[LETTERHEAD OF SEARS HOLDINGS CORPORATION]

Annual base salary at a rate of $280,000.

Your annual incentive opportunity will increase to 50% of your base salary under Sears Holdings Annual Incentive Plan (“AIP”). Any incentive payable under the 2011 AIP will be prorated based on the amount of time in each base salary level and applicable annual incentive target through January 28, 2012, the last day of Sears Holdings 2011 fiscal year. Any annual incentive payable with respect to a fiscal year will be paid by April 15^th of the following fiscal year, provided that you are actively employed at the payment date. Your 2011 AIP will be prorated as follows:

For the period January 30, 2011 - through May 31, 2011:
Base salary of $233,400 and target bonus of 45%

For the period June 1, 2011 through January 28, 2012 (the end of fiscal year 2011):

Your 2010 Long-Term Incentive Plan (“2010 LTIP”) target incentive of 50% of your annual base salary in effect on April 27, 2010 will remain unchanged through the end of the performance period on February 2, 2013.

Your 2011 Long-Term Incentive Plan (“2011 LTIP”) target incentive of 50% of your annual base salary in effect on April 27, 2011 will remain unchanged through the end of the performance period on February 1, 2014.