Paid Time Off

TABLE OF CONTENTS
Paid Time Off............................................................................................................................................................................. 14-1  Vacation ..................................................................................................................................................................................... 14-1  Your Vacation Allotment................................................................................................................................................ 14-1  Vacation for Newly Hired Associates ............................................................................................................................ 14-1  How You Earn Vacation ................................................................................................................................................ 14-1  Accumulating Vacation.................................................................................................................................................. 14-1  If You Use Too Much Vacation ..................................................................................................................................... 14-1  If You Go on Leave of absence..................................................................................................................................... 14-1  If You Leave the Company............................................................................................................................................ 14-1  National and Designated Holidays .......................................................................................................................................... 14-1  National Holidays .......................................................................................................................................................... 14-1  Designated Holidays ..................................................................................................................................................... 14-2  Personal Days ........................................................................................................................................................................... 14-2  Important Note .......................................................................................................................................................................... 14-2  For More Information................................................................................................................................................................ 14-2 

Sears Holdings Benefits Handbook 2008 Full-time Hourly

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Paid Time Off

Eligibility for Kmart store hourly associates to accumulate vacation from one year to the next is dependent upon additional automated systems integration and development (unless prohibited by state law). Thanksgiving Day and Christmas Day. associates who work in a Kmart Distribution Center. IF YOU USE TOO MUCH VACATION Company policy does not permit the anticipation of a future year’s vacation. Please note that certain paid time off provisions may be different for certain associate groups. you can take up to 40 hours of your vacation during the year before you actually earn it. However. Sears Holdings recognizes the importance of time projected target date for rolling out the vacation accumulation away from work.01926 2. Years of Continuous Service 1 but less than 2 years 2 but less than 7 years 7 but less than 15 years 15 years and over Grandfathered Hours of Vacation Earned for Each Week FT40 60 hours 120 hours 180 hours 240 hours 300 hours FT30 53 hours 105 hours 158 hours 210 hours 263 hours Once you reach the maximum accumulation amount for your years of service. if your vacation account becomes full in April and you decide not to take a vacation until June. you can accumulate up to the maximum vacation time shown in the following chart.69234 3.PAID TIME OFF will provide for an automated accumulation of earned vacation and a means to identify vacation earned and not taken. if you find at the end of the year that you mistakenly took more vacation than you earned. and personal days to use each year.36539 Annual Equivalent (weeks) 1 2 3 4 5 You begin earning vacation at a higher weekly rate the pay cycle after you reach your 2nd. The amount of vacation available after one year is pro-rated based on the number of months remaining in the year. you could then start to accumulate vacation again for each following week until your vacation account becomes full again. If you took a week of vacation at the end of June. VACATION FOR NEWLY HIRED ASSOCIATES Newly hired associates are eligible for vacation after one year of service. which runs from approximately February 1 to January 31. to the extent possible. you are entitled to earn vacation each year up to a specified amount. This means that during the year in which one of these anniversary dates occurs. you can begin to earn vacation.07720 3. unused vacation when you leave. you may provision to Kmart store hourly associates is the beginning of qualify for as much as four weeks of vacation and up to 10 holidays 2009 fiscal year. If you have taken more vacation than you have earned. you may not use a future year’s vacation. Labor Day.76924 1. Vacation accumulation is currently not available to Kmart store hourly associates. Depending on your length of service.30772 3. the Company will pay you for your accrued. Once you have completed at least one year of service. The plan year for vacation is aligned with Sears Holdings’ fiscal year. For example. your vacation benefit will be somewhat different than shown in the chart. including associates in California. and associates covered by a collective bargaining agreement. 7th and 15th service anniversaries. Memorial Day (if locally observed by the retail community). including New Year’s Day. ACCUMULATING VACATION NATIONAL AND DESIGNATED HOLIDAYS You may be eligible for national and designated holidays each year. It’s important that you understand that as long as you have at least one year of service. No retroactive adjustments will be made for weeks in which you do not accumulate vacation because you are at the maximum. you can’t earn or accumulate any additional vacation until you use some of your maximum accumulated time. IF YOU LEAVE THE COMPANY If you leave the Company and you have taken less vacation than you have earned during the current year. HOW YOU EARN VACATION Full-time hourly associates (includes Sears and Kmart) will earn vacation as set forth in the chart below and according to the average number of hours worked in the previous fiscal year. Independence Day. In this case. You do not earn additional vacation while you are on a leave of absence. Maximum Accumulation Years of Continuous Service 1 but less than 2 years 2 but less than 7 years 7 but less than 15 years 15 years and over Grandfathered VACATION YOUR VACATION ALLOTMENT As a full-time hourly associate. The actual dates are based on the Sears Holdings fiscal year and your payroll schedule. you will owe the Company the difference. The Like all employers. FT40 0. However. the extra vacation taken will be considered part of the following year’s entitlement.67308 1. If you are a Sears full-time hourly associate or a Kmart Support Center hourly associate. The integration and development Sears Holdings Benefits Handbook 2008 Full-time Hourly NATIONAL HOLIDAYS The Company observes six national holidays each year. the Company will deduct the amount owed from any final pay or severance allowance to which you may be entitled. you will not earn or receive any additional vacation hours for May – none would be added to your vacation account balance.34617 2. However.84616 FT30 0. This gives you the flexibility you need to take your vacation when you want to—subject to your manager’s approval. Montana and North Dakota.53848 2. IF YOU GO ON LEAVE OF ABSENCE You may request that earned but unused vacation be paid to you at the time you are placed on leave of absence. 14-1 Paid Time Off . you do not earn any vacation while you are on a leave of absence.

to take as you wish. Personal days are allocated throughout the year as follows: Kmart Full-time Hourly Associates: First day of the fiscal year (about February 1) May 1 August 1 Sears Full-time Hourly Associates: The next day immediately following the last payroll in the current fiscal year May 1 August 1 2 personal days 1 personal day 1 personal day 2 personal days 1 personal day 1 personal day Personal days not taken by the end of the plan year are forfeited. The Paid Time Off program is a payroll practice that is exempt from welfare benefit plan status under the Employee Retirement Income Security Act of 1974 (ERISA). and associates covered by a collective bargaining agreement. the number of personal days for which you are eligible will be reduced by the number of additional designated holidays observed by your unit/work location. The plan year tracks Sears Holdings’ fiscal year. unless prohibited by state law. The fact that a summary of the Paid Time Off program is included in this Handbook should not be construed as making it an ERISA plan. The actual dates are based on the Sears Holdings fiscal year and your payroll schedule. Sears Holdings Benefits Handbook 2008 Full-time Hourly 14-2 Paid Time Off . Holidays may not be designated in units/work locations that do not close. which runs from approximately February 1 to January 31. If less than six national and designated holidays are observed in your unit/work location. or locally celebrated holidays on which the District has authorized units/work locations to be closed. If more than six national and designated holidays are observed in your unit/work location. after you complete six months of service with Sears Holdings. associates who work in a Kmart Distribution Center. the number of personal days for which you are eligible will be increased by the number of fewer designated holidays observed by your unit/work location. Once you complete six months of service. PERSONAL DAYS You are eligible for up to four personal days.DESIGNATED HOLIDAYS Some units or work locations may observe additional designated holidays. you will receive the next allocation of personal days. FOR MORE INFORMATION The following details about your benefit coverage are provided in the Other Information section of this handbook: Contact information for benefit claims administrators and insurance carriers. Montana and North Dakota. IMPORTANT NOTE Certain paid time off rules differ for associates in California. These are days on which the company has authorized nonselling units/work locations to be closed. as amended (ERISA).

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