Exhibit 10.37

EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT

By this Executive Employment and Severance Agreement, dated as of February 25,
2008 (“Agreement”), Sears Holdings Corporation and its affiliates and
subsidiaries (“Sears”) and Kevin Holt (“Executive”) (collective referred to as
the “Parties”) intending to be legally bound, and for good and valuable
consideration, agree as follows:

PART A – EMPLOYMENT

1. Employment Term. Executive agrees to an eighteen (18) month term of
employment with Sears, as Executive Vice President, Store Operations and
President, Store Operations Business Unit, which employment term shall run from
February 25, 2008 through August 25, 2009 (“Employment Term”), and during which
term:

(a) Executive shall be deemed, for all purposes under applicable employment
policies and associate benefit programs, a full-time, salaried employee.

(b) Executive shall work at the Hoffman Estates Support Center or on approved
store visits no fewer than either:

 

  i. three (3) weeks per month for at least six (6) weekdays each week; or

 

  ii. such other combination of days as may be agreed time to time by the
Executive and the Chief Executive Officer as would be the equivalent of clause
(i);

provided that, in either case, Executive shall ensure that he is present and
available at the Hoffman Estates Support Center for at least three of the weekly
Senior Leadership Team staff meetings per month (with the remaining weekly
Senior Leadership Team meetings attended by telephone or video conference), the
monthly Business Unit board meetings and any other critical Senior Leadership
meetings, as shall be agreed by the Chief Executive Officer and Executive.

2. Compensation Package. During this employment term, Executive shall be
entitled to the compensation package set forth in the offer letter to Executive
from William Harker, dated February 15, 2008 (“Offer Letter”)

PART B – SEVERANCE

1. Severance Benefits. Subject to the provisions of subsection 4(e) of this Part
B and Sections 1 and 6 of Part C:

(a) Salary Continuation. In the event that Executive’s employment is terminated:

i. By Sears for any reason other than “Cause”, death or “Disability” (as such
terms are defined in Section 2 below), Executive shall be placed on a
severance-related leave of absence (“Leave”) and Sears shall Continue to pay
Executive’s base salary, at the rate in effect immediately prior to the
termination date, for a period (“Salary Continuation Period”) which shall be the
lesser of:

(1) Six (6) months, beginning on the day after the Executive’s termination date,
which shall be the first day of his severance-related leave of absence
(“Leave”); or

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(2) The period remaining in his Employment Term (as defined in Section 1 of Part
A above);

provided that, in any event, Sears obligations under this subsection (a) shall
be reduced on a dollar-for-dollar basis (but not below zero) to the extent
Executive earns fees, salary or wages from a subsequent employer (including
those arising from self-employment but excluding income from being employed by
Hudsonville Ice Cream one week per month) during the Salary Continuation Period.
Notwithstanding anything in this subsection (a) to the contrary, if as of the
first day of the Leave Executive is a “key employee” or “specified employee”
within the meaning of Internal Revenue Code (“Code”) Section 409A and
regulations issued thereunder, then, if necessary to comply with Code
Section 409A, payment to Executive shall not be made to Executive until six
(6) months after the first day of Executive’s Leave and payment of the first six
(6) months of salary continuation shall be made in a lump sum and payment of the
salary continuation shall instead be made in a lump sum at the end of the six
(6) month waiting period. In addition to the foregoing, a lump sum payment will
be made to Executive within ten (10) business days following the first day of
the Leave in an amount equal to the sum of any accrued base salary through the
first day of the Leave to the extent not already paid and any vacation benefits
that accrued prior to the Leave. No vacation will accrue during the Leave. All
salary continuation payments and benefits will terminate and forever lapse if
Executive is employed by a “Sears Competitor” as defined in Section 4(b)(ii) of
this Part B.

ii. By Sears for Cause during the Employment Term, Executive shall not be
entitled to any severance-related salary continuation or benefits under Part B
of this Agreement, or under any other Sears severance pay plan.

iii. By Executive for any reason, Executive shall not be entitled to any
severance-related salary continuation or benefits under Part B of this
Agreement, or under any other Sears severance pay plan.

(b) Continuation of Benefits. During the Salary Continuation Period, Executive
will be entitled to participate in all benefit plans and programs (except as
specified in this subsection (b)) in which Executive was eligible to participate
immediately prior to the Leave (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,
flexible spending accounts, Sears paid life

 

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insurance and the Sears Holdings 401(k) Savings Plan (or any other defined
contribution plan sponsored by Sears) during the Leave. Executive and
Executive’s eligible dependents shall be entitled to continue to participate in
Sears medical and dental plans (subject to the terms and conditions and
continued availability of such plans). However, in the event Executive provides
services to another employer and is covered by 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 Sears health benefit plans.

(c) Stock Plan. Upon occurrence of a Leave, the Executive shall be credited with
service during his Salary Continuation Period for purposes of continuing to vest
in his restricted stock award, as described in the Offer Letter.

(d) Corporate Housing and Aircraft. Upon the occurrence of a Leave, the
Executive shall no longer be entitled to payment by Sears for corporate housing
nor will he be entitled to continued use of the corporate aircraft.

2. Definitions. For purposes of this Agreement, the following 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, as specifically agreed to under the Offer Letter and this
Agreement, 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 and is not remedied in a reasonable period of
time after receipt of written notice from Sears specifying such breach; (ii) the
commission by Executive of a felony involving moral turpitude; 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.

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, provided such invention or expression of an idea relates to
the business of Sears, or relates to Sears actual or demonstrably anticipated
research or development, or results from any work performed by Executive for or
on behalf of Sears, 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.

 

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4. Protective Covenants. Executive acknowledges that this Agreement provides for
additional consideration beyond what Sears is otherwise obligated to pay. In
consideration of the opportunity for severance benefits and special payments
specified above, and other good and valuable consideration, Executive agrees to
the following

(a) Non-Disclosure and Non-Solicitation. Executive acknowledges and agrees to be
bound by the following, whether or not Executive receives the “Severance
Benefits” referred to in Section 1 of this Part B:

i. Non-Disclosure of Sears Confidential Information.

1. Executive will not, during the term of Executive’s employment with Sears
(including the Leave) or thereafter, 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 herein) 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.

ii. Sears Confidential Information. For purposes of this Agreement, “Sears
Confidential Information” means trade secrets and non-public information which
Sears 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, 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 that is not known generally
to the public or in the industry.

iii. Return of Sears Property. All documents and other property that relate to
the business of Sears are the exclusive property of Sears, even if Executive
authored or created them. Executive agrees to return all such documents 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 (including
the Leave), except as may be approved in writing by Sears, neither Executive nor
members of Executive’s immediate family will have financial investments or other
interests or relationships with the Sears’ customers, suppliers or competitors
which might impair Executive’s

 

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independence of judgment on behalf of the Company. Executive agrees further not
to engage in any activity in competition with Sears 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, discredit Sears or otherwise
conflict with the Sears’ best interests. For the avoidance of doubt, Executive
and Sears agree that Executive’s employment by Hudsonville Ice Cream one week
per month shall not be considered to violate this clause iv.

v. Non-Solicitation of Employees. During Executive’s employment with Sears
(including the Leave) and for one (1) year from the first day of the Leave,
Executive shall not, directly or indirectly, solicit or encourage any person to
leave her/his employment with Sears or assist in any way with the hiring of any
Sears employee by any future employer or other entity.

(b) Non-Competition. Executive acknowledges that as a result of Executive’s
position at Sears, Executive has learned or developed, or will learn or develop,
Sears Confidential Information (as defined in subsection 4(a)(ii) above) 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 one (1) year from the first day of the Leave, whether or not
Executive receives Severance Benefits referred to in Section 1 of this Part B,
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 (2), below,
and further acknowledges that this is not an exclusive list of Sears Competitors
and is not intended to limit the generality of subsection 4(b)(ii)(2), 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, auto parts and/or apparel products, or providing home
improvement, product repair and/or home services, with combined annual revenue
in excess of $1 billion, (B) any vendor with combined annual gross sales of
services or merchandise to Sears in excess of $200 million, or (C) a party
engaged in any other line of business, in which Sears has commenced business
prior to the end of Executive’s employment, with Sears having annual gross sales
in that line of business in excess of $100 million.

 

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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 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.

(c) 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, its agents and employees, from all liability
for any damage arising from any such contacts or communications.

(d) 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. Executive further agrees and acknowledges that the
provisions of this Agreement are reasonable.

(e) General Release and Waiver. Upon the occurrence of a Leave under the terms
of this Agreement (whether initiated by Executive or Sears), Executive will
execute a binding General Release and Waiver of claims in a form to be provided
by Sears, which is incorporated by reference herein. 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 or is signed but subsequently revoked,
Executive will not receive severance pay (if any) or any other benefits due
under this Agreement.

(f) Exception Request. For the avoidance of doubt, Executive may request (i) a
waiver of the non-competition provisions of this Agreement or (ii) that the time
frame in subsection 4(b) above commence during Executive’s continued employment
with Sears, by written request to the Senior Vice President, General Counsel 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.

PART C – GENERAL PROVISIONS

1. Irreparable Harm. Executive acknowledges that irreparable harm would result
from any breach by Executive of the provisions of Parts B (including without
limitation subsections 4(a) and 4(b)) or Part C of this Agreement, and that
monetary damages alone

 

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would not provide adequate relief for any such breach. Accordingly, if Executive
breaches or threatens to breach Part B or C of 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 Part B or C of this Agreement, including a forfeiture
of any future payments and a return of any payments already received by
Executive.

2. Non-Disparagement. Executive will not take any actions that would reasonably
be expected to be detrimental to the interests of Sears, nor make derogatory
statements, either written or oral to any third party, or otherwise publicly
disparage Sears, 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.

3. Cooperation. Executive agrees, without receiving additional compensation, to
fully and completely cooperate with Sears, both during and after the period of
employment with Sears (including the period of the Leave), 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.

4. 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.

5. Acting as Witness. Executive agrees that both during and after the period of
employment with Sears (including the period of the Leave), 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 corporate relative of Sears, unless
subject to judicial enforcement to appear as a fact witness only.

6. 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, Part B) and the non-disparagement provision (Section 2,
Part C) of this Agreement, Sears obligation to make salary continuation or any
other payments under this Agreement (including the vesting of the restricted
stock award) will immediately cease and any payments already received will be
returned by Executive to Sears. Further, Executive agrees that Sears shall be
entitled to recovery of its attorneys’ fees and other associated costs incurred
as a result of any attempt to redress a breach by Executive or to enforce its
rights and protect its interests under the Agreement.

7. 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.

 

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8. 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.

9. 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 or termination
of employment 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.

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

11. Other Plans, Programs, Policies and Practices. If any provision of this
Agreement conflicts with any other plan, program, 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. Entire Agreement. This Agreement, including any exhibit hereto, and the
Offer Letter, contain and comprise the entire understanding and agreement
between Executive and Sears and fully supersede 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 the Chief
Executive Officer or Senior Vice President, General Counsel of Sears.

13. Confidentiality. Executive agrees that the existence and terms of the
Agreement, including the compensation paid to Executive, and discussions with
Sears 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, domestic partner, or financial/legal
advisors, all of whom shall agree to keep such information confidential.

14. Tax Withholding. All 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.

 

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15. 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:        Senior Vice President, General Counsel

16. 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.

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

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/ Kevin Holt

    BY:  

/s/ William R. Harker

Kevin Holt       2-25-2008     2/25/2008 Date     Date

 

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NOTICE: YOU MAY CONSIDER THIS GENERAL RELEASE AND WAIVER FOR UP TO TWENTY-ONE
(21) DAYS. 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, Kevin Holt, will receive under the
attached Amended and Restated Executive Severance/Non-Compete Agreement, I and
any person acting by, through, or under me hereby release, waive, and forever
discharge Sears Holdings Corporation, its current and former agents,
subsidiaries, affiliates, employees, officers, stockholders, successors, and
assigns (“Sears”) from any and all liability, actions, charges, causes of
action, demands, damages, or claims for relief or remuneration of any kind
whatsoever, whether known or unknown at this time, arising out of, or connected
with, my employment with Sears and the termination of my employment, including,
but not limited to, all matters in law, in equity, in contract (oral or written,
express or implied), or in tort, or pursuant to statute, including any claim for
age or other types of discrimination under the Age Discrimination in Employment
Act (“ADEA”), Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, or other federal, state, or local law or ordinance, to the
fullest extent permitted under the law, including the Employee Retirement Income
Security Act (“ERISA”). 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 my 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,
(2) any rights or claims to benefits accrued under benefit plans maintained by
Sears pursuant to ERISA, and (3) any claims that cannot be waived under the Fair
Labor Standards Act or Family and Medical Leave Act. I do, however, waive my
right to any monetary recovery should any agency 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.

In addition, I agree never to sue Sears in any forum for any claim covered by
this General Release and Waiver except that I may bring a claim under the ADEA
to challenge this General Release and Waiver. If I violate this General Release
and Waiver by suing Sears, other than under ADEA, I shall be liable to Sears for
its reasonable attorney’s fees and other litigation costs and expenses incurred
in defending against such a suit.

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.

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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.

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 SIGN

    Signed by:  

SAMPLE ONLY - DO NOT SIGN

      Witness by:  

 

 

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