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Exhibit 10 SEARS, ROEBUCK AND CO. 3333 BEVERLY ROAD HOFFMAN ESTATES, IL 60179 GREG A. LEESenior Vice PresidentHuman Resources847-286-0558Fax: 847-286-3258
 August 16, 2004 Mr. Luis Padilla
415 North First Street
Minneapolis, MN 55401 Dear Luis This letter will confirm our offer of employment to join Sears, Roebuck and Co.
(the Company) as President, Merchandising and Marketing, reporting to Alan J.
Lacy, Chairman and CEO, Sears, Roebuck and Co. Your start date is to be
determined. Your compensation package will consist of the following:  
    
    Annual base salary of $650,000, with periodic increases based upon performance.
    
    Sign-on bonus of $100,000, minus applicable taxes.
    
    Participation in the Sears Annual Incentive Plan. Your annual incentive target will be 85% of base salary, amounting to
$552,500 on an annualized basis. Actual incentive awards can range from 0% to 230% of target depending on performance.
Annual incentive performance objectives for your position will be based on achievement of Sears earnings per share growth
and performance of the businesses and functions under your purview.
    
    We will guarantee a minimum Annual Incentive Plan award for 2004 of $650,000, payable in March 2005.
    
    In the event that you forfeit the retention award you are scheduled to receive from the May Department Stores Company, we
will pay an amount equal to 50% of the award at the time your sign-on bonus is paid.
    
    100,000 non-qualified stock options, to be granted within 30 days of the
commencement of your employment (Start Date), that will vest in three
equal annual installments from the date of grant.  --
    
    33,333 options will vest one year from the date of grant--
    
    33,333 options will vest two years from the date of grant--
    
    33,334 options will vest three years from the date of grant  
    
    With respect to your stock options, you will be eligible for retirement
status upon the attainment of age 55.
    
    50,000 shares of restricted stock, to be granted within 30 days the Start
Date, that will cliff vest three years from the date of grant.
    
    You will be recommended for participation in the Sears Long-Term
Incentive Plan, to be approved by the Sears Compensation Committee of the
Board of Directors, beginning with the 2005 plan cycle. If
approved, your incentive award target will be set equal to 125% of base
salary. Details will be provided when your award is granted.




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
    
    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.
    
    You will be recommended for a grant of career shares, subject to
approval of the Sears Compensation Committee of the Board of
Directors, provided you remain employed with the Company five years
beyond your Start Date. You must retire from Sears to receive your
shares. The amount of career shares you will earn will depend on your
age at retirement, and the final value will depend on the price of
Company stock at that time. A schedule of share awards is attached is
included as Attachment A.
    
    You will also be eligible to participate in the Sears 401(k) Savings
Plan and the Sears Supplemental 401(k) Plan. Assuming you contribute
at least at the maximum pre-tax deferral rate (currently 6%, subject
to compensation limits), the Company contribution rate will be 5.5% of
cash compensation (base plus earned bonus), beginning January 1, 2005.
    
    You will be asked to sign an Executive Severance / Non-Compete
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 up to 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 two years following
termination of employment. Should you be involuntarily terminated for
a reason other than for Cause (as defined in the agreement) before the
first anniversary of your service with Sears, the following would
occur:  --
    
    The 50,000 shares of restricted stock granted to you at the
time of your hire would fully vest at the end of your two-year
severance period.--
    
    You would receive a cash payment within 30 days of the end of
the two-year salary continuation period equivalent in value to the
product of the 33,334 options that would not otherwise vest during
the salary continuation period times the option spread value (the
positive difference between the fair market value on the last day of
the salary continuation period and the exercise price of the option
grant).  
    
    The above is contingent upon your satisfactorily passing a pre-employment drug test.
    
    You will be eligible for relocation assistance benefits that are typically provided to an executive at your level and in
accordance with the terms of the relocation program. In addition, you will be eligible to receive reimbursement for
temporary living expenses for up to one year after your start date and reimbursement of relocation expenses incurred within
the first two years of your service with Sears. Sincerely, /s/ Greg A. Lee Accepted /s/ Luis Padilla Date 8/16/04 cc:          Alan J. Lacy




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ATTACHMENT A
Offer of Employment to Luis Padilla
August 16, 2004 Career Shares  Schedule of Awards Age at retirement
    
    
    Career Shares awarded54
    
    
    
    8,00055
    
    
    
    9,00056
    
    
    
    10,00057
    
    
    
    11,00058
    
    
    
    12,00059
    
    
    
    13,00060
    
    
    
    15,00061
    
    
    
    17,00062
    
    
    
    19,00063
    
    
    
    21,00064
    
    
    
    23,00065
    
    
    
    25,000