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Newsletter

Winter 2011

Volunteer with serveyourway

Sears Holdings recently announced a new volunteerism initiative called serveyourway which is being driven by associate leadership and passion. All retirees and alumni are invited to participate as well. The company is striving to impact and improve the lives of thousands of people and hundreds of communities around the country in 2011 by volunteering at least 1.25 million hours. When you do the math, it's less than three hours per associate or retiree. Through serveyourway the goal is to: · Invite you to learn about what's happening in your local community · Empower you to get involved · Involve you in activities you care about · Connect you with other retirees to build a stronger sense of community To get started, log on1 to serveyourway at http://shc.volunteermatch.org. On this site, you'll be able to: · Register as a user to develop your personal interest and area profile · Search the database to identify volunteerism opportunities close to where you live · Sign up to volunteer and track your volunteer hours · Create a volunteerism event with any nonprofit organization The company is committed to social responsibility. This initiative provides all the tools and resources to help you make a positive impact in your local community. For any questions regarding serveyourway, please contact [email protected]

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Shop Your Way Rewards Keeps Getting Better

SM

It's a great time to be a Shop Your Way Rewards (SYWR) Member! In our last issue, we introduced you to this free program that rewards members with exciting benefits for shopping with us. As a member, you earn 10 Points for every $1 spent on just about anything you buy in-store, online and when using Sears Home Services.1 The SYWR team continues to enhance the program. For example, SYWR Members can now earn points on Kmart prescriptions, redeem points immediately after earning points and do it all without showing a SYWR card. Here are the changes now in effect: · For every Kmart pharmacy prescription filled, you'll receive 500 SYWR points. · On the same visit that you earn points for qualifying purchases, you can redeem those points on subsequent purchases on the same day. · You'll need your PIN to redeem points without a card. You can change your PIN to one you can easily remember by simply signing in to your account online at www.shopyourwayrewards.com and clicking edit next to PIN # in the Account at a Glance section. For more information about the SYWR program or to join for free, please visit www.shopyourwayrewards.com and www.kmart.com/pharmacy. You can also join when checking out at your local Kmart, Sears or The Great Indoors store.

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When logging on to the serveyourway site, please use the city and state where you live for location.

Terms and conditions apply. Please visit www.shopyourwayrewards.com to learn more and for the most current terms and conditions.

"Get Connected" and share your volunteerism experience in the communities at www.MyKmart.com/alumni or www.MySears.com/retired. Not a member of a community yet? Check out page two of this newsletter for details on how to join.

www.SearsHoldingsAlumni.com

Get Connected

Sweepstakes Winner! !

In the last Alumni News, we invited you to join the MyKmart and MySears communities and offered those who joined a chance to win a $100 Kmart or Sears gift card. Since that time, another 200 retirees have joined the communities. Congratulations to Lester Ritter, our sweepstakes winner! Lester started with Sears in the Bradenton, Fla., automotive center writing service orders. He retired in 1998 from the same store as a Home Improvement commissioned sales associate. With the gift card, Lester has already purchased some wonderful items for his wife including shoes and is saving the rest to buy some items for himself. Thanks to the over 1,400 retirees and alumni who signed up to be members since we introduced the alumni/retiree communities in August 2009. Your ongoing participation is appreciated.

Wishtogether Offers Great Deals

The Social Media team wants you to "Get Connected" so that you may take advantage of some amazing deals. During the recent holiday shopping season they developed a cool twist on "deal of the day" social shopping models. Deals on merchandise are "unlocked" when a critical mass "likes" the offer on Facebook. This group-buying application is available all year long and found on the wishtogether tab at www.facebook.com/sears. It encourages fans to share and unlock deals that can only be purchased from Sears.com1 through Facebook. Once a deal is unlocked, it's available for purchase instantly and everyone who "liked" it is notified by e-mail. To take advantage of wishtogether, simply "like" us on Facebook at www.facebook.com/sears. Please tell your family and friends about this new Facebook group-buying application too. And coming soon, Kmart's Facebook page will also be able to unlock amazing deals with wishtogether at www.facebook.com/kmart.

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While supplies last.

Have You Joined the MyKmart and MySears Communities Yet?

Here's how you can join:

· Go to www.MyKmart.com/alumni or www.MySears.com/retired · Go to Create a New Account · Create a Screen Name (this is the name other people will see when you're on the site, so don't use your full name) · Choose a password and confirm it · Enter your e-mail address · Enter your zip code · Read and agree to the Terms of Service · Click on the Sign Up button Once you have joined, please click on the My Home tab at the top of the screen and complete your profile. If you have questions, click on the Feedback tab at the bottom of each page and tell us how we can help you.

Special Online Offer!

Does Your Patio Need a Little Pizzazz?

Spring is just around the corner and soon the weather in all areas of the country will be delightful. Sears.com is the place to go for all your outdoor living. From grills and cooking tools, to outdoor lighting and décor ­ we've got everything you need at the prices you love. To show our appreciation, we are offering retirees 10 percent off all patio sets in addition to your retiree discount if you use the coupon code SPatio10 at checkout from Jan. 1, 2011 through Feb. 28, 2011. Visit Sears.com to see all of our patio sets and save.

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www.SearsHoldingsAlumni.com

Offering Apparel Brands Our Customers Know and Love

Building a strong apparel business is John Goodman's number one goal! In this conversation with Alumni News, the head of our Apparel and Home business units provides insight into his role and the strategies his team has put together for the upcoming year. What is your role at Sears Holdings? I oversee the Apparel and Home Fashions divisions for Sears and Kmart and also serve on the internal holding company business unit board of directors. It's a great role and it allows me to work closely with amazing teams across the entire company. How did you end up working in Apparel? I started my career over 25 years ago in Bloomingdale's executive training program and fell in love with retail. Throughout the years, I've enjoyed the challenges of opening new stores, transforming brands and offering great choices to customers no matter what their personal style or budget. Each new challenge I've faced has been fun as well as a learning experience. Apparel is exciting, fastpaced and always changing. I love working with our teams to stay ahead of the trends. What's the Apparel strategy for Sears and Kmart? We're working on different strategies for Sears and Kmart because of the kinds of stores they are. The big themes include offering great brands our customers know and love. At Kmart we're really proud of the great brands we've built over the years such as Jaclyn Smith and Joe Boxer. We've added Dream Out Loud by Selena Gomez and GLO to become a key destination for younger customers. At Sears we're looking to build a strong Young Men's business with brands like Amplify and a strong Junior's business with brands like Bongo, one of the few brands shared by Sears and Kmart. The new, updated Apostrophe was the star of "The Many Sides of Me" campaign we introduced in Fall 2010. You'll find it in the stores and online. Covington will be a richer brand in the seasons to come for both men and women. We believe you'll like how it evolves along with the rest of the brands in our assortment. Any new product launches to share? On the Sears side, we're thrilled to be working with French Connection and carrying UK Style by French Connection as a Sears exclusive brand beginning in March 2011. We're also really excited about our agreement with Everlast to be the exclusive retailer for their brand at Sears. The Everlast Sport brand will be carried at Kmart. Tell us about the apparel office in San Francisco. Our new office in San Francisco is in the heart of the city's Union Square. It's a great place to be if you're in the apparel business. By taking a short walk around the area you can see the latest trends across the whole Apparel industry. We have two floors in an historic building, one for Sears and one for Kmart. Our office includes a great mix of high-energy, talented people who love what they do. We all have cubicles, even me, and that makes for a more open and collaborative environment.

Offer valid 2/1/11-2/28/11 only

apparel and accessories

Savings off regular, sale and clearance prices apply to merchandise only. Not valid on Special Purchases, everyday great price items, Introductory Offers, Lands' End® merchandise, Two HeartsTM maternity, Levi's, jewelry, fragrances, footwear, outlet store purchases, Gift Cards, Sears licensed business. One coupon per purchase. Void if copied, transferred or obtained through channels not approved by Sears Holdings. Void where prohibited by law. Any other use constitutes fraud. Cash value 1/20¢. In an event of a return, coupon savings may be deducted from your refund. © 2011 Sears Brands, LLC. Sales Associate: Please collect this coupon. If unable to scan, manually enter the coupon number. Valid February 1 thru February 28, 2011. Applicable to in-store purchases only. Discount eligible retirees may present their discount card at the time of purchase for the additional savings. Certain eligibility restrictions apply. May not to be used with any other coupon.

10

%

off

You are invited to use this coupon on your next Apparel purchase at your local Sears store. When you're in our stores, take a few minutes to have a look at the great things going on in Apparel. Please send a note to [email protected] with your thoughts.

www.SearsHoldingsAlumni.com

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Walking Your Way to a Healthy Lifestyle

Are you looking to get active, but need some motivation or an incentive? Did you know walking is one of the easiest exercises to integrate into your daily routine? At Kmart Pharmacy we believe in living an active, healthy lifestyle and we've got just the plan for you - StepSmart! StepSmart is an online program that encourages an active lifestyle with: health and wellness tips, a tracking tool for counting your steps and the opportunity to be rewarded with monthly coupons from Sears and Kmart. It's simple to join: · Go to www.kmart.com/stepsmart · Enter your Shop Your Way Rewards Member number1 · Start walking and record your progress

Do We Have Your Correct Address?

The Financial Benefits team wants to make sure your address changes are handled in a timely and efficient manner. If you are a pension plan participant or have a 401(k) Savings Plan account, you need to make sure that ING, the program administrator, always has your correct address on file. To update your address, you may complete the "change of address" form found on the Financial Benefits website at sears401k.ingplans.com or send a letter with your prior and current addresses to: ING Pension Service Center P.O. Box 56856 Jacksonville, FL 32241-6856 ING 401(k) Savings Plan P.O. Box 56287 Jacksonville, FL 32241-6287 To report the death of a Sears or Kmart retiree or beneficiary receiving a pension, send an original death certificate to: ING Pension Service Center P.O. Box 56856 Jacksonville, FL 32241-6856 Keeping your address current will allow for effective handling of your pension and 401(k) account. Please visit www.sears401k.ingplans.com for updates, notices and plan information for your financial benefits.

Please share this information with your family and friends and join the discussions on www.facebook.com/kmartpharmacy. Kmart Pharmacy will help you get fit one step at a time!

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You must be a Shop Your Way Rewards Member to participate. Not a member? Join when checking out at your local Kmart or Sears or online at www.shopyourwayrewards.com.

A New and Personalized Shopping Solution

Have you heard about AdYourWay? It's a revolutionary new online tool that gets to know you and then sends personalized shopping offers to your e-mail account. Our customers told us that they wanted deals created just for them. So we created this tool and designed it to save both time and money. AdYourWay can be accessed from Sears.com (and soon on Kmart.com) under the Deals tab on the home page. The unique Follow feature allows you to specify the price you want to pay for merchandise you desire and receive e-mail alerts when price reductions occur. The products you're "following" can all be viewed and managed from a personal AdYourWay page that you set up. This tool is an expansion of our online capabilities and is helping the company further enhance customer relationships. Please check out AdYourWay and tell your family and friends about it as well.

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Sears is celebrating its 125th anniversary this year.

Please check out the Alumni website in the near future at www.SearsHoldingsAlumni.com for activities and how you can get involved. We will share more about this outstanding accomplishment in the retail industry in the next issue of Alumni News.

Kmart and Jaclyn Smith - Together for 25 Years

Kmart recently celebrated the 25th anniversary of its relationship with actress and designer Jaclyn Smith. For the past 25 years, Jaclyn Smith and Kmart have collaborated to create elegant apparel design that is both fashionable and affordable. The Jaclyn Smith Home Collection was introduced in August 2008 consisting of bedding, bath and outdoor furniture. At the same time, Jaclyn Smith's apparel lines expanded to include jewelry, footwear and handbags. Each collection is designed to reflect the timelessness and style that have become her signatures. To honor this occasion, one dollar from each item purchased from Jaclyn's speciallydesigned 25th Anniversary fashion collection and her home fashions lines during October 2010 was donated1 to support The Breast Cancer Research Foundation. A survivor herself, Jaclyn's grateful that her relationship with Kmart allows her to provide great merchandise at a truly affordable price, but also give back to a cause that's working diligently in the fight against breast cancer. To learn more, visit Kmart.com/JaclynSmith. Her collections can be purchased at your local Kmart store or online at Kmart.com.

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Up to a $100,000 maximum donation

Unemployed? Kmart Smart Assist Can Help

Unemployed customers with proof of unemployment can save 20 percent on Kmart Own Brands throughout the food and drug department. Visit kmart.com/smartassist for details.

www.SearsHoldingsAlumni.com 5

The Craftsman Experience

Craftsman is America's most trusted tool brand and is loved by tool enthusiasts and do-it-yourself warriors of all skill levels. In August 2010, this iconic brand unveiled the ultimate workshop - the Craftsman Experience. It's a one-ofa-kind venue that combines hands-on work stations, a live social media studio and project demonstrations that showcase the innovation and performance of Craftsman tools. The Craftsman Experience, located at 233 W. Huron St. in downtown Chicago's River North neighborhood, brings our products to life by allowing customers to touch, feel and test them plus see them in action. No worries if you don't live in Chicago, join the Craftsman Experience online at www.facebook.com/craftsman where we stream events, including interviews with special guests and project experts, live over the Web via an internet-based radio station. If you join us on Facebook you can participate in Q and A sessions online or by phone during the live broadcasts. If you are in the Chicago area, please check out the Craftsman Experience from 5 to 9 p.m. CT on Thursdays and Fridays and from noon to 8 p.m. CT on Saturdays and Sundays. Visit Craftsman.com for a schedule of events that will be broadcast online.

Kenmore Live Studio

In 1927, Kenmore was instrumental in building the appliance industry and today we're still the appliance leader with strengths in many areas. We're building on that great history and continuing to grow the Kenmore brand. Over the past couple of years the Kenmore brand has embarked on an exciting transformation including more than 450 new products across multiple categories, signature design elements and colors, a re-designed website at www.Kenmore.com, top ratings from a leading consumer magazine and the opening of the Kenmore Live Studio. The Kenmore Live Studio, located at the corner of Wells and Huron streets, offers an interactive experience merging inspiration and innovation in downtown Chicago. The studio hosts free events featuring local chefs, fashion designers, new product unveilings and more every Thursday through Sunday, with Monday evenings dedicated to events focused on healthy eating ­ made fun ­ for kids of all ages. All events are open to the public. If you are in the Chicago area, please check out the Kenmore Live Studio from 7 to 9 p.m. Monday through Thursday. Find a schedule of events or visit the studio's live broadcasts online at www.facebook.com/kenmore.

SearsHoldingsAlumni.com

Your website has been re-designed with the assistance of numerous retirees and alumni who submitted wonderful suggestions. Thanks to all who submitted ideas. Please visit SearsHoldingsAlumni.com for the latest company news, special offers, discount information and contacts for your benefits. The site also contains many resources to help you get connected and stay connected to Sears Holdings including your fellow retirees and alumni.

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www.SearsHoldingsAlumni.com

Alumni Mailbag

1920 Sears Mail Order Workers

In 1971, Loretta Lansford helped open the Kmart store in Soquel, Calif. She enjoyed all 26 years working in that store. Her first position was at the service desk, but her favorite was the Garden Shop because she loved the flowers. In her free time, she volunteers and shops at the Sears store in Santa Cruz. The former Sears Chicago Region Catalog Group is planning a reunion in the Chicago area on Sept. 20 and 21, 2011. All Catalog Sales Office (CSO) and Group staff alumni and their spouses from the eight CSO states (Wis., Ill., Mo., Ind., Mich., Ohio, Iowa, and Ky.) are invited. If able to attend, please contact Art Gravelle at [email protected] or 121 Tupelo Drive, Naperville, IL 60540 by March 1, 2011. If you're unable to attend, please send Art a brief note letting him know what you've been doing since you retired. He'll share your update at the reunion. Irva Harp retired in 1987 from the Kmart in Allentown, Pa. One of the first associates hired for this store, she worked in receiving and in the office ordering merchandise. Irva was married in 1949, the same year she opened a Sears Card account. Sixty-Two years later, she is still using the bakeware and cutting boards that she first purchased using that card.

87-year-old Robert Ferro retired from Sears after 28 years of service. He was married in 1946 and his in-laws gave them a Sears model 95 sewing machine as a wedding gift. The machine was used to make clothes for his boys and wife, who was a model. It's still working and they recently loaned it to their granddaughter. Ironically, in 1952 Robert's first job at the Sears store in San Diego was selling sewing machines. The Kmart Central Pennsylvania Retirement Group formed 11 years ago. On a monthly basis, each member of this service-focused group donates five dollars to their "good news committee" account. At year's end, they vote on a charity to receive the funds collected during the year. The Fisher House Program, Ronald McDonald House Charities and local food banks have all benefitted from their generosity over the years. Truman Christner began his 24-year career in 1949 in the Iowa City Sears store. When he became ill, the thoughtful associates from this store held a benefit dinner to help pay for his dialysis machine. Truman's family home is filled with Sears branded products that are in excellent working condition because they have the Whole House Plan from Sears Home Services. Their Coldspot refrigerator has been in great condition for 62 years along with their 53-year-old Craftsman belt sander and 50-yearold bench saw. Gary Ramsey, who retired from Sears after 30 years of service in 1993 put pen to paper again. He recently published his second novel The Spirit Survives and a collection of poetry entitled Poems, Dreams and Thoughts of Life. Both are available on www.Sears.com.

Looking to Join an Alumni/Retiree Club?

Are you looking to increase the membership of your local Kmart or Sears retiree/alumni clubs? Or maybe you're looking to join a club? Please send this information: club name and contact's name, phone number and e-mail to [email protected] Club information will be published in the next issue of Alumni News and is posted on SearsHoldingsAlumni.com to assist with engagement of your fellow alumni. When reaching out to join a club, please write Kmart or Sears retiree/alumni club in the subject line of your e-mail so you can be easily identified by the club contacts. Thanks to the following clubs for responding! Kmart 3150 Alumni of Winston-Salem, N.C., Jean Cockerham, 336-699-6016, [email protected] or Dot Lambert, 336-983-9275, [email protected] Old Pueblo Sears Retiree Club of Tucson, Ariz., Rose Lafond, 520-232-5512, [email protected] Kmart Central Pennsylvania Retirement Group, Chris Drees, 717-447-0315, [email protected]

www.SearsHoldingsAlumni.com 7

Sears Holdings Alumni Newsletter 3333 Beverly Road B6-379A Hoffman Estates, IL 60179

PRSRT STD U.S. POSTAGE

PAID

PERMIT NO. 854 CAROL STREAM, IL

Special Offers

Use this coupon at your local Kmart store and receive $2 off when you spend $10 on any Smart Sense branded items. This coupon is in addition to your retiree discount if you are discount eligible! Try out some of our top selling items - purified bottled water, cheese balls, bath tissue and bleach.

KMART SAVINGS COUPON Valid Feb. 1, 2011 ­ Feb. 28, 2011

Have you tried Smart Sense yet?

Save money without sacrificing quality!

GET $2 OFF INSTANTLY

When you spend $10 on any Smart Sense items!

valid on in-store purchases only

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40228 11250

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Purchase requirement calculated before taxes and after other discounts have been applied and must be made in a single transaction. Cannot combine with any other coupon for the same item(s) and cannot double. Limit (1) $2 off $10 Own Brand Kmart Savings Coupon per transaction. Not valid on "Buy One, Get One" events; non-merchandise; concessions; federal or state regulated items; alcohol; tobacco; fuel; items behind the pharmacy counter; prescriptions; prior purchases; if acquired from a non Sears Holdings-approved channel; if reproduced; and/or, where prohibited by law. Any other use constitutes fraud. Discount eligible retirees may present their discount card at the time of purchase for the additional savings. Certain retiree eligibility restrictions apply. Coupon value applied and pro-rated across all qualifying items; including qualifying items purchased in addition to the minimum requirements or limits and will be deducted from any refund. Cash value 1/20¢. Valid at all Kmart store locations. Associate: scan, collect and turn in to cash office. DO NOT SEND TO CLEARING HOUSE

Please Recycle

For information on the company's commitment to Environment Sustainability, visit www.SearsHoldings.com.

FOLLOW US ON TWITTER FOR GREAT DEALS

twitter.com/searsdeals twitter. com/KmartDealsnNews

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www.SearsHoldingsAlumni.com

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