This filing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the benefits of the business combination transaction involving Sears Holdings Corporation, Sears, Roebuck and Co. and Kmart Holding Corporation, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Sears’ and Kmart’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

     The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the ability to obtain governmental approvals of the transaction on the proposed terms and schedule; the failure of Sears and Kmart stockholders to approve the transaction; the risk that the businesses will not be integrated successfully; failure to quickly realize synergies and cost-savings from the transaction as a result of technical, logistical, competitive and other factors; disruption from the transaction making it more difficult to maintain relationships with clients, employees or suppliers; competitive conditions in retail and related services industries; changes in consumer confidence, tastes, preferences and spending; the availability and level of consumer debt; anticipated cash flow and the ability of Sears Holdings to maintain sufficient operating cash flow and liquidity; the successful execution of, and customer response to, strategic initiatives, including the full-line store strategy and the conversion and integration of the Kmart stores and other new store locations; the pace of growth in store locations, which may be higher or lower than anticipated; the possibility that new business and strategic options for one or more business segments will be identified, potentially including selective acquisitions, dispositions, restructurings, joint ventures and partnerships; trade restrictions, tariffs, and other factors potentially affecting the ability to find qualified vendors and access products in an efficient manner; the ability to successfully implement initiatives to improve inventory management capabilities; anticipated cash flow; changes in interest rates; the outcome of pending legal proceedings and bankruptcy claims; social and political conditions such as war, political unrest and terrorism or natural disasters; the possibility of negative investment returns in any pension plans; volatility in financial markets; changes in debt ratings, credit spreads and cost of funds; the possibility of interruptions in systematically accessing the public debt markets; the impact of seasonal buying patterns, which are difficult to forecast with certainty; and general economic conditions and normal business uncertainty. These forward-looking statements speak only as of the time first made, and no undertaking has been made to update or revise them as more information becomes available. Additional factors that could cause Sears’ and Kmart’s results to differ materially from those described in the forward-

looking statements can be found in the 2003 Annual Reports on Forms 10-K of Sears and Kmart filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).

     Sears Holdings Corporation has filed a Registration Statement on Form S-4 with the SEC (Registration No. 333-120954) containing the definitive joint proxy statement-prospectus regarding the proposed transaction. Stockholders are urged to read the definitive joint proxy statement-prospectus regarding the proposed transaction, because it contains important information. Stockholders may obtain a free copy of the definitive joint proxy statement-prospectus, as well as other filings containing information about Sears Holdings, Sears and Kmart without charge, at the SEC’s Internet site (http://www.sec.gov). Copies of the definitive joint proxy statement-prospectus and the filings with the SEC incorporated by reference in the definitive joint proxy statement-prospectus can also be obtained, without charge, by directing a request to Sears, Roebuck and Co., 3333 Beverly Road, Hoffman Estates, Illinois, 60179, Attention: Office of the Secretary, or to Kmart Holding Corporation, 3100 West Big Beaver Road, Troy, Michigan, 48084, Attention: Office of the Secretary.

     The proposed directors and executive officers of Sears Holdings, the respective directors and executive officers of Sears and Kmart and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Sears Holdings’ proposed directors and executive officers, Sears’ and Kmart’s directors and executive officers and other participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is available in the definitive joint proxy statement-prospectus contained in the above-referenced Registration Statement on Form S-4.

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		Robert J. O’Leary, SVP
		Public Relations & Government Affairs Sears, Roebuck and Co. 3333 Beverly Road, BC-129B Hoffman Estates, IL 60179 847-286-5703 Fax: 847-286-3826

Dear Sears Retiree Club President,

Last week, Sears Chairman and CEO Alan Lacy updated Sears headquarters associates on the progress of the Sears-Kmart proposed merger. Through informal town hall meetings, Alan briefed associates on merger planning activities, addressed associate questions on topics including headquarters changes, and provided them with an early look at the new company and culture ahead. While there are still many questions that cannot be answered because decisions have not been finalized, associates told us that the sessions were helpful in increasing understanding of where we have been and the rationale for the merger.

In order to bring the town hall meetings to our field associates unable to attend the headquarters meetings, we created a 15-minute videotape of meeting highlights. As we know our retirees are also eager to learn more about the progress of the merger, we want to share the town hall highlights with our 130-plus retiree clubs. We hope you will find the enclosed video helpful in providing perspective on the merger. We urge you to share the video with your fellow club members and, if possible, consider showing it if you have an upcoming club meeting scheduled.

As you know, we have also been posting merger-related Q&As on the Sears Retiree Website (www.retirees.sears.com) as decisions are reached. Attached is a recap of all Q&As to date. Since we know all retirees do not have access to the Internet, we thank you for your assistance in helping disseminate this information to your fellow retirees.

As the merger progresses, the 18-member Sears Retiree Advisory Council continues to serve as a valuable resource and partner to Sears management. regarding the retiree perspective. In fact, we are speaking with the council this week via conference call to update them on Sears business and the upcoming March 24 special meeting of shareholders where Sears and Kmart shareholders will have an opportunity to vote on the merger.

Thank you for your club leadership and continued support for the growth and success of our company.