On April 25, 2012, the Committee approved revised 2012 performance goals and measures under the AIP, subject to stockholder approval of the Umbrella Program at the 2012 Annual Meeting, as discussed below.

As revised, payouts with respect to all quarterly targets and thresholds under the AIP are subject to the attainment of an annual SHC EBITDA threshold amount in addition to the other payout conditions that were approved on March 7, 2012. Payouts under the AIP, if any, will range from 20%, generally, of the target incentive award at a threshold level of performance established by the Committee for each performance goal to 200% of the target incentive award at a maximum level of performance (150% of the target level of performance). In addition, any incentive award based on a business unit measure cannot payout for achievement above target unless a certain level of SHC EBITDA also is achieved. Target incentive awards continue to be calculated as a percentage of base salary. For the SHC EBITDA goal, the straight-line slope of the incentive payout percentage from threshold to a point below target was changed to a 1.24% increase in payout for every 1% increase in SHC EBITDA.

The target award percentages (which is a percentage of base salary) and annual incentive opportunity approved by the Committee on March 7, 2012, including for each of our current executive officers named in the Summary Compensation Table contained in the Company's Proxy Statement dated March 16, 2012, remain unchanged. The target award percentage for Ronald D. Boire, Executive Vice President, Chief Merchandising Officer and President, Sears Full Line Stores and Kmart Formats, and William K. Phelan, Senior Vice President, Finance, who were not named executive officers under applicable SEC rules at the time of the Committee's approval of the AIP on March 7, 2012, is 150% and 70%, respectively. The 2012 annual incentive opportunity for Mr. Boire is based solely on SHC EBITDA. The 2012 annual incentive opportunity for Mr. Phelan is based on the aggregate performance for the BOP goal of certain operating business units and the level of performance for the SHC EBITDA goal.