SEC Contract Filing

Filing Date: 2015-06-08

Document Content:
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>shldex102q12015.htm
<DESCRIPTION>2015 ADDITIONAL DEFINITIONS UNDER SEARS HOLDINGS CORP. ANNUAL INCENTIVE PLAN
<TEXT>
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<a name="sD9804E6E428613FD94D84E184091ABBA"></a><div><div style="line-height:120%;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Exhibit 10.2</font></div></div><br><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">2015 ADDITIONAL DEFINITIONS</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Under</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">SEARS HOLDINGS CORPORATION</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">ANNUAL INCENTIVE PLAN</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">EBITDA:</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(i)&#160;&#160;&#160;&#160;&#8220;EBITDA&#8221; is defined as earnings before interest, taxes, depreciation and amortization for the Performance Period computed as operating income appearing on the Company&#8217;s statement of operations for the applicable reporting period, other than Sears Canada (referred to herein as the &#8220;Domestic Company&#8221;), adjusted for depreciation and amortization and gains/(losses) on sales of assets.&#160; In addition, it is adjusted to exclude significant litigation or claim judgments or settlements (defined as matters which are $1,000,000 or more) including the costs related thereto; the effect of purchase accounting and changes in accounting methods; gains, losses and costs associated with acquisitions, divestitures and store closures; impairment charges; domestic pension expense; costs related to restructuring activities; and the effect of any items classified as &#8220;extraordinary items in the Company&#8217;s financial statements.&#160; If after the effective date of the 2015 AIP, the Domestic Company acquires assets or an entity that has associated EBITDA (measured using the same principles as those described in the preceding provisions of this paragraph (i)) in its last full fiscal year prior to the acquisition, of greater than or equal to $100,000,000, any EBITDA associated with such assets or entity (after its acquisition) and during the Performance Period shall be disregarded in determining EBITDA under this paragraph (i).</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(ii)&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Adjustments to Target EBITDA</font><font style="font-family:inherit;font-size:12pt;">.&#160; The EBITDA incentive target (i.e., Target EBITDA) contemplates that the Domestic Company remains approximately the same size over the Performance Period.&#160; If, after the beginning of a Performance Period, Domestic Company divests itself of assets or an entity that has associated EBITDA (measured using the same principles as those described in paragraph (i) above) in its last full fiscal year prior to the divestiture of greater than or equal to $100,000,000, Target EBITDA for the Performance Period will be decreased by actual EBITDA of such assets or entity for the portion of such assets&#8217; or entity&#8217;s last full fiscal year prior to the divestiture corresponding to the portion of the Performance Period (in which the divestiture occurs) remaining after the divestiture occurs.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">BOP</font><font style="font-family:inherit;font-size:12pt;">&#32;- &#8220;Business Operating Profit&#8221; is defined as earnings before interest, taxes, depreciation and other EBITDA adjustments, if related to the business unit, which are excluded from the definition of EBITDA (as defined above), for each business unit of the Domestic Company that is covered by the 2015 AIP, as reported on the Company&#8217;s domestic internal income statements derived from the vertical financial system. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">VPC</font><font style="font-family:inherit;font-size:12pt;">&#32;- &#8220;Variable Profit Contribution&#8221; (VPC) is defined as the balance reported on the system-generated store Profit &amp; Loss Statement and generally consists of store gross margin less expenses categorized as variable