Executive Severance/Non-Compete Agreement

Exhibit 10.16

[Sears Holdings Corporation logo]

February 3, 2006

Mr. Bruce Johnson

Dear Bruce, This letter will confirm our offer for you to serve as Executive Vice President, Supply Chain and Operations. Subject to approval by the Compensation Committee, your new compensation package will be effective February 1, 2006.

Your Sears Holdings Corporation compensation package will consist of the following:

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Annual base salary of $725,000, with periodic increases based upon your performance and the results achieved by your team.

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Participation in the Sears Holdings Corporation Senior Executive Annual Incentive Plan. Your annual incentive at target will remain at 90% of base salary. This will increase your annual incentive opportunity to $652,500 as of the effective date of your new assignment. Your annual incentive plan performance goals will be linked to 100% Sears Holdings Corporation EBITDA. The annual incentive for each plan year will be payable by April 15 of the following year, provided that you are actively employed at the payment date.

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Your participation in the Sears Holdings Corporation Senior Executive 2005-2007 Long Term Incentive Plan (SHC LTIP) will remain the same with a target base of $3,705,000. This award is payable in April 2008; the actual amount of the award you receive will depend on Sears Holdings Corporation Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). Your participation under the new 2006-2008 Long Term Ince