitions apply to this Section 4.3:
               1) "Common Share Unit" shall mean an amount of Compensation deferred whichis converted into a unit or fraction of a unit for purposes of the Planby dividing a dollar amount by the Fair Market Value of one of the Company'sCommon Shares.
               2) "Common Shares" shall mean the Company's common shares, par value $.75per share.
               3) "Dividend Equivalent" shall mean an amount equal to the cash dividendpaid on one of the Company's Common Shares credited to a Subaccount foreach Common Share Unit credited to such Subaccount.
               4) "Equity Fund Account" shall mean an account for a Section 16(a) Participantmaintained under a benefit plan of the Company, that contains a Company"equity security" within the meaning of the term "equity security of suchissuer" in Rule 16a-1 under the Exchange Act.
               5) "Equity Index" shall mean the Standard & Poor's 500 Composite StockPrice Index which is a market value-weighted index consisting of 500 commonstocks of large U.S. domiciled companies selected by Standard and Poor'sCorporation ("S&P") through a detailed screening process starting ona macro-economic level and working toward a micro-economic level dealingwith company specific information such as market value, industry groupclassification, capitalization and trading activity. S&P's primaryobjective for the S&P Index is to represent the segment of the U.S.equity securities markets consisting of large market capitalization stocks.However, companies are not selected by S&P for inclusion because theyare expected to have superior stock price performance relative to the marketin general or other stocks in particular.
               6) "Fair Market Value" shall mean the closing price of the Company's CommonShares as reported by the Wall Street Journal or other comparable sourcein a summary of composite transactions for stocks listed on the New YorkStock Exchange.
               7) "Fixed Income Index" shall mean the Lehman Brothers Aggregate Bond Index,which is made up of the Lehman Government/Corporate Bond Index ("Bond Index"),the Lehman Mortgage-Backed Securities Index ("Mortgage-Backed SecuritiesIndex"), and the Lehman Asset-Backed Securities Index ("Asset-Backed SecuritiesIndex"). The Bond Index is a composite of all publicly issued, fixed rate,nonconvertible, domestic bonds. The issues are rated investment grade orhigher by Moody's Investors Service, Inc., S&P, or Fitch InvestorsService, Inc., in that order, have a minimum outstanding principal of $100million for U.S. Government issues or $50 million for other bonds, andhave a maturity of at least one year. The index is capitalization-weighted.The Mortgage-Backed Securities Index includes 15- and 30-year fixed ratesecurities backed by mortgage pools of the Government National MortgageAssociation, the Federal Home Loan Mortgage Corporation, and the FederalNational Mortgage Association. Graduated payment mortgages and balloonmortgages are included in the index; buydown, manufactured homes and graduatedequity mortgages are not. The Asset-Backed Securities Index is composedof credit card, auto, and home equity loans. Included in the index arepass-through, bullet (noncallable), and controlled amortization structures;no subordination tranches are included. All securities have an averagelife of at least one year.
               8) "Subaccount" shall mean the portion of the balance in an Account reflectingthe Compensation deferred and indexed, as specified by the Participant,against one of the indices set forth in Sections 4.3(a), (b), (c), (d),(e), (f), or (g) and the interest, Dividend Equivalents and other amountscredited thereto.
(i)    Each Participant may vary the choice of Subaccountsto which Compensation is credited by executing and delivering a noticeto the Director of Executive Compensation of the Company at any time; provided,however, that (i) Equity Swap Common Shares deferred in accordance withSection 2.4(e) and Section 3.1 may be credited only to Subaccount #5 (untiltransferred to Subaccount #2 pursuant to the provisions of Section 4.3(e))and (ii) Stock Option Gain Compensation and Vested Common Share Compensationmay be credited only to Subaccount #6. Such election shall be implementedas soon as administratively practicable, but no later than with respectto Compensation payable on or after the first day of the month followingthe month in which such notice of election is received (and shall in noevent apply to compensation payable on or before the date that the electionis filed).
4.4 Vesting
A Participant shall be fully vested in his/her Deferred CompensationAccount at all times, subject to Sections 3.3 and 8.2 and any potentialforfeiture referred to in Section 4.3(e).
4.5 Participant Transfers
In the event of a Transfer, deferrals of Compensation under this Planshall be discontinued as of the first day of the pay period during whichthe Transfer becomes effective, according to Company policy. The Participant'sAccount shall continue to be credited with interest, Dividend Equivalentsand other amounts pursuant to Section 4.3 in the same manner as the Accountsof all other Participants, until such time as the Account is distributablepursuant to Article V. In the event such an Employee again becomes an EligibleEmployee, he/she will be notified of his/her eligibility to become a Participantagain in accordance with the procedure in Section 2.3 and may elect tobecome a Participant again in accordance with the procedure in Section2.3 and may elect to become a Participant again in accordance with theprocedure in Section 2.4.
4.6 Transfers of Liabilities From Another Plan
The Committee or the Board, in the sole discretion of either the Committeeor the Board, may approve the transfer of benefit liabilities from anotherunfunded deferred compensation arrangement of the Company (the "Other Plan")to this Plan with respect to any individual who is an Eligible Employee,even if such individual has not elected to participate in the Plan in accordancewith Section 2.4. If such individual is already a Participant, the balanceof his/her Account under this Plan will be increased by the balance ofhis/her account(s) under the Other Plan as of the date of transfer. Ifthe individual is not already a Participant, an Account will be establishedfor him/her reflecting the balance of his/her account(s) under the OtherPlan as of the date of transfer. Each individual who has an account balancefrom an Other Plan transferred to this Plan will be given the opportunity,prior to the date of transfer, to choose the Subaccount(s) to which thetransferred amount will be credited under Section 4.3 and the timing andform of payment to be made under Section 5.4; provided, however, that theBoard or Committee may eliminate the election with respect to any or allof the choice of Subaccounts, the timing of payment and/or the form ofpayment to the extent that the Other Plan provided the individual withthe same options as the Plan with respect to the choice of Subaccounts,the timing of payment and/or the form of payment; provided, further, thatthe Board or Committee may designate the Subaccount(s) to which restrictedproperty may be transferred; provided, further, that the Board or Committeemay limit or prohibit transfers to Subaccounts #5 and #6. If an individualfails to make a timely election in accordance with the preceding sentenceor to the extent the Board or the Committee eliminates an individual'selection as provided in the previous sentence, the individual's balancein the Other Plan will be transferred to this Plan and allocated amongthe Subaccount(s) under this Plan in a manner that, in the judgment ofthe Company's Senior Vice President, Human Resources, or any other personperforming similar functions, regardless of title (the "Senior Vice President,Human Resources"), most closely duplicates the subaccount(s) to which his/herbalance was allocated under the Other Plan, and/or such individual willbe deemed to have elected distribution in the form and/or at the time availableunder this Plan that in the judgment of the Senior Vice President, HumanResources, most closely matches his/her distribution election under theOther Plan. If the Senior Vice President, Human Resources, determines thatthis Plan does not have a comparable distribution option, the individualwill be deemed to have elected distribution in a lump sum upon the Participant'sSeparation from Service. Once the balance from the Other Plan is transferredto this Plan, it will be governed by the same rules regarding accrual ofinterest, Dividend Equivalents and other amounts and the same rules regardingdistributions, including the ability to make new elections, as any otherdeferrals under this Plan.  
ARTICLE V
PAYMENTS

5.1 Events Causing Accounts to Become Distributable
A Participant's Account becomes distributable on the date on which anyof the following occurs:
(a)        Separation from Service;
(b)        As to all of any portionof an Account, on a demonstration of Hardship by the Participant to theCommittee or its appointed representative;
(c)        As to all or any portionof an Account, on a date certain occurring at any time subsequent to thedate one month after the date on which the Committee receives a Participant'selection form under this Section 5.1(c), as shall be irrevocably specifiedby the Participant; provided, however, that a Participant shall be permittedto make an election under this Section 5.1(c) only if the Participant agreesto forego all entitlement to, and to allow the Company to withhold andretain for its own use, an amount equal to 10 percent of the portion ofthe Account specified by the Participant to be distributed on the datecertain.
(d)        As to all or any portionof an Account attributable to Compensation earned and deferred and interest,Dividend Equivalents and other amounts accrued thereon after the date onwhich the Committee receives a Participant's election form under this Section5.1(d), on a date certain occurring at any time subsequent to the closeof the Plan Year in which the Participant makes the election under thisSection 5.1(d), as shall be irrevocably specified by the Participant; provided,however, that a Participant shall be permitted to make an election underthis Section 5.1 (d) no more than one time per Plan Year and shall notbe permitted to have more than one election under this Section 5.1 (d)outstanding at any time.Any balance in the Participant's Account remaining after any paymentunder paragraph (b), (c) and/or paragraph (d), and any balance in the Accountattributable to participation in the Plan in any year subsequent to theyear in which a payout on such date(s) certain occurs, shall be paid tothe Participant as provided in paragraph (a) above (except to the extentanother payment is made under paragraph (b), (c) and/or (d)).
Notwithstanding any contrary election by a Participant, if any paymentunder this Section 5.1 would be made at a time when a Participant is a"covered employee" as defined in Section 162(m) of the Internal RevenueCode of 1986, as amended, and if such payment, together with other compensationpayable to the Participant, could cause the Company to be limited by saidSection 162(m) from claiming as a deduction the full amount of compensationpayable to that Participant on any tax return, then the Company may requirethe payment to be deferred hereunder until the first date on which theCompany can claim such deduction, unless further deferred as provided inthis Section 5.1.
Notwithstanding anything herein to the contrary, any amount credited(at the time of the occurrence of an event described at paragraph (a),(b), (c) or (d) above) to Part A of Subaccount #5 of Section 4.3(e) shallin no event be distributable upon the occurrence of such event.
5.2 Notice of Account Payment and Commencement of Distribution
The Committee or its appointed representative shall notify a Participantor Beneficiary, as the case may be, that he/she is entitled to receivepayment from an Account, no later than the first day of the month succeedingthe date on which the Account becomes distributable, or as soon thereafteras practicable. Distribution of Account balances shall commence on thefirst day of the month following the date on which the Account becomesdistributable, or as soon thereafter as practicable.
5.3 Form of Payment
(a) Payments of Account balances to a Participant from Subaccounts #1,#2, #3 and #4 shall be in cash; payments of Account balances to a Participantfrom Subaccount #6 shall be made in whole Common Shares. Payments of anyamount credited to Part B of Subaccount #5 of Section 4.3(e) shall be madein whole Common Shares. Except as provided in paragraphs (c) and (d) ofthis Section 5.3 and Article VIII hereof, payments of Account balancesto a Participant shall be in the form of one lump sum payment or periodicinstallment payments over a period of from 1 to 10 years (with at leastone payment required during each year), at the election of the Participant;provided, that, at the election of the Participant, a lump sum paymentdistributable upon the Participant's Separation from Service may be delayeduntil any date within two years after the Participant's Separation fromService; provided, further, that, at the election of the Participant, paymentof the first installment distributable upon the Participant's Separationfrom Service may be delayed until any date within one year after the Participant'sSeparation from Service; provided, further, that distributions becauseof an event described in one or more paragraphs (b), (c) or (d) of Section5.1 shall be in a lump sum only, unless the Committee or its appointedrepresentative notifies Participants otherwise.
(b) The following formula shall be used to determine each periodic installmentpayment to a Participant who has elected to receive installment payments:
(i) cash equal to:
remaining Account balance from Subaccounts #1, #2, #3 and #4 as of                                    current payment date_______________number of remaining payments, including the current one, as determinedby the distribution election in effect for that installment
plus
(ii) whole Common Shares equal to:
remaining number of Common Share Units from Part B of Subaccount #5and Subaccount#6                              as of current payment date________________number of remaining payments, including the current one, as determinedby the distribution election in effect for that installment
On the last payment date, in addition to the installment payment determinedaccording to the above formula, the Participant shall receive cash in anamount equal to the fractional Common Share Units remaining in Part B ofSubaccounts #(5) and Subaccount #6 after the application of the above formulafor that date, multiplied by the Fair Market Value on such date. Periodicpayments shall be made on the day payments commence pursuant to Section5.1 (or as delayed under paragraph (a) of this Section 5.3) and on eachdate as specified in the Participant's written notice of form of paymentdescribed in Section 5.4. Interest, Dividend Equivalents and other amountsshall continue to accrue on the entire unpaid Account balance, as providedin Section 4.3.
(c) In the event of a Participant's death prior to full distributionof his/her Account, the remaining Account balance shall be paid in a lump-sumto the Beneficiary or Beneficiaries, according to the designation madeby the Participant, as soon as practicable after a Participant's death,and shall accrue interest, Dividend Equivalents and other amounts, as providedin Section 4.3, until the account is completely distributed.
(d) Notwithstanding the provisions of paragraph (b) above, if the remainingunpaid Account balance is $5,000 or less on any date a periodic installmentpayment is to be made to a Participant, the payment shall be the remainingunpaid Account balance.
5.4 Distribution Election
(a)        Subject to this ArticleV, each Participant shall give written notice to the Committee of his/herdesired form of payment at the time of his/her first participation electionset forth in Section 2.4. Subject to this Article V (but notwithstandingany prior election under the first sentence of this Section 5.4(a) or Section5.4(b) and notwithstanding paragraph (b) of this Section 5.4), any Participantdesiring a distribution on the occurrence of an event described in paragraph(b), (c) or (d) of Section 5.1 shall give written notice to the Committee.Any written notice given under the second sentence of this Section 5.4(a)shall (1) supercede any prior notice by the Participant under this Section5.4 with respect to the portion of his/her Account to which the subsequentwritten notice applies and (2) with respect to events described in paragraph(c) or (d) of Section 5.1, be irrevocable.
(b)        Each Participant may fromtimeto time revise (subject to this Article V) the terms of distribution ofthe Participant's Account set forth in the notice he/she provided underthe first sentence of Section 5.4(a) by submitting to the Committee a revisedwritten notice of his/her desired form of payment by the day before thedate of the Participant's Separation from Service; provided, however, thatno revised written notice shall take effect until the later of (1) 20 businessdays following the date it is received by the Committee or its representativeand (2) the calendar year following the date it is received by the Committee.
5.5 Distribution Election Form
The Committee shall approve and make available to all Participants aform (on paper and/or electronically) which shall be used by each Participantto notify the Committee under the first sentence of Section 5.4(a) of his/herdesired form of payment or to notify the Committee under Section 5.4(b)of any revision to his/her desired form of payment. Such form shall clearlydelineate the payment alternatives provided pursuant to Section 5.3 hereof.The Committee shall approve and make available to all Participants a form(on paper and/or electronically) which shall be used by any Participantto notify the Committee under the second sentence of Section 5.4(a) ofan election to receive a distribution on the occurrence of an event describedin paragraph (b), (c) or (d) of Section 5.1.
ARTICLE VI
ADMINISTRATION

6.1 General Administration; Rights and Duties
Subject to the express limitations of the Plan, the Committee, on behalfof the Participants, shall be charged with the general administration ofthe Plan and with the responsibility for carrying out its provisions, andshall have all powers necessary to accomplish those purposes, including,but not by way of limitation, the following:
(a) To construe and interpret the Plan;
(b) To compute the amount of benefits payable to Participants;
(c) To authorize all disbursements by the Company of Account balancespursuant to the Plan;
(d) To maintain all the necessary records for the administration ofthe Plan;
(e) To make and publish rules for the administration and interpretationof the Plan and the transaction of its business;
(f) To inform each Participant as soon as practicable after January1 of each Plan Year, of the value of the Participant's Deferred CompensationAccount as of the end of the previous Plan Year;
(g) To appoint (i) officers or Employees of the Company whom the Committeebelieves to be reliable and competent; and (ii) legal counsel (who maybe Employees of the Company and Participants), independent accountantsand other persons to assist the Committee in administering the Plan; and
(h) To conclusively determine, in its sole discretion, all questionsarising under the Plan, including the power to determine the rights andeligibility of employees, Participants, and other persons, and the amountsof their benefits under the Plan, and to remedy ambiguities, inconsistenciesor omissions, and without limiting the generality of the foregoing, tointerpret the provisions of the Plan to eliminate these ambiguities, inconsistenciesor omissions, and such determination by the Committee shall be conclusiveon all persons unless demonstrated to be incorrect to the satisfactionof the Committee.
The determination of the Committee as to any disputed question or controversyshall be conclusive.
Any member of the Committee may resign by delivering a written resignationto the Board.
ARTICLE VII
PLAN AMENDMENTS AND TERMINATION
7.1 Amendments
The Company shall have the right to amend this Plan from time to timeby resolutions of the Board or by an Unaffiliated Director Committee orthe Committee, and to amend or rescind any such amendments; provided, however,that no action under this Section 7.1 shall in any way reduce the amountof Compensation deferred or any interest, Dividend Equivalents or otheramounts credited thereon, up to and including the end of the month in whichsuch action is taken; provided, further, that Sections 1.2 (m) and 4.3(g),each as it pertains to Section 16 (a) Participants, and Sections 1.2(ff),2.1 (a), 3.1 (a) and 4.3(h) may be amended only by the Board or by an UnaffiliatedDirector Committee. Interest, Dividend Equivalents and other amounts willcontinue to accrue as provided in Section 4.3. All such amendments shallbe in writing and shall be effective as provided by the Board or the Committee,as the case may be, subject to the limitations in this Section 7.1. TheCommittee shall inform each Participant as soon as practicable followingthe enactment of any such amendment.
7.2 Termination of Plan
Although the Company expects that this Plan will continue indefinitely,continuance of this Plan is not a contractual or other obligation of theCompany, and the Company expressly reserves its right to discontinue thisPlan at any time by resolutions of the Board or the Compensation Committeeof the Board, effective as provided in such resolutions. However, no suchaction shall in any way reduce the amount of Compensation deferred or anyinterest, Dividend Equivalents or other amounts credited thereon, up toand including the end of the month in which such action is taken. Interest,Dividend Equivalents and other amounts will continue to accrue as providedin Section 4.3.
ARTICLE VIII
MISCELLANEOUS

8.1 Notification to Committee
Any notification given by a Participant pursuant to this Plan shallbe made in writing to the Committee or to such representative of the Committeeas may be designated by it for such purpose, and shall be deemed to havebeen made or given on the date received by the Committee or such representative.To the extent permitted by the Committee or its appointed representative,any notification required to be provided in writing under this Plan maybe provided electronically.
8.2 Participants' Employment
Participation in this Plan shall not give any Participant the rightto be retained in the Company's employ or any right or interest other thanas herein provided. No Participant or Employee shall have any right toany payment or benefit hereunder except to the extent provided in thisPlan. The Company expressly reserves the right to dismiss any Participantwithout any liability for any claim against the Company, except to theextent expressly provided herein. This Plan shall create only a contractualobligation on the part of the Company and shall not be construed as creatinga trust or other fiduciary relationship with Participants. Participantswill have only the rights of general unsecured creditors of the Companywith respect to Compensation deferred and interest, Dividend Equivalentsand other amounts credited to their Accounts.
8.3 Other Plans
This Plan shall not affect the right of any Employee or Participantto participate in and receive benefits under and in accordance with theprovisions of any other Company plans which are now or may hereafter bein existence.
8.4 Beneficiaries and Contingent Beneficiaries
Each Participant shall, by written notice to the Committee, designateone or more persons or entities (including a trust or trusts or his/herestate) to receive any balance in his/her Deferred Compensation Accountpayable to him/her under this Plan in the event of his/her death priorto full payment thereof. The Participant may also designate a person orpersons as a Contingent Beneficiary or Contingent Beneficiaries who shallsucceed to the rights of the person or persons originally designated asBeneficiary or Beneficiaries, in case the latter should die. He/she mayfrom time to time change any designation of Beneficiary or Contingent Beneficiaryso made, and the last written notice given by him/her to the Committeeshall be controlling. In the event a Participant designates a person otherthan his/her spouse as Beneficiary of any interests under this Plan, theParticipant's spouse shall sign a statement specifically approving suchdesignation and authorizing the Committee to make payment of such interestsin the manner provided in such designation. In the absence of such designationby the Participant, or in the absence of spousal approval and authorizationas hereinabove provided, or in the event of the death prior to or simultaneouswith the death of the Participant, of all Beneficiaries or Contingent Beneficiaries,as the case may be, to whom payments were to be made pursuant to a designationunder this Section, and failing any other valid designation by the Participant,such payments or any balance thereof shall be paid to such Participant'slegal representatives. In the event of the death, subsequent to the deathof the Participant, of all Beneficiaries or Contingent Beneficiaries, asthe case may be, to whom such payments were to be made or were being madepursuant to a designation under this Section, such payments or any balancethereof shall be paid to the legal representatives of such Beneficiariesor Contingent Beneficiaries.
8.5 Taxes
To the extent permitted by law, if the whole or any part of a Participant'sAccount shall become the subject of any estate, inheritance, income, employmentor other tax which the Company shall legally be required to withhold and/orpay, the Company shall have full power and authority to pay such tax outof any monies or other property in its hands and charge such amounts paidagainst the Account of the Participant whose interest hereunder is subjectto such taxes. Prior to making any such tax payment, the Company may requiresuch releases or other documents from any lawful taxing authority as theCompany shall deem necessary.
8.6 Benefits Not Assignable; Obligations Binding Upon Successors
Benefits under this Plan and rights to receive the amounts creditedto the Account of a Participant shall not be assignable or transferableand any purported transfer, assignment, pledge or other encumbrance orattachment of any payments or benefits under this Plan, other than by operationof law, shall not be permitted or recognized, except in the case of qualifieddomestic relations orders that relate to the provision of child support,alimony or marital rights of a spouse, child or other dependent and whichmeet such other requirements, as may be imposed by Section 414(p) of theCode, the regulations issued thereunder, and such administrative proceduresas are prepared by the Company. Obligations of the Company under this Planshall be binding upon successors of the Company.
8.7 Illinois Law Governs; Saving Clause
The validity of this Plan or any of its provisions shall be construedand governed in all respects under and by the laws of the State of Illinois.If any provisions of this Plan shall be held by a court of competent jurisdictionto be invalid or unenforceable, the remaining provisions hereof shall continueto be fully effective.
8.8 Headings Not Part of Plan
Headings and subheadings in this Plan are inserted for reference only,and are not to be considered in the construction of the provisions hereof.
8.9 Mid-Year Participants
Notwithstanding Article III and Sections 4.5 and 5.4(a) and 5.5 of thePlan, any person who during a Plan Year (i) shall become eligible to participatein the LTIP and (ii) expects to have Compensation over the amount specifiedin Section 2.1(b) of the Plan for services rendered in such Plan Year (or,with respect to Compensation payable for a Fiscal Year, the Fiscal Yearending nearest the end of the Plan Year) ("Mid-Year Participants"), shallbe an Eligible Employee and may be a Participant, with respect to the portionof the Plan Year beginning the day after the effective date of electionor appointment, or eligibility to participate in the LTIP. The Directorof Executive Compensation of the Company, or any other person performingsimilar functions, regardless of title, is directed to notify all personswho become Mid-Year Participants of their eligibility to participate inthe Plan, as soon as practicable after their election or appointment orafter they become eligible to participate in the LTIP. Each Mid-Year Participantshall give written notice to the Committee or its appointed representative,of his/her or her election to become a Participant in the Plan for theremainder of such Plan Year, on a form to be provided by the Company, bythe relevant time or times provided in Section 2.4 or, if later, within30 days of being notified of his/her or her eligibility. If a Mid-YearParticipant fails to give such notice by the time provided in the foregoingsentence, such failure will be deemed an election not to become a Participantfor the remainder of such Plan Year.