Document:

EX-10.34

 EXHIBIT 10.34 
 Indemnification Agreements 
  

			
	 Name
	  	Date of Indemnification
Agreement
	 J. David Aronson
	  	March 10, 2011
	 I Michal Coslov
	  	March 10, 2011
	 John J. Connelly
	  	March 10, 2011
	 Joseph Curtin
	  	March 10, 2011
	 Timothy A.R. Duncanson
	  	March 10, 2011
	 Leon Z. Heller
	  	January 1, 2013
	 Raymond S. Kalouche
	  	March 10, 2011
	 Thomas E. Lippard
	  	March 10, 2011
	 Colin Osborne
	  	March 10, 2011
	 Herbert K. Parker
	  	February 8, 2012
	 Kirk D. Peters
	  	March 10, 2011
	 Daniel E. Rosati
	  	March 10, 2011
	 Manish K. Srivastava
	  	March 10, 2011
	 Patrick W. Tolbert
	  	March 10, 2011

 FORM OF 
 INDEMNIFICATION AGREEMENT 
 INDEMNIFICATION AGREEMENT (the
“Agreement”) between each of the entities identified as the “Company” on the signature page of this Agreement (the “Company”), and
[            ], a Representative (defined below) of the Company or an Affiliated Entity of the Company (the “Indemnitee”), dated as of
[            ], 201    . 
 More than one entity
is identified as the “Company” on the signature page of this Agreement. This document shall be deemed to be a separate and distinct agreement between Indemnitee and each such Company. The use of a single signature page is for
convenience only. 
 R E C I T A L S: 
 The Indemnitee has agreed to serve as a Representative of the Company. 
 The
Company is incorporated under the laws of Delaware, and its Affiliated Entities may include entities formed or organized under various jurisdictions as corporations, companies, partnerships, limited partnerships, joint ventures, limited liability
companies, trusts, employee benefit plans or other enterprises. To ensure a common standard of indemnification by the Company and its Affiliated Entities, the Company and Indemnitee have elected to have the standards of indemnification promulgated
under the Delaware General Corporation Law (the “DGCL”) applicable to corporations incorporated under the laws of Delaware govern the provisions of this Agreement as set forth herein. 

Certain capitalized terms used in this Agreement are defined in Section 15. 

In recognition of the Indemnitee’s need for substantial protection against personal liability and to provide the Indemnitee with
specific contractual assurance that indemnification, including the protection, if any, provided by the Constating Documents, will be available to the Indemnitee (regardless of, among other things, any amendment to the Constating Documents or merger,
exchange or reorganization of the Company resulting in changes in the Constating Documents), the Company wishes to provide in this Agreement for the indemnification of and the advancement of expenses to the Indemnitee to the fullest extent permitted
by Delaware law and as set forth in this Agreement, and, to the extent insurance is maintained, for the coverage of the Indemnitee under the Company’s directors’ and officers’ liability insurance policies 

NOW, THEREFORE, in consideration of the premises and intending to be legally bound hereby, the parties hereto agree as follows:

 SECTION 1. INDEMNIFICATION. 

a. In the event that the Indemnitee was or is made a party to, or is threatened to be made a party to, or otherwise becomes involved, as a
party or otherwise (including, but not limited to, as a witness or as the subject of a subpoena or discovery notice), or is threatened with, 

  
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any Proceeding by any third party or any derivative action made in the right of the Company, whether arising while such Indemnitee is a Representative of the Company or any Affiliated Entity or
afterwards, relating to or arising out of the business and affairs of, or activities undertaken in connection with, the Company, or by reason of the fact that the Indemnitee or a person of whom the Indemnitee is the legal representative is or was,
at any time, a Representative of the Company or any Affiliated Entity or is or was serving at the request of the Company or any Affiliated Entity for another corporation, company, partnership, limited partnership, joint venture, limited liability
company, trust, employee benefit plan or other enterprise, in any capacity (including service with respect to employee benefit plans), whether the basis of such Proceeding is alleged action in an official capacity as a Representative or in any other
capacity while serving as a Representative, the Company shall indemnify Indemnitee and hold Indemnitee harmless against all claims, demands, liabilities, costs, expenses, damages, judgment, fines, ERISA excise taxes or penalties, and amounts paid or
to be paid in settlement, losses, suits, proceedings and actions, whether judicial, administrative, investigative or otherwise, of whatever nature, known or unknown, liquidated or unliquidated (“Claims”), that may accrue to or be
incurred by the Indemnitee, or in which the Indemnitee may become involved, including, but not limited, to amounts paid in satisfaction of attorneys’ fees and all other costs, charges and expenses paid or incurred in connection with
investigating, defending, settling, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in any Claim relating to a Proceeding (“Expenses”) to the fullest extent a
Delaware corporation has the power or obligation to indemnify a person in accordance with the DGCL as the same exists or may hereafter be amended (but only to the extent that such amendment permits a corporation to provide broader indemnification
rights than a corporation was permitted to provide prior to such amendment), except (i) with respect to or in connection with the receipt of a personal benefit to which Indemnitee was not entitled, including but not limited to personal benefits
arising from trading in securities and (ii) to the extent that it shall have been determined by a final disposition that such Claims arose from the gross negligence or willful misconduct of the Indemnitee. 

b. For the avoidance of doubt, subject to the DGCL and the Company’s Constating Documents, the provisions of paragraph
(a) shall not apply to a Claim or Proceeding made directly by the Company against the Indemnitee but shall apply in the case of any derivative action or other Claim or Proceeding made by a third party in the right of the Company. 

c. For the avoidance of doubt, no indemnification under this Agreement in connection with any Claim or Proceeding, whether by or in the
right of the Company or otherwise, shall require any determination by the courts of Delaware or any other court. 
 d. The
indemnification provided in this Agreement specifically includes indemnification with respect to the period from and after the date hereof, notwithstanding the date this Agreement is executed and delivered by the parties. 

  
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 SECTION 2. NOTICES OF
CLAIMS. 
 Promptly after receipt by the Indemnitee of notice of the commencement of any Proceeding, the
Indemnitee shall, if a claim for indemnification in respect thereof is to be made against the Company, give written notice to the Company of the commencement of such Proceeding; provided, that the failure of the Indemnitee to give notice as
provided herein shall not relieve the Company of its obligations under this Agreement, except to the extent that the Company is actually prejudiced by such failure to give notice. In the event that any such Proceeding is brought against the
Indemnitee (other than a derivative suit in right of the Company), the Company will be entitled to participate in and to assume the defense thereof to the extent that the Company may wish, with counsel reasonably satisfactory to the Indemnitee.
After notice from the Company to the Indemnitee of the Company’s election to assume the defense thereof, the Company will not be liable for expenses subsequently incurred by the Indemnitee in connection with the defense thereof. The Company
will not consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnitee of a release from all liability in respect to such Claim. Any
indemnification provided for in Section 1 shall be made within 10 business days after receipt by the Company of the written notice of Indemnitee. 
 SECTION 3. INSURANCE. 
 In the event that
the Company maintains insurance to protect any director, officer or manager of the Company against any expense, liability or loss from wrongful acts, or to insure the Company’s indemnification obligations, such insurance shall cover the
Indemnitee to at least the same extent as any other director, officer or manager of the Company and the Company’s insurance shall be the primary insurance policy against any expense, liability or loss from wrongful acts, and to insure the
Company’s indemnification obligations[; in each case, notwithstanding that Indemnitee was designated as a Representative of the Company by affiliates of Onex Corporation (together with such affiliates, “Onex”) or the availability of
other insurance maintained or arranged by Onex]1.

 SECTION 4. ADVANCE OF EXPENSES. 

a. Notwithstanding anything in the Constating Documents or this Agreement to the contrary, the right to indemnification conferred by this
Agreement shall include the obligation of the Company to advance, if so requested by the Indemnitee (and within 10 business days of such request), Expenses incurred relating to a Claim involving the Indemnitee in advance of its final disposition or
to recover under any directors’ and officers’ liability insurance policies maintained by the Company; provided, that the payment of such Expenses incurred by Indemnitee in advance of the final disposition of any Proceeding shall be
made only upon delivery to the Company of an undertaking, by or on behalf of Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by a final disposition that Indemnitee is not entitled to be indemnified for such expenses
under this Agreement or otherwise, or to repay any amount advanced in excess of the amount of indemnity to which Indemnitee is entitled under this Agreement or otherwise. 

 
  

	1 	To be added for Onex employees 

  
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 b. For the avoidance of doubt, subject to the DGCL and the Company’s Constating
Documents, the provisions of paragraph (a) shall not apply to a Claim or Proceeding made directly by the Company against the Indemnitee but shall apply in the case of any derivative action or other Claim or Proceeding made by a third party in
the right of the Company. 
 SECTION 5. CONTRIBUTION. 

In the event that the indemnification provided for in this Agreement is unavailable to the Indemnitee for any reason whatsoever, the
Company, in lieu of indemnifying the Indemnitee, shall contribute to the amount incurred by the Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any
Proceeding, in such proportion as is deemed fair and reasonable, in light of all of the circumstances of such action, by a majority vote of the members of the then current Board of Directors (even though less than a quorum) or similar governing body
of the Company, in each case acting in good faith, or, if the Indemnitee disagrees with the determination of such governing body, then by the courts of the State of Delaware or other court having jurisdiction over the parties to reflect (a) the
relative benefits received by the Company and the Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such action; and/or (b) the relative fault of the Company (and its other Representatives) and the Indemnitee in
connection with such event(s) and/or transaction(s). The Indemnitee’s right to contribution under this Section 5 shall be determined in accordance with, pursuant to and in the same manner as, the provisions in Section 1 and 2 relating
to the Indemnitee’s right to indemnification under this Agreement. 
 SECTION 6.
ATTORNEYS’ FEES. 
 In the event that any action is instituted by the Indemnitee under
this Agreement to enforce or interpret any of the terms hereof, the prevailing party in such action shall be entitled to be paid all costs and expenses, including reasonable attorneys’ fees, incurred by the prevailing party with respect to such
action. 
 SECTION 7. NON-EXCLUSIVITY. 

The rights of the Indemnitee hereunder shall be in addition to any other rights the Indemnitee may have under the Constating Documents or
under applicable law, and nothing herein shall be deemed to diminish or otherwise restrict the Indemnitee’s right to indemnification under any such other provision. To the extent applicable law or the Constating Documents as in effect on the
date hereof, or at any time in the future, permit greater indemnification than as provided for in this Agreement, the parties hereto agree that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such law or provision of
the Constating Documents, and this Agreement shall be deemed amended without any further action by the Company or the Indemnitee to grant such greater benefits. The Indemnitee may elect to have the Indemnitee’s rights hereunder interpreted on
the basis of applicable law in effect at the time of execution of this Agreement, at the time of the occurrence of the event giving rise to a Claim or at the time indemnification is sought. 

  
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 SECTION 8. BURDEN OF
PROOF; NO PRESUMPTIONS 
 (a) Burden of Proof. In connection with any
determination by any person as to whether Indemnitee is entitled to be indemnified hereunder, the Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a written claim (and, in an action brought to
enforce a claim for an advancement of expenses, where the required undertaking, if any is required, has been tendered to the Company), and thereafter the burden of proof shall be on the Company to establish that Indemnitee is not so entitled.

 In any suit brought by Indemnitee to enforce a right to indemnification or to an advancement of Expenses hereunder, or
brought by the Company to recover an advancement of Expenses pursuant to the terms of an undertaking, the burden of proving that Indemnitee is not entitled to be indemnified, or to such advancement of Expenses, under this Agreement or otherwise,
shall be on the Company. 
 (b) No Presumptions. For purposes of this Agreement, the termination of any Proceeding, by
judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have
any particular belief or that a court has determined that indemnification is not permitted by applicable law. In addition, neither the failure of the Company to have made a determination that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct or had any particular belief, nor an actual determination by the Company that Indemnitee has not met such standard of conduct or did not have such belief, shall be a defense
to Indemnitee's claim for indemnification or advancement of expenses under this Agreement or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. The scope of the Company’s
indemnification of Indemnitee is that set forth in Section 1 of this Agreement, and nothing in this Section 8(b) shall be deemed to expand such scope. 
 SECTION 9. PARTIAL INDEMNITY. 
 If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of the Expenses, judgments, fines, penalties, amounts paid in settlement of a claim or any
other amount but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. 
 SECTION 10. SUBROGATION. 
 In the event
of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights. 

  
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 SECTION 11. NO DUPLICATION
OF PAYMENTS. 
 The Company shall not be liable under this Agreement to make any payment in
connection with any claim made against the Indemnitee to the extent the Indemnitee has otherwise actually received payment (under any insurance policy, the Constating Documents or otherwise) of the amounts otherwise indemnifiable hereunder.

 SECTION 12. BINDING EFFECT. 

This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors,
assigns, including any direct or indirect successor (whether by purchase, merger, consolidation, reorganization, exchange or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, spouses, heirs,
executors and personal and legal representatives. The Company shall require and cause any successor (whether by purchase, merger, consolidation, reorganization, exchange or otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place, but the absence of any such writing
shall not be a defense to any claim for indemnity made hereunder. This Agreement shall continue in effect regardless of whether the Indemnitee continues to serve as a Representative of the Company or of any other enterprise at the Company’s
request. 
 SECTION 13. SEVERABILITY. 

The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable in any respect, and the validity and enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired and shall remain enforceable to the fullest extent permitted by law. 

SECTION 14. AMENDMENT. 
 Except as otherwise provided in Section 7 herein, this Agreement may not be changed, modified or amended except in writing signed by the parties hereto. 

SECTION 15. CERTAIN DEFINITIONS. 

As used in this Agreement: 
 “Affiliated Entity” means each of the entities identified as the “Company” on the signature page hereof, and each corporation, company, partnership, limited partnership,
joint venture, limited liability company, trust, employee benefit plan or other enterprise directly or indirectly controlled by such Company. 
  

  
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 The “Constating Documents” of the Company mean its articles or certificate
of incorporation, articles or certification of association or formation, charter, by-laws, operating agreement, partnership agreement and/or other similar document or instrument governing its internal affairs. 

“final disposition” means a determination by final judicial decision from which there is no further right to appeal.

 “Proceeding” means any actual or threatened action, suit, proceeding, arbitration, alternate or dispute
resolution mechanism, or any inquiry or investigation, whether civil, criminal, administrative or investigative. 
 Indemnitee
will be deemed to be a “Representative” of an entity for which he is serving as an officer, a director, a manager, managing member, general partner, or in any other executive, fiduciary or representative capacity, including as an
“authorized signatory”, at the request of the entity. 
 SECTION 16.
COUNTERPARTS. 
 More than one entity is identified as the “Company” on the signature page of
this Agreement. This document shall be deemed to be a separate and distinct agreement between Indemnitee and each such Company. This Agreement may be executed in several counterparts, each of which shall be deemed an original. 

SECTION 17. GOVERNING LAW; EXCLUSIVE JURISDICTION.

 This Agreement shall be governed by the laws of the State of Delaware without regard to the principles of conflicts of law
thereof. The Court of Chancery of the State of Delaware is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this Agreement or otherwise by the Indemnitee.

 [Intentionally blank; signature page follows] 
  

  
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 IN WITNESS WHEREOF, the Company and the Indemnitee have executed this
Indemnification Agreement as of the day and year first above written. 
  

	
	INDEMNITEE:
	
	[NAME]
	
	 
	
	COMPANY:
	
	
	 TMS INTERNATIONAL CORP.,
 a
Delaware corporation

	
	By:                            
                                    
	        Name:
	        Title:
	
	COMPANY:
	
	 TUBE CITY IMS CORPORATION,

a Delaware corporation

	
	By:                            
                                        

	        Name:
	        Title:EX-10.1

 Exhibit 10.1 
 SEARS HOLDINGS CORPORATION  
 ANNUAL INCENTIVE PLAN

 (Amended and Restated Effective February 12, 2013) 

SECTION 1 

GENERAL 
 1.1. Purpose. The Sears Holdings Corporation Annual Incentive Plan (“AIP”) is a performance-based incentive program. The purpose of the AIP is to reward eligible employees of Sears
Holdings Corporation (“Company”) and its participating subsidiaries and affiliates (collectively referred to as “Employers”), for sustained Company fiscal performance. The AIP, as amended and restated herein, is established
under, and constitutes a part of, the amended and restated Sears Holdings Corporation Umbrella Incentive Program (“UIP”), which UIP was approved by the Compensation Committee (as defined in Section 9) effective March 7, 2012,
subject to shareholder approval. The AIP is hereby amended and restated effective as of February 12, 2013 (“Effective Date”), which is the date the Compensation Committee adopted the amended and restated AIP, subject to shareholder
approval of the amended and restated Sears Holdings Corporation Umbrella Incentive Program (“UIP”). For purposes of this document, the Effective Date shall also refer to the effective date of an annual incentive plan established in the
future by the Compensation Committee under the AIP. Both (a) Awards (as defined in Section 9) not structured to satisfy the requirements for “performance-based compensation” under Section 162(m) of the Internal Revenue Code
(“Code”), and (b) Section 162(m) Awards (as defined in Section 9), which are structured to satisfy such requirements, may be issued under the AIP. 
 1.2. Operation, Administration and Definitions. The operation and administration of the AIP, including the Awards made under the AIP with respect to any Performance Period (as defined under
subsection 3.3), shall be subject to the provisions of Section 7. Capitalized terms in the AIP shall be defined in the provision in which a term first appears or as set forth in Section 9. 

1.3. Participating Employers. Each Employer whose eligible employee’s are covered by the AIP may be referred to herein
as a “Participating Employer”. Participating Employers are listed on Appendix A. 
 SECTION 2 

PARTICIPATION 
 2.1. Eligible Employee. Except as provided herein, “Eligible Employee” means as to any Performance Period an employee of the Company or a participating Subsidiary who is designated
by the Compensation Committee or Senior Corporate Compensation Executive as eligible to participate in an AIP as of such Performance Period. The Senior Corporate Compensation Executive shall make eligibility determinations under this Section 2
with respect to all Eligible Employees other than those who are “Executives” for whom compensation matters are under the purview of the Compensation Committee (as defined in Section 9), and the Compensation Committee shall make
eligibility determinations with respect to all Executives. Once designated as eligible to participate, an Eligible Employee shall become a “Participant” in the applicable AIP; provided, however, that an otherwise Eligible Employee shall
not be a Participant in the AIP with respect to any portion of a Performance Period during which he or she is participating under any other annual incentive program that is sponsored by the Company or any subsidiary or affiliate of the Company
regardless of when awards under such program are paid. 

 Sears Holdings Corporation 

Annual Incentive Plan 
  

 2.2. New Hires; Changes in Status; Promotions and Demotions. 

(a) New Hires. The Compensation Committee, the Senior Corporate Compensation Executive, or an authorized
representative of either, as applicable, shall determine whether and when an employee who is a new hire is an Eligible Employee. The terms and conditions of any Award for such an individual shall be (i) based on the Target Annual Incentive for
the new hire’s incentive-eligible position and (ii) subject to a fraction, the numerator of which is the number of full days on active payroll (except as otherwise provided in Section 6.2) during the applicable Performance Period (as
defined in subsection 3.3) that the Eligible Employee was a Participant in the AIP and the denominator of which is the number of full days in such Performance Period. 

(b) Changes in Status. The Compensation Committee or Senior Corporate Compensation Executive, as applicable,
shall determine whether and when an employee who has a change in status becomes or ceases to be an Eligible Employee during the Performance Period. The terms and conditions of any Award for such an individual shall be (i) based on the Target
Annual Incentive for the incentive-eligible position and (ii) subject to a fraction, the numerator of which is the number of full days on active payroll (except as otherwise provided in Section 6.2) during the applicable Performance Period
that the Eligible Employee was a Participant in the AIP and the denominator of which is the number of full days in such Performance Period. 
 (c) Promotion. If a Participant is promoted, the Award for such an individual shall be based on a pro-ration, whereby the Target Annual Incentive for the new position will apply to the remainder of
the applicable Performance Period and the Target Annual Incentive for the immediately preceding incentive-eligible position will apply to the portion of such Performance Period immediately preceding the effective date of the promotion, subject to
subsection 3.2. 
 (d) Demotions. If a Participant is demoted, the Award for such an individual shall be
based on a pro-ration, whereby the Target Annual Incentive for the new incentive-eligible position (if any) will apply only to the remainder of the Performance Period and the Target Annual Incentive for the immediately preceding incentive-eligible
position will apply only to the portion of the Performance Period immediately preceding the effective date of the demotion, subject to subsection 3.2. 
 SECTION 3 
 ANNUAL INCENTIVE AWARDS 

3.1. Annual Incentive Awards. Except as provided herein, the Senior Corporate Compensation Executive shall determine, in
its sole discretion, the “Target Annual Incentive” (as defined herein) for each Participant. Notwithstanding the forgoing, the Compensation Committee shall approve the Target Annual Incentives and the Awards for Executives (as defined in
Section 9) under its purview. 

  
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 Sears Holdings Corporation 

Annual Incentive Plan 
  

 (a) A “Target Annual Incentive” shall refer to the percentage
of a Participant’s rate of base pay during a Performance Period, which may be reflected as a percentage of base pay or flat dollar amount (or combination thereof). The Target Award Incentive shall consist of any annual, quarterly and/or monthly
award components applicable to a Participant. 
 (b) The “Target Incentive Award” shall consist of a
commitment by the Company to distribute, at the time(s) specified in, and in accordance with the applicable provisions of, Section 5 below, a dollar amount based on a Participant’s Target Annual Incentive and based on actual performance of
the Company and the Participant, as compared to established performance goals described in Section 4 below, subject to subsection 4.1(b)(vii). The Target Incentive Award shall be subject to pro-ration (if applicable) and certification of the
calculation of the final Award amount by the Compensation Committee or Senior Corporate Compensation Executive, as applicable. A Participant’s Target Incentive Award may consist of annual, quarterly and/or monthly award components as described
below in this Section 3.1. 
 (c) The “Quarterly Incentive Award” shall refer to the final
quarterly portion of a Participant’s Target Incentive Award that is based on applicable quarterly performance goal(s) and measures, and, if any, may be payable on a Quarterly Payment Date (as defined in subsection 5.1(b) below) or the Annual
Payment Date (as defined in subsection 5.1(a) below), as determined by the Compensation Committee or Senior Corporate Compensation Executive, as applicable. Notwithstanding the foregoing, this does not preclude the Compensation Committee or Senior
Corporate Compensation Executive, as applicable, from creating a Performance Period by combining Fiscal Quarters (as defined in Section 9) months into a period less than a Fiscal Year. 

(d) The “Monthly Incentive Award” shall refer to the final monthly portion of a Participant’s Target
Incentive Award that is based on applicable monthly performance goal(s) and measures, and, if any, may be payable on a Monthly Payment Date (as defined in subsection 5.1(b) below) or the Annual Payment Date (as defined in subsection 5.1(a) below),
as determined by the Compensation Committee or Senior Corporate Compensation Executive, as applicable. Notwithstanding the foregoing, this does not preclude the Compensation Committee or Senior Corporate Compensation Executive, as applicable, from
creating a Performance Period by combining Fiscal Months (as defined in Section 9) into a period less than a Fiscal Year. 
 (e) The “Annual Incentive Award” shall refer to the final annual portion of a Participant’s Target Incentive Award payable on the Annual Payment Date, if any. 

(f) Any Quarterly Incentive Award, Monthly Incentive Award and/or Annual Incentive Award shall be satisfied by a
distribution in accordance with Section 5 and subject to Sections 6 and 7. 
 3.2. Adjustments based on Status
Changes during Performance Period. Notwithstanding anything in the AIP to the contrary, with respect to Awards that are not Section 162(m) Awards, and prior to the settlement of any such Award, if the Target Annual Incentive for a new
incentive-eligible position (including if due to promotion or demotion) is lower or higher than the Target Annual Incentive for a Participant’s immediately prior position, the 

  
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 Sears Holdings Corporation 

Annual Incentive Plan 
  

 
Participant’s Target Incentive Award may be adjusted by the Compensation Committee or Senior Corporate Compensation Executive, as applicable, to ensure that the overall target cash
compensation (i.e., the sum of base pay and Target Annual Incentive) for the new position is comparable to the overall target cash compensation for the immediately prior position. 

3.3. Performance Period. The “Performance Period” refers to (a) with respect to the portion of an Award that
is payable based on the Fiscal Year (as defined in Section 9), the applicable Fiscal Year, (b) with respect to the portion of an Award that is payable based on a Fiscal Quarter (as defined in Section 9), the applicable Fiscal Quarter,
and (c) with respect to the portion of an Award that is payable based on a Fiscal Month (or months), the applicable calendar or Fiscal Month(s); in either case, as determined by the Compensation Committee or Senior Corporate Compensation
Executive, as applicable. The amount of an Award, if any, shall be determined following completion of the applicable Performance Period in accordance with this Section 3 and Section 4. 

3.4. Pro-ration. 
 (a) The Annual Incentive Award and applicable Quarterly Incentive Awards and/or Monthly Incentive Awards, if any, of a Participant who experiences a status change or position change are subject to
pro-rated based on the number of days worked on active payroll in each incentive-eligible position during the applicable Performance Period. 
 (b) The Annual Incentive Award and applicable Quarterly Incentive Awards and/or Monthly Incentive Awards, if any, of a Participant who experiences a demotion, promotion, status or location change are
subject to pro-rated based on the Target Annual Incentives in effect during the applicable Performance Period, subject to Sections 2.2 and 3.2 above. 
 (c) The Annual Incentive Award and applicable Quarterly Incentive Awards and/or Monthly Incentive Awards, if any, of a Participant who experiences a disability or death, as described in subsections 6.1(b)
and (c) respectively, shall be pro-rated based upon a fraction, the numerator of which is the number of days worked on active payroll in an incentive-eligible position during the applicable Performance Period and the denominator of which is the
number of days in such Performance Period. 
 (d) The Annual Incentive Award and applicable Quarterly Incentive
Awards and/or Monthly Incentive Awards, if any, of a Participant who experiences an unpaid leave of absence during the applicable Performance Period shall be pro-rated in accordance with subsection 6.2(a). 

3.5. Reimbursement of Excess Awards. If the Company’s financial statements or approved performance measures under the
AIP are the subject of a restatement due to error or misconduct, to the extent permitted by governing law, in all appropriate cases, the Company will seek reimbursement of Excess Awards paid under the AIP to Executives (and any other Participant who
is determined to have known of or been involved in any such misconduct) for the relevant performance period(s). For purposes of the AIP, an “Excess Award” means the positive difference, if any, between (a) the Annual Incentive
Award, Quarterly Incentive Awards and/or Monthly Incentive Award paid to an Executive and (b) the Annual Incentive Award, 

  
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 Sears Holdings Corporation 

Annual Incentive Plan 
  

 
Quarterly Incentive Awards and/or Monthly Incentive Award that would have been paid to the Executive, had the Award been calculated based on the Company’s financial statements or performance
measures as restated. The Company will not be required to award Participants, including Executives, an additional AIP payment should the restated financial statements or performance measures result in a higher Annual Incentive Award, Quarterly
Incentive Awards or Monthly Incentive Award. 
 SECTION 4 

GOALS AND PERFORMANCE 
 4.1. Company Goals and Performance. For each Performance Period, the Compensation Committee or Senior Corporate Compensation Executive, as applicable, shall establish in writing the
performance goals and any particulars or components (including without limitation Targets or Thresholds) applicable to each business unit (including sub-business units) and, with respect to each Participant, his or her Assignment (as defined in
Section 9). The performance goals and any particulars or components will be objectively measurable and any payment based upon the achievement of a specified percentage or level of performance. 

(a) Goals. Except as otherwise approved by the Compensation Committee or Senior Corporate Compensation Executive,
as applicable, with respect to a Performance Period, the performance goals shall be based upon one or more of the performance measures identified in the UIP. 
 (b) Performance. Except as otherwise approved by the Compensation Committee or Senior Corporate Compensation Executive, as applicable, with respect to a Performance Period, the following concepts
shall apply: 
 (i) Achievement of Target. With respect to each Performance Period, the Compensation
Committee or Senior Corporate Compensation Executive, as applicable, shall establish a target level of achievement for each performance goal (“Target”), which may be reflect as annual, quarterly and/or monthly Targets, as applicable to the
performance measure. If achieved, payout of applicable Award(s) to which that performance goal applies shall be at 100%, subject to any applicable modifiers or adjustments. 

(ii) Achievement of Threshold. With respect to each Performance Period, the Compensation Committee or Senior
Corporate Compensation Executive, as applicable, shall establish a threshold level of achievement that must be met with respect to a performance goal before any portion of an applicable Award to which the performance goal applies is payable
(“Threshold”), which may be reflect as annual, quarterly and/or monthly Thresholds. If achieved, payout of Awards to which that performance goal applies shall be at the Threshold percentage, subject to any applicable modifiers or
adjustments. 
 (iii) Achievement Between Threshold and Target. In the event achievement of a performance
goal falls between Threshold and Target with respect to a Performance Period, the Compensation Committee or Senior Corporate Compensation Executive, as applicable, may establish a formula for determining payout levels between these two points, which
payout shall be subject to any applicable modifiers or adjustments. 

  
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 (iv) Payout Above Target. In the event achievement of a
performance goal exceeds the Target with respect to a Performance Period, the Compensation Committee or Senior Corporate Compensation Executive, as applicable, may establish a formula for determining payout levels above Target, which payout shall be
subject to any applicable modifiers or adjustments. The Compensation Committee or Senior Corporate Compensation Executive, as applicable, also may provide for a maximum payout level or no maximum. 

(v) Modifiers. Notwithstanding this subsection 4.1, for each Performance Period, the Compensation Committee or
Senior Corporate Compensation Executive, as applicable, shall have the discretion to establish individual, team, department, store or other unit performance modifiers to an Annual Incentive Award, Quarterly Incentive Award or Monthly Incentive
Award, which enables the Award to be modified, positively (subject to subsection 4.2 below) or negatively, based on the performance of an individual, team, department, store or other unit with respect to a Performance Period. 

(vi) Qualifiers. Notwithstanding this subsection 4.1, for each Performance Period, the Compensation Committee or
Senior Corporate Compensation Executive, as applicable, shall have the discretion to establish qualifiers based on Company, business unit, store, department or other unit performance measures, which qualifiers would need to be achieved, in addition
to achievement of the performance goals described above, in order for any Annual Incentive Award, Quarterly Incentive Award or Monthly Incentive Award to be paid. Such qualifiers may or may not be (1) equivalent to specific AIP goals and
thresholds, and (2) the same for all Participants. 
 (vii) Discretionary Allocation. Notwithstanding
this subsection 4.1 or anything else in the AIP to the contrary, with respect to non-Executive Participants, for each Performance Period the Senior Corporate Compensation Executive shall have the discretion to establish that a portion of a
Participant’s Target Incentive Award shall be subject to a discretionary performance measure, based on relative contribution and overall productivity as determined in the sole discretion of the Company. 

4.2. Awards Subject to Code Section 162(m) 
 (a) General Rules. 
 (i) Notwithstanding anything in the AIP
to the contrary, this Section 4.2 will apply to all Section 162(m) Awards. To the extent there is a conflict between the rules of this Section 4.2 and any other section in the AIP, the terms of this Section 4.2 will control.

  
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 (ii) In no event will positive discretion be applied, by the
Compensation Committee or Senior Corporate Compensation Executive, to any Section 162(m) Award with respect to the Performance Period or as of the Payment Date (as defined under subsection 5.1(c) below). Modifiers described in
Section 4.1(b)(v) shall not apply to any Section 162(m) Award. 
 (iii) To the extent that an Executive
experiences a promotion or other change in status, no adjustment to a Section 162(m) Award shall be made if such adjustment would not otherwise meet the requirements of Code Section 162(m). 

(b) Performance Measures. Section 162(m) Awards shall use the performance measures established under the UIP.
As provided in the UIP, at the time of establishing the performance goals, the Compensation Committee may exclude the effects of extraordinary items in a manner that satisfies the requirements of Code Section 162(m). 

(c) Establishment of Performance Goals. Section 162(m) Awards shall have the applicable objective performance
goals and any particulars or components established in writing and approved by the Compensation Committee by the deadline established in the UIP, in accordance with Code Section 162(m) and the regulations issued thereunder. 

(d) Attainment of Performance Goals. Distributions under Section 162(m) Awards shall not be made until the
Compensation Committee has determined, and certifies in writing, that the performance goals have been satisfied. 

(e) Maximum Award. Section 162(m) Awards are subject to the maximum award limits established under the UIP.

 4.3. Additional Requirements. All Annual Incentive Awards, Quarterly Incentive Awards and Monthly Incentive
Awards awarded under the AIP are subject to the provisions of Sections 5, 6 and 7. 
 SECTION 5 

DISTRIBUTION 
 5.1. Time of Payment. Subject to Sections 6 and 7, the Annual Incentive Awards, Quarterly Incentive Awards and Monthly Incentive Awards that are payable under the AIP, based on the Awards
and payout formulas described at Sections 3 and 4, shall be distributed after the Compensation Committee or Senior Corporate Compensation Executive, as appropriate, has determined the amount to be paid to each Participant, subject to the following:

 (a) The Annual Incentive Award, if any, shall be distributed no later than the date that
is the 15th day of the third month following the last day
of the relevant Performance Period; provided, however, that no distribution shall be made hereunder until after the Compensation Committee has certified the attainment of the performance goals and the Compensation Committee or Corporate
Compensation, as appropriate, has determined the amount to be paid to each Participant. Notwithstanding anything herein to the contrary, such distributions shall be made no later than required by Code Section 409A to avoid treatment of the AIP
as a deferred compensation plan under Code Section 409A. The date as of which payment of an Annual Incentive Award is made in accordance with this subsection 5.1(a) shall be the “Annual Payment Date.” 

  
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	 	(b)	The Quarterly Incentive Awards, if any, shall be distributed, as follows: 

(i) If payable quarterly, then with respect to the first three Fiscal Quarters of the Performance
Period, within sixty (60) days of the close of the applicable Fiscal Quarter (or quarters if combined as a Performance Period within the applicable Fiscal Year) (or as soon as administratively feasible thereafter if later), and with respect to
the fourth Fiscal Quarter of the Performance Period, no later than the date that is the 15th day of the third month following the last day of the applicable fourth Fiscal Quarter; which may be referred to as a “Quarterly Payment Date”; 

(ii) If payable annually, no later than the date that is the 15th day of the third month following the last day of the applicable
Fiscal Year that constitutes the Performance Period; and 
 (iii) Provided, however, that no distribution shall
be made hereunder until after the Compensation Committee or Corporate Compensation, as appropriate, has certified the attainment of the performance goals and the Compensation Committee or Corporate Compensation, as appropriate, has determined the
amount to be paid to each Participant. 
  

	 	(c)	The Monthly Incentive Awards, if any, shall be distributed, as follows: 

(i) If payable monthly, then with respect to the first eleven Fiscal Months of the Performance
Period, within thirty (30) days of the close of the applicable Fiscal Month (or months if combined as a Performance Period within the applicable Fiscal Year) (or as soon as administratively feasible thereafter if later), and with respect to the
twelve Fiscal Month of the Performance Period, no later than the date that is the 15th day of the third month following the last day of the applicable twelfth Fiscal Month; which may be referred to as a “Monthly Payment Date”; 

(ii) If payable annually, no later than the date that is the 15th day of the third month following the last day of the applicable
Fiscal Year that constitutes the Performance Period; and 
 Provided, however, that no distribution shall be made hereunder
until after the Compensation Committee or Corporate Compensation, as appropriate, has certified the attainment of the performance goals and the Compensation Committee or Corporate Compensation, as appropriate, has determined the amount to be paid to
each Participant. 
 (d) The Annual Payment Date, Quarterly Payment Date and Monthly Payment Date may be referred
to herein generically the “Payment Date”. 

  
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 5.2. Form of Payment. An Annual Incentive Award, Quarterly Incentive
Awards and Monthly Incentive Awards shall generally be satisfied by a single, lump sum cash payment to the Participant with respect to the applicable Performance Period, provided, however, that, at the discretion of the Compensation Committee, the
Company may elect, by such deadline as specified under uniform and nondiscriminatory rules established by the Compensation Committee, to satisfy such Award by payment of shares of Company common stock (“Stock”) in lieu of cash, or a
combination of cash and shares of Stock. The number of shares of Stock shall be equal to (a) the amount of the Award to be paid in stock in accordance with this subsection 5.2, divided by (b) the fair market value of a share of Stock as
evidenced by its closing price, on the principal securities exchange or market on which the Stock is then listed or admitted, on the business day immediately preceding the date of distribution or, if the Stock is not traded on that date, on the next
preceding date on which Stock was traded; provided that issuance of any shares of Stock in accordance with this subsection 5.2 shall be contingent on the availability of shares of Stock under any shareholder-approved plan of the Company providing
for the issuance of Stock in satisfaction of the Awards hereunder (which in no event shall be an employee stock purchase plan). 

SECTION 6 

TERMINATION OF EMPLOYMENT; LEAVE OF ABSENCE; REINSTATEMENT 

Any Award payable under this Section 6 shall be payable in accordance with Section 5. 

6.1. Termination of Employment. If a Participant incurs a termination of employment before the applicable Payment Date (as
defined in Section 5.1(c) above) for a Performance Period, the effect of termination of employment on a Participant’s right to receive an Award under the AIP shall depend on the reason for the termination, as described in this subsection
6.1. 
 (a) Voluntary Termination or Involuntary Termination. In the event that prior to the Payment Date
of an Award, a Participant (i) voluntarily terminates employment (for any reason other than due to permanent and total disability (as defined in subsection (b) immediately below)) or (ii) is involuntarily terminated for any reason
(other than death), such Participant shall forfeit his or her Award, except as prohibited by law. A Participant’s decision to retire prior to the Payment Date of an Award is a voluntary termination and such Participant shall forfeit his or her
Award. 
 (b) Disability. Except as otherwise approved by the Compensation Committee or Senior
Corporate Compensation Executive, as applicable, in the event that prior to the Payment Date of an Award, a Participant suffers a permanent and total disability (as defined in the Company’s long-term disability program, regardless of whether
the Participant is covered by such program) while employed by the Company or an Employer resulting in termination or retirement, subject to Section 7 below, such Participant shall be entitled to a distribution of the Award that would otherwise
be payable to the Participant under Sections 3 and 4 above, pro-rated based upon a fraction, the numerator of which is the number of full days worked on active payroll in an incentive-eligible position during the applicable Performance Period and
the denominator of which is the number of days in such Performance Period (or the number of days remaining in such Performance Period after the individual is assigned to an incentive-eligible position). 

  
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 (c) Death. Except as otherwise approved by the Compensation
Committee or Senior Corporate Compensation Executive, as applicable, in the event that a Participant dies while employed by a Participating Employer but prior to the Payment Date of his or her Award, the estate of such Participant shall be entitled
to a distribution of the Award, if any, payable in cash that would otherwise be payable to the Participant under Sections 3 and 4 above, pro-rated based upon a fraction, the numerator of which is the number of full days worked on active payroll in
an incentive-eligible position during the applicable Performance Period and the denominator of which is the number of full days in such Performance Period (or the number of days remaining in such Performance Period after the individual is assigned
to an incentive-eligible position). 
 6.2. Leave of Absence.  

(a) General. Except as otherwise approved by the Compensation Committee or Senior Corporate Compensation Executive,
as applicable, in the event that a Participant is on an unpaid leave of absence any time during the Performance Period or at the time of the Payment Date, subject to subsections (b) and (c) immediately below and Section 7, such
Participant shall be entitled to a distribution of the Award that would otherwise be payable to the Participant under Sections 3 and 4 above, pro-rated based upon a fraction, the numerator of which is the number of full days worked on active payroll
in an incentive-eligible position during the applicable Performance Period and the denominator of which is the number of days in such Performance Period. 
 (b) Short-Term Disability. Subject to subsection 6.2(a) above, In the event that a Participant is on a leave of absence due to short-term disability (including, for purposes of the AIP, paid
maternity leave) any time during the Performance Period, subject to subsection (c) below and Section 7, the period of the leave of absence shall be treated as time on active payroll and will be credited toward the determination of the
Participant’s Award and the Participant shall be entitled to payment of the Award in accordance with Section 5, even if the Participant is on the short-term disability leave of absence as of the Payment Date. 

(c) Salary Continuation. In the event that a Participant is receiving salary continuation under a severance-related
agreement or a Company-sponsored transition pay or severance pay plan as of the Payment Date, such Participant shall forfeit his or her Award. 
 6.3. Reinstatement. If a Participant who forfeited his or her Award with respect to a Performance Period as a result of a termination of employment is reinstated or rehired during the
Performance Period, any Award attributable to the portion of such Performance Period prior to the termination of employment shall remain forfeited. Notwithstanding the foregoing, such a Participant shall be eligible for an Award based on a fraction,
the numerator of which is the number of days worked on active payroll in an incentive-eligible position on or after the date of reinstatement or rehire during the Performance Period and the denominator of which is the number of days in such
Performance Period. 

  
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 SECTION 7 
 OPERATION AND ADMINISTRATION 
 7.1. Compensation Committee and
Senior Corporate Compensation Executive. 
 (a) Compensation Committee. Notwithstanding subsection
(b) immediately below, the Compensation Committee: 
 (i) Shall approve the Target Annual Incentives
and the Awards, including eligibility for Quarterly Incentive Awards, for Executives under its purview; 
 (ii)
With respect to Executives under its purview, shall have the authority and discretion to establish the terms, conditions, restrictions, and other provisions of such Awards, including without limitation the performance goals and the performance
measures for each such Executive’s Assignment in accordance with Section 4, and to amend, cancel, or suspend Awards (in accordance with Section 8), subject to the requirements of Code Section 162(m), if applicable; 

(iii) May make additional changes to the AIP that it deems appropriate for the effective administration of the AIP;
provided however, that these changes may not increase the benefits to which Participants may become entitled under the AIP nor change the pre-established measures or goals that have been approved, except as explicitly provided in the AIP; and

 (iv) Shall be responsible for all other duties and responsibilities allocated to the Compensation Committee
under the terms and conditions of the AIP. 
 (b) Senior Corporate Compensation Executive. Except as
provided in subsection (a) immediately above, the Senior Corporate Compensation Executive: 
 (i) Shall
Determine the Target Annual Incentive and Awards, including eligibility for Quarterly Incentive Awards and Monthly Incentive Awards, for Participants other than Executives under the purview of the Compensation Committee; 

(ii) Shall have the authority to control and manage the operation and administration of the AIP; 

(iii) Shall be responsible for the day-to-day administration of the AIP, including without limitation the exception
process described in Section 7.2 below; 
 (iv) With respect to Participants other than Executives under the
purview of the Compensation Committee and subject to the other provisions of the AIP, shall have the authority and discretion to determine the time or times of receipt of Awards, to establish the terms, conditions, restrictions, and other provisions
of such Awards, and to amend, cancel, or suspend Awards (in accordance with Section 8), subject to the requirements of Code Section 162(m), if applicable; and 

  
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 (v) Shall be responsible for all other duties and responsibilities
allocated to the Senior Corporate Compensation Executive under the terms and conditions of the AIP. 
 (c) Any
determinations by the Compensation Committee or Senior Corporate Compensation Executive, as applicable, regarding this AIP are binding on all applicable Participants. 

(d) The Compensation Committee and the Senior Corporate Compensation Executive, as appropriate, shall have the authority
and discretion to interpret the AIP, to establish, amend, and rescind any rules and regulations relating to the AIP and to make all other determinations that may be necessary or advisable for the administration of the AIP. 

7.2. Incentive Exceptions. The Senior Corporate Compensation Executive shall have the authority to receive and consider
requests by business units of the Participating Employers for an exception to an established performance measure due to circumstances outside of the business unit’s control. The Senior Corporate Compensation Executive may establish a procedure
for reviewing and approving or rejecting an exception. Any exception determination shall be binding. 
 7.3.
Discretion. Notwithstanding Section 7.2 or anything in the AIP to the contrary, with respect to Awards that are not Section 162(m) Awards, and prior to the settlement of any such Award, the Compensation Committee or Senior
Corporate Compensation Executive, as applicable, may change the pre-established measures and goals that have been approved for such Award and increase or reduce the amount of such Award. 

7.4. Tax Withholding. All distributions under the AIP are subject to withholding of all applicable taxes. In the case of
Awards under the AIP that are settled in shares of Stock, if any, the Compensation Committee or Senior Corporate Compensation Executive, as applicable, may condition the delivery of any shares or other benefits under the AIP on satisfaction of the
applicable withholding obligations. To the extent permitted by the Compensation Committee or Senior Corporate Compensation Executive, as applicable, such withholding obligations may be satisfied: (a) through cash payment by the Participant;
(b) through the surrender of shares of Stock which the Participant already owns (provided, however, that to the extent shares described in this subsection (b) are used to satisfy more than the minimum statutory withholding obligation, as
described below, then, except as otherwise provided by the Compensation Committee or Senior Corporate Compensation Executive, as applicable, payments made with shares of Stock in accordance with this subsection (b) shall be limited to shares
held by the Participant for not less than six months prior to the Payment Date (or such other period of time as the Company’s accountants may require)); or (c) through the surrender of shares of Stock to which the Participant is otherwise
entitled under the AIP, provided, however, that such shares under this subsection (c) may be used to satisfy not more than the Company’s minimum statutory withholding obligation (based on minimum statutory withholding rates for Federal and
state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). 

  
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 7.5. Source of Awards. In the case of Awards under the AIP that are
settled in shares of Stock, such shares shall be distributed under a stock plan adopted by the Company and approved by the shareholders thereof that provides for the issuance of Stock in satisfaction of Awards hereunder, (which in no event shall be
an employee stock purchase plan.) In the event of any conflict between this document and such stock plan, the provisions of the stock plan shall govern. 
 7.6. Settlement of Awards. The obligation to make payments and distributions with respect to Awards may be satisfied through cash payments, the delivery of shares of Stock, or a combination
thereof, as provided under subsection 5.2, subject, in the case of settlement in shares, to the terms of the stock plan under which the Stock is issued. Satisfaction of any such obligations under an Award, which is sometimes referred to as the
“settlement” of the Award, may be subject to such conditions, restrictions and contingencies as the Compensation Committee or Senior Corporate Compensation Executive, as appropriate, shall determine. Each Employer shall be liable for
payment of an Award due under the AIP with respect to any Participant to the extent that such benefits are attributable to the services rendered for that Employer by the Participant. Any disputes relating to liability of an Employer for payment of
an Award shall be resolved by the Compensation Committee or Senior Corporate Compensation Executive, as appropriate. 
 7.7.
Transferability. Except as otherwise provided by the Senior Corporate Compensation Executive, Awards under the AIP are not transferable except as designated by the Participant by will or by the laws of descent and distribution.

 7.8. Form and Time of Elections. Unless otherwise specified herein, any election required or permitted
to be made by any Participant or other person entitled to benefits under the AIP, and any permitted modification, or revocation thereof, shall be in writing filed with the Senior Corporate Compensation Executive at such times, in such form, and
subject to such restrictions and limitations, not inconsistent with the terms of the AIP, as the Senior Corporate Compensation Executive shall require. 
 7.9. Action by Company or Employer. Any action required or permitted to be taken under the AIP by the Company or any other Employer shall be by resolution of its board of directors, or by
action of one or more members of the board of directors of such company (including a committee of the board) who are duly authorized to act for such board with respect to the applicable action, or (except to the extent prohibited by applicable law
or applicable rules of any securities exchange or similar entity) by a duly authorized officer of such company. 
 7.10.
Gender and Number. Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural and the plural shall include the singular. 

7.11. Limitation of Implied Rights. 

(a) Neither a Participant nor any other person shall, by reason of participation in the AIP, acquire any right in or title
to any assets, funds or property of the Company or any Employer whatsoever, including, without limitation, any specific funds, assets, or other property which the Company or any Employer, in its sole discretion, may set aside in anticipation of a
liability under the AIP. A Participant shall have only a contractual right to the cash, if any, payable under the AIP, unsecured by any assets of the Company or any Employer, and nothing contained in the AIP shall constitute a guarantee that the
assets of the Company or any Employer shall be sufficient to pay any benefits to any person. 

  
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 (b) The AIP does not constitute a contract of employment, and status as
a Participant shall not give any Eligible Employee the right to be retained in the employ of the Company or any Employer, nor any right or claim to any benefit under the AIP, unless such right or claim has specifically accrued and vested under the
terms of the AIP. 
 7.12. Evidence. Evidence required of anyone under the AIP may be by certificate, affidavit,
document or other information, which the person charged with acting on such evidence considers pertinent and reliable, and which has been signed, made or presented by the proper party or parties. 

7.13. Information to be Furnished. The Company and the Participating Employers shall furnish the Compensation Committee and
the Senior Corporate Compensation Executive with such data and information as it determines may be required for it to discharge its duties. The records of the Company and the Participating Employers as to an employee’s or Participant’s
employment, termination of employment, leave of absence, reemployment, and compensation shall be conclusive on all persons unless determined to be incorrect. Participants and other persons entitled to benefits under the AIP must furnish the
Compensation Committee or Senior Corporate Compensation Executive, as appropriate, such evidence, data or information as the Compensation Committee or Senior Corporate Compensation Executive considers desirable to carry out the terms of the AIP,
subject to any applicable privacy laws. 
 7.14. Governing Law. The AIP will be governed under the internal laws of
the state of Illinois without regard to principles of conflicts of laws. The state and federal courts located in the state of Illinois shall have exclusive jurisdiction in any action, lawsuit or proceeding based on or arising out of the AIP.

 7.15. Severability. If any provision(s) of the AIP shall be found invalid, illegal, or unenforceable, in whole
or in part, then such provision(s) shall be modified or restricted so as to effectuate as nearly as possible in a valid and enforceable way the provisions hereof, or shall be deemed excised from the AIP, as the case may require, and the AIP shall be
construed and enforced to the maximum extent permitted by law, as if such provision(s) had been originally incorporated herein as so modified or restricted or as if such provision(s) had not been originally incorporated herein, as the case may be.

 SECTION 8 
 AMENDMENT AND TERMINATION 
 The Company may amend or terminate the
AIP at any time and for any reason in its sole discretion. No amendment shall be made that would cause the AIP not to comply with any applicable law or rule of any applicable securities exchange or similar entity, or cause Participants to experience
adverse tax consequences under Code Section 409A. The AIP and any Award thereunder may be amended without Participant consent to the extent that the Compensation Committee (or its authorized representative) determines such amendment necessary
to cause the AIP or any Award to comply with any applicable law or rule of any applicable securities exchange or similar entity or to prevent adverse tax consequences under Code Section 409A for Participants. 

  
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 SECTION 9 
 DEFINED TERMS 
 9.1. Each capitalized term in the AIP is defined
where it first appears herein or in this Section 9. In addition to the terms defined previously in the AIP, the following definitions shall apply: 
 (a) Assignment. The term “Assignment” refers to the performance goals and measure(s) that have been assigned by the Compensation Committee or Senior Corporate Compensation Executive, as
appropriate, to a Participant, based upon position, location and/or business unit. Assignment also includes the weight of each performance measure assigned to the Participant. 

(b) Award. The term “Award” or “Awards” refers to any Annual Incentive Award(s), Quarterly
Incentive Award(s) and Monthly Incentive Award(s), as applicable, awarded under the AIP. 
 (c) Compensation
Committee. The term “Compensation Committee” refers to the Compensation Committee of the Board of Directors of Sears Holdings Corporation. 
 (d) Code. The term “Code” means the Internal Revenue Code of 1986, as amended from time to time (and the regulations issued thereunder). A reference to any provision of the Code shall
include reference to any successor provision of the Code (and the regulations issued thereunder). 
 (e)
Executive. The term “Executive” refers to any employee of an Employer who holds a position of senior vice president or higher of Sears Holdings Corporation (not of any subsidiary or affiliate) or any employee who is an officer under
Section 16(b) of the Securities and Exchange Act of 1934 with respect to Sears Holdings Corporation. 
 (f)
Fiscal Month. The capitalized term “Fiscal Month” refers to a fiscal month within the applicable Fiscal Year of the Company. 
 (g) Fiscal Quarter. The capitalized term “Fiscal Quarter” refers to a fiscal quarter within the applicable Fiscal Year of the Company. 

(h) Fiscal Year. The capitalized term “Fiscal Year” refers to the applicable fiscal year of the Company.

 (i) Section 162(m) Award. The term “Section 162(m) Award” refers to any Award that is
designated by the Compensation Committee as intended to meet the requirements for “performance-based compensation” under Code Section 162(m). 

  
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 (j) Senior Corporate Compensation Executive. The term
“Senior Corporate Compensation Executive” refers to the Senior Vice President and President, Talent and Human Capital Services (or equivalent), or if he or she has explicitly delegated his or her duties with respect to the AIP, as provided
herein, then the Senior Corporate Compensation Executive shall refer to such authorized representative to whom the duties of administering the AIP have been delegated. 
 SECTION 10 
 EXPIRATION OF AIP 

The payment obligation under the AIP with respect to a specific Performance Period shall expire, subject to earlier termination pursuant
to Section 8, on the date on which all Annual Incentive Awards, Quarterly Incentive Awards and/or Monthly Incentive Awards (if any) are paid in full or would have been payable in accordance with the provisions of the AIP with respect to such
Performance Period. Notwithstanding this Section 10, the Company’s right to reimbursement under Section 3.5 will continue to survive after the expiration of the AIP. 

[Remainder of page intentionally left blank.] 

  
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 IN WITNESS WHEREOF, on February 12, 2013 the Compensation Committee of the
Board of Directors of Sears Holdings Corporation approved this restatement of the AIP effective as of March 7, 2012, and delegated the authority to the undersigned officer of Sears Holdings Corporation to execute this document this 18th day of
February, 2013. 
  

			
	SEARS HOLDINGS CORPORATION
		
	 By:
	 	 /s/ Dean Carter

		 	Dean Carter
	 Title:
	 	Vice President, Talent and Human Capital Services
		
	 Date:
	 	 February 18, 2013

  
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 SEARS HOLDINGS CORPORATION  
 ANNUAL INCENTIVE PLAN

 APPENDIX A 
 Participating Employers 
 (As of February 12, 2013) 

 

	1.	Sears Holdings Corporation 

  

	 	•	 	 Excluding: (a) Sears Canada Inc.; (b) SHC Israel Ltd.; and (c) Sears IT Management Services India Pvt. Ltd other than with respect to
U.S.-based employees of Sears Global Technology Services LLC designated for participation in accordance with Section 2.1 

  

	2.	Sears Holdings Management Corporation 

  

	3.	Sears, Roebuck and Company 

  

	4.	Kmart Holding Corporation

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