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Military Pay Differential and Benefits Continuation

   * In September 2004, the company extended its military pay differential (fills the gap between military pay and employer pay) and benefits continuation to 60 months for eligible employees called to duty in the Reserves or National Guard.
         o Previously, policy provided 36 months of coverage.
   * While deployed, eligible employees can:
         o Continue participating in SHC's life insurance, medical and dental programs.
         o Receive annual merit pay increases, incentive pay.
   * SHC holds a comparable position for deployed employees for up to five years.
   * The company has encouraged and supported employees serving in the armed forces for decades.
         o Records indicate that Sears provided support to employees serving in the military in 1916.
         o Sears' pay differential was first instituted in 1990 for Operation Desert Shield-Storm