2005 narse Meeting Minutes

Executive Summary - December 16, 2005 Meeting
National Association of Retired Sears Employees, Inc.

Ron Olbrysh called the meeting to order at 9:24 a.m. at the headquarters office.

In Attendance: Bill Barker, Dick Bruce, Tony Debevetz, Bud Defano, Leo McCormack, Ron Olbrysh, Mel Schultz, Keith Tice and special guest Thomas Pizur, President of Senior Care Plus.

Conference Call Participants: Ernie Arms, Ev Buckardt, Richard Cofran, Tom Douglas, Richard Foulke, Blair Holden, Ken Johnson, Art Levin, Gordon Muschett, Lee _________, George O’Hare, Ruth Pilant, Jack Rollins, Elaine Russell, Lloyd Van Schoyck, Allen Wallach and Penny Williams.

FINANCIALS & MEMBERSHIP: Leo McCormack reported that through November membership is up 294 above last year. The membership retention rate is 114 per cent

WEBSITE VISITS: Ron Olbrysh reported that visits to the NARSE website averaged about 2,500 per month in 2004. During 2005 there was a high of 11,000 and a low of 3,569. Visits in September were 5,341 with 5,894 in October and 6,316 in November.

STRAIGHT TALK MAILING: A special December eight-page edition of Straight Talk devoted to the new 2006 Sears retiree medical benefits program is at the printer and planned for mailing later this month. Articles are devoted to the good and not so good aspects of the new Retiree Health Access (RHA) administered program. A different format in layout of the paper was prepared by the printer. A NARSE membership application with a return addressed envelope will be included in the newsletter. The total mailing is approximately 20,000 copies

MEDICAL INSURANCE: Confusion still reigns over coverage options. Every retiree must make a choice under the new administrator, Retiree Health Access (RHA). Ron reviewed the response from Robert Luse to his letter addressed to Edward Lampert concerning the operation of RHA. Both of those letters will be reprinted in the Straight Talk. It was reported during a SRAC conference call two weeks earlier that RHA would assign a program to any retiree who failed to sign up for a program. While many retirees seem to be pleased with the Sears subsidy of medical coverage costs in 2006 for post-65 retirees, there is great concern that the subsidy may not exist beyond 2006.

Tom Pizur from Senior Care Plus presented a summary of the medical coverage products and services that are now available through his company. Senior Care Plus is licensed in 30+ states and works with more than 90 companies to help retirees find the best individual medical coverage.

FUTURE PLANS OF NARSE: A brief discussion of developing the purpose and strategy of NARSE in the future wrapped up the conference call.

MISCELLANEOUS:

(1) Ken Posey reported briefly on the October retiree club meeting at which Aylwin Lewis addressed the retirees. He mingled with the attendees and thanked them for all they had contributed to the company.
(2) It is not known if Sears is going to have an annual meeting. SRAC members who were on the conference call were encouraged to e-mail Sharon Phillips asking her about the annual meeting.

The meeting was adjourned at 11:45 am.

The next NARSE meeting will be held on Friday, January 13, 2006 at 9:00 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. Central Time.

Executive Summary October 21, 2005 Meeting
National Association of Retired Sears Employees, Inc.
 

Ron Olbrysh called the meeting to order at 9:14 a.m. at the headquarters office.

In Attendance: Dick Bruce, Tony Debevetz, Bud Defano, Claude Ireson, Leo McCormack, George O’Hare, Ron Olbrysh, Mel Schultz and Keith Tice.
Conference Call Participants: Ernie Arms, Bill Barker, Dick Bruce, Ev Buckhardt, Richard Cofran, Steve Doubeck, Don Giles, Tom Higgins, Gordon Muschett, Tom Nally, Ken Posey, Jack Rollins, Elaine Russell, Lloyd Van Schoyck, and Penny Williams.

FINANCIALS & MEMBERSHIP: Leo McCormack reported that through September membership is up 296 above last year. The membership retention rate is 114 per cent

WEBSITE VISITS: Ron Olbrysh reported that visits to the NARSE website are occurring at about 6,500 per month. Pre-November, 2004 the average was 2,500 per month.

MEDICAL INSURANCE: Confusion is rampant about coverages, and premium amounts are not available making it difficult to assess individual coverage costs. Adding to the consternation of everyone is the fact that as of 12/31/05 Sears plans are dead. Every retiree must make a choice under the new administrator, Retiree Health Access (RHA). Much discussion ensued about what RHA is all about. There are many unanswered questions about the companies comprising RHA, who the officers are, where RHA is headquartered, how many retirees are included and the role of Hewitt Associates. As a result, Ron was asked to write Ed Lampert a letter relating these questions and seeking to find out about the structure of the organization.

A conference call from Sears human resources to the retiree club presidents took place October 14 from 3:30 to about 5:00 pm. The content of the call was going through the pre-enrollment guide and its information concerning the 2006 medical plan changes.

Lloyd Van Schoyck reported on the October 19 Arizona Club meeting where over 200 retirees were present. Bob Luse from Headquarters Human Resources was there. Questions about RHA were asked at that meeting with little information given. The opinion was that while Sears is subsidizing medical coverage costs for 2006, the subsidy will go away eventually. The feeling after the meeting was that there was more confusion on the part of the retirees than before the meeting.

A Sears video designed to address coverage options for post-65 retirees was sent to the club presidents this week.

DECEMBER EDITION OF STRAIGHT TALK: Plans are being made to issue Straight Talk in December with special articles on the RHA medical coverage program. Requests have been made to cover such subjects as understanding “suspension of coverage”; the necessity of pre-65 retirees to shop around, but don’t cancel Sears coverage; understanding “pre-existing conditions” and how it works; the elimination of the cap on benefits; and an article discussing “creditable coverage.”

The meeting was adjourned at 11:45 am.

The next NARSE meeting will be held on Friday, November 11, 2005 at 9:10 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. Central Time.

Executive Summary - September 23, 2005 Meeting
National Association of Retired Sears Employees, Inc.

Ron Olbrysh called the meeting to order at 9:10 a.m. at the headquarters office.

In Attendance: Dick Bruce, Bud Defano, Tony Debevetz, Leo McCormack, Ron Olbrysh, Mel Schultz, and Keith Tice.
Conference Call Participants: Ernie Arms, Dick Cofran, Tom Douglas, Jim Fletcher, Richard Foulke, Blair Holden, Art Levin, Leo Murphy, Tom Nally, Ruth Pilant, Ken Posey, Jack Rollins, Elaine Russell, and Penny Williams.

FINANCIALS & MEMBERSHIP: Leo McCormack reported that NARSE’s paid membership was up by 144 members over one year ago, and NARSE is experiencing a 107% retention rate.

NEW RETIREE MEDICAL INSURANCE PROGRAM: A new health care program for Sears retirees will go into effect January 1, 2006. Instead of Sears providing health insurance, a coalition of major employers formed Retiree Health Access, or simply RHA, who will administer health care benefits. Retiree medical benefits will be handled under two different programs: Medicare-Eligible Retirees and Retirees Not Eligible for Medicare.

For Medicare-Eligible retirees Sears will provide a level of subsidy if the retiree is over 65 and retired prior to January 1, 2000. If the retirement occurred after January 1, 2000, the full cost of medical premiums will be the responsibility of the retiree. This program will have a choice of 12 plans A-L offered through AARP and United Healthcare plus two Medicare Part D plans through Aetna.

Retirees under the age of 65 will be responsible for paying the full cost of medical premiums beginning January 1, 2006. If the retirement occurred prior to January 1, 2000, this group of retirees will be eligible for the Sears subsidy when they become eligible for Medicare. This program will include three options: a Standard PPO, a Consumer-Wise PPO with a health savings account and a Value Plan.

The annual enrollment for both programs will be administered by RHA, and retirees are to receive their personalized enrollment kit in early November. The enrollment deadline is December 2, 2005.

Sears will be conducting informational meetings about the medical insurance program with 40 retirement clubs across the country plus two meetings October 3 at Sears Hoffman Estates headquarters. Additionally, on October 17 the RHA Service Center will be available to answer specific questions about the plans.

MISCELLANEOUS:

1) According to a Chicago Tribune article, approximately 6,750 retirees of the 45,000 Sears retirees are pre-65 retirees not eligible for Medicare.
2) The Sears retiree website www.retireessears.com will list the retiree club medical meeting dates.
3) A Sears video is being produced to cover the RHA program, and five copies are being sent to each club president.

Most of the meeting was devoted to discussing the new medical insurance program for the Sears retirees and the concern for adequate information being provided to make informed decisions about coverage for the new year.

The meeting was adjourned at 12:15 p.m.

The next NARSE meeting will be held on Friday, October 21, 2005 at 9:10 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. Central Time.

Executive Summary -  August 12, 2005 Meeting
National Association of Retired Sears Employees, Inc.

Ron Olbrysh called the meeting to order at 9:22 a.m. at the headquarters office.

In Attendance: Bill Barker, Tony Debevetz, Bud Defano, George O’Hare, Ron Olbrysh, Mel Schultz and Keith Tice.
Conference Call Participants: Dick Bruce, Richard Foulke, Art Levin, Tom Nally, Ken Posey, Jack Rollins, Elaine Russell, Lloyd Van Schoyck, Penny Williams and Ken Winkler.

FINANCIALS & MEMBERSHIP: Leo McCormack reported that there were some negatives in finances due to the printing and mailing of Straight Talk. July members increased 16, which was down from last year’s membership increase of 211. This is attributable to Straight Talk mailing in June last year versus this year’s July date. It was also reported that we have been receiving some excellent comments about the content of Straight Talk.

RETIREE CLUB UPDATES: The March mailing to retiree clubs seeking current information about their officers and activities garnered 80 responses back to NARSE. Discussion ensued regarding the collection of information about the clubs and the hopeful anticipation of success on the part of the regional vice presidents’ contact with the clubs in their assigned states.

We were all saddened to hear of the passing of Jim Griffiths, president of the Canton, Ohio retiree club. He will be missed. The new president is Walt McDade.

SOCIAL SECURITY BENEFITS: Tony Debevetz gave an update on the AARP continuing involvement with social security legislative issues. He reported that the privatization of accounts appears to be pretty well dead at this point, and that the AARP will endorse raising the social security tax by increasing the rate and the cap on the base amount to which the tax rate is applied. They will also push for further diversification of the trust fund investments made with the social security funds.

The new Medicare prescription drug benefit program is reportedly very complicated and will cause a great deal of confusion on the part of all eligible recipients. Tony reported that the social security administration wants to mail out questionnaires to all recipients in an attempt to help them in their decision process.

MEDICAL INSURANCE: There was a lot of discussion about what Sears is going to do regarding medical health insurance for retirees. Discussion also included the role that NARSE might play in being a source of information to all our members about medical benefit alternatives.

MISCELLANEOUS:
(1) The Elmhurst K-Mart and Plainfield K-Mart are converting to Sears Essentials. It was reported by Chicago Tribune reporter Becky Yerak that 1,400 K-Mart employees are being transferred to Hoffman Estates, and that approximately 300 have accepted the transfer.
(2) Alwyn Lewis is speaking to the retirees in Atlanta on October 25.

The meeting was adjourned at 11:48 am.

The next NARSE meeting will be held on Friday, September 23, 2005 at 9:10 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. Central Time.

Executive Summary July 15, 2005 Meeting
National Association of Retired Sears Employees, Inc.

Ron Olbrysh called the meeting to order at 9:08 a.m. at the headquarters office.

In Attendance: Bill Barker, Ev Buckardt, Bud Defano, Dick Cofran, George O’Hare, Leo McCormack, Ron Olbrysh, Mel Schultz, and Keith Tice.
Conference Call Participants: Ernie Arms, Richard Foulke, Jim Griffiths, Blair Holden, Art Levin, Gordon Muschett, Ruth Pilant, Jack Rollins, Elaine Russell, Ken Winkler, Lloyd Van Schoyck, and Steve Zuback.

FINANCIALS & MEMBERSHIP: Don Eller’s monthly financials for NARSE were discussed and approved by the Board. Leo McCormack reported that NARSE’s paid membership was up by 208 members over one year ago. As a result, the dues revenue is $4,257 greater than last year at this time.

REGIONAL VICE PRESIDENT ASSIGNMENTS: Ron Olbrysh has divided up the country in consort with each of the regional vice presidents, assigning specific states for which they are responsible. Their job is to keep in touch with the various retiree clubs in those states and update the club information.

JUNE 30 SEARS RETIREE COUNCIL BREAKFAST: As a result of the June 29 one-day Sears Retiree Council meeting in Chicago, NARSE sponsored a breakfast for Council members at their hotel on Thursday, June 30. Highlights of the retiree council meeting were presented and discussed. Of particular importance and interest was what Sears is going to do with the medical insurance. According to information received at the meeting, the pre-65 retiree information letter is going out in August, and the post-65 retiree information will be mailed in October. It was suggested by Tom Douglas that Ron
continue to maintain close contact with Sharon Phillips for further details.

MEDICAL INSURANCE ALTERNATIVES:
Howard Gnatowsky, President of Mature Health Services, Inc., Palatine, Illinois made a presentation to the NARSE Board. Founded in 1984, they provide a wide array of services and integrated lines of personal and group insurance programs and act as a health insurance resource center. Of special interest were their No Cost Discount Prescription Card and the Prescription Wizard program which provides up-to-the-minute drug prices. You can access the Prescription Wizard at:

http://catalyst.rxinquiry.com/start.php?RXSESSID

Board discussion included asking the organization to cost out a pre-65 and post-65 health insurance program for one of our members for comparison to what Sears program costs. In addition, it was suggested that we should have them cost out a life insurance program for comparison as well as prescription drug costs.

Mature Health Services offered to conduct educational seminars for NARSE members, produce and send a letter of introduction to the members, and provide a dedicated website for members to request information and read topics of interest and various tips.

MISCELLANEOUS:
(1) The NARSE website has had approximately 6,000 visits compared to 2,000 before the Sears/Kmart merger.
(2) The summer issue of Straight Talk was at the printers at the time of this meeting and should be distributed by the end of the month.
(3) During the conference call it was confirmed that Kmart has no retiree organization.
(4) Dick Cofran made an excellent suggestion that we should explore setting up links to the NARSE website for the various retiree clubs around the country.

The meeting was adjourned at 11:50 a.m.

The next NARSE meeting will be held on Friday, August 12, 2005 at 9:00 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. Central Time.

Executive Summary - June 10, 2005 Meeting
National Association of Retired Sears Employees, Inc.

Ron Olbrysh called the meeting to order at 9:03 a.m. at the headquarters office.

In Attendance: Bill Barker, Dick Bruce, Dick Cofran, Tony Debevetz, Bud Defano, Claude Ireson, Leo McCormack, Ron Olbrysh, Mel Schultz, and Keith Tice.
Conference Call Participants: Ernie Arms, Tom Douglas, Richard Foulke, Blair Holden, Leo Murphy, Gordon Muschett, Tom Nally, Ruth Pilant, Ken Posey, Jack Rollins, Elaine Russell, Lloyd Van Schoyck, and Lou Zuback.

FINANCIALS & MEMBERSHIP. Don Eller’s monthly financials for NARSE were discussed and approved by the Board. Leo McCormack reported that NARSE’s paid membership was up by 187 members over one year ago.

GULP (GROUP UNIVERSAL LIFE PLAN). Retirees who have GULP were recently informed by the administrator of the plan that they will no longer be on a flat rate, but that their premiums will be age related. GULP is a separate life insurance program, not related to the life insurance benefit that was subject to a lawsuit/settlement a number of years ago. GULP is paid for by the insured. According to the GULP program manager, since the plan continues to operate in a deficit situation, the previous flat rate premiums are being eliminated and all premiums are now being re-calculated using rates based upon age and smoker status. These new rates become effective July 1, 2005. For some retirees, the premiums will double!

Ron Olbrysh informed the Board that he has received numerous e-mails and phone calls about the premium increase. An editorial, entitled: “GULP – SEARS RETIREES ARE BEING SOCKED AGAIN!” will appear in the next issue of Straight Talk and also on NARSE’s web site. Premiums can certainly be increased. But such increases are the latest affront to the entire defenseless retiree population at a time when retirees are vulnerable and the cost of replacing the coverage is prohibitive.

MEDICAL INSURANCE ALTERNATIVES. Ron Olbrysh reported on his recent meeting with a ChicagoLand firm with 21 years experience in the marketing, designing, distributing of life and health programs. This firm can act in a manner similar to an employer group Human Resources Department. These programs are all voluntary with no participation requirements. Members would benefit from group status and the programs are cost competitive with rate stability. Some of the companies they represent include: Mutual of Omaha, PacifiCare, Blue Cross Blue Shield, Humana, United Health Care, Fortis, John Alden, Unicare and American Medical Security.

This firm will make a presentation to NARSE’s Board at its July 15 meeting. The company has also offered to make educational seminars that detail the endorsed benefit programs to any interested Sears Retiree Clubs throughout the country.

ELECTION OF NARSE OFFICERS FOR 2005 – 2006. Last year, NARSE elected a Board of Directors to three-year terms, ending May 2007. These directors include:

Ron Olbrysh, Chairman
Dick Bruce
Tony Debevetz
Bud Defano
Claude Ireson
Ken Johnson
Art Levin
Leo McCormick
Elaine Russell
Mel Schultz
Dave Silgers

The following slate of officers were presented and approved by the Board:

Secretary – Keith Tice
Treasurer – Don Eller
Vice Presidents:
Ernie Arms – Electronic Communications
Tony Debevetz – Legislation
Bill Barker – Club Relations
Lloyd Van Schoyck – Coalition Relations
George O’Hare – Media Relations

Regional Vice Presidents:
Tom Douglas – Pacific Southwest
Richard Foulke – Middle Atlantic Region
Jim Griffiths – Midwest Region
Tom Higgins, Jr. – Rocky Mountain Region
Blair Holden – Midwest Region
Leo Murphy – East Coast
Gordon Muschett – Pacific Northwest
Tom Nally – East Coast
Ruth Pilant – Southern Region
Jack Rollins – Southeast Region
Ken Winkler – South Atlantic Region

For the new regional vice presidents, Olbrysh will send out a list of their responsibilities. He also informed them that he would like to obtain stories about their clubs, highlight individuals, events, etc. Also, a picture of each of the regional vice presidents would be appreciated. NARSE would like to publicize more human interest stories about the local Sears Retiree Clubs in future issues of Straight Talk.

EV BUCKARDT HONORARY AWARD. The Board also approved the first honorary lifetime directorship to Ev Buckardt. Ev was one of the founding members of NARSE and served as its chairman for three years before his retirement several years ago. Ev’s input and support has been invaluable over the years.

JUNE 30 BREAKFAST MEETING. The Sears Retiree Council is having a one- day meeting in Chicago on Wednesday, June 29. As a result, NARSE is sponsoring a breakfast for them at their hotel on Thursday, June 30, the day they are returning home. Ron has talked to all of the Council members and learned that at least seven of the eighteen council members will not be coming to Chicago for the Sears Retiree Council meeting for a variety of reasons.

MISCELLANEOUS.
 (1) Ron Olbrysh and Elaine Russell had telephone interviews with a researcher for Time magazine regarding pensions;
(2) Tony Debevitz was asked to provide an AARP speaker for the August meeting to talk about health insurance;
(3) A Board member reported that Dan Quaid’s retiree club in Darien Illinois will be having an AARP speaker at their August 11, 2005 meeting to talk about social security;
(4) On October 25, 2005, Aylwin Lewis, the President of Sears Holdings and also CEO of Kmart and Sears Retail is scheduled to speak at the Atlanta Sears Retiree Club; and
(5) Articles are still be submitted for the summer issue of Straight Talk. In addition to the GULP editorial, there will be stories/articles about: “Sears Authorized Retail Dealer Program-A Modern Day David & Goliath Tale”; “Retiree Clubs Update”; “We Get Mail!”; “NARSE Election Results”; and a fictional, satirical piece entitled “Billionaires Appreciation Sale.”

The meeting was adjourned at 11:38 a.m.

The next NARSE meeting will be held on Friday, July 15, 2005 at 9 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. Central Time.

Executive Summary, May 20, 2005 Meeting
National Association of Retired Sears Employees, Inc.

Ron Olbrysh called the meeting to order at 9:01 a.m. at the headquarters office.

In Attendance: Bill Barker, Ev Buckardt, Dick Cofran, Bud Defano, Leo McCormack, George O’Hare, Ron Olbrysh, Mel Schultz, and Becky Yerak.
Conference Call Participants: Ernie Arms, Richard Foulke, Ken Johnson, Gordon Muschett, Ruth Pilant, Ken Posey, Elaine Russell, Lloyd Van Schoyck, Ken Winkler, and Penny Williams.

FINANCIALS & MEMBERSHIP. Don Eller’s monthly financials for NARSE were discussed and approved by the Board. Leo McCormick reported that NARSE’s paid membership was up by 167 members over one year ago.

PENSIONS. The spotlight has been put on pensions as a result of a recent decision of a Chicago bankruptcy judge that approved United Airlines’ historic plan to dump its underfunded pension plans on a federal agency, the Pension Benefit Guaranty Corp. (PBGC). The ruling clears the way for the largest corporate pension default in the 31-year history of PBGC and it added to the massive financial problems that the PBGC is trying to contain.

This decision was an immediate blow to United’s 121,500 active and retired employees, many of who are likely to see their retirement checks reduced because federal pension laws cap how much the PBGC pays out. The bankruptcy judge, in defending his decision, said that “The least bad of the available choices here has got to be the one that keeps an airline functioning, that keeps employees being paid.”

According to the Summary Annual Report of Sears, Roebuck and Co. dated December 2004, the Sears Pension Plan is described as follows: “Benefits under the plan are provided by a trust fund. Plan expenses were $312,211,976. These expenses included $292,171,094 in benefits paid to beneficiaries and participants, and $20,040,882 in administrative expenses. A total of 202,280 persons were participants in or beneficiaries of the plan at the end of the plan year, although not all of these persons had yet earned the right to receive benefits.”

The description concluded by stating: “An actuary’s statement shows that enough money was contributed to the plan to keep it funded in accordance with the minimum funding standards of ERISA.” It is our understanding that a significant portion of the money that was contributed by Sears to keep the pension plan properly funded came from the sale of Sears credit operations.

Sears Holdings recently said that it will phase out its defined benefit pension plan. Sears Pension Plan accruals will end on December 31, 2005. Associates will not lose any pension benefits that were earned under the Plan through 12/31/05 as long as they are vested when they leave Sears. However, according to Sears Holdings, there is no impact on current retiree pensions.

SHC is phasing out its defined benefit pension program for a number of reasons, including “competitive pressures.” Additionally, a SHC spokesman said that employees increasingly are interested in more-portable benefit programs such as 401(k) plans rather than traditional pension plans.

SEARS DEALER MEETING. Ron Olbrysh reported on addressing the organizational meeting of the Dealer Store Owner’s Association (DSOA) in St. Louis on April 24, 2005. Simply put, these dealers are “ma & pa” businesses with a significant investment in their stores trying to make a living in rural America. Recently, Sears has started testing the sale of Kenmore-branded appliances and Craftsman tools and lawn mowers in revamped Kmart stores across the country. This will certainly have an impact on dealers located near these Kmart stores.

Ron reviewed with the dealers the organization, history, and the meetings that NARSE has had with Sears. He also suggested a number of DSOA opportunities. The last 20 minutes of his one hour presentation was spent responding to questions. Ron shared with the Board the e-mail he received from one of the DSOA organizers who said, “thank you for an extremely informative presentation about NARSE and their life with Sears. Everyone commented about how informative it was as well as how much our DSOA seems to parallel the efforts and needs of the NARSE association…”

GROUP UNIVERSAL LIFE INSURANCE (GUL) PLAN. Retirees who have signed up for the GUL are now receiving a letter from the GUL program manager informing them that since the plan continues to operate in a deficit situation, that the previous flat rate premiums are being eliminated and all premiums are now being re-calculated using rates based upon age and smoker status. Depending upon your age, the premiums for some individuals will double. This will become effective beginning July 1, 2005. This is a step that was taken for active associates in 2002. This is not the life insurance subject to the settlement agreement.

HEALTH BENEFITS FOCUS GROUPS. On May 9, Hewitt Associates, on behalf of Sears Holdings Corp. conducted four focus groups (two in Chicago and two in Atlanta) of 10 – 15 retirees in each group, to explain the health care crisis now existing and presenting some options for consideration. Some participants left with the feeling that Sears would offer something for 2006.

As background, some time ago a coalition of 60 large companies are considering offering voluntary health benefits to workers ineligible for employer-based coverage. The program, called National Health Access, is designed to help part-time workers, temporary and seasonal employees, contract and franchise workers, pre-Medicare retirees and dependents. The companies would not subsidize the premiums, but the premiums would be at a group rate. Could such a plan be offered to all retirees?

MISCELLANEOUS.
(1) The Sears Retiree Advisory Council has been informed of a one day meeting in Chicago on June 30;
(2) The Board agreed to arrange for an AARP presentation about health care benefits;
(3) After some discussion about local retiree clubs, it was agreed that the Club Section of our web site must be updated; and
(4) At the June NARSE meeting, a slate of officers will be presented to the Board for their consideration.

The meeting was adjourned at 11:43 a.m.

The next NARSE meeting will be held on Friday, June 10, 2005 at 9 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. Central Time.

Executive Summary - April 8, 2005  Meeting
National Association of Retired Sears Employees, Inc.
Friday, April 8, 2005 at HQ Office

Ron Olbrysh called the meeting to order at 9:05 a.m. at the headquarters office.

In Attendance: Dick Bruce, Ev Buckardt, Tony Debevetz, Bud Defano, Leo McCormack, George O’Hare, Ron Olbrysh, Mel Schultz, and Dave Silgers.
Conference Call Participants: Ernie Arms, Richard Foulke, Dick Cofran, Carroll Elijah, Claude Ireson, Gordon Muschett, Tom Nally, Ruth Pilant, Ken Posey, Jack Rollins, Elaine Russell, and Penny Williams.

FINANCIALS. Don Eller’s monthly financials for NARSE were discussed and approved by the Board.

NARSE PRESS CONFERENCE. The NARSE press conference on March 24 was held at the Marriott Hotel at Prairie Stone, about one mile from Sears headquarters. It started at 10 a.m., between the Kmart Special Meeting about the proposed merger, beginning at 8:30 a.m.; and the Sears Special Meeting beginning at 11 a.m. Between 8 a.m. – 11 a.m. there was a small plane, with a 120 foot banner, circling Sears headquarters and also flying around Woodfield Mall and I-90 and many of the northern suburbs. The banner simply stated: “ENTER KMART – EXIT SEARS JOBS & BENEFITS.” Such banner appeared on the 9 p.m. Fox News in Chicago.

The press conference “talking points” included the following:

(1) NARSE views this possible takeover by Kmart as a continuation of the “betrayal of trust” by Sears top management and its Board of Directors, with its shareholders, employees, dealers, and retirees;

(2) NARSE believes Sears can and should continue as an independent entity;

(3) It is NARSE’s opinion that the Kmart takeover has artificially inflated the stocks of both companies and the only “winners” are the self-serving CEO’s and their Board of Directors. As has been reported, since the November 17, 2004 merger announcement, Sears top 12 executives have exercised their stock options and sold more than 1 million Sears shares.

(4) If this Kmart takeover is approved, NARSE has grave concerns for Sears future and that of it employees and retirees;

(5) Sears Board appears to be more concerned about corporate greed and corporate governance. More concerned about rewarding poor performance, rather than being concerned about the lack of great performance and trying to correct poor performance! And the new Sears Holdinsgs 7-3 Board will be more concerned about selling off Sears – than the survival of Sears as a previer American retailer!

(6) If the takeover fails to win the support of shareholders, Sears retirees stand ready and willing to support a new and different administration and independent Board dedicated to Sears success as a vibrant, profitable, merchandising institution; and

(7) If Sears walks away from retirees regarding medical benefits, then we will walk away from Sears when we walk to shop!

Present at the press conference were reporters from Crain’s Chicago Business, the Chicago Sun-Times, the Chicago Tribune, ABC News and Fox News. Ron Olbrysh, Chairman of NARSE was also interviewed by the Public Radio Network and several local radio stations, which carried his comments on their stations during the day. ABC News, Chicago channel 7, reported on the press conference on its 5 p.m. news; and Fox News, Chicago channel 32, covered it on their 9 p.m. newscast. In addition, on the following day, the Chicago Sun-Times, on the front page of their Business Section, carried a 4-column picture of NARSE’s press conference.

MEDICAL BENEFITS. Sears has publicly stated that there will be no changes in retirees’ benefits for 2005. But what will happen in 2006 and beyond if Sears decides to reduce or eliminate its sponsored retired medical benefits? Guest speakers at this Board meeting were three representatives of Gallagher Benefit Services, Inc., a subsidiary of Arthur J. Gallagher & Co., the third largest consultant/broker in the United States. The Board went into Executive Session to discuss medical alternatives and challenges, supplemental coverages, pre-age 65 alternatives, etc.

MISCELLANEOUS.

(1) The life insurance settlement agreement is permanent; it is binding on the parties and their successors;

(2) Kmart retirees have a non-subsidized medical plan that is endorsed by the company;

(3) The Sears Retiree Advisory Council is expected to meet sometime in May;

(4) NARSE’s web site, which had about 11,300 visitors during March, will be publicized in the next issue of Straight Talk; and

(5) Board recommended an invitation to recent retirees to join NARSE.

The meeting was adjourned at 12:05 p.m.

The next NARSE meeting will be held on Friday, May 20, 2005 at 9 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. CST.

Executive Summary - March 11, 2005 Meeting
National Association of Retired Sears Employees, Inc.
Friday, March 11, 2005 at HQ Office

Ron Olbrysh called the meeting to order at 9:02 a.m.

In Attendance: Bill Barker, Dick Bruce, Ev Buckardt, Tony Debevetz, Bud Defano, Chuck Harrison, Leo McCormack, George O’Hare, Ron Olbrysh, Mel Schultz, Pat Shields, Keith Tice, Sandra Jones (Crain’s Chicago Business), and Becky Yerak (Chicago Tribune).
 Conference Call Participants: Richard Foulke, Ken Johnson, Art Levin, Ruth Pilant, Ken Posey, Elaine Russell, Penny Williams, Ken Winkler, Steve Zuback and Sandra Guy (Chicago Sun-Times).

FINANCIALS.
Don Eller’s monthly financials for NARSE were discussed and approved by the Board.

MEMBERSHIP.
 Leo McCormack reported that NARSE posted an increase of 347 membership renewals over one year ago.

NARSE INTERNET SURVEY.
The preliminary results of the NARSE Special Survey regarding the proposed Kmart-Sears Merger (take-over) were reviewed. This survey consisted of 21 questions and about 500 respondents, to date, answered the survey, which will be available on NARSE’s web site through March 15, 2005.

About 40% of the respondents identified themselves as “Sears employees.” Eighty-eight percent of the respondents do not approve of the Kmart-Sears merger. Another 87% are not satisfied with Sears’ Directors, executive leadership, performance, competitiveness and growth under the Alan Lacy administration. Slightly more than 95% felt that Sears employees and retirees would not be fairly represented and treated under the new management of Sears Holdings Corp. And about 94% were concerned about the future and security of employee and retiree pension, medical and health care insurance, life insurance and discount benefits.

SRAC CONFERENCE CALL – MARCH 9, 2005.
 In addition to the Sears Retiree Advisory Council members, representing Sears was Bob O’Leary, Sharon Phillips (Public Relations); Greg Lee, Shelly Carlin, Lynn Zehnder, Marcia Dalton (HR/Benefits); Steve Cook (Legal). Bob O’Leary gave a brief business update and an update on the Sears full-line store concept. In short, he said that the “business was good” and that the merger would go through. The merger would be “good for the business.” O’Leary also said that Sears updated its return policy as a result of how competition was handling returns and he also mentioned “customer abuse” regarding the “Satisfaction guaranteed or your money back” policy.

Greg Lee discussed the Special Shareholder meeting, the Shareholder vote and the status of the merger planning. An SRAC attendee asked what would happen if the merger did not pass. Lee said that they did not have a “Plan B” but that many jobs would be cut. However, he said that “retiree benefits would be okay for 2005.” He also said that SRAC would continue this year and they would be having a meeting this coming May or early part of June.

NARSE MARCH 24 “SPECIAL” EVENTS.
Discussed possible NARSE activities for the day of Sears Special Meeting to vote on the proposed Kmart-Sears merger. Some banner slogans were suggested including: “1886 – 2005 Sears Rest In Peace,” “Kmart Buys Sears – Bye Bye Sears,” “Kmart Buys Sears, But Can’t Buy Trust,” “Hello Kmart, Goodbye Sears” “Final Takeover Score – Kmart 7 – Sears 3”. The Board then went into Executive Session to discuss the specifics of the NARSE “special” events for March 24, including a possible press conference.

The meeting was adjourned at 11:55 p.m.

The next NARSE meeting will be held on Friday, April 8, 2005 at 9 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. CST.

Executive Summary: February 11, 2005
National Association of Retired Sears Employees, Inc.

Ron Olbrysh called the meeting to order at 9:05 a.m. at the headquarters office.

In Attendance: Bill Barker, Ev Buckardt, Tony Debevetz, Bud Defano, Leo McCormack, George O’Hare, Ron Olbrysh, Mel Schultz, and Keith Tice.
Conference Call Participants: Ernie Arms, Dick Cofran, Richard Foulke, Carmen Liggett, Doug Liggett, Tom Nally, Ken Posey, Elaine Russell, Lloyd Van Schoyck, Penny Williams, and Steve Zuback.

FINANCIALS.
Don Eller’s monthly financials for NARSE were discussed and approved by the Board.

MEMBERSHIP.
Leo McCormack reported that NARSE posted a 238% increase in membership renewals over one year ago.

SURVEY.
As of today, Sears has yet to announce the date of their annual meeting. No proxy statements have been been sent out regarding the proposed merger of Kmart and Sears. The Board suggested sending out another e-mail on its network soliciting comments about this merger proposal. When a similar e-mail was sent to members last December, the response was overwhelmingly negative. Many of these comments will be appearing in the next issue of Straight Talk which will be mailed shortly. Mel Schultz and Ron Olbrysh will be developing a “survey” that will b e diseminated on NARSE’s e-mail network but also be placed on the NARSE web site.

FEBRUARY ISSUE OF STRAIGHT TALK.
This issue of Straight Talk will include the letter of introduction that NARSE sent to Lampert, Lacy and Lewis and Mr. Lampert’s response. It also includes a representative sampling of letters from retirees opposing the merger. Most retirees are naturally concerned about the status of their retiree benefits. However, many also mentioned the dire state of affairs of Sears management of its retail business. One retiree said: “...I do not see Kmart as a long term solution. I am sure it will help a few executives net worth but it is questionable as to whether it is a long term plus to stockholders and retirees.”

NARSE ANNUAL MEETING.
The Board discussed the “when” and “where” and nature of the 8th Annual NARSE meeting. In previous years, it has always been held the day before Sears Annual Meeting. However, since Sears meeting has not been announced and it may not be the typical annual meeting anyway, the Board is exploring alternative plans for its meeting. After extended discussion, the Board approved a motion to explore having its next annual meeting at a Sears retiree club, once the date of the Sears meeting is announced.

BY-LAWS.
The Board began its review of NARSE’s by-laws which were drafted in 1997. it was felt that for the most part, just a few changes had to be made. However, special attention was directed to membership and the Board suggested creating different categories of members so that non-retirees can also participate in many of the association’s activites. A revised draft will be presented to the Board in several months for a discussion and vote on the amendments.

MISCELLANEOUS.
(1) Went into Executive Session to discuss NARSE’s course of action once a Sears meeting has been announced; (2) Since NARSE has been tracking the Kmart and Sears stock movements since November 17, 2004, should they be posted on the web site?; (3) discussed AARP’s opposition to the privatization of Social Security; and (4) reviewed Sears phone contacts with a number of retirees regarding the proposed merger.

The meeting was adjourned at 12:10 p.m.

The next NARSE meeting will be held on Friday, March 11, 2004 at 9 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. CST.

Executive Summary: January 14, 2005 Meeting
National Association of Retired Sears Employees, Inc.
 

Ron Olbrysh called the meeting to order at 9:00 a.m. at the headquarters office.

In Attendance: Bill Barker, Bud Defano, Leo McCormack, George O’Hare, Ron Olbrysh, Mel Schultz, Dave Silgers, and Keith Tice.
Conference Call Participants: Ernie Arms, Ev Buckardt, Dick Cofran, Tony Debevetz, Don Eller, Jim Fletcher, Richard Foulke, Ken Johnson, Art Levin, Carmen Liggett, Doug Liggett, Gordon Muschett, Tom Nally, Ruth Pilant, Ken Posey, Elaine Russell, Lloyd Van Schoyck, Penny Williams, Ken Winkler, and Steve Zuback.

FINANCIALS. Don Eller’s monthly financials for NARSE were discussed and approved by the Board.

MEMBERSHIP. Leo McCormack reported that NARSE currently has a 93% retention rate for its renewals.

PROXYMATTERS.COM. Ron Olbrysh informed the Board of a web site dealing with corporate matters. It has “hot topics” for many companies. The hot topic for Sears is: “Should Sears shareholders vote to approve the merger proposal with Kmart, receiving either $50.00 in cash or 1/2 share of new Sears Holdings stock per each share of Sears common stock?” The web site gives the reader the opportunity to vote and register messages. As of January 13, 2005, the vote for the Sears hot topic was 12 for the merger and 77 against the merger.

One of the messages was captioned: “Retirees Warn of Merger Stock Impact.” It said that the National Association of Retired Sears Employees has tracked Sears and Kmart’s performance and found that the merger offer for shareholders fall behind in both scenarios. For the deal to be advantageous to Sears, NARSE said that Sears shares either must trade at $50.00 or less, or sell for 50 percent or less than Kmart’s share price. That has rarely happened. As reported in the January 11, 2005 issue of the Chicago Tribune, Mel Schultz, a NARSE Board member, said that “Since the announcement of the merger, there has not been one single day when the market assessment of the deal has been advantageous to Sears shareholders.”

This web site also listed a March 1, 2005 date for the Sears Annual meeting. However, upon checking with proxymatters.com, it was learned that this was only an “estimated date.”

LETTER FROM LLOYD. Ron reported that he recently received a letter from Lloyd VanSchoyck, NARSE’s Regional Vice President for Florida, resigning his position for health considerations and his move to Chandler, Arizona. He said that: “It has been an honor and a genuine pleasure to have served NARSE as Vice President of Florida. I, of course, expect to continue an active and committed member of our fine organization as we move ahead with the challenges brought about by the reorganization of Sears into whatever form the future brings.”
The Board thanked Lloyd for all of his work for NARSE and asked him to stay “on board” as a Regional Vice President at large. He agreed and by motion, it was approved.

RESPONSE FROM LAMPERT. By letter dated December 13, 2004, NARSE sent a letter to Messrs. Edward Lampert and Alywin Lewis, with a copy to Alan Lacy, introducing NARSE to these individuals. The letter noted that for the proposed merger to succeed, it must contain the following three elements:

(1) your efforts must result in a competitive, powerful merchandising organization accepted by the shopping public; (2) this merger must be free from any stock price manipulation and be a solid, attractive stock investment for everyone, including investors, associates, and retirees who are also shareholders; and (3) Sears Holdings Corp. must honor its commitments to both associates and Sears retirees.

By letter dated January 6, 2005, Ed Lampert responded. He said: “I appreciate your letter of introduction...and your offer of providing assistance in making this merger a success. As you know, the combined companies will face significant obstacles including competing against the best retailers in the world. We clearly have our work cut out for us to, in the words of the recent retiree you quoted, ‘restore Sears to its position as a premier American retailer.

“I can assure you that, upon completion of the merger, the management of Sears Holdings Corp. will work hard to take advantage of the potential benefits of the transaction.”

MISCELLANEOUS. (1) Went into Executive Session to discuss the challenges that Kmart and Sears face in integrating their businesses; and how sincere is the new organization about running a merchandise company; (2) Ron noted that this meeting had 28 participants which is the largest number NARSE has had for a regular meeting; (3) During the next month, a letter will be drafted to be sent out by Bill Barker to all local Sears Retiree Clubs throughout the country. This will be an informational letter about NARSE objectives and activities and the services we can provide to the clubs.

The meeting was adjourned at 12:05 p.m.

The next NARSE meeting will be held on Friday, February 11, 2004 at 9 a.m. CST, 8th Floor Conference Room at NARSE’s Headquarters. A conference call will be available for those not able to attend in person at 10:30 a.m. CST.