EXHIBIT 10.39

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as [*****]. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

EXECUTIVE SEVERANCE AGREEMENT

By this Executive Severance Agreement dated and effective as of January 8, 2012
(“Agreement”), Sears Holdings Corporation and its affiliates and subsidiaries
(“Sears”), and Ronald D. Boire (“Executive”), intending to be legally bound, and
for good and valuable consideration, agree as follows:

1. Effect of Severance.

(a) Severance Benefits. If Executive is involuntarily terminated without “Cause”
or Executive voluntarily terminates Executive’s employment for “Good Reason” (as
such terms are defined in Section 2 below), Executive shall be entitled to the
benefits described in subsection (i), (ii) and (iii) below (collectively
referred to herein as “Severance Benefits”). Executive shall not be entitled to
the Severance Benefits if Executive’s employment terminates for any other
reason, including due to death or “Disability” (as defined in Section 2 below).
Executive shall also not be entitled to Severance Benefits if Executive does not
meet all of the other requirements under this Agreement, including under
subsection 4(g).

i. Continuation of Salary.

1. Sears or the appropriate “Sears Affiliate” (as defined in Section 2 below)
shall pay Executive a cash severance equal to the sum of (A) plus (B).

(A) Executive’s annual base salary rate as of the date Executive’s employment
terminates (“Date of Termination”). Subject to subsection (a)(i)(2) below,
payment of such amount (“Salary Continuation”) shall commence on Executive’s
“Separation from Service” (as defined in Section 2 below) and shall be paid in
substantially equal installments on each regular salary payroll date for a
period of twelve (12) months following Date of Termination (“Salary Continuation
Period”), except as otherwise provided in this Agreement.

(B) A bonus payable under the Sears Holdings Corporation Annual Incentive Plan
(“AIP”) (subject to proration as defined herein), provided that Executive was
employed at least six (6) months of the then current AIP performance period (as
defined therein) as of Executive’s Date of Termination and only to the extent an
incentive award would have been payable to Executive under the terms of the such
AIP but for incurring a Date of Termination (“Bonus”). For purposes of
calculating the Bonus, the incentive award to which Executive otherwise would

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have been entitled to under the AIP shall be subject to a fraction, the
numerator of which shall be the number of full days on active payroll during the
applicable performance period (as defined in the AIP) and the denominator of
which shall be the number of full days in such performance period. Subject to
subsection (a)(i)(2) below, any Bonus shall be payable as of the payment date
for the AIP and shall be paid in substantially equal installments on each
regular salary payroll date for the remainder of the Salary Continuation Period,
except as otherwise provided in this Agreement. In the event the payment date
for the AIP occurs after the Salary Continuation Period, such Bonus shall be
payable in a one-time, single lump sum payment to Executive, subject to
applicable withholding in accordance with Section 18 below, except as otherwise
provided in this Agreement.

Notwithstanding the foregoing, the Sears or Sears Affiliate obligations under
this subsection (a)(i)(1) shall be reduced on a dollar-for-dollar basis (but not
below zero), by the amount, if any, of fees, salary or wages that Executive
earns from a subsequent employer (including those arising from self-employment)
during the Salary Continuation Period. For avoidance of doubt, Executive shall
not be obligated to seek affirmatively or accept an employment, contractor,
consulting or other arrangement in order to mitigate Salary Continuation and
Bonus. Further, to the extent Executive does not execute and timely submit the
applicable General Release and Waiver (in accordance with subsection 4(g) below)
by the deadline specified therein, Salary Continuation and Bonus payments shall
terminate and forever lapse, and Executive shall be required to reimburse Sears
for any portion of the Salary Continuation and Bonus paid during the Salary
Continuation Period.

2. Notwithstanding anything in this subsection (a)(i) to the contrary, if the
Salary Continuation and Bonus payable to Executive in accordance with subsection
(a)(i)(1) above during the first six (6) months after Executive’s Separation
from Service would exceed the “Section 409A Threshold” and if as of the date of
the Separation from Service Executive is a “Specified Employee” (as such terms
are defined in Section 2 below), then, payment shall be made to Executive on
each regular salary payroll date during the first six (6) months of the Salary
Continuation Period until the aggregate amount received equals the Section 409A
Threshold. Any portion of the Salary Continuation and Bonus in excess of the
Section 409A Threshold that would otherwise be paid during such first six
(6) months or any portion of the Salary Continuation and/or Bonus that is
otherwise subject to Section 409A, shall instead be paid to Executive in a lump
sum payment on the date that is six (6) months and one (1) day after the date of
Executive’s Separation from Service.

 

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3. All Salary Continuation and Bonus payments (described under this subsection
(a)(i)) will terminate and forever lapse if Executive is employed by a “Sears
Competitor” or “Sears Vendor” (as such terms are defined in subsection 4(c)(ii)
and 4(d)(ii) herein, respectively) during the Salary Continuation Period or in
the event of Executive’s breach of this Agreement (in accordance with Section 10
below), and Executive shall be required to reimburse Sears for any portion of
the Salary Continuation and Bonus paid during the Salary Continuation Period.

ii. Continuation of Benefits.

1. During the Salary Continuation Period, Executive will be entitled to
participate in all benefit plans and programs (except as specified in this
subsection (a)(ii)), on the same terms (including payment of all or a portion of
the cost of coverage by Sears or a Sears Affiliate) as a similarly situated
active associate, in which Executive was eligible to participate on the Date of
Termination (subject to the terms and conditions and continued availability of
such plans and programs); provided, however, that Executive will not be eligible
to participate in the long-term disability plan (as of the 15th day following
the Date of Termination), health care flexible spending account (except on an
after-tax basis and only through the earlier of the end of Salary Continuation
Period or the calendar year in which the Separation from Service occurs), Sears
paid life insurance and the Sears Holdings 401(k) Savings Plan (or any other
defined contribution plan sponsored by Sears or a Sears Affiliate) during the
Salary Continuation Period. Without limiting the generality of the foregoing
sentence, Executive and Executive’s eligible dependents shall be entitled to
continue to participate, as active participants, in Sears medical and dental
plans (subject to the terms and conditions and continued availability of such
plans) during the Salary Continuation Period. Upon the expiration of the Salary
Continuation Period, Executive and his eligible dependents shall be eligible to
elect COBRA continuation coverage under the Sears medical and dental plans.

2. If Executive does not timely execute and submit the applicable General
Release and Waiver (in accordance with subsection 4(g) herein) by the deadline
specified therein, Executive shall be required to reimburse Sears for the
portion of the cost of the coverage referred to under subsection (a)(ii)(1)
immediately above paid by Sears during the Salary Continuation Period, and
Executive shall instead be eligible for COBRA continuation coverage under the
Sears medical and dental plans as of Executive’s Date of Termination.

3. Subject to subsection (a)(ii)(4) immediately below, in the event Executive
provides services to another employer and becomes covered by (and not merely
eligible for) such employer’s health benefits plan or program, the medical and
dental benefits provided by Sears hereunder shall be secondary to such
employer’s health benefits plan or program in accordance with the terms of the
Sears health benefit plans.

 

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4. All of the benefits described in this subsection (a)(ii) will terminate and
forever lapse if Executive is employed by a Sears Competitor or Sears Vendor
during the Salary Continuation Period or in the event of Executive’s breach (in
accordance with Section 10 below), and Executive shall be required to reimburse
Sears for any portion of the cost of the coverage referred to under subsection
(a)(ii)(1) immediately above paid by Sears during the Salary Continuation
Period, and Executive shall instead be eligible for COBRA continuation coverage
under the Sears medical and dental plans as of Executive’s Severance from
Service date.

iii. Outplacement. As of Executive’s Separation from Service, Executive will be
immediately eligible for reasonable outplacement services at the expense of
Sears or the appropriate Sears Affiliate. Sears and Executive will mutually
agree on which outplacement firm, among current vendors used by Sears, will
provide these services. Such services will be provided for up to twelve
(12) months from the Separation from Service or until employment is obtained,
whichever occurs first. Outplacement benefits described in this subsection
(a)(iii) will terminate and forever lapse if Executive is employed by a Sears
Competitor or Sears Vendor or in the event of Executive’s breach (in accordance
with Section 10 below).

iv. Other.

1 In addition to the foregoing Severance Benefits, a lump sum payment will be
made to Executive within ten (10) business days following the Date of
Termination in an amount equal to the sum of any base salary and any vacation
benefits that have accrued through the Date of Termination to the extent not
already paid and any unreimbursed business expenses. No vacation will accrue
during the Salary Continuation Period. Further, if Executive is involuntarily
terminated other than for Cause and such Date of Termination occurs after the
end of the performance period for the immediately prior AIP and prior to the
payment date for such performance period, Executive shall be paid, outside of
such annual incentive plan, an amount equivalent to the target bonus Executive
would have been entitled to, if any, under such AIP in the form of a one-time,
single lump sum payment, subject to applicable withholding in accordance with
Section 18 below.

2. Notwithstanding the foregoing and anything herein to the contrary, in the
event of Executive’s death during the Salary Continuation Period, any unpaid
portion of the Salary Continuation and/or Bonus payable in accordance with
subsection (a)(i) above shall be paid in a lump sum, within sixty (60) days of
death (and no later than amounts would have been paid absent death), to
Executive’s estate, and any eligible dependents who are covered dependents as of
the date of death shall incur a qualifying event under COBRA as a result of such
death.

 

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(b) Impact of Termination on Certain Other Plans/Programs.

i. Annual Incentive Plan. Except as provided herein, upon Executive’s Date of
Termination, Executive’s entitlement to any award under the applicable annual
incentive plan (“AIP”) sponsored by Sears, shall be determined in accordance
with the terms and conditions of the AIP document regarding termination of
employment.

ii. Long-Term Incentive Program(s). Upon Executive’s Date of Termination,
Executive’s entitlement to any award granted to Executive under a long-term
incentive program (“LTIP”) sponsored by Sears, shall be determined in accordance
with the terms and conditions of the award letter and the LTIP document
regarding termination of employment.

iii. Stock Plan. Upon Executive’s Date of Termination, Executive’s entitlement
to any unvested options, restricted stock or other equity award granted to
Executive under a stock plan sponsored by Sears shall be determined in
accordance with the terms and conditions of the applicable award agreement and
the stock plan document regarding termination of employment.

(c) Post-Termination Forfeiture of Severance Benefits. If Sears determines after
Executive’s Date of Termination that Executive engaged in activity during
employment with Sears that Sears determines constituted Cause, Sears will
provide Executive with written notice specifying such breach, which notice will
specifically identify the manner in which Sears or the Sears Affiliates believes
that Executive has materially breached his duties and responsibilities.
Executive shall immediately cease to be eligible for Severance Benefits and
shall be required to reimburse Sears for any portion of the Salary Continuation
and Bonus paid to Executive and for the cost of other Severance Benefits
received by Executive during the Salary Continuation Period.

2. Definitions. For purposes of this Agreement, each capitalized term in this
Agreement is either defined in the section, exhibit or appendix in which it
first appears or in this Section 2. The following capitalized terms shall have
the definitions as set forth below:

(a) “Cause” shall mean (i) a material breach by Executive (other than a breach
resulting from Executive’s incapacity due to a Disability) of Executive’s duties
and responsibilities which breach is demonstrably willful and deliberate on
Executive’s part, is committed in bad faith or without reasonable belief that
such breach is in the best interests of Sears or the Sears Affiliates and is not
remedied in a reasonable period of time after receipt of written notice from
Sears specifying such breach, which notice specifically identifies the manner in
which Sears or the Sears Affiliates believes that Executive has materially
breached his duties and responsibilities; (ii) the commission by Executive of a
felony; or (iii) dishonesty or willful misconduct in connection with Executive’s
employment.

(b) “Disability” shall mean disability as defined under the Sears long-term
disability plan (regardless of whether the Executive is a participant under such
plan).

(c) “Good Reason” shall mean, without Executive’s written consent, (i) a
reduction of more than ten percent (10%) in the sum of Executive’s annual base
salary and target AIP bonus from those in effect as of the date of this
Agreement; (ii)

 

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Executive’s mandatory relocation to an office more than fifty (50) miles from
the primary location at which Executive is required to perform Executive’s
duties immediately prior to the date of this Agreement; (iii) the failure of
Sears or the Sears Affiliates to pay any undisputed amount due under this
Agreement; (iv) a material diminution of Executive’s title, duties or
responsibilities unrelated to (A) an organizational or a corporate restructuring
or (B) Executive’s performance; or (v) any other action or inaction that
constitutes a material breach of the terms of this Agreement, including failure
of a successor company to assume or fulfill the obligations under this
Agreement. In each case, Executive must provide Sears with written notice of the
facts giving rise to a claim that “Good Reason” exists for purposes of this
Agreement, within thirty (30) days of the date Executive knows (or reasonably
should have known) of the existence of such Good Reason event, and Sears shall
have a right to remedy such event within sixty (60) days after receipt of
Executive’s written notice (“the sixty (60) day period”). If Sears remedies the
Good Reason event within the sixty (60) day period, the Good Reason event (and
Executive’s right to receive any benefit under this Agreement on account of
termination of employment for Good Reason) shall cease to exist. If Sears does
not remedy the Good Reason event within the sixty (60) day period, and Executive
does not incur a termination of employment within thirty (30) days following the
earlier of: (y) the date Sears notifies Executive that it does not intend to
remedy the Good Reason or does not agree that there has been a Good Reason
event, or (z) the expiration of the sixty (60) day period, the Good Reason event
(or any claim of Good Reason) shall cease to exist. Notwithstanding the
foregoing, if Executive fails to provide written notice to Sears of the facts
giving rise to a claim of Good Reason within thirty (30) days of the date
Executive knows (or reasonably should have known) of the existence of such Good
Reason the initial existence of such Good Reason event, the Good Reason event
(and Executive’s right to receive any benefit under this Agreement on account of
termination of employment for Good Reason) shall cease to exist as of the
thirty-first (31st) day following the later of its occurrence or Executive’s
knowledge thereof.

(d) “Sears Affiliate” shall mean any person with whom Sears is considered to be
a single employer under Code Section 414 (b) and all persons with whom Sears
would be considered a single employer under Code Section 414 (c), substituting
“50%” for the “80%” standard that would otherwise apply.

(e) “Section 409A Threshold” shall mean an amount equal to two times the lesser
of (i) Executive’s base salary for services provided to Sears and any Sears
Affiliate as an employee for the calendar year preceding the calendar year in
which Executive has a Separation from Service; or (ii) the maximum amount that
may be taken into account under a qualified plan in accordance with Code
Section 401(a)(17) for the calendar year in which the Executive has a Separation
from Service. In all events, this amount shall be limited to the amount
specified under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A) or any
successor thereto.

(f) “Separation from Service” shall mean a “separation from service” with Sears
(including any Sears Affiliate) within the meaning of Code Section 409A (and
regulations issued thereunder). Notwithstanding anything herein to the contrary,
the fact that Executive is treated as having incurred a Separation from Service
under Code Section 409A and the terms of this Agreement shall not be
determinative, or in any way

 

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affect the analysis, of whether Executive has retired, terminated employment,
separated from service, incurred a severance from employment or become entitled
to a distribution, under the terms of any retirement plan (including pension
plans and 401(k) savings plans) maintained by Sears (including by a Sears
Affiliate).

(g) “Specified Employee” shall mean a “specified employee” under Code
Section 409A (and regulations issued thereunder), which shall be determined in
accordance with the provisions of Supplement A to the Supplemental Retirement
Income Plan (as amended and restated effective January 1, 2008).

3. Intellectual Property Rights. Executive acknowledges that Executive’s
development, work or research on any and all inventions or expressions of ideas,
that may or may not be eligible for patent, copyright, trademark or trade secret
protection, hereafter made or conceived solely or jointly within the scope of
employment at Sears or any Sears Affiliate, provided such invention or
expression of an idea relates to the business of Sears or any Sears Affiliate,
or relates to actual or demonstrably anticipated research or development of
Sears or any Sears Affiliate, or results from any work performed by Executive
for or on behalf of Sears or any Sears Affiliate, are hereby assigned to Sears,
including Executive’s entire rights, title and interest. Executive will promptly
disclose such invention or expression of an idea to Executive’s management and
will, upon request, promptly execute a specific written assignment of title to
Sears. If Executive currently holds any inventions or expressions of an idea,
regardless of whether they were published or filed with the U.S. Patent and
Trademark Office or the U.S. Copyright Office, or is under contract to not so
assign, Executive will list them on the last page of this Agreement.

4. Protective Covenants. Executive acknowledges that this Agreement provides for
additional consideration beyond what Sears or any Sears Affiliate is otherwise
obligated to pay. In consideration of the opportunity for the Severance
Benefits, and other good and valuable consideration, Executive agrees to the
following:

(a) Non-Disclosure of Sears Confidential Information. Executive acknowledges and
agrees to be bound by the following, whether or not Executive receives any
Severance Benefits under this Agreement:

i. Non-Disclosure.

1. Executive will not, during the term of Executive’s employment with Sears or
any Sears Affiliate or thereafter, and other than in the performance of his
duties and obligations during his employment with Sears or as required by law or
legal process, and except as Sears may otherwise consent or direct in writing,
reveal or disclose, sell, use, lecture upon or publish any “Sears Confidential
Information” (as defined in subsection 4(a)(ii) below) until such time as the
information becomes publicly known other than as a result of its disclosure,
directly or indirectly, by Executive; and

2. Executive understands that if Executive possesses any proprietary information
of another person or company as a result of prior employment or otherwise, Sears
expects and requires that Executive will honor any and all legal obligations
that Executive has to that person or company with respect to proprietary
information, and Executive will refrain from any unauthorized use or disclosure
of such information.

 

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ii. Sears Confidential Information. For purposes of this Agreement, “Sears
Confidential Information” means trade secrets and non-public information which
Sears or any Sears Affiliate designates as being confidential or which, under
the circumstances, should be treated as confidential, including, without
limitation, any information received in confidence or developed by Sears or any
Sears Affiliate, its long and short term goals, vendor and supply agreements,
databases, methods, programs, techniques, business information, financial
information, marketing and business plans, proprietary software, personnel
information and files, client information, pricing, and other information
relating to the business of Sears or any Sears Affiliate that is not known
generally to the public or in the industry. Sears Confidential Information shall
not include any information that is (1) generally known to the industry or the
public or (2) required by law or judicial process to be disclosed.

iii. Return of Sears Property. All documents and other property that relate to
the business of Sears or any Sears Affiliate are the exclusive property of
Sears, even if Executive authored or created them. Executive agrees to return
all such documents that Executive knowingly has and tangible property to Sears
upon termination of employment or at such earlier time as Sears may request
Executive to do so.

iv. Conflict of Interest. During Executive’s employment with Sears or any Sears
Affiliate and during any Salary Continuation Period, except as may be approved
in writing by Sears, neither Executive nor members of Executive’s immediate
family (which shall refer to Executive, any spouse or any child) will knowingly
have financial investments or other interests or relationships with Sears’ or
any Sears Affiliate’s customers, suppliers or competitors which might impair
Executive’s independence of judgment on behalf of the Company. Also during
Executive’s employment with Sears or any Sears Affiliate and during any Salary
Continuation Period, Executive agrees further not to knowingly engage in any
activity in competition with Sears or any Sears Affiliate and will avoid any
outside activity that could adversely affect the independence and objectivity of
Executive’s judgment, interfere with the timely and effective performance of
Executive’s duties and responsibilities to Sears or any Sears Affiliate,
discredit Sears or any Sears Affiliate or otherwise conflict with the best
interests of Sears or any Sears Affiliate.

(b) Non-Solicitation of Employees. During Executive’s employment with Sears or
any Sears Affiliate and for twelve (12) months following Executive’s Date of
Termination, whether or not Executive receives any Severance Benefits under this
Agreement, Executive will not, directly or indirectly, solicit or encourage any
person to leave her/his employment with Sears or any Sears Affiliate or assist
in any way with the hiring of any Sears or any Sears Affiliate employee by any
future employer or other entity.

 

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(c) Non-Competition. Executive acknowledges that as a result of Executive’s
position at Sears or any Sears Affiliate, Executive has learned or developed, or
will learn or develop, Sears Confidential Information and that use or disclosure
of Sears Confidential Information is likely to occur if Executive were to render
advice or services to any Sears Competitor.

i. Therefore, for twelve (12) months following Executive’s Date of Termination,
whether or not Executive receives any Severance Benefits under this Agreement,
Executive will not, directly or indirectly, aid, assist, participate in, consult
with, render services for, accept a position with, become employed by, or
otherwise enter into any relationship with (other than having a passive
ownership interest in or being a customer of) any Sears Competitor.

ii. For purposes of this Agreement, “Sears Competitor” means:

1. Those companies listed on Appendix A, each of which Executive acknowledges is
a Sears Competitor, whether or not it falls within the categories in subsection
(ii)(2) immediately below, and further acknowledges that this is not an
exclusive list of Sears Competitors and is not intended to limit the generality
of subsection (ii)(2) immediately below; and

2. Any party (A) engaged in any retail business (whether in a department store,
specialty store, discount store, direct marketing, or electronic commerce or
other business format), that consists of selling furniture, appliances,
electronics, hardware, lawn/garden, auto parts, food/consumables, toys,
seasonal, fitness/sporting goods, apparel and/or pharmacy products, or providing
home improvement, product repair and/or home services, with combined annual
revenue in excess of $1 billion, or (B) a party engaged in any other line of
business, in which Sears (including any Sears Affiliate) has commenced business
prior to the end of Executive’s employment, having annual gross sales in that
line of business in excess of $100 million.

iii. Executive acknowledges that Sears shall have the right to propose
modifications to Appendix A periodically to include (1) emergent Competitors in
Sears existing lines of business and (2) Competitors in lines of business that
are new for Sears, in each case, with the prior written consent of Executive,
which consent shall not be unreasonably withheld.

iv. Executive further acknowledges that Sears (or Sears Affiliates) does
business throughout the United States, Puerto Rico, U.S. Virgin Islands, Guam
and Canada and that this non-compete provision applies in any state or province
(as applicable) of the United States, Puerto Rico, U.S. Virgin Islands, Guam and
Canada, in which Sears does business.

(d) Restriction on Post-Employment Affiliation with Sears Vendors. Executive
acknowledges that as a result of Executive’s position at Sears or any Sears
Affiliate, Executive has learned or developed, or will learn or develop, Sears
Confidential Information and that use or disclosure of Sears Confidential
Information is likely to occur if Executive were to render advice or services to
any “Sears Vendor” (as defined herein).

 

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i. Therefore, for twelve (12) months from Executive’s Date of Termination,
whether or not Executive receives any Severance Benefits under this Agreement,
Executive will not, directly or indirectly, aid, assist, participate in, consult
with, render services for, accept a position with, become employed by, or
otherwise enter into any relationship with (other than having a passive
ownership interest in or being a customer of) any Sears Vendor.

ii. For purposes of this Agreement, “Sears Vendor” means, the vendors, if any,
listed in Appendix A as well as any vendor with combined annual gross sales of
services or merchandise to Sears in excess of $200 million.

(e) Compliance with Protective Covenants. Executive will provide Sears with such
information as Sears may from time to time reasonably request to determine
Executive’s compliance with this Section 4. Executive authorizes Sears to
contact Executive’s future employers and other entities with which Executive has
any business relationship to determine Executive’s compliance with this
Agreement or to communicate the contents of this Agreement to such employers and
entities. Executive releases Sears, Sears Affiliates, their agents and
employees, from all liability for any damage arising from any such contacts or
communications.

(f) Necessity and Reasonableness. Executive agrees that the restrictions set
forth herein are necessary to prevent the use and disclosure of Sears
Confidential Information and to otherwise protect the legitimate business
interests of Sears and Sears Affiliates. Executive further agrees and
acknowledges that the provisions of this Agreement are reasonable.

(g) General Release and Waiver. Upon Executive’s Date of Termination (whether
initiated by Sears or Executive in accordance with subsection 1(a) above)
potentially entitling Executive to Severance Benefits, Executive will execute a
binding general release and waiver of claims in a form to be provided by Sears
(“General Release and Waiver”), which is incorporated by reference under this
Agreement. This General Release and Waiver will be in a form substantially
similar to the attached sample. If the General Release and Waiver is not signed
within the time required by the waiver or is signed but subsequently revoked,
Executive will not continue to receive any Severance Benefits otherwise payable
under subsection 1(a) above. Further, Executive shall be obligated to reimburse
Sears for any portion of (i) the Salary Continuation paid during the Salary
Continuation Period under subsection (1)(a)(i) herein, and (ii) the cost for the
benefits provided during the Salary Continuation Period under subsection
(1)(a)(ii) herein. A sample of this General Release and Waiver is provided as
Exhibit A to this Agreement. Upon Executive’s executing the General Release and
Waiver, Sears agrees to sign a binding general release and waiver of claims
against Executive, which shall exclude claims provided for under any applicable
compensation or benefit agreement or plan document and claims regarding
compliance with this Agreement and shall be subject to the Sears corporate
charter and bylaws.

 

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(h) Exception Request. Notwithstanding the foregoing, Executive may request a
waiver or a specific exception to the non-competition provisions of this
Agreement by written request to the Senior Vice President and President,
Talent & Human Capital Services or Senior Vice President, General Counsel and
Corporate Secretary (or the equivalent) of Sears. Such a request will be given
reasonable consideration and may be granted, in whole or in part, or denied at
Sears’ absolute discretion.

5. Irreparable Harm. Executive acknowledges that irreparable harm would result
from any breach by Executive of the provisions of this Agreement, including
without limitation subsections 4(a), 4(b), 4(c) and 4(d), and that monetary
damages alone would not provide adequate relief for any such breach.
Accordingly, if Executive breaches or threatens to breach this Agreement,
Executive consents to injunctive relief in favor of Sears without the necessity
of Sears posting a bond. Moreover, any award of injunctive relief shall not
preclude Sears from seeking or recovering any lawful compensatory damages which
may have resulted from a breach of this Agreement, including a forfeiture of any
future payments and a return of any payments and benefits already received by
Executive.

6. Non-Disparagement. Executive will not take any actions that would reasonably
be expected to be detrimental to the interests of Sears or any Sears Affiliate,
nor make derogatory statements, either written or oral to any third party, or
otherwise publicly disparage Sears or any Sears Affiliate, its products,
services, or present or former employees, officers or directors, and will not
authorize others to make derogatory or disparaging statements on Executive’s
behalf. Sears shall not authorize and shall take reasonable measures to prevent
its present or former officers and directors from making derogatory or
disparaging statements regarding Executive to any third party. This provision
does not and is not intended to preclude Executive from entering into any
relationship with a Sears Competitor or Sears Vendor after such relationship is
permissible under subsection 4(c) or 4(d), respectively, nor does it preclude
Executive from providing truthful testimony in response to legal process or
governmental inquiry.

7. Cooperation. Executive agrees, without receiving additional compensation, to
fully and completely cooperate with Sears to the extent that such cooperation
does not materially and unreasonably interfere with Executive’s subsequent
employment, both during and after the period of employment with Sears or any
Sears Affiliate (including any Salary Continuation Period), with respect to
matters that relate to Executive’s period of employment, in all investigations,
potential litigation or litigation in which Sears is involved or may become
involved other than any such investigations, potential litigation or litigation
between Sears and Executive. Sears will reimburse Executive for reasonable
travel and out-of-pocket expenses incurred in connection with any such
investigations, potential litigation or litigation.

8. Future Enforcement or Remedy. Any waiver, or failure to seek enforcement or
remedy for any breach or suspected breach, of any provision of this Agreement by
Sears or Executive in any instance shall not be deemed a waiver of such
provision in the future.

9. Acting as Witness. Executive agrees that both during and after the period of
employment with Sears or any Sears Affiliate (including any Salary Continuation
Period), Executive will not voluntarily act as a witness, consultant or expert
for any person or party in any action against or involving Sears or any Sears
Affiliate or corporate relative of Sears, unless subject to judicial enforcement
to appear as a fact witness only.

 

  11    12/31/2011

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10. Breach by Executive. In the event of a breach by Executive of any of the
provisions of this Agreement, including without limitation the non-competition
provisions (Section 4) and the non-disparagement provision (Section 6) of this
Agreement, the obligation of Sears or any Sears Affiliate to pay Salary
Continuation, Bonus or to provide other Severance Benefits under this Agreement
will immediately cease and any Salary Continuation and Bonus payments already
received and the value of any other Severance Benefits already received will be
returned by Executive to Sears.

11. Severability. If any provision(s) of this Agreement shall be found invalid,
illegal, or unenforceable, in whole or in part, then such provision(s) shall be
modified or restricted so as to effectuate as nearly as possible in a valid and
enforceable way the provisions hereof, or shall be deemed excised from this
Agreement, as the case may require, and this Agreement shall be construed and
enforced to the maximum extent permitted by law, as if such provision(s) had
been originally incorporated herein as so modified or restricted or as if such
provision(s) had not been originally incorporated herein, as the case may be.

12. Governing Law. This Agreement will be governed under the internal laws of
the state of Illinois without regard to principles of conflicts of laws.
Executive agrees that the state and federal courts located in the state of
Illinois shall have exclusive jurisdiction in any action, lawsuit or proceeding
based on or arising out of this Agreement, and Executive hereby: (a) submits to
the personal jurisdiction of such courts; (b) consents to the service of process
in connection with any action, suit, or proceeding against Executive; and
(c) waives any other requirement (whether imposed by statute, rule of court, or
otherwise) with respect to personal jurisdiction, venue or service of process.

 

13. Right to Jury. Executive agrees to waive any right to a jury trial on any
claim contending that this Agreement or the General Release and Waiver is
illegal or unenforceable in whole or in part, and Executive agrees to try any
claims brought in a court or tribunal without use of a jury or advisory jury.
Further, should any claim arising out of Executive’s employment, termination of
employment or Salary Continuation Period (if any) be found by a court or
tribunal of competent jurisdiction to not be released by the General Release and
Waiver, Executive agrees to try such claim to the court or tribunal without use
of a jury or advisory jury.

14. Employment-at-Will. This Agreement does not constitute a contract of
employment, and Executive acknowledges that Executive’s employment with Sears or
any Sears Affiliate is terminable “at-will” by either party with or without
cause and with or without notice.

15. Other Plans, Programs, Policies and Practices. If any provision of this
Agreement conflicts with any other plan, programs, policy, practice or other
Sears document, then the provisions of this Agreement will control, except as
otherwise precluded by law. Executive shall not be eligible for any benefits
under the Sears Holdings Corporation Master Transition Pay Plan or the Kmart
Corporation Master Severance Pay Plan or any successor severance plan or
program.

 

  12    12/31/2011

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16. Entire Agreement. This Agreement, including any exhibits or appendices
hereto, contains and comprises the entire understanding and agreement between
Executive and Sears (including any Sears Affiliate) and fully supersedes any and
all prior agreements or understandings between Executive and Sears with respect
to the subject matter contained herein, and may be amended only by a writing
signed by Executive and the Chief Executive Officer, Senior Vice President and
President, Talent & Human Capital Services or Senior Vice President, General
Counsel and Corporate Secretary (or equivalent) of Sears.

17. Confidentiality. Executive agrees that the existence and terms of the
Agreement, including any compensation paid to Executive, and discussions with
Sears (including any Sears Affiliate) regarding this Agreement, shall be
considered confidential and shall not be disclosed or communicated in any manner
except: (a) as required by law or legal process; (b) to Executive’s spouse or
domestic partner, or (c) to Executive’s financial/legal advisors, all of whom
shall agree to keep such information confidential; provided, however, that
Executive may disclose to any prospective future employer the provisions of
Section 4 of this Agreement to the extent Executive obtains such employer’s
agreement to maintain the confidentiality of the terms of Section 4.

18. Tax Withholding. Any compensation paid or provided to Executive under this
Agreement shall be subject to any applicable federal, state or local income and
employment tax withholding requirements.

19. Notices. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other parties or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Executive:   At the most recent address on file at Sears. If to Sears:
 

    Sears Holdings Corporation

    3333 Beverly Road

    Hoffman Estates, Illinois 60179

 

    Attention to both:

 

Senior Vice President and President, Talent & Human Capital Services

Senior Vice President, General Counsel and Corporate Secretary

20. Assignment. Sears may assign its rights under this Agreement to any
successor in interest, whether by merger, consolidation, sale of assets, or
otherwise. This Agreement shall be binding whether it is between Sears and
Executive or between any successor or assignee of Sears or affiliate thereof and
Executive. This Agreement, and all of Executive’s rights and duties hereunder,
shall not be assignable or delegable by Executive; provided, however, that if
Executive shall die, all amounts then payable to Executive hereunder shall be
paid in accordance with the terms of this Agreement to Executive’s devisee,
legatee or other designee or, if there be no such devisee, legatee or designee,
to Executive’s estate.

21. Section 409A Compliance. To the extent that a payment or benefit under this
Agreement is subject to Code Section 409A, it is intended that this Agreement as
applied to that payment or benefit comply with the requirements of Code
Section 409A, and the Agreement shall be administered and interpreted consistent
with this intent. Each payment of Salary Continuation and Bonus on each regular
salary payroll date, and each other payment of other Severance Benefits
occurring on a particular date, shall be treated as a separate “payment,” as
defined in Treasury Regulations Section 1.409A-2(b)(2), for purposes of Code
Section 409A.

22. Counterparts. This Agreement may be executed in one or more counterparts,
which together shall constitute a valid and binding agreement.

 

  13    12/31/2011

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IN WITNESS WHEREOF, Executive and Sears, by its duly authorized representative,
have executed this Agreement on the dates stated below, effective as of the date
first set forth

above.

 

  EXECUTIVE     SEARS HOLDINGS CORPORATION   /s/ Ronald D. Boire     BY:   /s/
Dane A. Drobny   Ronald D. Boire    

Dane A. Drobny

Senior Vice President, General Counsel and Corporate Secretary

  1/1/2012         12/31/11   Date     Date  

 

  14    12/31/2011

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EXHIBIT A

NOTICE: YOU MAY CONSIDER THIS GENERAL RELEASE AND WAIVER FOR UP TO TWENTY-ONE
(21) DAYS. YOU MAY NOT SIGN IT UNTIL ON OR AFTER YOUR LAST DAY OF WORK. IF YOU
DECIDE TO SIGN IT, YOU MAY REVOKE THE GENERAL RELEASE AND WAIVER WITHIN SEVEN
(7) DAYS AFTER SIGNING. ANY REVOCATION WITHIN THIS PERIOD MUST BE IMMEDIATELY
SUBMITTED IN WRITING TO GENERAL COUNSEL, SEARS HOLDINGS CORPORATION,
3333 BEVERLY ROAD, HOFFMAN ESTATES, IL 60179. YOU MAY WISH TO CONSULT WITH AN
ATTORNEY BEFORE SIGNING THIS DOCUMENT.

GENERAL RELEASE AND WAIVER

In consideration for the benefits that I will receive under the attached
Executive Severance Agreement, I, and any person acting by, through, or under me
hereby release Sears Holdings Corporation, its current and former agents,
subsidiaries, affiliates, employees, officers, stockholders, successors, and
assigns (“Sears”) from any and all claims arising out of my employment or the
termination thereof. This General Release and Waiver is to be broadly construed
to encompass all claims of any kind or character whatsoever, whether known or
unknown, based upon any matter occurring prior to my execution of this General
Release and Waiver and including, but without limiting the generality of the
foregoing, any and all claims under the Age Discrimination in Employment Act
(“ADEA”), Title VII of the Civil Rights Act of 1964, Section 1981 of the Civil
Rights Act of 1866, the Americans with Disabilities Act (“ADA”), the Employee
Retirement Income Security Act (“ERISA”), the Worker Adjustment and Retraining
Notification Act (“WARN”), the Family and Medical Leave Act (“FMLA”) and any
other federal, state or local constitution, statute, regulation, or ordinance,
and any and all common law claims including, but not limited to, claims for
wrongful or retaliatory discharge, intentional infliction of emotional distress,
negligence, defamation, invasion of privacy, and breach of contract. This
General Release and Waiver does not apply to any claims or rights that may arise
after the date that I signed this General Release and Waiver. I understand that
Sears is not admitting to any violation of my rights or any duty or obligation
owed to me.

Excluded from this General Release and Waiver are any claims which cannot be
waived by law, including but not limited to (1) the right to file a charge with
or participate in an investigation conducted by certain government agencies, and
(2) any rights or claims to benefits accrued under benefit plans maintained by
Sears pursuant to ERISA. I do, however, waive my right to any monetary recovery
should any agency or other third party pursue any claims on my behalf. I
represent and warrant that I have not filed any complaint, charge, or lawsuit
against Sears with any governmental agency and/or any court.

I have read this General Release and Waiver and I understand its legal and
binding effect. I am acting voluntarily and of my own free will in executing
this General Release and Waiver.

I have had the opportunity to seek, and I was advised in writing to seek, legal
counsel prior to signing this General Release and Waiver.

--------------------------------------------------------------------------------

I was given at least twenty-one (21) days to consider signing this General
Release and Waiver. Any immaterial modification of this General Release and
Waiver does not restart the twenty-one (21) day consideration period.

GENERAL RELEASE AND WAIVER (continued)

I understand that, if I sign the General Release and Waiver, I can change my
mind and revoke it within seven (7) days after signing it by notifying the
General Counsel of Sears in writing at Sears Holdings Corporation, 3333 Beverly
Road, Hoffman Estates, Illinois 60179. I understand that this General Release
and Waiver will not be effective until after this seven (7) day revocation
period has expired.

 

    Date: SAMPLE ONLY—DO NOT DATE   Signed by:     SAMPLE ONLY—DO NOT SIGN  

 

Witness by:

    SAMPLE ONLY—DO NOT SIGN      

Page 2 of 2

Return both pages of the signed General Release and Waiver

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Executive: Ronald A. Boire    Date: January 8, 2012

Appendix A

Executive Severance Agreement

The following companies (including affiliates and subsidiaries within the same
controlled group of corporations) are included within the definition of “Sears
Competitors”, as referred to under subsection 4(c)(ii)(1) of the Executive
Severance Agreement:

[*****]

 

[*****]     Confidential material redacted and filed separately with the
Securities and Exchange Commission.