Letter from Registrant to Robert J. O'Leary



 



EXHIBIT 10(b)



SEARS, ROEBUCK AND CO.


3333 BEVERLY ROAD


HOFFMAN ESTATES, IL 60179



	 	 	 
	 	Greg A. Lee

Senior Vice President

Human Resources

847-286-0558

Fax 847-286-3258





June 2, 2003


Mr. Robert J. O’Leary

2664 Pickerington Way

Hudson, OH 44236


Dear Bob,



This letter will confirm our offer of employment to join Sears, Roebuck and Co.
as Senior Vice President, Public Relations, Community & Government Affairs —
Sears, Roebuck and Co. reporting to Alan Lacy, Chairman and Chief Executive
Officer — Sears, Roebuck and Co. Your start date will be determined.


Your compensation package will consist of the following:


	 	•
	 	Annual base salary of $365,000 with periodic increases
based upon performance. Your next scheduled salary review will
be in early 2004.




	 	•
	 	A one time sign-on bonus of $100,000 net of applicable
taxes and payable after 30 days of your start date.




	 	•
	 	Participation in the Sears Annual Incentive Plan. Your
annual incentive opportunity at target equals 65% of base
salary, or $237,250 on an annualized basis. The annual
incentive for each calendar year will be payable by March 15 of
the following year, provided that you are actively employed
through the end of the final month of the incentive plan year.




	 	•
	 	For the 2003 incentive payable in 2004, we will guarantee
you a minimum Annual Incentive award equal to 100% of your 2003
annual bonus target.




	 	•
	 	25,000 non-qualified stock options, granted as soon as
practical after your date of hire, that will vest in three
equal annual installments from the date of grant. You will be
eligible for annual stock option grants starting in 2004
commensurate with your position.




	 	•
	 	20,000 shares of restricted stock that will cliff vest
three years from the date of the grant.




	 	•
	 	7,000 performance shares granted as part of the Sears
Long-Term Performance Incentive Program (LTPIP). The Sears
Board of Directors has approved the terms and provisions of the
LTPIP, which is designed to reward senior-level executives for
achievement of specified goals.




 









 



	 	•
	 	You will 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.




	 	•
	 	Pension will commence at your employment date. A service
enhancement to your pension benefit will be provided through
the non-qualified pension plan. The service enhancement will
be accrued to you as a 2-year for 1-year of service credit for
10 years or your termination of active service, whichever is
sooner. At age 65, the estimated value of your Sears pension
would equal a lump sum of approximately $1.5 million, while the
enhancement would equal an additional lump sum of approximately
$1.4 million.




	 	•
	 	You will be asked to sign an Executive Severance /
Non-Compete Agreement and an Executive Non-Disclosure and
Non-Solicitation of Employees Agreement. If you 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 two years of pay
continuation (i.e., base salary and target annual bonus). If
you are terminated following a change-in-control, you will
receive the aforementioned severance benefit in an undiscounted
lump-sum payment. 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.




	 	•
	 	You are eligible to receive 3 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 each year. Five flexible days off will be
granted after one year of service.




This offer is contingent upon passing a pre-employment drug test.


	 	•
	 	You must complete the drug test prior to your start date.
You may schedule the drug test at the site nearest you by
immediately contacting the Sears Wellness Center at (847)
286-0009. Please reference your business identification
number: (0194) when contacting the Wellness Center. Your test
results must be received before your start date.




	 	•
	 	You must present documentation on your start date verifying
your eligibility to work (passport, driver’s license, social
security card, etc.) and to complete the mandatory Form I-9
required by the Immigration Reform and Control Act.





	 	 	 
	Sincerely,
    
/s/ Greg A. Lee	 	 
	    	 	 
	    	 	 
	    	 	 
	Accepted /s/ Robert J. O’Leary	 	
Date 6/3/03