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Sears CEO Gains $2.2 Million From Options

March 22, 2004

WASHINGTON (AP) _ Sears Roebuck & Co.’s top executive gained $2.2 million in the latest fiscal year from the exercise of 75,479 stock options, according to a regulatory filing Monday.

Sears also said in Monday’s filing that chairman and chief executive Alan J. Lacy received a bonus of $897,813, down from his bonus of $1.8 million in the previous fiscal year, which ended Dec. 28, 2002.

The company said Lacy’s salary grew slightly to $1.02 million from $996,875 a year ago.

As of the year ended Jan. 3, according to the proxy statement, Lacy had 451,324 exercisable stock options valued at $3.3 million and 942,448 unexercisable stock options valued at $12.7 million.

Sears, the department-store chain based in Hoffman Estates, Ill., also said it granted Lacy 264,146 stock options during the year, compared with no stock options in the previous year.

Assuming the company’s stock appreciates 5 percent annually from the grant date to expiration, the value of 230,000 of the total options is $3.1 million, according to the Securities and Exchange Commission filing. The 230,000 stock options have an exercise price of $21.64 a share and expire Feb. 13, 2013.

The filing said the value of 25,267 options is $831,379 under the same assumptions. It said these options were granted according to a reload feature and have an exercise price of $52.32 a share and expire Dec. 29, 2006.

Sears said the remaining 8,879 stock options have a value of $292,153 and were also granted according to a reload feature. The options have an exercise price of $52.32 a share and expire Jan. 31, 2007.

Shares of Sears traded at $42.91, down 49 cents, or 1.1 percent, Monday afternoon on the New York Stock Exchange.

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