Exhibit 10


RETIREMENT AGREEMENT



This Retirement Agreement (the "Agreement")
is entered into between Sears, Roebuck and Co., a New York corporation
(the "Company") and Arthur C. Martinez, a resident of the State of Illinois
(the "Executive") as of April 11, 2000.

This Agreement is hereby entered
into in consideration of the following covenants and mutual promises.

2. Payments. Following the
execution of this Agreement, the Company shall make the following payments
to the Executive:

b) An amount (the "2000 Annual Bonus"),
calculated according to the Sears, Roebuck and Co. Annual Incentive Compensation
Plan (the "Annual Incentive Compensation Plan"), equal to the greater of
(i) the amount of the 2000 target annual bonus under the Annual Incentive
Compensation Plan to which Executive would have been entitled if he had
remained employed by the Company through December 31, 2000 and the Company
had met the target level performance requirements for 2000, and (ii) 
the amount of the annual bonus under the Annual Incentive Compensation
Plan to which Executive would have been entitled based on the actual percentage
earned by the other senior executives, in each case, prorated for the year
2000 based on the number of days elapsed in such calendar year as of the
earlier of the Retirement Date or December 31, 2000. The 2000 Annual Bonus
shall be paid at such time as it would have been paid had Executive remained
employed by the Company but in any event no later than March 1, 2001;

c) A lump sum payment payable on
January 5, 2001 (or the Retirement Date, if later), equal to three times
the sum of (i) annual base salary at the rate currently in effect and (ii)
the amount of the non-prorated 2000 target annual bonus referred to above;
and

d) The award under the Long Term
Performance Plan ("LTPP") for the LTPP period January 1, 1999 through December
31, 2001 in an amount determined as if the Company had met the target level
performance requirements for that LTPP period as provided in the LTPP and
payable at the time such award would have been paid pursuant to the LTPP
if Executive had continued employment with the Company through December
31, 2001, but in any event no later than March 1, 2002.

4. Welfare Coverage. The Company
shall provide Executive with coverage under the welfare plans in which
Executive currently participates through the Retirement Date. Thereafter,
Executive shall be treated as eligible to receive Retiree Medical coverage
and for all purposes thereunder shall be treated as having been covered
under a Sears medical option on the Retirement Date and as having been
continuously covered for the ten (10) consecutive years immediately prior
to the Retirement Date.

5. Chairman's Retirement Benefits.
In recognition of the Executive's services as Chairman of the Company,
the following additional benefits shall be provided, or the cost of such
benefits reimbursed, consistent with traditional benefits provided upon
retirement to the Chairman of the Company:

b) Fees for services consistent with
current practice and suitable for Executive's needs, from a financial planner
and tax advisor selected by the Executive, until December 31, 2005.

7. Mutual Release. In consideration
of the service commitments and benefits provided under this Agreement,
Executive and the Company have entered into the Mutual Release which is
attached hereto as Exhibit A. This Mutual Release shall for purposes of
this Agreement be treated as incorporated into this Section 7 in the form
attached hereto.

8. Resignation of Officerships,
Titles and Directorships. Effective on the Retirement Date, the Executive
will resign all then remaining officerships, titles, and directorships
with the Company, its subsidiaries and affiliates.

9. Prior Agreements, Non-Competition,
Nonsolicitation, Confidentiality and Non-Disparagement. Except as provided
for herein, this Agreement shall supersede all prior agreements between
the Executive and the Company regarding Executive's employment; provided,
however, the protective covenants provided for in Section 5 of the Non-Compete/Change-of-Control
Agreement between the Company and Executive dated April 7, 1999 (the "Change-of-Control
Agreement") shall continue in full force and effect as provided therein.
Furthermore, the Executive agrees not to engage in any act after execution
of this Agreement that is intended, or may reasonably be expected, to harm
the reputation, business, prospects or operations of the Company, its officers,
directors, stockholders, or employees. The Company further agrees that
it will engage in no act which is intended, or may reasonably be expected,
to harm the reputation, business, or prospects of the Executive.

10. Indemnification; D&O Insurance
Coverage. To the fullest extent permitted by law, the Company will
indemnify the Executive (including the advancement of expenses) for any
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorney's fees, incurred by the Executive in connection with the defense
of any lawsuit or other claim to which he is made a party by reason of
being or having been an officer, director or employee of the Company or
any of its subsidiaries. In addition, the Company shall cause Executive
to be covered (with respect to acts, errors or omissions which shall have
occurred on or before the Retirement Date) under such director and officer
liability insurance policies as the Company shall from time to time have
in effect for its then-active officers and directors to the same extent
as coverage is available thereunder to the then-active officers and directors
for acts, errors or omissions during their periods of service to the Company.

11. Beneficiary. If the Executive
should die prior to receiving all of the benefits payable under this Agreement,
any remaining benefits will be paid to the beneficiary designated in writing
by the Executive. If no such beneficiary is designated, any payments shall
be paid to the Executive's estate at the time or times and in the manner
as would otherwise be due to the Executive.

12. Involuntary Termination; Change-of-Control.
Should Executive be involuntarily terminated by the Company for any reason,
other than Cause (as defined in the Change-of-Control Agreement), death
or total and permanent disability, the Executive's date of termination
shall be his Retirement Date. Notwithstanding anything in this Agreement
to the contrary, in the event of a Change-of-Control of the Company (as
defined in the Change-of-Control Agreement) (a) the Executive's Retirement
Date shall be any date on or after the date of the Change-of-Control as
designated by the Executive in his sole discretion, but in any event no
later than ninety (90) days after the Change-of-Control, and (b) the Executive
shall receive all amounts due him under Sections 2 and 3 of this Agreement
on the earlier of (i) the date(s) such amounts would otherwise be paid
to him under this Agreement or (ii) a date that is no later than ten (10)
business days after his Retirement Date.

13. Withholding. The Company's
obligation to pay amounts under this Agreement are subject to its withholding
obligations under applicable federal, state and local tax laws.

14. Severability. If all or
any part of this Agreement is declared by any court or governmental authority
to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate
any other portion of this Agreement. Any section or a part of a section
declared to be unlawful or invalid shall, if possible, be construed in
a manner, or shall be deemed modified in a manner, which will give effect
to the terms of the section to the fullest extent possible while remaining
lawful and valid.

15. Amendment. Except as provided
in Section 14, this Agreement shall not be altered, amended, or modified
except by written instrument executed by the Company and the Executive.
A waiver of any portion of this Agreement shall not be deemed a waiver
of any other portion of this Agreement.

16. Counterparts. This Agreement
may be executed in several counterparts, each of which shall be deemed
to be an original, but all of which together will constitute one and the
same instrument.

17. Applicable Law. The provisions
of this Agreement shall be interpreted and construed in accordance with
the laws of the State of Illinois without regard to its choice of law principles.

18. Arbitration. Any controversy
or claim relating to this Agreement (except for court action initiated
by the Company to enforce the Executive's protective covenants) will be
settled exclusively by arbitration in Chicago, Illinois in accordance with
the rules of the American Arbitration Association then in effect. Any arbitration
award will be binding on the parties and may be enforced in any court having
jurisdiction.

|ATTEST:          | SEARS, ROEBUCK
AND CO.                     
|---------------- | -------------------------------------------
|                 |                                            
|/s/John T.
Sloan | By: Anastasia
D. Kelly
Its: General Counsel
|                 |                                            
|                 |                                            
|                 | EXECUTIVE:                                 
|                 |                                            
|                 | /s/Arthur
C. Martinez                      

EXHIBIT A

Mutual Release

In consideration of the benefits
provided under that certain Retirement Agreement dated as of April 11,
2000 (the "Agreement") by and between Sears, Roebuck and Co. (the "Company")
and the undersigned Executive, Executive and the Company, and any person
acting by, through, or under the Executive or the Company, hereby release,
waive, and forever discharge each other and their respective agents, subsidiaries,
affiliates, employees, officers, shareholders, successors, and assigns
(if any) 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,
Executive's employment with the Company (other than indemnification to
which the Executive may be entitled under the Company's bylaws, policies
or agreements (now or hereafter maintained) with regard to the indemnification
of its executive officers or directors), Executive's decision to retire,
and/or the termination of the Executive's employment, including, but not
limited to, all matters in law, in equity, in contract, or in tort, or
pursuant to statute, including any claim by Executive for age or other
types of discrimination under the Age Discrimination in Employment Act,
Title VII of the Civil Rights Act of 1964, the Americans With Disabilities
Act, or any other federal, state, or local law or ordinance (the foregoing
being sometimes hereinafter referred to as the "Waiver"). The Waiver does
not apply to any rights or claims that may arise under the Age Discrimination
in Employment Act after the date that Executive signs this Waiver. Executive
acknowledges that he has read the Waiver and is voluntarily executing the
Waiver and the Agreement.

Executive acknowledges that he has
been advised to consult with an attorney prior to signing the Waiver, and
was given at least twenty-one (21) days within which to consider the Agreement,
including the Waiver, before signing the Waiver and the Agreement. Executive
also acknowledges that he understands that if he signs the Waiver, he may
revoke the Waiver and the Agreement within seven (7) days after signing
the Waiver. The Agreement and the Waiver will, therefore, not be effective
until seven (7) days after the Waiver is signed.

Any other provision hereof notwithstanding,
the Waiver does not apply to any benefits provided in the Agreement or
any benefits to which the Executive may be entitled under a Company-sponsored
benefit plan.

Executed: April 11, 2000

|ATTEST:          | SEARS, ROEBUCK
AND CO.                     
|---------------- | -------------------------------------------
|                 |                                            
|/s/John T.
Sloan | By: Anastasia
D. Kelly
Its: General Counsel
|                 |                                            
|                 |                                            
|                 | EXECUTIVE:                                 
|                 |                                            
|                 | /s/Arthur
C. Martinez