Document:

Exhibit 4

Exhibit
4.4

SECOND
AMENDMENT

TO THE

SEARS 401 (k) SAVINGS PLAN

(As
Amended and Restated effective as of January 1, 2000)

Pursuant to the
authority reserved to the Company in subsection 14.1 of the Plan, the Plan is
hereby amended in the following respects, effective as of August 1, 2001, except
as otherwise indicated below:

  1. Subsection 1.9 is
  hereby revised to read as follows:

  
    1.9 Form of
    Election and Signature. Unless otherwise specified herein, any election
    or consent permitted or required to be made or given by any Participant or
    other person entitled to benefits under the Plan, and any permitted
    modification or revocation thereof, shall be made in writing or shall be
    given by means of such interactive telephone and/or computer system, such as
    website access, as the Plan Administrator may designate from time to time as
    the sole vehicles, for executing regular transactions under the Plan
    (referred to generally herein as the "Phone System"). Each
    Participant shall have a personal identification number or "PIN"
    for purposes of executing transactions through the Phone System. In
    addition, the Plan Administrator can establish an alternate procedure for
    executing regular transactions through the Phone System by which each
    participant can use individually identifiable information (other than his
    PIN) as specified by the Plan Administrator.

    The entry by a
    Participant of his PIN (with his Social Security Number) or any other
    identification information specified by the Plan Administrator, shall
    constitute his valid signature for purposes of any transaction the Company
    determines should be executed by means of the Phone System, including, but
    not limited to, enrolling in the Plan, electing contribution rates, making
    investment choices, executing loan documents (if loans are permitted under
    the Plan) and consenting to a withdrawal or distribution. Any election made
    through the Phone System shall be considered submitted to the Plan
    Administrator on the date it is electronically transmitted, unless such
    transmission occurs after the applicable cut off date, as determined by the
    Company in its sole discretion, for the Phone System for that day, in which
    case it will be considered submitted on the next day on which the New York
    Stock Exchange is open for business.

  

  2. Existing
  subsection 2.7 is hereby renumbered 2.8, and new subsection 2.7 is hereby
  added to the Plan:

  
    2.7. Service
    With Sears Canada Inc. Any eligibility service earned by an employee of
    Sears Canada Inc., who subsequently becomes employed by an Employer as
    defined in this Plan, will be recognized under this Plan.

  

  3. Subsection 3.1 is
  hereby revised to read as follows:

  
    3.1 Eligibility
    for Participation. Subject to the terms and conditions of the Plan, each
    Eligible Employee who was a Participant in the Plan immediately prior to the
    Effective Date will continue as such.

    As of January 1,
    2000, each other Eligible Employee will become a "Participant"
    in the Plan on the latest of (i) the date he attains age 21, (ii) the first
    day following the date on which he has completed one Year of Eligibility
    Service, and (iii) the effective date of his election to participate in the
    Plan, provided he is still an Eligible Employee on such date. As of August
    1, 2001, an Eligible Employee will become a "Participant" in the
    Plan on the later of (i) the first day of the third month following the date
    of hire, regardless of age and (ii) the effective date of his election to
    participate in the Plan, provided he is still an Eligible Employee on such
    date. Each employee of an Employer is an "Eligible Employee"
    for any period in which he satisfies all of the following requirements:

    	
        He belongs to
        a group of employees to whom participation in the Plan has been extended
        by the Company ("an eligible group"),

	
        He is not a
        member of a collective bargaining unit, unless the Plan has been
        extended to the collective bargaining unit under a currently effective
        collective bargaining agreement,

	
        He is not a
        person employed outside the United States who is neither a citizen nor a
        resident of the United States, and

	
        He does not
        perform services for an Employer under a contract, agreement or
        arrangement that purports to treat him as either an independent
        contractor or the employee of a leasing organization or agency, even if
        he is subsequently determined (by judicial action or otherwise) to have
        instead been a common law employee of such Employer.

	
        He is not a
        seasonal, temporary or peak employee, nor an intern. (However, if a
        seasonal, temporary, or peak employee is reclassified at a subsequent
        time in his employment with an Employer, then for eligibility purposes
        his original date of hire will be used.)

    For purposes of
    paragraph (a) above, all employees of an Employer will be considered to
    belong to an eligible group unless the Company by written action of the
    Benefits Executive designates certain groups of employees or business units
    as ineligible to participate in the Plan.

    Except as provided
    in subsection 2.3, if a Participant ceases to be an Eligible Employee for
    any reason, including termination of employment, and he again becomes an
    Eligible Employee, he will be eligible to recommence his participation in
    the Plan immediately upon again becoming an Eligible Employee. In the event
    an employee of an Employer or a Related Company who was not an Eligible
    Employee becomes an Eligible Employee, such employee will immediately be
    eligible to commence participation in the Plan if he has completed a Year of
    Eligibility Service and is at least age 21; provided that effective as of
    August 1, 2001, in the event an employee of an Employer or a Related
    Company, who was not an Eligible Employee, becomes an Eligible Employee,
    such employee will immediately be eligible to commence participation in the
    Plan on the first day of the month following the date he becomes an Eligible
    Employee, or if later, the first day of the third month following his date
    of hire.

  

  4. The last four
  sentences of subsection 4.7 are hereby revised to read as follows:

  
    All items in
    categories (a) and (c) that are paid to a Participant during a Plan Year or
    that would have been paid to a Participant during such Plan Year, but for
    his Pre-Tax Contribution election under this Plan (or any other cash or
    deferred arrangement maintained by the Employers and Related Companies), his
    salary reduction election under a cafeteria plan (within the meaning of
    Section 125 of the Code) maintained by an Employer or Related Company, or,
    for Plan Years beginning on or after January 1, 2001, any elective amounts
    under Code Section 132(f)(4)), constitute "Eligible Compensation"
    for such Plan Year. All items in categories (a), (b) and (c) (determined
    prior to any Pre-Tax Contribution election under this Plan (or any other
    cash or deferred arrangement maintained by the Employers and Related
    Companies), any salary reduction election under Section 125 and, for Plan
    Years beginning on or after January 1, 2001, any elective contributions
    under Code Section 132(f)(4)) are considered to constitute
    "Compensation" within the meaning of Treas. Reg. Section
    1.415-2(d) and sections 414(s) and 414(q) of the Code for purposes of
    applying the limits of Section 8 of the Plan. Items in categories (d) and
    (e) are not taken into account for any purpose under this Plan.
    Notwithstanding the foregoing, the term Eligible Compensation shall not
    include amounts paid after the date shown as the Participant's termination
    date on his Employer's payroll records.

  

  5. Subsection 5.1 is
  hereby revised to read as follows:

  
    5.1 Amount of
    Employer Contribution. Subject to the terms and conditions of the Plan,
    including subsection 5.5 and Supplement C hereof, the "Employer
    Contribution" to the Plan for the Plan Year commencing January 1,
    1999, and for each Plan Year thereafter shall be an amount equal to 70
    percent of the Pre-Tax Contributions made on behalf of Participants for such
    Plan Year that do not exceed 5 percent of their Eligible Compensation for
    the Plan Year, excluding (i) Eligible Compensation for any period before
    their "Match Eligibility Date," as defined in subsection 5.6, and
    (ii) Eligible Compensation for the period prior to the date that they become
    Participants in the Plan . Notwithstanding the foregoing, the Employer
    Contribution otherwise required under this subsection 5.1 for any Plan Year
    shall be reduced by the Fair Market Value of the ESOP Common Stock allocated
    to the Accounts of Participants in accordance with paragraph C-8(b) of
    Supplement C. For purposes of calculating the reduction described in the
    preceding sentence, the "Fair Market Value" of the ESOP
    Common Stock allocated to Participant Accounts for each quarter of a Plan
    Year shall be determined as of the last day of such calendar quarter and
    shall have the same meaning as set forth in subsection C-10 of Supplement C.
    The Employer Contribution shall be allocated to Participants' in accordance
    with the provisions of subsection 5.5.

  

  6. Subsection 5.5
  (a) is hereby revised to read as follows:

  
    5.5 Allocation
    of Employer Contribution Among Participants.

    Subject to the terms and conditions of the Plan, including paragraph 7.3(b),
    the Employer Contribution for a Plan Year will be allocated among and
    credited to the Accounts of Participants who made Pre-Tax Contributions
    during such Plan Year and who either:

    

    	
        were in the
        employ of the Employers and Related Companies on December 31 of such
        Plan Year and who have attained the "Match Eligibility Date";
        or

	
        terminated
        employment with all Employers and Related Companies on or after
        attainment of age 55 and completion of 10 or more years of continuous
        service with the Employers, measured from the service date shown on the
        last Employer's payroll records,

    provided that the
    Company, by written action of the Benefits Executive, may waive the
    requirement of paragraph (a) above in the case of Participants who are
    employed by an Employer or a business unit which is sold to or merged or
    combined with another entity or otherwise disposed of in a business
    transaction and whose employment is terminated because of such transaction
    as determined by such Benefits Executive in his sole discretion.

    The allocation of
    the Employer Contribution among Participants under paragraph (a) or (b)
    shall be made pro rata, based upon all of the Participant's Pre-Tax
    Contributions that were made during the Plan Year, that do not exceed 5% of
    the Participant's Eligible Compensation for the Plan Year, excluding (i)
    Eligible Compensation for any period before the Participant's "Match
    Eligibility Date", as defined in subsection 5.6, and (ii) Eligible
    Compensation for the period prior to the date that he becomes a Participant
    in the Plan.

  

  7. Subsections 5.6,
  5.7, and 5.8 are hereby renumbered 5.7, 5.8, and 5.9 and all cross references,
  if any, to subsections 5.6, 5.7 and 5.8 are changed to 5.7, 5.8 and 5.9 and
  new subsection 5.6 is hereby added to the Plan:

  
    5.6 Match
    Eligibility Date. As of August 1, 2001, an Eligible Employee will attain
    his "Match Eligibility Date" after completing a "Year of
    Eligibility Service", as defined in subsection 2.1(a).

    An Eligible
    Employee whose employment is terminated for any reason after having met the
    Year of Eligibility Service requirement and who is subsequently rehired will
    have his Match Eligibility Date immediately reinstated, unless such
    individual is treated as a new employee pursuant to subsection 2.3
    (describing the rule of parity).

  

  8. Subsection 8.7(a)
  is hereby revised to read as follows:

  
    8.7 Section
    401(k)(3) Testing. For any Plan Year beginning on or after January 1,
    1997, the amount by which the average of the Deferral Percentages (as
    defined below) for that Plan Year of each eligible employee who is Highly
    Compensated for that Plan Year (the "Highly Compensated Group
    Deferral Percentage") exceeds the average of the Deferral
    Percentages for that Plan Year of each eligible employee who is not Highly
    Compensated for that Plan Year (the "Non-highly Compensated Group
    Deferral Percentage"), shall be less than or equal to either (i) a
    factor of 1.25 or (ii) both a factor of 2 and a difference of 2. The "Deferral
    Percentage" for any eligible employee for a Plan Year shall be
    determined by dividing his Pre-Tax Contributions (and Qualified Matching
    Contributions, if applicable) for that Plan Year by his Compensation for
    that Plan Year (measured from the date he first becomes eligible to
    participate in the Plan and not the date he actually becomes a participant),
    subject to the following special rules:

    
      (a) any employee
      eligible to participate in the Plan at any time during a Plan Year in
      accordance with subsection 3.1 (without regard to any suspension imposed
      by any other provision hereunder) shall be counted, whether or not any
      Pre-Tax Contributions are made on his behalf for the year, provided,
      however, that if the Company elects, in accordance with Code Section
      401(k)(4)(F), to apply Code Section 410 (b)(4)(B) in determining whether
      the Plan meets Code Section 410(b), the Company may, in determining
      whether the Plan meets the requirements of this Subsection 8.8, exclude
      from consideration all employees (other than highly compensated employees)
      who have not met the minimum age and service requirements of Code Section
      410(a)(1)(A).

    

  

  9. Subsection 8.9(a)
  is hereby revised to read as follows:

  
    8.9 Section
    401(m)(2) Testing. For any Plan Year beginning on or after January 1,
    1997, the amount by which the average of the Contribution Percentages (as
    defined below) for that Plan Year of each eligible employee who is Highly
    Compensated for that Plan Year (the "Highly Compensated Group
    Contribution Percentage") exceeds the average of the Contribution
    Percentages for that Plan Year of each eligible emloyee who is not Highly
    Compensated for that Plan Year (the "Non-highly Compensated Group
    Contribution Percentage") shall be less than or equal to either
    (i) a factor of 1.25 or (ii) both a factor of 2 and a difference of 2. The "Contribution
    Percentage" for any eligible employee for a Plan Year shall be
    determined by dividing his total After-Tax Contributions and Employer
    Contributions (and, if applicable, Qualified Matching Contributions) for
    that Plan Year by his Compensation for that Plan Year (measured from the
    date he first becomes eligible to join the Plan and not the date he actually
    becomes a participant), subject to the following special rules:

    
    
    (a) any employee
    eligible to participate in the Plan at any time during a Plan Year in
    accordance with subsection 3.1 (without regard to any suspension imposed by
    any other provision hereunder) shall be counted, regardless of whether any
    After-Tax, Employer or Qualified Matching Contributions are made by him for
    the year, provided, however, that if the Company elects, in accordance with
    Code Section 401(k)(4)(F), to apply Code Section 410(b)(4)(B) in determining
    whether the Plan meets Code Section 410(b), the Company may, in determining
    whether the Plan meets the requirements of this subsection 8.10, exclude
    from consideration all employees (other than the highly compensated
    employees) who have not met the minimum age and service requirements of Code
    Section 410(a)(1)(A).

    

  

  10. Subsection 10.1
  is hereby revised to read as follows:

  
    10.1 Partial
    Withdrawals from the Plan Without Terminating Employment. No more
    frequently than once in any six month period, a participant may elect to
    withdraw from the Plan, without terminating employment, an amount specified
    by him, which amount shall be no less than $250 (or the remaining balance
    available for withdrawal in the Participant's account if less than $250) and
    shall not exceed the balance of such Participant's Accounts reduced by the
    following:

    	
        Any Employer
        Contributions (and the earnings thereon) contingently allocated under
        paragraph 7.3(b);

	
        If he has not
        participated in the Plan for at least 5 years, an amount equal to the
        Employer Contributions credited to his Accounts for the last two Plan
        Years; and

	
        If he has not
        attained age 59 1/2, all Pre-Tax Contributions and any earnings
        attributable thereto.

    In addition, the
    six month limitation period will not be applicable to a Participant who has
    not attained age 591/2 and is confronted by a Hardship (as defined below).
    Such participant may withdraw any amounts described in Sections 10.1(a)-(c)
    plus his Pre-Tax Contributions (up to the amount required by such Hardship),
    but not the earnings on his Pre-Tax Contributions, provided he has first
    withdrawn all other amounts then available under the Plan. In the event that
    a Participant becomes "permanently and totally disabled," such
    Participant may at any time withdraw his Accounts under the Plan. A
    Participant is "permanently and totally disabled" if he is unable
    to perform each of the material duties of his regular occupation with Sears
    as determined by the Committee on the basis of a written opinion by a
    licensed physician selected by the Committee.

  

  11. Paragraph (a) of
  subsection 11.1 is hereby revised to read as follows:

  
    (a) If the value
    of the Participant's Accounts does not exceed $5,000, his Accounts will be
    distributed to him in a lump sum payment as soon as practicable after the
    Plan's Recordkeeper is notified of his termination of employment.

  

  12. Effective with
  respect to distributions with an annuity starting after the earlier of (i) the
  90th day after the date the Participant has been furnished a
  summary that reflects this item 13 of this Second Amendment and that satisfies
  the requirements of 29 CFR 2520.104b-3 (relating to a summary of material
  modifications) for pension plans, or (ii) the first day of the second Plan
  Year following the Plan Year in which this amendment is adopted, revise
  Supplement G by eliminating subsections (a) through (f) and adding the
  following sentence to the end of the introductory paragraph of Section G-6:

  
    "The only
    form of distribution available under this Supplement G is a single sum lump
    sum distribution."Exhibit 4

Exhibit 4.5

 

FOURTH AMENDMENT TO THE SEARS
401(k) SAVINGS PLAN

(As Amended and Restated Effective January 1, 2000)

Pursuant to the authority reserved to the
Company in subsection 14.1 of the Sears 401(k) Savings Plan (the
"Plan"), the Plan is hereby amended in the following respects,
effective November 27, 2001, except as otherwise indicated below:

  1. The following paragraph is hereby added to
  subsection 1.1:

  
    Thus, prior to November 27, 2001, the
    portion of the Company Stock Fund attributable to Employer Contributions and
    After-Tax Contributions constituted a part of the Plan ESOP. Effective
    November 27, 2001, the Company Stock Fund, in its entirety, shall satisfy
    the requirements of an employee stock ownership plan within the meaning of
    Code Section 4975(e)(7) and shall be a part of the Plan's existing ESOP.
    Hence, as of November 27, 2001, the ESOP portion of the Plan shall consist
    of the following components: (i) the stock and cash equivalents described at
    Supplement C and all contributions thereunder (the "LESOP"); (ii)
    the portion of the Plan invested in the Company Stock Fund as of November
    27, 2001, as adjusted thereafter to reflect (A) new contributions that are
    invested in the Company Stock Fund, as well as (B) subsequent fund transfers
    into or out of that fund; and (C) any distributions or withdrawals from, and
    gains, losses, earnings, or expenses of that fund; and (iii) the short term
    investment fund included in the ESOP and described at subsection 6.3. As of
    any date on or after November 27, 2001, the portion of the Plan which (i) is
    not a part of the LESOP, and (ii) not invested in the Company Stock Fund or
    the short term investment fund held under the ESOP, including amounts
    transferred from the Company Stock Fund or the LESOP pursuant to Participant
    investment fund transfer elections, will not be part of the ESOP and instead
    will constitute the nonESOP portion of the Plan. All Pre-Tax Contributions
    to the Plan are made to the nonESOP portion of the Plan, but may be
    transferred to the ESOP portion by Participant election to invest such
    amounts in the Company Stock Fund. All
    Employer Contributions are made to the ESOP portion of the Plan and may be
    transferred to the nonESOP portion of the Plan only pursuant to the
    diversification election described at subsection 6.4 and Section C-6 of
    Supplement C. All After-Tax Contributions are made to the ESOP portion of
    the Plan, are thereafter invested in accordance with Participant direction
    and may be transferred to, and invested in, Investment Funds held under the
    nonESOP portion of the Plan.

    

  
  2. Section 1.3 is hereby revised to read as
  follows:

  
    1.3 Plan Administration, Trust and
    Fiduciary Responsibility. The authority to control and manage the
    noninvestment operations of the Plan is vested in the Company, as more fully
    described in subsection 13.1. Except as otherwise expressly provided herein,
    the Company shall have the rights, duties and obligations of an
    "administrator" as that term is defined in Section 3(16)(A) of the
    Employee Retirement Income Security Act of 1974, as amended ("ERISA")
    and of a "Plan Administrator" as that term is defined in
    Section 414(g) of the Code. Except as otherwise provided herein or in the
    Trust, a committee comprised of one or more members appointed by the Company
    to oversee the investment of the Plan's assets (the "Investment
    Committee") has the authority and responsibility to appoint or
    select trustees, custodians, and the Named Fiduciary described in
    Section 13, to determine the number and type of investment options
    (including, without limitation, the investment style of each investment
    option, such as active or passive management style, growth or value
    investment orientation or large cap or small cap investment orientation)
    offered under the Plan and to exercise investment discretion with respect to
    the ESOP (including the Company Stock Fund portion thereof), to oversee any
    Participant-directed brokerage accounts, and to select mutual funds, or a
    window option of mutual funds ("window option"), pursuant to and
    in accordance with subsections 6.1 and 13.11 of the Plan. The Named
    Fiduciary has the authority and responsibility to select, subject to the
    authority of the Investment Committee set forth in the immediately preceding
    sentence, and subject to subsections 6.1 and 13.11, the investment options
    offered under the Plan (within the categories established by the Investment
    Committee), to appoint the investment manager for each option made available
    under the Plan (other than the ESOP, any Participant-directed brokerage
    account or any mutual fund or window option), to establish investment
    guidelines, proxy voting policies and securities trading and lending
    procedures for all Investment Funds for which it is responsible, and to
    monitor the performance of the Trustee and custodian, and of the Investment
    Managers retained by the Named Fiduciary, and of the Investment Funds (other
    than the ESOP, any Participant-directed brokerage account and any mutual
    fund or window option entirely chosen by the Investment Committee). A mutual
    fund or window option is treated as "entirely chosen" by the
    Investment Committee if the Investment Committee, rather than the Named
    Fiduciary, directs the Trustee to execute the subscription agreement and all
    other documentation related to the Plan's investment in such mutual fund
    or window option. The Company, the Investment Committee, the members
    thereof, and the Named Fiduciary shall be "named fiduciaries", as
    described in Section 402 of ERISA, with respect to their authority under the
    Plan. All assets of the Plan will be held, managed and controlled by one or
    more trustees (the "Trustee") acting under a "Trust"
    established pursuant to a "Trust Agreement" which forms a
    part of the Plan. The Company may also appoint an outside recordkeeper ("Recordkeeper")
    to maintain the records of Participants' Accounts under the Plan and to
    handle other administrative matters.

  

  3. The third sentence of subsection 4.9 is
  hereby revised to read as follows:

  
    For purposes of subsections 5.1, 5.5 and
    5.8, such a Participant's After-Tax Contributions of up to the lesser of 5
    percent of Eligible Compensation or an amount equal to the maximum amount of
    Pre-Tax Contributions permitted in accordance with subsection 4.1 will be
    treated in the same manner as Pre-Tax Contributions under the Plan.

  

  4. Subsection 6.1 is hereby revised to read as
  follows:

  
    6.1 Investment Funds. The Investment
    Committee shall determine the number and type of "Investment
    Funds" to be offered under the Plan, including the number of mutual
    funds, and the number that are not mutual funds, and the investment style of
    each option, including, without limitation, active or passive management
    style, growth or value investment orientation, composition of debt and
    equity securities and focus on domestic or international securities. After
    the Investment Committee has made the foregoing determinations, the Named
    Fiduciary shall select (A) the mutual funds offered; and (B) the Investment
    Managers for the options offered that are not mutual funds. (With regard to
    (A), however, the Investment Committee may select a specific mutual fund or
    a window option of mutual funds to be offered under the Plan, or may specify
    the sponsor of the mutual fund to be otherwise selected by the Named
    Fiduciary. The Committee may determine, or may direct that the Named
    Fiduciary determine, whether an investment option will be offered as a
    mutual fund, commingled fund or separate account.) The Named Fiduciary shall
    establish the investment guidelines and asset classes, to the extent not
    established by the Investment Committee, for each Investment Fund, other
    than the ESOP, any Participant-directed brokerage accounts and any mutual
    funds or commingled funds "entirely chosen" by the Committee (as
    defined at subsection 1.3). The Committee in its discretion may change the
    number of Investment Funds offered, and the Committee or the Named Fiduciary
    (as applicable) may, in its discretion, change the investment strategy or
    categories of permitted investments of any Investment Fund for which it is
    responsible without prior notice to Participants. One of the Investment
    Funds shall be the "Company Stock Fund" invested in Common Stock
    of the Company and cash or cash equivalents held for liquidity purposes,
    which shall be a part of the ESOP.

  

  5. The following paragraph is added at the end
  of subsection 6.3:

  
    Pre-Tax Contributions are made to the
    nonESOP portion of the Plan and are initially held in a short term
    investment fund in the nonESOP portion of the Plan designated by the
    Committee for a period of two to three days. Thereafter, all such amounts
    are invested in accordance with each Participant's directions, as
    described in the first paragraph of this subsection 6.3, and may be invested
    in the Company Stock Fund and thereby transferred to the ESOP portion of the
    Plan. Employer Contributions and After-Tax Contributions are made to the
    ESOP portion of the Plan. After-Tax Contributions are held in a short term
    investment fund in the ESOP portion of the Plan designated by the Committee
    for a period of two to three days after they are made to the Trust.
    Thereafter, such After-Tax Contributions are invested in accordance with
    each Participant's directions, as described in the first paragraph of this
    subsection 6.3, and as a result may be transferred to Investment Funds in
    the nonESOP portion of the Plan. Notwithstanding the first paragraph of this
    subsection 6.3, Employer Contributions made in cash (other than those
    described in Section C-6 of Supplement C) are invested in the Company Stock
    Fund, Employer Contributions made in Company Stock are held under the
    Company Stock Fund, and none of such Employer Contributions may be
    transferred to any other Investment Funds except in accordance with
    subsection 6.4.

  

  6. Subsection 6.5 is hereby revised to read as
  follows:

  
    6.5 Liquidity. In order to
    accommodate investment changes and other elections by Participants in a
    timely manner, a certain portion of each of the Investment Funds may be held
    in cash or cash equivalents. The percentage of assets held in each
    Investment Fund in cash or cash equivalents may differ from Fund to Fund and
    from time to time, as considered appropriate by (i) the Investment Committee
    in the case of the ESOP (including the Company Stock Fund portion thereof),
    and (ii) by the Named Fiduciary in the case of all other Investment Funds
    excluding mutual funds and commingled funds. The rate of return of each
    Investment Fund will be a combination of the short term earnings (or losses)
    on the cash portion of the Fund and the earnings (or losses) of the
    securities or other investments in which such Fund is primarily invested,
    determined in accordance with uniform rules established by the Named
    Fiduciary or the Investment Committee as the case may be.

  

  7. The following new subsection 6.8 is hereby
  added to the Plan effective November 27, 2001:

  
    6.8 Company Stock Fund. As outlined
    at subsection 1.1, the portion of the Plan invested in the Company Stock
    Fund as of November 27, 2001, as adjusted thereafter to reflect (i) new
    contributions that are invested in the Company Stock Fund, as well as (ii)
    subsequent fund transfers into or out of that fund, and (iii) any
    distributions or withdrawals from and gains, losses, earnings, or expenses
    of that fund, shall satisfy the requirements of Section 4975(e)(7) of the
    Code and shall be a part of the Plan's ESOP. The Company Stock Fund is
    designed to invest exclusively in Company Stock, subject to the provisions
    of subsection 6.5. Effective for dividends paid in Plan Years beginning on
    or after January 1, 2002, cash dividends paid during a Plan Year on Company
    Stock in the Company Stock Fund that is not subject to Section C-5 of
    Supplement C and that is allocable to a Participant's Account shall be
    reinvested in the Company Stock Fund, unless such Participant elects (in
    such manner and in accordance with such procedures as the Plan Administrator
    shall establish) that such dividends be paid to the Participant in cash no
    later than the 90th day after the end of the Plan Year in which such
    dividends are paid, and further provided that such election shall apply to
    dividends related to any amounts contingently allocated to a Participant's
    Account under subsection 7.3(b) for such Plan Year only if the Participant
    satisfies the requirements of subsection 5.5 with respect to such
    contingently allocated amounts.

    In addition, with respect to dividends paid
    during the Plan Year commencing on January 1, 2001, on Company Stock that (i)
    was held on the record date of such dividends in the portion of the Company
    Stock Fund that constituted an ESOP prior to November 27, 2001 and (ii) was
    not subject to Section C-5 of Supplement C, the Plan Administrator may in
    its discretion, pursuant to uniform rules, permit the Participants to whose
    Accounts such dividends are allocable to elect that such dividends be paid
    to the Participant in cash no later then the 90th day after the
    end of the Plan Year in which such dividends are paid, provided that such
    election shall apply to dividends related to any amounts contingently
    allocated to a Participant's Account under subsection 7.3(b) for such Plan
    Year only if the Participant satisfies the requirements of subsection 5.5
    with respect to such contingently allocated amounts.

  

  8. Subsection 8.7 is hereby amended by adding
  the following sentence at the beginning thereof:

  
    All Pre-Tax Contributions (and Qualified
    Matching Contributions, if any) are made to the nonESOP portion of the Plan,
    and thus are tested together under the limitations of this subsection 8.7
    and subsection 8.8.

  

  9. Subsection 8.7(a) is hereby revised to read
  as follows:

  
    (a) any employee eligible to make Pre-Tax
    Contributions under the Plan at any time during a Plan Year in accordance
    with subsections 3.1 and 4.1 (without regard to any suspension imposed by
    any other provision hereunder) shall be counted, whether or not any Pre-Tax
    Contributions are made on his behalf for the year, provided, however, that
    if the Company elects, in accordance with Code Section 401(k)(4)(F), to
    apply Code Section 410(b)(4)(B) in determining whether the Plan meets the
    requirements of this subsection 8.8, exclude from consideration all
    employees (other than highly compensated employees) who have not met the
    minimum age and service requirements of Code Section 410(a)(1)(A).
    Participants who are residents of Puerto Rico are not eligible to make
    Pre-Tax Contributions and shall not be taken into account for purposes of
    this subsection 8.7.

  

  10. Subsection 8.9 is hereby amended by adding
  the following sentence at the beginning thereof:

  
    All After-Tax Contributions and Employer
    Contributions are made to the ESOP portion of the Plan, and thus are tested
    together under the limitations of this subsection 8.9 and subsection 8.10.

  

  11. Subsection 11.5 is hereby amended to read
  as follows:

  
    11.5 Distribution Only Upon Separation
    From Service.

    (a) For Plan Years beginning prior to
    January 1, 2002, a Participant may not commence distribution of the portion
    of his Accounts attributable to his Pre-Tax Contributions pursuant to this
    Section 11 prior to the date he attains age 59-1/2, even though his
    employment with the Employers and Related Companies has terminated, unless
    or until he also has a "separation from service" within the
    meaning of section 401(k)(2)(B) of the Code. The foregoing restriction shall
    not apply, however, if the Participant's termination of employment occurs
    in connection with either (a) the sale by an Employer or a Related Company
    to an unrelated corporation of at least 85% of the assets of a trade or
    business or (b) the disposition of its interest in a subsidiary to an
    unrelated entity, and the requirements for distribution under applicable
    Treasury regulations on account of such sale or disposition are met.

    (b) Notwithstanding the foregoing, for
    periods after December 31, 2001, all of a Participant's Accounts shall be
    available for distribution on account of the Participant's severance from
    employment, including distributions that are attributable to events
    occurring prior to January 1, 2002. However, such a distribution shall be
    subject to the other provisions of the Plan regarding distributions, other
    than the provisions of paragraph (a) of this subsection 11.5 that require a
    separation from service before such amounts may be distributed. For purposes
    of Section 10, such separation from employment shall be treated as a
    Termination Date.

  

  12. Paragraph (c) of subsection 13.11 is
  hereby revised to read as follows:

  
    (e) The Named Fiduciary shall not be
    responsible for any matters relating to the ESOP (including without
    limitation the Company Stock Fund portion thereof), nor for any
    Participant-directed brokerage accounts, or any mutual funds or window
    options entirely chosen by the Committee.

  

  13. Paragraph (a) of subsection 13.12 is
  hereby revised to read as follows:

  
    (a) To direct the Trustee to the extent
    required under the terms of any trust agreement, or to appoint an Investment
    Manager, including, but not limited to, Sears Investment Management Co.
    ("SIMCO") with the authority to so direct the Trustee, with
    respect to the acquisition, retention and disposition of Plan assets in the
    Company Stock Fund portion of the ESOP and with respect to the exercise of
    investment powers, authorities and discretions relating to such assets, and
    with respect to matters relating to the ESOP assigned to the Investment
    Committee under Supplement C, provided, however, that subject to the other
    provisions of the Plan (including Supplement C), the Trustee shall invest
    that portion of the assets of the Plan consisting of Employers'
    Contributions and earnings thereon in Common Stock to the end that, in the
    largest measure possible, Participants may share in the earnings of the
    Company and acquire a proprietary interest therein.

  

  14. Section C-5 of Supplement C is hereby
  revised to read as follows:

  
    C-5 ESOP Cash Equivalents.

    (a) All cash dividends on Common Stock held
    in the portion of the ESOP described in this Supplement C which are not
    allocated to Participants' Accounts or, in the case of allocated shares
    under this Supplement C or under Supplement A, which the Company directs be
    used to make payments on ESOP Loans, and all Employer Contributions made
    under subsection C-6 with respect to Plan Years beginning on or after
    January 1, 1990, shall be credited to a cash equivalents account pending
    their application to ESOP Loan payments. All such dividends and earnings
    shall be used to make principal payments on outstanding ESOP Loans to the
    extent then due. In the event that the amount of such dividends and earnings
    exceeds the amount of principal payable on that date, the excess shall be
    applied until exhausted to interest payable on that date, and principal and
    interest payments due thereafter. Any amount that is applied to make a
    payment on an outstanding ESOP Loan after the last day of a Plan Year (the
    "prior Plan Year"), but on or before the due date (including
    extensions thereof) for filing of the federal income tax return of the
    Company for the tax year in which the last day of such prior Plan Year
    occurs, may be designated by the Employers as a payment with respect to such
    prior Plan Year.

    (b) Notwithstanding the foregoing provisions
    of this subsection C-5, effective for dividends paid in Plan Years beginning
    on or after January 1, 2002, to the extent that the Company does not direct,
    at paragraph (a), above, that dividends on allocated shares of Company Stock
    be used to make payments on outstanding ESOP loans, all or any amount of
    cash dividends received with respect to Common Stock held in the portion of
    the ESOP described in this Supplement C or in Supplement A and allocated to
    Participants' Accounts shall be credited to such Participants' Accounts
    and invested in the Company Stock Fund, unless such Participant elects (in
    such manner and in accordance with such procedures as the Plan Administrator
    shall establish) that such dividends be paid to the Participant in cash no
    later than the 90th day after the end of the Plan Year in which
    such dividends are paid, and further provided that such election shall apply
    to dividends on any Company Shares contingently allocated to the Participant's
    Accounts during such Plan Year under Section C-8 only if the Participant
    satisfies the requirements of subsection 5.5 with respect to such
    contingently allocated shares.

    (c) With respect to dividends paid during
    the Plan Year commencing on January 1, 2001, on Company Stock that was
    allocated under this Supplement C or Supplement A, and that was held under
    the ESOP on the record date for such dividends, the Plan Administrator may
    in its discretion, pursuant to uniform rules, permit the Participants to
    whose Accounts such dividends are allocable to elect that such dividends be
    paid to the Participant in cash no later then the 90th day after
    the end of Plan Year in which such dividends are paid, provided that such
    election shall apply to dividends related to any amounts contingently
    allocated to a Participant's Account under Section C-8 for such Plan Year
    only if the Participant satisfies the requirements of subsection 5.5 with
    respect to such contingently allocated amounts.

  

  15. The Amendment to the Plan previously
  adopted March 26, 2001, and designated "Amendment to the Sears 401(k)
  Savings Plan" is hereby re-designated "The First Amendment to the
  Sears 401(k) Savings Plan"; the amendment to the Plan adopted May 10,
  2001 and designated the First Amendment to the Sears 401(k) Savings Plan is
  hereby re-designated "The Second Amendment to the Sears 401(k) Savings
  Plan"; the amendment adopted in August of 2001 and
  designated the "Second Amendment to the Sears 401(k) Savings Plan"
  is hereby re-designated "The Third Amendment to the Sears 401(k) Savings
  Plan."

  16. Subsections 5.9 and 5.10 as previously
  added by the First Amendment to the Plan adopted March 26, 2001, are
  renumbered subsections 5.10 and 5.11.

  17. Supplement J is hereby added to the Plan
  in the form attached hereto effective as of the Effective Date.

SUPPLEMENT J

RESIDENTS OF PUERTO RICO

J-1 Application. This Supplement J to the
Sears 401(k) Savings Plan (the "Plan") is incorporated for purposes of
the qualification of the Plan with the Department of Treasury of the
Commonwealth of Puerto Rico. To the extent that the Plan applies to the
employees of the Employer who are residents of Puerto Rico ("Puerto Rico
Employees"), the Plan is intended to comply with Section 1165 and other
applicable provisions of the Puerto Rico Internal Revenue Code of 1994, as
amended ("PRIRC"), the regulations promulgated thereunder and any
successor legislation of similar nature. The Plan is also intended to comply
with all applicable laws of the Commonwealth of Puerto Rico except as such laws
may be preempted by any applicable federal legislation.

Puerto Rico Employees shall be subject to all of
the provisions of the Plan, including this Supplement J, except to the extent
that the provisions of this Supplement J are inconsistent with the Plan, in
which case the following shall apply. In general, the provisions of this
Supplement J, as applied to Puerto Rico Employees, shall supersede the remaining
provisions of the Plan to the extent inconsistent therewith, except in the event
that, and to the extent that, application of the provisions of this Supplement J
would jeopardize the qualified status of the Plan under the Code, in which case
the provisions of the Plan that are inconsistent with this Supplement J and
necessary for the Plan's continued qualification under the Code shall apply.

Subject to the foregoing, each of the Plan
sections described below is modified as it relates to Puerto Rico Employees, in
accordance with the terms of this Supplement J.

J-2 Subsection 4.6 Rollover Contributions.
The term "Rollover Contributions" means a rollover contribution of all
of a distribution which, under applicable provisions of the PRIRC, is permitted
to be rolled over to a qualified plan.

J-3 Subsection 5.8 (formerly subsection 5.7). Limitations
on Amount of Employer Contribution. As applied to Puerto Rico Employees,
reference to Section 404 of the Code shall be to Section 1023(n) of the PRIRC.

J-4 Subsection 5.9 (former subsection 5.8) Payment
of Employer Contributions. Each Employer's Contribution under the Plan
(other than Pre-Tax Contributions) for any Plan Year made on behalf of Puerto
Rico Employees shall be paid to he Trustee no later than the time prescribed by
law for filing the Employer's Puerto Rico Corporate Income Tax Return,
including any extensions thereof.

J-5 Subsection 5.10 (formerly subsection 5.9). Minimum
Employer Contribution. As applied to Puerto Rico Employees, reference to
Section 404 of the Code shall be to Section 1023(n) of the PRIRC.

J-6 Subsection 8.1 Reduction of Contribution
Rates. As applied to Puerto Rico Employees, reference to Sections 401(a)(4),
401(k)(3) and 402(g) of the Code in subsection 8.1 shall be to 1165(a)(4),
1165(e)(3) and 1165(e)(7) of the PRIRC, provided that Section 1165(e)(3) shall
have no application to Puerto Rico Employees unless the Plan is amended to
permit Puerto Rico Employees to make Pre-Tax Contributions to the Plan.

J-7 Subsection 8.7 Section 401(k)(3) Testing.
Reference to Sections 401(k)(3), 401(k) and 410(b) of the Code in subsection
8.7, as applied to Puerto Rico Employees, shall be to Sections 1165(e)(3),
1165(e) and 1165(a)(3) of the PRIRC, provided that Section 1165(e)(3) shall have
no application to Puerto Rico Employees unless the Plan is amended to permit
Puerto Rico Employees to make Pre-Tax Contributions to the Plan.

J-8 Subsection 8.8 Correction under Section
401(k) Test. Reference to Treasury regulations and notices shall include the
regulations promulgated under the PRIRC and any Puerto Rico Department of
Treasury notices, provided that such regulations shall have no application
unless the Plan is amended to permit Puerto Rico Employees to make Pre-Tax
Contributions to the Plan.

J-9 Subsection 8.11 Highly Compensated.
Under subsection 8.11, as applied to Puerto Rico Employees, an employee shall be
a "Highly Compensated" for any Plan Year if he performs services
during the Plan Year and is more highly compensated than two thirds of the
eligible employees, provided that Section 1165(e)(3)(E)(iii) shall have no
application to Puerto Rico Employees unless the Plan is amended to permit Puerto
Rico Employees to make Pre-Tax Contributions to the Plan.

J-10 Subsection 11.3 Limits on Commencement
and Duration of Distributions. Reference to Section 206(a) of ERISA in
subsection 11.3, as applied to Puerto Rico Employees, shall apply to the Puerto
Rico Employees.

J-11 Subsection 11.5 Distribution Only Upon
Separation from Service. Reference to Section 401(k)(2)(B) of the Code, in
subsection 11.5, as applied to Puerto Rico Employees, shall be to 1165(e)(2)(B)
of the PRIRC.

J-12 Subsection 11.8 Interest Not
Transferable. Reference to Section 414(p) of the Code and the regulations
issued thereunder in subsection 11.8, as applied to Puerto Rico Employees, shall
be to Section 206(d) of ERISA and the regulations issued thereunder.

J-13 Subsection 11.11 Direct Rollover Option.
Reference to Section 414(p) of the Code in subsection 11.11, as applied to
Puerto Rico Employees, shall be 206(d) of ERISA.

J-14 Section 12. No Reversion to Employees.
Reference to subsection 404 of the Code under subsection (a) of Section 12, as
applied to Puerto Rico Employees, shall be to Section 1023(n) of the PRIRC and
subsection (c) of Section 12 shall not be applicable to Puerto Rico Employees.

J-15 Subsection 14.3 Merger and Consolidation
of the Plan, Transfer of Plan Assets, Acceptance of Transfer from other Plans.
Add the phrase "Section 208 of ERISA" after Section 411(d)(6) of the
Code at subsection 14.3 as applied to Puerto Rico Employees.

J-16 Supplement C. Employee Stock Ownership
Plan ("ESOP") Portion of Plan. For purposes of qualification with
the Department of Treasury of Puerto Rico, the leveraged ESOP portion of the
Plan in Supplement C as applied to the Puerto Rico Employees shall apply, and
shall be deemed to have applied for all Plan Years, to the maximum extent
possible, as a stock bonus plan and not as a part of an employee stock ownership
plan within the meaning of Section 407(d)(6)(A) of ERISA and Section 4975(d)(3)
of the Code.

Pursuant to the foregoing, no loan to the ESOP
shall apply to any Puerto Rico Employee in any respect and the amounts allocated
to the Participants account shall be as applied to the Puerto Rico Employees as
if the Plan were exclusively a stock bonus plan.

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