This document constitutes part of a prospectus covering
securities that have been
registered under the Securities Act of 1933.

















SEARS, ROEBUCK AND CO.

DEFERRED COMPENSATION PLAN

AS AMENDED AND RESTATED TO

August 11, 1999


















                           SEARS, ROEBUCK AND CO.
                        DEFERRED COMPENSATION PLAN




ARTICLE I


DESIGNATION OF PLAN AND DEFINITIONS


	1.1
Title

			This Plan shall be known as the "Sears,
Roebuck and Co. Deferred Compensation Plan" and shall become
effective for Compensation received on and after January 1,
1987.

	1.2
Definitions

			As used herein, the terms below shall have
the following meanings.  Any of these terms, unless the
context otherwise requires, may be used in the singular or
plural, depending upon the reference.

                               "Accounts" shall mean
Deferred Compensation Accounts.

(b)
                 "Annual Bonus" shall mean an
award (including Restricted Common Shares payable
pursuant to an Equity Swap election) payable under
the Sears, Roebuck and Co. Annual Incentive Plan.

(a) "Annual Bonus Election Date" shall mean, for any
Fiscal Year, November 30 of the Plan Year (or such other
date as selected by the Committee or its appointed
representative, provided that the Committee or its appointed
representative shall not select any such other date with
respect to a Fiscal Year unless the date  (1) is established
and communicated to Eligible Employees by the date two
months prior to the last day of the Fiscal Year, (2) does
not change after the date two months prior to the last day
of the Fiscal Year, (3) is the same date for all Eligible
Employees and (4) is no later than the last day of the
Fiscal Year or such earlier date as the Committee or its
appointed representative determines is necessary to be
satisfied that, for income tax purposes, no Participant may
be in constructive receipt of any Compensation deferred
under this Plan.

(b) "Base Salary" shall mean the base salary payable to
an employee of a Participating Employer, by the
Participating Employer, in cash.

(c) "Beneficiary" or "Contingent Beneficiary"
(collectively, "Beneficiary" or "Beneficiaries") shall mean
the person or persons last designated in writing by the
Participant to the Committee, in accordance with Section 8.4
of this Plan.

(d) "Board" shall mean the Board of  Directors of the
Company.

(e) "Code" shall mean the Internal Revenue Code of 1986,
as amended.

(f) "Committee" shall mean the Administrative
Committee for Sears Benefit Plans established by the Board
of Directors on August 14, 1996.

(g) "Common Shares" shall have the same meaning as set
forth in Section 4.3(h).

(h) "Common Shares Vesting Date" shall mean, for any
Vested Common Share Compensation, the date on which the
Vested Common Share Compensation arises because of the
lapsing of the Section 83 Restrictions on Restricted Common
Shares.

(i) "Company" shall mean Sears, Roebuck and Co. and
all consolidated subsidiaries thereof.

(j) "Company Stock Option" shall mean any option to
acquire Common Shares granted under a stock plan of the
Company by a Participating Employer to an Eligible Employee
for services rendered, but only if (1) the Eligible Employee
is (i) a member of the Corporate Strategic Leadership Team
(or the successor to such group) or any other group
designated by the Committee for purposes of this definition
or (ii) designated by the Committee for purposes of this
definition and (2) the stock option grant specifically
provides for option gain deferral under the terms of this
Plan.

(k) "Compensation" shall mean Base Salary, Annual
Bonuses, LTIP Awards, Stock Option Gain Compensation, Vested
Common Share Compensation and Other Compensation; provided,
however, that notwithstanding any other provision of this
Plan, (1) none of Base Salary, Annual Bonuses, LTIP Awards,
Vested Common Share Compensation or Other Compensation may
include any stock option, compensation paid in the form of
one or more stock options or compensation related to a stock
option and (2) Compensation shall only include any stock
option, compensation paid in the form of one or more stock
options or compensation related to a stock option if it is
Stock Option Gain Compensation.

(l) "Deferred Compensation Account" shall mean the
balance of all Compensation deferred by a Participant, plus
all interest, Dividend Equivalents and other amounts accrued
pursuant to Article IV of the Plan.

(m) "Dividend Equivalent" shall have the same meaning
as set forth in Section 4.3(h) of this Plan.

(n) "Eligible Employee" shall mean any Employee who is
eligible to be selected as a Participant under Article II of
this Plan.

(o) "Employee" shall mean any regular, full-time
employee of the Company.

(p) "Equity Swap" shall mean any plan, contract,
authorization or arrangement of the Company that allows an
employee of the Company to elect to receive all or any
portion of an Annual Bonus or LTIP Award in Common Shares
that are subject to Section 83 Restrictions.

(q) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.

(r) "Fair Market Value" shall have the same meaning as
set forth in Section 4.3(h).

(s) "Fiscal Year" shall mean the fiscal year of the
Company for accounting and federal income tax purposes.

(t) "Hardship" shall mean severe financial hardship to
the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of a dependent (as
defined in Section 152(a) of the Internal Revenue Code of
1986, as amended) of the Participant, loss of the
Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant.  The
circumstances that will constitute an unforeseeable
emergency will depend upon the facts of each case, but, in
any case, payment may not be made to the extent that such
hardship is or may be relieved-

1) through reimbursement or compensation by
insurance or otherwise,
2) by liquidation of the Participant's assets,
to the extent the liquidation of such assets would not
itself cause severe financial hardship, or

3) by cessation of deferrals under the Plan.

Examples of what are not considered to be unforeseeable
emergencies include the need to send a Participant's
child to college or the desire to purchase a home.

(u) "LTIP" shall mean the Sears, Roebuck and Co.
Long-Term Incentive Compensation Plan.

(v) "LTIP Award" shall mean an award payable
under the LTIP (including Common Shares payable
pursuant to the LTIP and Restricted Common Shares
payable pursuant to an Equity Swap election).

(w) "LTIP Award Election Date" shall mean, for
any LTIP cycle, November 30 of the last Fiscal Year of
the LTIP cycle (or such other date as selected by the
Committee or its appointed representative, provided
that the Committee or its appointed representative
shall not select any such other date with respect to
any LTIP cycle unless the date (1) is established and
communicated to Eligible Employees prior to the date
two months prior to the last day of the LTIP cycle, (2)
does not change after the date two months prior to the
last day of the LTIP cycle, (3) is the same date for
all Eligible Employees and (4) is no later than the
last day of the LTIP cycle or such earlier date as the
Committee or its appointed representative determines is
necessary to be satisfied that, for income tax
purposes, no Participant may be in constructive receipt
of any Compensation deferred under this Plan).

(x) "Other Compensation" shall mean
compensation that is not Base Salary, an Annual Bonus,
an LTIP Award, Stock Option Gain Compensation or Vested
Common Share Compensation, but is (i) a special bonus
or other compensation, in each case payable in cash or
equity securities of the Company by a Participating
Employer to an employee for services rendered or (ii)
any other compensation payable for services rendered as
may be designated by the Board, an Unaffiliated
Director Committee or, as pertaining only to
Participants who are not Section 16(a) Participants,
the Committee.

(y) "Participant" shall mean an Eligible Employee
participating in the Plan in accordance with Article II
hereof.

(z) "Participating Employer" shall mean the
Company, or any Subsidiary which adopts this Plan in
accordance with Section 2.2 hereof.

(aa) "Plan" shall mean this Sears, Roebuck and Co.
Deferred Compensation Plan as set forth herein, and as
amended from time to time in accordance with Article
VII hereof.

(bb) "Plan Year" shall mean the calendar year.

(cc) "Restricted Common Shares" shall mean
Common Shares subject to Section 83 Restrictions that
have not yet lapsed and that are received by an
Employee (1) as a special bonus or other compensation
for services rendered to the Participating Employer or
(2) because of the Employee's Equity Swap election with
respect to an Annual Bonus or an LTIP Award.

(dd) "Section 16(a) Participants" shall mean
Participants who are required to file reports under
Section 16(a) of the Exchange Act.

(ee) "Section 83 Restrictions" shall mean
restrictions that (1) prevent the Common Shares to
which they are attached from being transferable or (2)
cause the Common Shares to which they are attached to
be subject to a substantial risk of forfeiture, in each
case as defined by Section 83(c) of the Code.

(ff) "Separation from Service" shall mean the
termination of a Participant's employment with the
Company for any reason whatsoever, including
retirement, resignation, dismissal and death.

(gg) "Stock Option Gain Compensation" shall mean
the excess of the Fair Market Value on the exercise
date of the Common Shares acquired from the exercise of
a Company Stock Option by an Eligible Employee over the
exercise price of the Company Stock Option.
Notwithstanding any other provision in this Plan, any
stock option, compensation paid in the form of one or
more stock options or compensation related to a stock
option (1) shall only constitute Compensation if it is
Stock Option Gain Compensation and (2) shall not
constitute any other type of Compensation.

(hh) "Stock Option Gain Compensation Election
Date" shall mean, with respect to any acquisition of
Common Shares pursuant to the exercise of a Company
Stock Option, the date two calendar months prior to the
date the Eligible Employee acquires the Common Shares
by exercising the Company Stock Option (or such other
date as selected by the Committee or its appointed
representative, provided that the Committee or its
appointed representative shall not select any such
other date for acquisitions of Common Shares in a Plan
Year unless the date  (1) is established and
communicated to Eligible Employees prior to the
beginning of the Plan Year, (2) does not change after
the beginning of the Plan Year, (3) is the same date
for all Eligible Employees and (4) is, for any
acquisition of Common Shares in the Plan Year, no later
than the date the Company Stock Option is exercised
with respect to those Common Shares, or such earlier
date as the Committee or its appointed representative
determines is necessary to be satisfied that, for
income tax purposes, no Participant may be in
constructive receipt of any Compensation deferred under
this Plan).

(ii) "Subaccount" shall have the same meaning as
set forth in Section 4.3(h) of this Plan.

(jj) "Subsidiary" shall mean any corporation,
partnership, limited liability company or other entity
at least 50 percent of the equity securities or voting
power of which are owned directly or indirectly by the
Company.

(kk) "Transfer" shall mean a change in a
Participant's employment from a Participating  Employer
to a Subsidiary which is not a Participating Employer.

(ll) "Unaffiliated Director Committee" shall
mean a committee of the Board that is composed solely
of two or more non-employee directors, as that term is
defined in Rule 16b-3 promulgated under the Exchange
Act.

(mm) "Vested Common Share Compensation" shall
mean compensation that an Employee receives in the form
of Common Shares when, and if, the Section 83
Restrictions on any Restricted Common Shares lapse.

(nn) "Vested Common Share Compensation Election
Date" shall mean, with respect to any Vested Common
Share Compensation, the date two months prior to the
Common Shares Vesting Date (or such other date as
selected by the Committee or its appointed
representative, provided that the Committee or its
appointed representative shall not select any such
other date for Vested Common Share Compensation
potentially to be received in a Plan Year unless the
date (1) is established and communicated to Eligible
Employees prior to the beginning of the Plan Year, (2)
does not change after the beginning of the Plan Year,
(3) is the same date for all Eligible Employees and (4)
is, for any Vested Common Share Compensation, no later
than the Common Shares Vesting Date, or such earlier
date as the Committee or its appointed representative
determines is necessary to be satisfied that, for
income tax purposes, no Participant may be in
constructive receipt of any Compensation deferred under
this Plan).


ARTICLE II


PARTICIPATION


	2.1		Eligibility

		(a)	All Employees who are designated by the Board
from time to time as "executive officers" for the purposes
of Section 16 of the Exchange Act, and the rules and
regulations promulgated thereunder, shall be Eligible
Employees and may be Participants for the next Plan Year.

		(b)	Unless the Committee designates otherwise,
all other key officers and Employees who are expected to
have Compensation and such other items of income as the
Committee shall determine, of over the amount fixed from
time to time by the Secretary of the Treasury pursuant to
Section 401(a)(17) of the Code, for services rendered in the
next Plan Year (or, with respect to Compensation that is for
services rendered in a Fiscal Year, in the Fiscal Year that
ends nearest to the end of the next Plan Year), shall be
Eligible Employees and may be Participants for the next Plan
Year.  The Committee may change the requirements in this
Section 2.1 for eligibility, provided, however, that the
Committee shall not decrease said income eligibility
requirement.

	2.2		Participating Employers

		Any Subsidiary, with the approval of the Company,
may adopt this Plan for its Eligible Employees.

	2.3		Notice of Eligibility

		The Committee or its appointed representative
shall notify each Eligible Employee no later than 30 days
prior to the first business day of any Plan Year or as soon
thereafter as practicable, that he/she is entitled to become
a Participant in the Plan for such Plan Year.

	2.4		Participation Election

		An Eligible Employee shall be a Participant in the
Plan for any Plan Year if he/she elects to defer any
Compensation for the Plan Year (or, with respect to
Compensation that is for services rendered in a Fiscal Year,
the Fiscal Year that ends nearest to the end of the Plan
Year) in accordance with the procedures set forth in one or
more of paragraphs (a) through (f) below (subject to the
limitations and conditions set forth in this Section 2.4 and
in Sections 2.6 and 3.1 hereof):

(a) Base Salary.  Each Eligible Employee shall
give written notice to the Committee or its appointed
representative, of his/her election to defer Base Salary
expected to be earned by and otherwise payable to him/her in
any Plan Year, no later than the last business day of the
preceding Plan Year.  Such notice shall specify the deferral
percentage to be deferred of the Base Salary which would be
expected to be earned by and otherwise payable to him/her in
the upcoming Plan Year, as set forth in Section 3.1 of the
Plan.  If an Eligible Employee fails to give such written
notice of election by the last business day of the preceding
Plan Year, such failure will be deemed an election not to
defer Base Salary earned by and payable to him/her in such
upcoming Plan Year.  A Participant (or Eligible Employee)
may make changes in the deferral election for (or election
not to defer) Base Salary expected to be earned by otherwise
payable to him/her for the remainder of a Plan Year starting
with Base Salary expected to be earned by and otherwise
payable to him/her in the pay period following the receipt
by the Committee or its appointed representative of written
notice of such change; provided, however, that
notwithstanding the foregoing, the Committee and its
appointed representative shall only allow one change in Base
Salary deferral election per Plan Year quarter for each
Participant, unless the Committee or its appointed
representative notifies Participants that more frequent
changes are to be permitted.

(b) Annual Bonus.  Each Eligible Employee shall
give written notice to the Committee or its appointed
representative, of his/her election to defer all or any
portion of the Annual Bonus expected to be payable to
him/her for services rendered in the Fiscal Year that ends
nearest to the end of any Plan Year, no later than the
Annual Bonus Election Date.  Such notice shall specify the
deferral percentage or amount to be deferred of the Annual
Bonus which would otherwise be expected to be payable to
him/her for services rendered in the Fiscal Year, as set
forth in Section 3.1 of the Plan.  If an Eligible Employee
fails to give such written notice of election by the Annual
Bonus Election Date, such failure will be deemed an election
not to defer any Annual Bonus payable to him/her for
services rendered in the Fiscal Year.  A Participant may
make changes in his/her previously made deferral election
for an Annual Bonus otherwise expected to be payable to
him/her for services rendered in the Fiscal Year up to and
including the Annual Bonus Election Date.

(c) LTIP Award.  Each Eligible Employee shall
give written notice to the Committee or its appointed
representative, of his/her election to defer the LTIP Award
(or portion of any LTIP Award) expected to be payable to
him/her for services rendered in the Fiscal Years of an LTIP
cycle that end nearest to the end of each Plan Year in an
LTIP cycle, no later than the LTIP Award Election Date.
Such notice shall specify the deferral percentage or amount
to be deferred of the LTIP Award which would otherwise be
expected to be payable to him/her for services rendered in
the LTIP cycle, as set forth in Section 3.1 of the Plan.  If
an Eligible Employee fails to give such written notice of
election by the LTIP Award Election Date, such failure will
be deemed an election not to defer any LTIP Award payable to
him/her for services rendered in the LTIP cycle.  A
Participant may make changes in his/her previously made
deferral election for an LTIP Award otherwise expected to be
payable to him/her for services rendered in a LTIP cycle up
to and including the LTIP Award Election Date.
Notwithstanding any of the foregoing, for LTIP cycles
beginning with the 1999-2001 cycle, any Eligible Employee's
deferral election (or change in deferral election) with
respect to an LTIP Award must be made for the entire LTIP
cycle, except to the extent that the person is not an
Eligible Employee for the entire LTIP cycle.  The deferral
election (or change in deferral election) of a person who is
not an Eligible Employee for the entire LTIP cycle shall be
effective only for the Fiscal Years of the LTIP cycle that
end nearest to the end of the Plan Years in which he/she is
an Eligible Employee.

(d) Stock Option Gain Compensation.  Each
Eligible Employee shall give written notice to the Committee
or its appointed representative, of his/her election to
defer his/her Stock Option Gain Compensation related to any
Common Shares he/she may acquire pursuant to any Company
Stock Option no later than the Stock Option Gain
Compensation Election Date for that acquisition of Common
Shares.  Such notice shall specify the number of Common
Shares and the Company Stock Option(s) to which it is
applicable.  If an Eligible Employee fails to give such
written notice of election by the Stock Option Gain
Compensation Election Date for any acquisition of Common
Shares, such failure will be deemed an election not to defer
the Stock Option Gain Compensation related to those Common
Shares.  Any deferral election with respect to Stock Option
Gain Compensation is irrevocable in the event that the
Eligible Employee actually exercises the Company Stock
Option to which the election relates.  If an Eligible
Employee makes a deferral election with respect to any
Company Stock Option, he/she is prohibited from exercising
that Company Stock Option until the date two calendar months
after the election date (or such other date as selected by
the Committee or its appointed representative, the selection
of which shall be subject to the same proviso as set forth
in the parenthetical of Section 1.2(jj)).

(e) Vested Common Share Compensation.  Each
Eligible Employee shall give written notice to the Committee
or its appointed representative, of his/her election to
defer the Vested Common Share Compensation he/she may
receive with respect to any Restricted Common Shares no
later than the Vested Common Share Compensation Election
Date.  Such notice shall specify the Restricted Common
Shares and the Common Shares Vesting Date(s) that are
related to the Vested Common Share Compensation to be
deferred.  If an Eligible Employee fails to give such
written notice of election by the Vested Common Share
Compensation Election Date for any Vested Common Share
Compensation, such failure will be deemed an election not to
defer that Vested Common Share Compensation.  Any deferral
election with respect to Vested Common Share Compensation is
irrevocable.  Notwithstanding the provisions of Sections
2.4(b) and (c), it is understood that in the case of
Restricted Common Shares received pursuant to an Equity Swap
election made in connection with an Annual Bonus or an LTIP,
an Eligible Employee may defer, in accordance with the
provisions of this Section 2.4(e), the Vested Common Share
Compensation that he/she may receive with respect to those
Restricted Common Shares.

(f) Other Compensation. Each Eligible Employee
shall give written notice to the Committee or its appointed
representative, of his/her election to defer all or any
portion of any type of Other Compensation on or before the
date that is 20 business days prior to the date on which
such Other Compensation would otherwise be payable to the
Eligible Employee.  Notwithstanding the foregoing, such
notice of deferral election shall not become effective
unless approved by the Committee or its appointed
representative in a written notice to the Eligible Employee
making the election, it being understood that the Committee
or its appointed representative may reject the Eligible
Employee's notice of deferral election only if the Committee
or its appointed representative, in its sole discretion,
determines that, for federal income tax purposes, the
Eligible Employee may be in constructive receipt of the
Other Compensation otherwise payable if the deferral
election is approved.  A Participant's deferral election
shall specify the deferral percentages or amount to be
deferred and the type of Other Compensation to be deferred,
as set forth in Section 3.1 of the Plan.  If an Eligible
Employee fails to give such written notice of election or if
the Committee or its appointed representative rejects an
Eligible Employee's notice of election with respect to any
Other Compensation, such failure or rejection will be deemed
an election not to defer such Other Compensation.  A
Participant may not make changes in his/her previously made
deferral election for any type of Other Compensation without
the prior approval of the Committee or its appointed
representative, which approval may be withheld if the
Committee or its appointed representative, in its sole
discretion, determines that, for federal income tax
purposes, the Eligible Employee or any other Participant may
be in constructive receipt of Compensation deferred under
this Plan if the change in deferral election is approved.

	2.5		Participation Election Forms

			The Committee shall approve and make
available to all Eligible Employees the forms (on paper
and/or electronically) which shall be used by Eligible
Employees to notify the Committee of their elections
pursuant to Section 2.4 hereof to participate in the Plan.
Such forms shall clearly delineate the deferral alternatives
provided by the Plan, pursuant to Section 3.1 hereof.

	2.6		Exercise of Company Stock Option

			Notwithstanding any other provision of this
Plan, the deferral of Stock Option Gain Compensation with
respect to any Company Stock Option is conditioned on the
Eligible Employee's use of the reload feature of the Company
Stock Option and the attestation by the Eligible Employee of
his/her current ownership of Company Common Shares having a
Fair Market Value on the exercise date equal to the exercise
price of the Company Stock Option.

ARTICLE III


DEFERRALS


	3.1		Amount of Deferral

		(a)	Pursuant to Section 2.4 hereof, a Section
16(a) Participant may elect to defer in whole number
percentages or whole dollar terms, or a combination thereof,
up to all of such person's Compensation for the Plan Year
(or the Fiscal Year, as the case may be); provided, however,
that a Participant may defer Base Salary only in whole
number percentages; provided, further, that a Participant's
deferral election with respect to any number of Common
Shares related to a Company Stock Option shall apply to all
of such person's Stock Option Gain Compensation with respect
to that number of Common Shares first thereafter acquired
pursuant to the exercise of such Company Stock Option;
provided, further, that a Participant's deferral election
with respect to the Vested Common Share Compensation related
to any number of Restricted Common Shares and any Common
Shares Vesting Date shall apply to all the Vested Common
Share Compensation related to both that number of Restricted
Common Shares and that Common Shares Vesting Date; provided,
further, that any deferral election shall be subject to the
limitations and conditions set forth in Section 2.4 and
Section 2.6 hereof.  Notwithstanding any other provision of
this Plan, except in the case of deferrals of Base Salary,
no deferral election with respect to any Compensation shall
take effect unless, on the date the Compensation otherwise
would be deferred, the amount of such type of Compensation
otherwise to be deferred is at least $1000.

		(b)	Any other Participant may, pursuant to
Section 2.4 hereof, elect to defer in whole number
percentages or whole dollar terms, or a combination thereof,
up to all of such Participant's Compensation for the Plan
Year (or the Fiscal Year, as the case may be); provided,
however, that a Participant may defer Base Salary only in
whole number percentages; provided, further, that a
Participant's deferral election with respect to any number
of Common Shares related to a Company Stock Option shall
apply to all of such person's Stock Option Gain Compensation
with respect to that number of Common Shares first
thereafter acquired pursuant to the exercise of such Company
Stock Option; provided, further, that a Participant's
deferral election with respect to the Vested Common Share
Compensation related to any number of Restricted Common
Shares and any Common Shares Vesting Date shall apply to all
the Vested Common Share Compensation related to both that
number of Restricted Common Shares and that Common Shares
Vesting Date; provided, further, that any deferral election
shall be subject to the limitations and conditions set forth
in Section 2.4 and Section 2.6 hereof.

	3.2		Effective Date of Deferral

		Compensation deferred shall be credited to a
Participant's Account as set forth in Section 4.2.

	3.3.		Use of Amounts Deferred

		Amounts credited to Deferred Compensation Accounts
hereunder shall be a part of the general funds of the
Company, shall be subject to all the risks of the Company's
business, and may be deposited, invested or expended in any
manner whatsoever by the Company.

ARTICLE IV


DEFERRED COMPENSATION ACCOUNTS AND VESTING


	4.1		Establishment of Account

		The Committee shall establish, by bookkeeping
entry on the books of the Company, a Deferred Compensation
Account for each Participant.  Such Account shall be
established as of the first day of the Plan Year for which
the Eligible Employee first becomes a Participant.

	4.2		Contributions to Account

(a) Timing.  The Committee shall cause deferred
Compensation to be credited by bookkeeping entry to each
Participant's Account on the following dates:  (1) Base
Salary deferred in accordance with Sections 2.4(a) and 3.1
shall be credited as of the first day of the month following
the month containing the date on which such Compensation
otherwise would have been payable to the Participant; (2)
Annual Bonuses and LTIP Awards (including Restricted Common
Shares otherwise payable pursuant to an Equity Swap
election) deferred in accordance with Section 2.4(b) or (c)
and Section 3.1 shall be credited as of the date on which
such Compensation otherwise would have been payable to the
Participant; (3) Stock Option Gain Compensation deferred in
accordance with Sections 2.4(d), 2.6 and 3.1 shall be
credited as of the date the Participant exercises the
Company Stock Option with respect to the Common Shares to
which it relates; (4) Vested Common Share Compensation
deferred in accordance with Sections 2.4(e) and 3.1 shall be
credited as of the Common Shares Vesting Date and (5) Other
Compensation deferred in accordance with Sections 2.4(f) and
3.1 shall be credited as of the date on which such Other
Compensation otherwise would have been payable to the
Participant.


(b) Amount.  The Committee shall cause deferred
Compensation credited by bookkeeping entry to each
Participant's Account on the above dates to be credited in
the following amounts:  (1)  deferred Compensation that
would have otherwise been payable in cash shall be credited
in the amount of the cash Compensation that would have
otherwise been payable; (2) deferred Compensation that would
have been payable in Common Shares (including Vested Common
Share Compensation, but not including Restricted Common
Shares) shall be credited in the amount of the Fair Market
Value on the date of credit of the Common Shares; (3)
deferred Compensation that would have been payable in
Restricted Common Shares shall be credited in the amount of
the Fair Market Value on the date of credit of the Common
Shares to which the Section 83 Restrictions are attached
(determined without regard to the Section 83 Restrictions);
(4) deferred Compensation that would have been payable in
equity securities of the Company that are not Common Shares
or Restricted Common Shares shall be credited in the amount
of the fair market value on the date of credit of the equity
securities, as determined by the Committee or its appointed
representative; and (5) Stock Option Gain Compensation that
is deferred shall be credited in the amount of the Stock
Option Gain Compensation.

4.3 Accrual of Interest, Dividend Equivalents and
Other
	Amounts on Compensation Deferred

		To each Subaccount shall be credited, as
applicable, Compensation deferred, interest, Dividend
Equivalents and other amounts as set forth in paragraphs (a)
through (i) of this Section 4.3.  Payments to the
Participant shall be debited from the appropriate Subaccount
on the date of payment and amounts transferred from another
Subaccount under the Plan shall be debited from the
appropriate Subaccount on the date the transfer is effective
pursuant to Section 4.3(g).

		(a)	Subaccount #1 - Sears Roebuck Acceptance
Corp. Commercial Paper Rate.  Compensation deferred into
Subaccount #1 shall be credited to the Subaccount on the
same date or dates and in the same amount or amounts the
Participant's Account is credited as set forth in Section
4.2.  Transfers to this Subaccount from another Subaccount
shall be credited to the Subaccount on the effective date of
the transfer as set forth in Section 4.3(g).  Amounts
credited to this Subaccount shall earn interest from the
date of credit to the date of debit.  At the end of each
calendar month or, if earlier, on the date of payment,
interest at a rate equal to the monthly average per annum
cost of commercial paper or the equivalent issued by Sears
Roebuck Acceptance Corp. ("SRAC") as reported in the monthly
report to the SRAC Board of Directors shall be credited to
the amounts in each Subaccount for the period from the date
amounts were credited to such Subaccount for amounts
credited during the month or from the first day of the month
for amounts in the Subaccount on the last day of the
preceding month to the end of such calendar month or, if
earlier, to the date of payment.

		(b)	Subaccount #2 - Common Share Units.
Compensation deferred into Subaccount #2 shall be credited
to the Subaccount on the same date or dates and in the same
amount or amounts the Participant's Account is credited as
set forth in Section 4.2.  Transfers to this Subaccount from
another Subaccount shall be credited to the Subaccount on
the effective date of the transfer as set forth in Section
4.3(g), except for mandatory transfers from Subaccount #5,
which shall be credited to the Subaccount on the same date
as provided in Section 4.3(e).  Amounts credited to this
Subaccount shall be converted into a number of Common Share
Units on the date credited to the Subaccount by dividing the
Compensation deferred by the Fair Market Value on such date.
If Common Share Units exist in a Participant's Subaccount
which are indexed under Subaccount #2 on a dividend record
date for the Company's Common Shares, Dividend Equivalents
shall be credited to the Participant's Subaccount on the
related dividend payment date, and shall be converted into
the number of Common Share Units which could be purchased
with the amount of Dividend Equivalents so credited.

		In the event of any change in the Company's Common
Shares outstanding, by reason of any stock split or
dividend, recapitalization, merger, consolidation,
combination or exchange of stock or similar corporate
change, the Committee shall make such equitable adjustments,
if any, by reason of any such change, deemed appropriate in
the number of Common Share Units credited to each
Participant's Subaccount #2.

		(c)	Subaccount #3 -  Equity Index Subaccount.
Compensation deferred into Subaccount #3 shall be credited
to the Subaccount on the same date or dates and in the same
amount or amounts the Participant's Account is credited as
set forth in Section 4.2.  Transfers to this Subaccount from
another Subaccount shall be credited to the Subaccount on
the effective date of the transfer as set forth in Section
4.3(g).  On the last day in the month the amounts in the
Participant's Subaccount shall be adjusted by a percentage
factor based on the total return (including dividends) of
the  Equity Index from the date the amount was credited to
the Subaccount for amounts credited during the month or from
the first day of the month for amounts in the Subaccount on
the last day of the preceding month.  Similar adjustments
shall also be made on any date the Subaccount is debited by
reason of any distribution to the Participant.  In the event
that the Equity Index is not published for any date referred
to above, the Equity Index for the closest day preceding
such date for which such Index is published shall be used.

		(d)	Subaccount #4 -  Fixed Income Index
Subaccount.  Compensation deferred into Subaccount #4 shall
be credited to the Subaccount on the same date or dates and
in the same amount or amounts the Participant's Account is
credited as set forth in Section 4.2.  Transfers to this
Subaccount from another Subaccount shall be credited to the
Subaccount on the effective date of the transfer as set
forth in Section 4.3(g).  Amounts in the Subaccount shall
earn additional amounts which will be credited to the
Subaccount on the last business day of each month or, if
earlier, the date of distribution to the Participant, based
upon the performance of the Fixed Income Index and the
period of time during the month that the amounts were in the
Subaccount.

		(e)	Subaccount #5 - Restricted Common Share Unit
Account.  Compensation deferred into Subaccount #5 shall be
credited to the Subaccount on the same date or dates and in
the same amount or amounts the Participant's Account is
credited as set forth in Section 4.2.  If a Participant has
elected under this Plan to defer Restricted Common Shares
that otherwise would have been received pursuant to an
Equity Swap election in connection with an Annual Bonus or
an LTIP Award, then the dollar amount of such Compensation
shall be allocated to Subaccount #5 and to no other
Subaccount, except as provided below.

		 Such Compensation shall be converted into Common
Share Units in the same manner as provided in Section 4.3(b)
on the same date credited to the Subaccount.  Dividend
Equivalents shall be credited to and equitable adjustments
shall be made to Subaccount #5 in the same manner as to
Subaccount #2 as set forth in Section 4.3(b).   Any event
that would cause a forfeiture of the Restricted Common
Shares that otherwise would have been received under the
Equity Swap election, shall cause a forfeiture of Common
Share Units under Subaccount #5.

		On the date on which all Section 83 Restrictions
would lapse if a participant had received Restricted Common
Shares pursuant to the Equity Swap election, instead of
restricted common share units pursuant to this Plan, all
Dividend Equivalents (except for Dividend Equivalents
accruing as of the close of business on such date) will
cease to accrue and all amounts in Subaccount #5 shall
automatically be transferred into Subaccount #2 and
thereafter shall be subject to all of the provisions of the
Plan applicable to Subaccount #2, including provisions
relating to transfers of amounts between Subaccount #2 and
other Subaccounts and distribution.

		(f)	Subaccount #6 - Nondiversifiable Common Share
Subaccount.  Stock Option Gain Compensation and Vested
Common Share Compensation deferred into Subaccount #6 shall
be credited to the Subaccount on the same date or dates and
in the same amount or amounts the Participant's account in
credited as set forth in Section 4.2.  If a Participant has
elected under this Plan to defer Stock Option Gain
Compensation and/or Vested Common Share Compensation, then
the dollar amount of such Compensation shall be allocated to
Subaccount #6 and to no other Subaccount.  The dollar amount
of such Compensation shall be converted into Common Share
Units on the date credited to the Subaccount in the same
manner as provided in Section 4.3(b).  Dividend Equivalents
shall be credited to and equitable adjustments shall be made
to Subaccount #6 in the same manner as to Subaccount #2 as
set forth in Section 4.3(b).

		(g)	Transfers between Subaccounts.  Transfers
among Subaccounts #1, #2, #3 and #4 may be made once each
calendar month at the request of the Participant upon
application to the Director of Executive Compensation of the
Company (or any person succeeding to the functions
previously performed by the Director of Executive
Compensation of the Company, regardless of title), and shall
be effective as of the first day of the calendar month
subsequent to the month in which the Company receives such
Participant's request to transfer.  Notwithstanding the
foregoing, (i) except for the mandatory transfer referred to
in Section 4.3(e) above, no transfers shall be allowed to or
from Subaccount #5 and (ii) no transfers shall be allowed to
or from Subaccount #6.

	With respect to a Section 16(a) Participant, in the
case of:

(i) 	any election to transfer or withdraw from
Subaccount #2 which occurs within six months after
an election to transfer into Subaccount #2 or into
another Equity Fund Account; and

(ii)	any election to transfer into Subaccount #2 which
occurs within six months after an election to
transfer or withdraw from Subaccount #2 or from
another Equity Fund Account,

the second election shall not be effective for any purpose
under this Plan, and the account of any such Section 16(a)
Participant shall continue to reflect all balances and
accruals as if such election had not been made.  The Company
is authorized to make any adjustments to a Section 16(a)
Participant's account as may be necessary to give effect to
the foregoing provision.

		(h)	The following definitions apply to this
Section 4.3:

			1)	"Common Share Unit" shall mean an amount
of Compensation deferred which is converted
into a unit or fraction of a unit for
purposes of the Plan by dividing a dollar
amount by the Fair Market Value of one of the
Company's Common Shares.

2)	"Common Shares" shall mean the Company's
common shares, par value $.75 per share.

			3)	"Dividend Equivalent" shall mean an
amount equal to the cash dividend paid on one
of the Company's Common Shares credited to a
Subaccount for each Common Share Unit
credited to such Subaccount.

			4)	"Equity Fund Account" shall mean an
account for a Section 16(a) Participant
maintained under a benefit plan of the
Company, that contains a Company "equity
security" within the meaning of the term
"equity security of such issuer" in Rule 16a-
1 under the Exchange Act.

			5)	"Equity Index" shall mean the Standard &
Poor's 500 Composite Stock Price Index which
is a market value-weighted index consisting
of 500 common stocks of large U.S. domiciled
companies selected by Standard and Poor's
Corporation ("S&P") through a detailed
screening process starting on a macro-
economic level and working toward a micro-
economic level dealing with company specific
information such as market value, industry
group classification, capitalization and
trading activity.  S&P's primary objective
for the S&P Index is to represent the segment
of the U.S. equity securities markets
consisting of large market capitalization
stocks.  However, companies are not selected
by S&P for inclusion because they are
expected to have superior stock price
performance relative to the market in general
or other stocks in particular.

			6)	"Fair Market Value" shall mean the
closing price of the Company's Common Shares
as reported by the Wall Street Journal or
other comparable source in a summary of
composite transactions for stocks listed on
the New York Stock Exchange.

			7)	"Fixed Income Index" shall mean the
Lehman Brothers Aggregate Bond Index, which
is made up of the Lehman Government/Corporate
Bond Index ("Bond Index"), the Lehman
Mortgage-Backed Securities Index ("Mortgage-
Backed Securities Index"), and the Lehman
Asset-Backed Securities Index ("Asset-Backed
Securities Index").  The Bond Index is a
composite of all publicly issued, fixed rate,
nonconvertible, domestic bonds.  The issues
are rated investment grade or higher by
Moody's Investors Service, Inc., S&P, or
Fitch Investors Service, Inc., in that order,
have a minimum outstanding principal of $100
million for U.S. Government issues or $50
million for other bonds, and have a maturity
of at least one year.  The index is
capitalization-weighted.  The Mortgage-Backed
Securities Index includes 15- and 30-year
fixed rate securities backed by mortgage
pools of the Government National Mortgage
Association, the Federal Home Loan Mortgage
Corporation, and the Federal National
Mortgage Association.  Graduated payment
mortgages and balloon mortgages are included
in the index; buydown, manufactured homes and
graduated equity mortgages are not.  The
Asset-Backed Securities Index is composed of
credit card, auto, and home equity loans.
Included in the index are pass-through,
bullet (noncallable), and controlled
amortization structures; no subordination
tranches are included.  All securities have
an average life of at least one year.

			8)	"Subaccount" shall mean the portion of
the balance in an Account reflecting the
Compensation deferred and indexed, as
specified by the Participant, against one of
the indices set forth in Sections 4.3(a),
(b), (c),  (d), (e) or (f), and the interest,
Dividend Equivalents and other amounts
credited thereto.

		(i)	Each Participant may vary the choice of
Subaccounts to which Compensation is credited by executing
and delivering a notice to the Director of  Executive
Compensation of the Company at any time; provided, however,
that (i) an Annual Bonus and/or LTIP Award that the
Participant has elected to receive in Restricted Common
Shares under an Equity Swap and that the Participant has
deferred in accordance with Section 2.4(b) or (c) and
Section 3.1 may be credited only to Subaccount #5 and (ii)
Stock Option Gain Compensation and Vested Common Share
Compensation may be credited only to Subaccount #6.  Such
election shall be applicable only to Compensation payable on
or after the first day of the month following the month in
which such notice of election is received.

	4.4		Vesting

		A Participant shall be fully vested in his/her
Deferred Compensation Account at all times, subject to
Sections 3.3 and 8.2 and any potential forfeiture referred
to in Section 4.3(e).


	4.5		Participant Transfers

		In the event of a Transfer, deferrals of
Compensation under this Plan shall be discontinued as of the
first day of the pay period during which the Transfer
becomes effective, according to Company policy.  The
Participant's Account shall continue to be credited with
interest, Dividend Equivalents and other amounts pursuant to
Section 4.3 in the same manner as the Accounts of all other
Participants, until such time as the Account is
distributable pursuant to Article V.  In the event such an
Employee again becomes an Eligible Employee, he will be
notified of his eligibility to become a Participant again in
accordance with the procedure in Section 2.3 and may elect
to become a Participant again in accordance with the
procedure in Section 2.3 and may elect to become a
Participant again in accordance with the procedure in
Section 2.4.

	4.6		Transfers of Liabilities From Another Plan

		The Committee or the Board, in the sole discretion
of either the Committee or the Board, may approve the
transfer of benefit liabilities from another unfunded
deferred compensation arrangement of the Company (the "Other
Plan") to this Plan with respect to any individual who is an
Eligible Employee, even if such individual has not elected
to participate in the Plan in accordance with Section 2.4.
If such individual is already a Participant, the balance of
his/her Account under this Plan will be increased by the
balance of his account(s) under the Other Plan as of the
date of transfer.  If the individual is not already a
Participant, an Account will be established for him/her
reflecting the balance of his/her account(s) under the Other
Plan as of the date of transfer.  Each individual who has an
account balance from an Other Plan transferred to this Plan
will be given the opportunity, prior to the date of
transfer, to choose the Subaccount(s) to which the
transferred amount will be credited under Section 4.3 and
the timing and form of payment to be made under Section 5.4;
provided, however, that the Board or Committee may eliminate
the election with respect to any or all of the choice of
Subaccounts, the timing of payment and/or the form of
payment to the extent that the Other Plan provided the
individual with the same options as the Plan with respect to
the choice of Subaccounts, the timing of payment and/or the
form of payment; provided, further, that the Board or
Committee may designate the Subaccount(s) to which
restricted property may be transferred; provided, further,
that the Board or Committee may limit or prohibit transfers
to Subaccounts #5 and #6.  If an individual fails to make a
timely election in accordance with the preceding sentence or
to the extent the Board or the Committee eliminates an
individual's election as provided in the previous sentence,
the individual's balance in the Other Plan will be
transferred to this Plan and allocated among the
Subaccount(s) under this Plan in a manner that, in the
judgment of the Company's Senior Vice President, Human
Resources, or any other person performing similar functions,
regardless of title (the "Senior Vice President, Human
Resources"), most closely duplicates the subaccount(s) to
which his balance was allocated under the Other Plan, and/or
such individual will be deemed to have elected distribution
in the form and/or at the time available under this Plan
that in the judgment of the Senior Vice President, Human
Resources, most closely matches his/her distribution
election under the Other Plan.  If the Senior Vice
President, Human Resources, determines that this Plan does
not have a comparable distribution option, the individual
will be deemed to have elected distribution in a lump sum
upon the Participant's Separation from Service.  Once the
balance from the Other Plan is transferred to this Plan, it
will be governed by the same rules regarding accrual of
interest, Dividend Equivalents and other amounts and the
same rules regarding distributions, including the ability to
make new elections, as any other deferrals under this Plan.

ARTICLE V

PAYMENTS


	5.1		Events Causing Accounts to Become
			Distributable

		A Participant's Account becomes distributable on
the date on which any of the following occurs:

(a) Separation from Service;

(b) Demonstration of Hardship by the Participant
to the Committee or its appointed representative;

(c) As to all or any portion of an Account, on a
date certain occurring at any time subsequent to the date
one month after the date on which the Committee receives a
Participant's election form under this Section 5.1(c), as
shall be irrevocably specified by the Participant; provided,
however, that a Participant shall be permitted to make an
election under this Section 5.1(c) only if the Participant
agrees to forego all entitlement to, and to allow the
Company to withhold and retain for its own use, an amount
equal to 10 percent of the portion of the Account specified
by the Participant to be distributed on the date certain.

(d) As to all or any portion of an Account
attributable to Compensation earned and deferred and
interest, Dividend Equivalents and other amounts accrued
thereon after the date on which the Committee receives a
Participant's election form under this Section 5.1(d), on a
date certain occurring at any time subsequent to the close
of the Plan Year in which the Participant makes the election
under this Section 5.1(d), as shall be irrevocably specified
by the Participant; provided, however, that a Participant
shall be permitted to make an election under this Section
5.1 (d) no more than one time per Plan Year and shall not be
permitted to have more than one election under this Section
5.1 (d) outstanding at any time.

		Any balance in the Participant's Account remaining
after any payment under paragraph (c) and/or paragraph (d),
and any balance in the Account attributable to participation
in the Plan in any year subsequent to the year in which a
payout on such date(s) certain occurs, shall be paid to the
Participant as provided in paragraph (a) or (b) above.

		Notwithstanding any contrary election by a
Participant, if any payment under this Section 5.1 would be
made at a time when a Participant is a "covered employee" as
defined in Section 162(m) of the Internal Revenue Code of
1986, as amended, and if such payment, together with other
compensation payable to the Participant, could cause the
Company to be limited by said Section 162(m) from claiming
as a deduction the full amount of compensation payable to
that Participant on any tax return, then the Company may
require the payment to be deferred hereunder until the first
date on which the Company can claim such deduction, unless
further deferred as provided in this Section 5.1.

	5.2		Notice of Account Payment and Commencement
			of Distribution

		The Committee or its appointed representative
shall notify a Participant or Beneficiary, as the case may
be, that he/she is entitled to receive payment from an
Account, no later than the first day of the month succeeding
the date on which the Account becomes distributable, or as
soon thereafter as practicable.  Distribution of Account
balances shall commence on the first day of the month
following the date on which the Account becomes
distributable, or as soon thereafter as practicable.

	5.3	 	Form of Payment

		(a)	Payments of Account balances to a Participant
from Subaccounts #1, #2, #3 and #4 shall be in cash;
payments of Account balances to a Participant from
Subaccount #6 shall be made in whole Common Shares.  Except
as provided in paragraphs (c) and (d) of this Section 5.3
and Article VIII hereof, payments of Account balances to a
Participant shall be in the form of one lump sum payment or
annual installment payments over a period of from 1 to 10
years, at the election of  the Participant; provided, that,
at the election of the Participant, a lump sum payment
distributable upon the Participant's Separation from Service
may be delayed until the date one or two years after the
Participant's Separation from Service; provided, further,
that,
at the election of the Participant, payment of the first
installment distributable upon the Participant's Separation
from Service may be delayed until one year after the
Participant's Separation from Service.

		(b)	The following formula shall be used to
determine each annual installment payment to a Participant
who has elected to receive installment payments:

		(i)	 cash equal to:

remaining Account balance from Subaccounts #1, #2, #3 and #4
as of
		current payment date
number of remaining payments, including the current one

plus

		(ii) 	whole Common Shares equal to:

 remaining number of Common Share Units from Subaccount #6
		as of current payment date
   number of remaining payments, including the current one


On the last payment date, in addition to the installment
payment determined according to the above formula, the
Participant shall receive cash in an amount equal to the
fractional Common Share Units remaining in Subaccount # 6
after the application of the above formula for that date,
multiplied by the Fair Market Value on such date.  Annual
payments shall be made on the day payments commence pursuant
to Section 5.2 and on each annual anniversary date of such
initial payment.  Interest, Dividend Equivalents and other
amounts shall continue to accrue on the entire unpaid
Account balance, as provided in Section 4.3.

		(c)	In the event of a Participant's death prior
to full distribution of his/her Account, the remaining
Account balance shall be paid in a lump-sum to the
Beneficiary or Beneficiaries, according to the designation
made by the Participant, as soon as practicable after a
Participant's death, and shall accrue interest, Dividend
Equivalents and other amounts, as provided in Section 4.3,
until the account is completely distributed.

		(d)	Notwithstanding the provisions of paragraph
(b) above, if the remaining unpaid Account balance is $5,000
or less on any date an annual installment payment is to be
made to a Participant, the payment shall be the remaining
unpaid Account balance.

	5.4		Distribution Election

		(a)	Each Participant shall give written notice of
his/her desired form of payment at the time of his/her first
participation election set forth in Section 2.4.

		(b)	Except for distribution elections under
Section 5.1(c) and (d), each Participant may from time to
time revise the terms of distribution of the Participant's
Account by submitting a revised written notice of his/her
desired form of payment, provided that the revised written
notice of his/her desired form of payment must be filed by
the Participant with the Committee or its appointed
representative no later than (1) the earlier of (A) the end
of the calendar year prior to the date on which payment
would commence to be made in the absence of such revised
written notice and (B) 20 business days prior to the date on
which payment would commence to be made in the absence of
such revised written notice, (2) the earlier of (A) the end
of the calendar year prior to the date on which payment
would commence under the Participant's revised notice and
(B) 20 business days prior to the date on which payment
would commence under the revised notice and (3) the day
before the date of the Participant's Separation from
Service.

	5.5		Distribution Election Form

		The Committee shall approve and make available to
all Participants a form (on paper and/or electronically)
which shall be used by each Participant to notify the
Committee of his/her desired form of payment or to notify
the Committee of any revision to his/her desired form of
payment.  Such form shall clearly delineate the payment
alternatives provided pursuant to Section 5.3 hereof.

ARTICLE VI


ADMINISTRATION


	6.1		General Administration; Rights and Duties

		Subject to the express limitations of the Plan,
the Committee, on behalf of the Participants, shall be
charged with the general administration of the Plan and with
the responsibility for carrying out its provisions, and
shall have all powers necessary to accomplish those
purposes, including, but not by way of limitation, the
following:

	(a)	To construe and interpret the Plan;

	(b)	To compute the amount of benefits payable to
Participants;

	(c)	To authorize all disbursements by the Company of
Account balances pursuant to the Plan;

	(d)	To maintain all the necessary records for the
administration of the Plan;

	(e)	To make and publish rules for the administration
and interpretation of the Plan and the transaction of its
business;

	(f)	To inform each Participant as soon as practicable
after January 1 of each Plan Year, of the value of the
Participant's Deferred Compensation Account as of the end of
the previous Plan Year;

	(g)	To appoint (i) officers or Employees of the
Company whom the Committee believes to be reliable and
competent; and (ii) legal counsel (who may be Employees of
the Company and Participants), independent accountants and
other persons to assist the Committee in administering the
Plan; and

	(h)	To conclusively determine, in its sole discretion,
all questions arising under the Plan, including the power to
determine the rights and eligibility of employees,
Participants, and other persons, and the amounts of their
benefits under the Plan, and to remedy ambiguities,
inconsistencies or omissions, and without limiting the
generality of the foregoing, to interpret the provisions of
the Plan to eliminate these ambiguities, inconsistencies or
omissions, and such determination by the Committee shall be
conclusive on all persons unless demonstrated to be
incorrect to the satisfaction of the Committee.

		The determination of the Committee as to any
disputed question or controversy shall be conclusive.

		Any member of the Committee may resign by
delivering a written resignation to the Board.

ARTICLE VII


PLAN AMENDMENTS AND TERMINATION


	7.1		Amendments

		The Company shall have the right to amend this
Plan from time to time by resolutions of the Board or by an
Unaffiliated Director Committee or the Committee, and to
amend or rescind any such amendments; provided, however,
that no action under this Section 7.1 shall in any way
reduce the amount of Compensation deferred or any interest,
Dividend Equivalents or other amounts credited thereon, up
to and including the end of the month in which such action
is taken; provided, further, that Sections 1.2 (m) and
4.3(g), each as it pertains to Section 16 (a) Participants,
and Sections 1.2(ff), 2.1 (a), 3.1 (a) and 4.3(h) may be
amended only by the Board or by an Unaffiliated Director
Committee.  Interest, Dividend Equivalents and other amounts
will continue to accrue as provided in Section 4.3.  All
such amendments shall be in writing and shall be effective
as provided by the Board or the Committee, as the case may
be, subject to the limitations in this Section 7.1.  The
Committee shall inform each Participant as soon as
practicable following the enactment of any such amendment.

	7.2		Termination of Plan

		Although the Company expects that this Plan will
continue indefinitely, continuance of this Plan is not a
contractual or other obligation of the Company, and the
Company expressly reserves its right to discontinue this
Plan at any time by resolutions of the Board or the
Compensation Committee of the Board, effective as provided
in such resolutions.  However, no such action shall in any
way reduce the amount of Compensation deferred or any
interest, Dividend Equivalents or other amounts credited
thereon, up to and including the end of the month in which
such action is taken.  Interest, Dividend Equivalents and
other amounts will continue to accrue as provided in Section
4.3.

ARTICLE VIII


MISCELLANEOUS


	8.1		Notification to Committee

		Any notification given by a Participant pursuant
to this Plan shall be made in writing to the Committee or to
such representative of the Committee as may be designated by
it for such purpose, and shall be deemed to have been made
or given on the date received by the Committee or such
representative.  To the extent permitted by the Committee or
its appointed representative, any notification required to
be provided in writing under this Plan may be provided
electronically.

	8.2		Participants' Employment

		Participation in this Plan shall not give any
Participant the right to be retained in the Company's employ
or any right or interest other than as herein provided.  No
Participant or Employee shall have any right to any payment
or benefit hereunder except to the extent provided in this
Plan.  The Company expressly reserves the right to dismiss
any Participant without any liability for any claim against
the Company, except to the extent expressly provided herein.
This Plan shall create only a contractual obligation on the
part of the Company and shall not be construed as creating a
trust or other fiduciary relationship with Participants.
Participants will have only the rights of general unsecured
creditors of the Company with respect to Compensation
deferred and interest, Dividend Equivalents and other
amounts credited to their Accounts.

	8.3		Other Plans

		This Plan shall not affect the right of any
Employee or Participant to participate in and receive
benefits under and in accordance with the provisions of any
other Company plans which are now or may hereafter be in
existence.

	8.4		Beneficiaries and Contingent Beneficiaries

		Each Participant shall, by written notice to the
Committee, designate one or more persons or entities
(including a trust or trusts or his/her estate) to receive
any balance in his/her Deferred Compensation Account payable
to him/her under this Plan in the event of his/her death
prior to full payment thereof.  The Participant may also
designate a person or persons as a Contingent Beneficiary or
Contingent Beneficiaries who shall succeed to the rights of
the person or persons originally designated as Beneficiary
or Beneficiaries, in case the latter should die.  He/she may
from time to time change any designation of Beneficiary or
Contingent Beneficiary so made, and the last written notice
given by him/her to the Committee shall be controlling.  In
the event a Participant designates a person other than
his/her spouse as Beneficiary of any interests under this
Plan, the Participant's spouse shall sign a statement
specifically approving such designation and authorizing the
Committee to make payment of such interests in the manner
provided in such designation.  In the absence of such
designation by the Participant, or in the absence of spousal
approval and authorization as hereinabove provided, or in
the event of the death prior to or simultaneous with the
death of the Participant, of all Beneficiaries or Contingent
Beneficiaries, as the case may be, to whom payments were to
be made pursuant to a designation under this Section, and
failing any other valid designation by the Participant, such
payments or any balance thereof shall be paid to such
Participant's legal representatives.  In the event of the
death, subsequent to the death of the Participant, of all
Beneficiaries or Contingent Beneficiaries, as the case may
be, to whom such payments were to be made or were being made
pursuant to a designation under this Section, such payments
or any balance thereof shall be paid to the legal
representatives of such Beneficiaries or Contingent
Beneficiaries.

	8.5		Taxes

		To the extent permitted by law, if the whole or
any part of a Participant's Account shall become the subject
of any estate, inheritance, income, employment or other tax
which the Company shall legally be required to withhold
and/or pay, the Company shall have full power and authority
to pay such tax out of any monies or other property in its
hands and charge such amounts paid against the Account of
the Participant whose interest hereunder is subject to such
taxes.  Prior to making any such tax payment, the Company
may require such releases or other documents from any lawful
taxing authority as the Company shall deem necessary.

	8.6		Benefits Not Assignable; Obligations
			Binding Upon Successors

		Benefits under this Plan and rights to receive the
amounts credited to the Account of a Participant shall not
be assignable or transferable and any purported transfer,
assignment, pledge or other encumbrance or attachment of any
payments or benefits under this Plan, other than by
operation of law, shall not be permitted or recognized.
Obligations of the Company under this Plan shall be binding
upon successors of the Company.

	8.7		Illinois Law Governs; Saving Clause

		The validity of this Plan or any of its provisions
shall be construed and governed in all respects under and by
the laws of the State of Illinois.  If any provisions of
this Plan shall be held by a court of competent jurisdiction
to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.

	8.8		Headings Not Part of Plan

		Headings and subheadings in this Plan are inserted
for reference only, and are not to be considered in the
construction of the provisions hereof.

	8.9		Mid-Year Participants

		Notwithstanding Article III and Sections 4.5 and
5.4(a) and 5.5 of the Plan, any person who during a Plan
Year (i) shall become eligible to participate in the LTIP
and (ii) expects to have Compensation over the amount
specified in Section 2.1(b) of the Plan for services
rendered in such Plan Year (or, with respect to Compensation
payable for a Fiscal Year, the Fiscal Year ending nearest
the end of the Plan Year) ("Mid-Year Participants"), shall
be an Eligible Employee and may be a Participant, with
respect to the portion of the Plan Year beginning the day
after the effective date of election or appointment, or
eligibility to participate in the LTIP.  The Director of
Executive Compensation of the Company, or any other person
performing similar functions, regardless of title, is
directed to notify all persons who become Mid-Year
Participants of their eligibility to participate in the
Plan, as soon as practicable after their election or
appointment or after they become eligible to participate in
the LTIP.  Each Mid-Year Participant shall give written
notice to the Committee or its appointed representative, of
his or her election to become a Participant in the Plan for
the remainder of such Plan Year, on a form to be provided by
the Company, by the relevant time or times provided in
Section 2.4 or, if later, within 30 days of being notified
of his or her eligibility.  If a Mid-Year Participant fails
to give such notice by the time provided in the foregoing
sentence, such failure will be deemed an election not to
become a Participant for the remainder of such Plan Year.


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