Prepared By R.R. Donnelley Financial -- Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): 12/03/2008

Sears Holdings Corporation

(Exact name of registrant as specified in its charter)

Commission File Number: 000-51217

Delaware		20-1920798
(State or other jurisdiction of		(IRS Employer
incorporation)		Identification No.)

3333 Beverly Road

Hoffman Estates, Illinois 60179

(Address of principal executive offices, including zip code)

847-286-2500

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On December 3, 2008, the Board of Directors of Sears Holdings Corporation (the "Company") appointed Michael D. Collins to the position of Chief Financial Officer, effective immediately. Mr. Collins, age 45, joined the Company in October 2008 as Senior Vice President, Financial Planning and Analysis. Prior to joining the Company, Mr. Collins served as Senior Vice President, Planning and Analysis, at General Electric Company's NBC Universal Division from March 2004 to October 2008. Mr. Collins worked in a variety of finance positions in his eighteen year career at General Electric Company.

Pursuant to a letter relating to employment, Mr. Collins will receive an annual base salary of $600,000. He is also eligible for a 2008 target award of 75% of his base salary under the 2008 Annual Incentive Plan ("AIP"), the payout for which can be higher or lower depending on the Company's financial performance in relation to performance goals set by the Compensation Committee of the Board of Directors. The AIP award is s ubject to pro-ration based on the portion of the 2008 annual incentive period actually worked. Mr. Collins participates in the Company's 2008 Long-Term Incentive Program ("LTIP"), with a 2008 target award of 150% of his base salary, the payout for which can be higher or lower depending on the Company's financial performance in relation to the three-year performance goals set by the Compensation Committee of the Board of Directors. Mr. Collins's LTIP award is subject to pro-ration based on the portion of the LTIP performance period remaining after the grant date. Mr. Collins will receive an initial sign-on bonus of $100,000 within 30 days of the relocation of his residence to the Chicago area. He will receive an additional sign-on bonus of $200,000 payable in March 2009, subject to his relocation of his residence to the Chicago area. He will be required to repay the sign-on bonuses if he voluntarily terminates his employment or is terminated for misconduct or integrity issues within two years of his date of hire. Mr. Collins also received a grant of 18,278 shares of restricted stock under the Company's 2006 Stock Plan, which will vest in full on November 3, 2011. Mr. Collins will receive relocation benefits under the standard Company policy. Mr. Collins has entered into an Executive Severance Agreement, which provides, among other things, that if he is involuntarily terminated by the Company for any reason other than cause, death or disability (or he voluntarily terminates his employment for good reason), he will receive one year of salary continuation, equal to base salary at the time of termination, subject to mitigation and further subject to the completion of the relocation of his residence to the Chicago area by December 31, 2008. The Executive Severance Agreement also includes customary non-compete, non-solicitation and non-disclosure covenants.

Mr. Collins succeeds J. Miles Reidy, who joined the Company in October 2007. In consideration of Mr. Reidy extending his employment through the end of the fisc al year, the Company amended Mr. Reidy's letter relating to employment to remove the repayment requirements associated with the $250,000 sign-on bonus that he received in October 2008 and the relocation benefits that he received under the Sears Relocation Policy.

Copies of the letter from the Company to Mr. Collins relating to employment dated November 11, 2008 and the amendment to Mr. Reidy's letter dated December 5, 2008 are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by this reference. The foregoing description of the terms of the letter and amendment are qualified in their entirety by reference to the full texts of the letter and amendment.

Signature(s)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Sears Holdings Corporation


Date: December 09, 2008	By:	/s/ William K. Phelan
		William K. Phelan
		Senior Vice President and Controller

Exhibit Index

Exhibit No.		Description
EX-10.1		Letter from Registrant to Michael D. Collins relating to Employment dated December 5, 2008
EX-10.2		Amendment to Letter from Registrant to J. Miles Reidy dated December 5, 2008

EX-10.1 2 rrd225862_26724.htm LETTER FROM REGISTRANT TO MICHAEL D. COLLINS RELATING TO EMPLOYMENT DATED DECEMBER 5, 2008 Exhibit 10

Exhibit 10.1

[SEARS HOLDINGS LETTERHEAD]

December 5, 2008

Mr. Michael D. Collins

[Address]

Dear Michael,

Congratulations on your promotion. The purpose of this letter is to restate your original offer Letter dated August 31, 2008 (as amended by the November 11, 2008 letter), based on your promotion to approved December 3, 2008 by the Board of Directors of Sears Holdings Corporation ("SHC" or "Sears Holdings"), effective December 4, 2008.

The following restates the key elements of your compensation package:

Title is SVP, Chief Financial Officer.
Annual base salary at a rate of $600,000.
Annual incentive opportunity of 75% of your base salary. Your incentive under the 2008 Annual Incentive Plan will be prorated from your start date through January 31, 2009, the last day of the Company's 2008 fiscal year, and will be adjusted as of November 1, 2008 to reflect this November 1, 2008 increase in your base salary. Any annual incentive payable with respect to a fiscal year will be paid by April 15 of the following fiscal year, provided that you are actively employed at the payment date.

Participation in the Sears Holdings Corporation 2008 Long-Term Incentive Program ("2008 LTIP") at 150% of your base salary as of August 31, 2008 (which base salary was $500,000), as previously approved by the Compensation Committee. Payout under the 2008 LTIP will be linked to 100% Sears Holdings EBITDA. Your target award has been prorated based on the date during the performance period that you became a participant (i.e., date of hire).
A grant of restricted stock valued at $1,000,000 under the Sears Holdings 2006 Stock Plan. The number of restricted shares granted (18,278) was determined using the market closing price of Sears Holdings shares on the grant date, which was November 3, 2008. The restricted shares granted are scheduled to vest in full on the third anniversary of the grant date.

You will receive a one-time sign-on bonus of $100,000 (gross), payable within thirty (30) days after you have completed your relocation to the greater Chicago metropolitan area. Additionally you will receive a one-time sign-on bonus of $200,000 (gross), payable in March 2009, contingent on your completed relocation to the greater Chicago metropolitan area. You will be required to repay both of these amounts to the company in the event you voluntarily terminate your employment with SHC or are terminated by SHC for Cause (as defined in the Restated Executive Severance Agreement referred to below) within twenty four (24) months of your date of hire.

In connection with your original offer letter, you signed an Executive Severance Agreement on September 10, 2008 and upon the increase in your base salary, as communicated in the November 11, 2008 update to your original offer letter, you signed a Restated Executive Severance Agreement on November 14, 2008. You hereby agree to execute a replacement Executive Severance Agreement, in connection with this promotion, which agreement provides for the same severance pay, benefits, rights and features as your current Restated Executive Severance Agreement, but has been redrafted to ensure compliance with Internal Revenue Code Section 409A. This replacement Executive Severance Agreement will supersede the Restated Executive Severance Agreement.

You are eligible for relocation assistance in accordance with SHC standard relocation policy. It is expected that you will complete the relocation of your primary residence to the greater metropolitan Chicago area by December 31, 2008. In the event that your relocation is not completed by this date, SHC will have the right to terminate your employment without severance, which SHC right is reflected in your Executive Severance Agreement (including the restated Agreement referred to immediately above).

You are eligible to receive three (3) weeks paid vacation, which will be pro-rated during your first year of service based on your start date. Added to this, you will qualify for six (6) paid National Holidays each year. You will be eligible for up to four (4) Personal Days per year, after completing six (6) months of service.

You are eligible to participate in all retirement and welfare programs on a basis no less favorable than other executives at your level, in accordance with the applicable terms, conditions and availability of those programs.

Michael, if you need additional information or clarification, please call. To acknowledge your acceptance of this restated offer letter, sign below and return this letter along with the signed replacement Executive Severance Agreement to my attention.

Sincerely,

William R. Harker

Accepted:

/s/ Michael D. Collins

Michael D. Collins

12/5/2008

Date

EX-10.2 3 rrd225862_26725.htm AMENDMENT TO LETTER FROM REGISTRANT TO J. MILES REIDY DATED DECEMBER 5, 2008 Exhibit 10

Exhibit 10.2

[SEARS HOLDINGS LETTERHEAD]

December 4, 2008

J. Miles Reidy

[Address]

Dear Miles,

The purposes of this letter are to confirm your intent to resign from Sears Holdings Corporation effective as of January 31, 2009, and to confirm our agreement to additional changes to the June 25, 2008 update ("June Update") to your September 12, 2007 offer letter ("Original Offer Letter") (regarding repayment of your sign-on bonus) and to your Original Offer Letter (regarding repayment of your relocation benefits). These latest changes have been approved by the Compensation Committee of SHC's Board of Directors.

These changes, to which the parties intend to be legally bound for good and valuable consideration, are as follows:

With respect to your one-time sign-on bonus of $250,000 (gross), which amount was paid to you October 22, 2008, you will not be required to repay this amount if you do not voluntarily terminate your employment with SHC before January 31, 2009.
With respect to the relocation benefits, which benefits were paid either directly to you or to a third party on your behalf under Sears Relocation Policy (payments totaled approximately $67,000 including tax gross-up), you will not be required to repay these amounts if you do not voluntarily terminate your employment with SHC before January 31, 2009.

In consideration for SHC's agreement to waive the right to these repayments, you agree to execute the attached General Release and Waiver. Further, you understand that by voluntarily terminating your employment you are not entitled to severance-relate pay or benefits under your Executive Severance Agreement but you remain obligated to comply with this agreement, including the one (1) year non-compete and non-solicitation provisions and the non-disclosure provision.

Your Original Offer Letter (as updated by the June Update and this letter), your September 7, 2007 Executive Severance Agreement (including Appendix A and the June 25, 2008 Addendum), the Restricted Stock Award Agreement (as amended June 25, 2008) and your General Release and Waiver, shall contain and comprise the entire understanding and agreement between you and Sears and shall fully supersede any and all prior agreements or understandings between you and Sears with respect to the subject matter contained herein.

Please sign below and return this letter, and your executed General Release and Waiver, to my attention.

Sincerely,

/s/ William R. Harker

William R. Harker

Accepted:

/s/ J. Miles Reidy

J. Miles Reidy

12/5/2008

Date

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