EXHIBIT 10.1

[SEARS HOLDINGS LETTERHEAD]

July 21, 2006

Mr. Craig T. Monaghan
[address omitted]

Dear Craig,

We are pleased to extend to you our offer to join Sears Holdings Corporation
(SHC) as EVP, Chief Financial Officer reporting to Bill Crowley. Your start date
is to be September 1, 2006. This letter serves as a confirmation of our offer.
This offer is subject to approval by the Compensation Committee of SHC’s Board
of Directors.

Some key elements of the offer are as follows:

Effective September 1, 2006, your compensation package will consist of the
following:

·      Annual base salary at a rate of $600,000, with periodic increases based
upon your performance and the results achieved by your team.   ·      You will
be eligible for an annual target incentive opportunity of 75% of your base
salary or $450,000. Although your start date will be after the commencement of
the 2006 annual incentive period, your 2006 annual incentive will not be
subjected to pro-ration and you will be entitled to a full year performance
based award. Your 2006 annual incentive will be linked to 100% SHC EBITDA. The
actual amount of the incentive you earn may range from 0% to 200% depending on
how well both you and the company perform. The annual incentive for each plan
year will be payable by April 15 of the following year, provided that you are
actively employed at the payment date. Notwithstanding the preceding, any amount
of incentive earned under the SHC program for the 2006 annual incentive period
will be reduced to the extent that such amount exceeds $340,000 (the target
annual incentive opportunity you were eligible for at AutoNation for 2006), but
not reduced by more than $250,000 (the amount of sign-on bonus being provided to
you and discussed below).   ·      You will be eligible for participation in the
Sears Holdings Corporation 2006 Executive Long Term Incentive Program (SHC
LTIP). Your 2006 LTIP target award is $1,000,000. Your performance period will
begin on September 1, 2006 and end on the last day of fiscal year 2008. The
previously established SHC LTIP EBITDA goals will be adjusted as a result of the
change in your performance period. The actual amount of the award you receive
will depend on SHC cumulative EBITDA over your performance period. The award
becomes payable in 2009 and is subject to the provisions of the Program. Our
LTIP program anticipates annual grants similar to the 2006 LTIP. For example, a
2007 LTIP grant would provide a similar grant amount, with a performance period
covering the 2007 through 2009 fiscal years.   ·      You will receive a grant
of restricted stock valued at $1,500,000 under SHC’s 2006 Stock Plan. The number
of restricted shares granted will be determined using the market closing price
of SHC shares on the grant date. The grant date will be September 1 providing
you have signed the executive agreements discussed below. The restricted shares
granted will be scheduled to cliff vest on the third anniversary of the grant
date.   ·      You will receive a $250,000 sign-on bonus (gross) payable within
30 days after your start date. A portion of this amount may become part of an
offset to your SHC 2006 annual incentive award payable in 2007.     See above
discussion regarding annual target incentive opportunity for details about this
offset.   ·      You will be asked to sign an Executive Severance / Non-Compete
Agreement and an Executive Non-Disclosure and Non-Solicitation of Employees
Agreement as a condition of your new assignment. If you  

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  are involuntarily terminated from Sears for any reason other than cause,
death, total and permanent disability, resignation, or retirement after age 65,
you will receive one year of pay continuation, equal to your base salary and
target bonus at the time of termination, subject to mitigation. In consideration
for these severance terms, you agree not to disclose confidential information
and not to solicit employees. You would also agree not to aid, assist or render
services for any ‘Competitor’ (as defined in the agreement) for one year
following termination of employment. The restricted stock grant referenced above
is conditioned upon your signing of these documents which are included with this
letter.   ·      You are eligible for relocation assistance in accordance with
Sears standard relocation policy. A Relocation Benefits package will be sent to
you from Prudential Relocation. To receive relocation assistance, you must sign
the Sears Relocation Repayment Agreement, which requires you to pay back to
Sears all or part of the assistance you receive in the event that you
voluntarily leave Sears or retire within the time frames specified in the
agreement. In addition, to the terms of the standard relocation policy, you will
be provided with an extended period of up to twelve (12) months to complete your
relocation. During this period prior to your relocation of up to twelve months,
you will be reimbursed for the cost of travel to and from your current home and
Hoffman Estates, IL on weekends and vacations. In addition, company paid
temporary living accommodations, including an apartment, will be provided until
your relocation is completed Please contact me if you have any questions
regarding relocation assistance.  

·      You are eligible to receive 4 weeks paid vacation, which will be
pro-rated during your first year of service based on your start date. Added to
this, you will qualify for six paid National Holidays and four Flexible Days
each year.   ·      You will be eligible to participate in all retirement and
welfare programs on a basis no less favorable than other executives at your
level, in accordance with the applicable terms of those programs.   ·      This
offer is contingent upon satisfactory completion of a background reference
check, employment authorization verification and pre-employment drug test.  

Craig, we are looking forward to you joining us. We are excited about the
important contributions you will make at Sears Holdings. I look forward to your
acceptance of our offer. If you need additional information or clarification,
please call.

This offer will expire if not accepted within two weeks from the date of this
letter.

Sincerely,        /s/ Robert D. Luse      Robert D. Luse      SVP, Human
Resources        Accepted:        /s/ Craig T. Monaghan    7/26/06  Craig T.
Monaghan    Date 

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