Exhibit 10.4

Executive Severance Agreement

August 15, 2017

This Executive Severance Agreement (this “Agreement”) is between Sears Hometown
and Outlet Stores, Inc. (together with its subsidiaries “SHO”) and E. J. Bird
(“Executive”).

Preliminary Statement

In accordance with, and subject to, the terms and conditions of an Offer Letter
dated August 15, 2017, Executive has agreed to serve as SHO’s Senior Vice
President and Chief Financial Officer (the “Offer Letter”).

Terms and Conditions

Executive and SHO, intending to be legally bound and for good and valuable
consideration, agree as follows:

1. Benefits Upon Termination of Employment.

a. Severance Benefits. If Executive’s employment is involuntarily terminated
without Cause or Executive voluntarily terminates Executive’s employment for
Good Reason (as such terms are defined in Section 2 below), Executive will be
entitled to the benefits described in Sections 1(a)(i) and (ii) below
(collectively, the “Severance Benefits”). Executive will not be entitled to the
Severance Benefits if Executive’s employment terminates for any other reason,
including for Cause or due to death or Disability (as defined in Section 2
below). Executive will not be entitled to Severance Benefits if Executive does
not meet all of the other requirements of this Agreement, including those of
Section 4(g).

i. Continuation of Salary

1. SHO will pay Executive cash severance in an amount equal to twelve
(12) months of Executive’s annual base salary at the rate in effect on the date
on which Executive’s employment terminates (the “Date of Termination”). The
amount determined in accordance with the preceding sentence (the “Salary
Continuation Amount”) will be paid upon the satisfaction of the following
conditions: (A) Executive’s Separation from Service (as defined in Section 2
below) has occurred; and (B) the Revocation Period (as defined in Appendix B to
this Agreement) has expired. If the foregoing conditions have been satisfied,
SHO will pay the Salary Continuation Amount in substantially equal installments
on each regular salary payroll date for a period of twelve (12) months (the
“Salary Continuation Period”), except as otherwise provided in this Agreement.

2. Notwithstanding the foregoing, to the extent Executive’s termination is as a
result of an event that would trigger payments under a then-current and
applicable transition pay or severance plan or program (the “Other Severance
Program”) under which Executive would have been eligible for severance pay and
benefits for a period longer than the Salary Continuation Period, and provided
the severance pay under the Other Severance Program is greater than the Salary
Continuation Amount, then the Salary Continuation Amount and the Salary
Continuation Period for purposes of this Agreement will be the greater amount
and the longer period provided by the Other Severance Program, except as
otherwise provided in this Agreement.

3. Further and notwithstanding the foregoing, the SHO obligations that may
become due under this Section 1(a)(i) will be reduced on a dollar-for-dollar
basis (but not below zero), by the amount, if any, of salary or wages that
Executive earns from a subsequent employer (including those arising from
self-employment) during the Salary Continuation Period other than all approved

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external director fees that Executive earns or is otherwise entitled to receive.
Executive will not be obligated to seek affirmatively or accept an employment,
contractor, consulting or other arrangement in order to mitigate the Salary
Continuation Amount. Further, to the extent Executive does not execute and
timely submit the General Release and Waiver (in accordance with Section 4(g)
below) by the deadline specified therein, Salary Continuation Amount payments
will terminate, and any entitlement to future Salary Continuation Amount
payments will be forfeited, and Executive will be required to reimburse SHO for
any portion of the Salary Continuation Amount already paid to Executive.

4. Notwithstanding anything in this Section 1(a)(i) to the contrary, if the
Salary Continuation Amount payable to Executive in accordance with
Section 1(a)(i) during the six (6) months after Executive’s Separation from
Service would exceed the Section 409A Threshold and if as of the date of the
Separation from Service Executive is a Specified Employee (as such terms are
defined in Section 2 below), then payment will be made to Executive on each
regular salary payroll date during the first six (6) months of the Salary
Continuation Period until the aggregate amount received equals the Section 409A
Threshold. Any portion of the Salary Continuation Amount that is in excess of
the Section 409A Threshold and that would otherwise be paid during such six
(6) months will instead be paid to Executive in a lump sum payment on the date
that is six (6) months and one (1) day after the date of Executive’s Separation
from Service.

5. All Salary Continuation Amount payments (described under this
Section 1(a)(i)) will terminate if Executive is employed by a SHO Competitor or
SHO Vendor (as such terms are defined in Sections 4(c)(ii) and 4(d)(ii) herein,
respectively) during the Salary Continuation Period (which for purposes of this
Section 1(a)(i)(3) will not exceed twelve (12) months), or in the event of
Executive’s breach of this Agreement (in accordance with Section 10 below). In
either case, Executive will be required to reimburse SHO for any portion of the
Salary Continuation Amount already paid to Executive.

ii. Continuation of Benefits.

1. During the Salary Continuation Period and subject to the next sentence,
Executive will be entitled to participate in all benefit plans and programs
(except as specified in this Section 1(a)(ii)) in which Executive was eligible
to participate immediately prior to the Date of Termination (subject to the
terms and conditions in effect from time to time and the continued availability
and applicability of such plans and programs to former employees who are not
active employees of SHO). Executive will not be eligible to participate in the
long-term disability plan, health care flexible spending account (except on an
after-tax basis and only through the earlier of the end of Salary Continuation
Period or the calendar year in which the Separation from Service occurs),
SHO-paid life insurance, any 40l(k) savings plan maintained by SHO (or any other
defined contribution plan sponsored by SHO), or any other plan or benefit that
by its terms or in accordance with law is not applicable to former employees who
are not active employees of SHO. SHO’s current medical, dental, and vision plans
provide COBRA-only coverage for former employees who are not active employees of
SHO. If at the Date of Termination COBRA coverage is the only coverage available
under SHO’s then-current medical and dental plans, Executive and Executive’s
eligible dependents will be eligible during the Salary Continuation Period for
COBRA coverage under the then-current plans, with Executive’s percentage share
of the cost of COBRA premiums to be the same as the percentage share that
Executive paid for medical, dental, and vision plan coverage immediately prior
to the Date of Termination.

2. If Executive does not timely execute and submit the General Release and
Waiver (in accordance with Section 4(g) herein) by the deadline specified
therein, Executive will be required to reimburse SHO for the portion of the cost
for the benefits referred to under Section 1(a)(ii)(l) immediately above paid by
SHO during the Salary Continuation Period, and Executive will

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instead be eligible for COBRA coverage under the SHO medical, dental, and vision
plans as of the Date of Termination. Executive will be responsible for the full
cost of COBRA premiums if this Section 1(a)(ii)(2) is applicable.

3. Subject to Section 1(a)(ii)(4) immediately below, if Executive provides
services to another employer and is covered by such employer’s health benefits
plan or program, the medical and dental benefits provided by SHO hereunder will
be secondary to such employer’s health benefits plan or program in accordance
with the terms of the SHO health benefit plans.

4. All of the benefits described in this Section 1(a)(ii) will terminate, and
any entitlements to future such payments will be forfeited, if Executive is
employed by a SHO Competitor or a SHO Vendor during the Salary Continuation
Period (which for purposes of this Section 1(a)(ii)(4) will not exceed twelve
(12) months) or in the event of Executive’s breach of this Agreement (in
accordance with Section 10 below). In either case, Executive will be required to
reimburse SHO for any portion of the cost for the benefits referred to under
Section 1(a)(ii)(1) immediately above paid by SHO during the Salary Continuation
Period, and Executive will instead be eligible for COBRA continuation coverage
under the SHO medical, dental, and vision plans as of Executive’s Severance from
Service date. Executive will be responsible for the full cost of COBRA premiums
if this Section 1(a)(ii)(4) is applicable.

iii. Other. In addition to the foregoing Severance Benefits, a lump sum payment
will be made to Executive not later than Executive’s next regular salary payroll
date following the Date of Termination in an amount equal to the sum of any base
salary and any vacation benefits that have accrued through the Date of
Termination but only to the extent not already paid. No vacation will accrue
during the Salary Continuation Period. No payment will be made with respect to
unused “personal” days. Notwithstanding the foregoing and anything herein to the
contrary, in the event of Executive’s death during the Salary Continuation
Period, any unpaid portion of the Salary Continuation Amount payable in
accordance with Section 1(a)(i) above will be paid in a lump sum, within sixty
(60) days of death (and no later than amounts would have been paid absent
death), to Executive’s estate, and any eligible dependents who are covered
dependents as of the date of death will experience a qualifying event under
COBRA as a result of such death.

iv. Impact of Termination on Certain Other Plans/Programs.

1. Annual Incentive Plan. Upon the Date of Termination, Executive’s entitlement
to any award under SHO’s Annual Incentive Plan (the “AIP”) or other applicable
annual incentive plan sponsored by SHO will be determined in accordance with the
terms and conditions of the AIP or other plan document regarding termination of
employment.

2. Long-Term Incentive Program. Upon the Date of Termination, Executive’s
entitlement to any award granted to Executive under SHO’s Long-Term Incentive
Program (the “LTIP) or other applicable long-term incentive program sponsored by
SHO will be determined in accordance with the terms and conditions of the
applicable award letter and the LTIP or other plan document regarding
termination of employment.

3. Stock Plan. Upon the Date of Termination, Executive’s entitlement to any
unvested options, restricted stock, or other award granted to Executive under
SHO’s 2012 Amended and Restated Stock Plan or other stock plan sponsored by SHO
will be determined in accordance with the terms and conditions of the applicable
award agreement and the stock plan document regarding termination of employment.

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v. Post-Termination Forfeiture of Severance Benefits. If SHO determines after
the Date of Termination that Executive engaged in activity during employment
with SHO that SHO determines constituted Cause, Executive will immediately cease
to be eligible for Severance Benefits and will be required to reimburse SHO for
any portion of Severance Benefits received by Executive during the Salary
Continuation Period.

2. Definitions. For purposes of this Agreement, each capitalized term herein is
either defined in the section, exhibit, or Appendix in which it first appears or
in this Section 2. The following capitalized terms will have the definitions as
set forth below:

a. “Cause” means (i) a material breach by Executive (other than a breach
resulting from Executive’s incapacity due to a Disability) of Executive’s duties
and responsibilities to SHO, including under the Offer Letter, which breach is
demonstrably willful and deliberate on Executive’s part, is committed in bad
faith or without reasonable belief that such breach is in the best interests of
SHO, and is not remedied in a reasonable period of time after receipt of written
notice from SHO specifying such breach; (ii) Executive’s conviction of a felony
involving moral turpitude; or (iii) Executive’s dishonesty or willful misconduct
in connection with Executive’s employment.

b. “Disability” means disability as defined under the SHO long-term disability
plan in effect as of the date of execution of this Agreement (regardless of
whether Executive is a participant under such plan).

c. “Good Reason” means, without Executive’s written consent, (i) a reduction of
more than ten percent (10%) in the sum of Executive’s annual base salary and
target annual incentive under the AIP from those in effect as of the date of
this Agreement; (ii) Executive’s mandatory relocation to an office more than
fifty (50) miles from the primary location at which Executive is required to
perform Executive’s duties immediately prior to the date of this Agreement; or
(iii) any other action or inaction that constitutes a material breach of the
terms of Executive’s employment with SHO, including under the Offer Letter, by
SHO or its successor, including failure of a successor company to assume or
fulfill the obligations under this Agreement. In each case, Executive must
provide SHO with written notice of the facts giving rise to a claim that Good
Reason exists for purposes of this Agreement within thirty (30) days of the
initial existence of such Good Reason event, and SHO will have a right to remedy
such event within sixty (60) days after receipt of Executive’s written notice
(the “Sixty (60)-Day Period”). If SHO remedies the Good Reason event within the
Sixty (60)-Day Period, the Good Reason event (and Executive’s right to receive
any benefit under this Agreement on account of termination of employment for
Good Reason) will cease to exist. If SHO does not remedy the Good Reason event
within the Sixty (60)-Day Period, and Executive does not incur a termination of
employment within thirty (30) days following the earlier of: (y) the date SHO
notifies Executive that it does not intend to remedy the Good Reason or does not
agree that there has been a Good Reason event, or (z) the date on which the
Sixty (60)-Day Period expires, the Good Reason event (or any claim of Good
Reason) will cease to exist. Notwithstanding the foregoing, if Executive fails
to provide written notice to SHO of the facts giving rise to a claim of Good
Reason within thirty (30) days of the initial existence of such Good Reason
event, the Good Reason event (and Executive’s right to receive any benefit under
this Agreement on account of termination of employment for Good Reason) will
cease to exist as of the thirty-first (31st) day following the later of its
occurrence or Executive’s knowledge thereof. If Executive terminates Executive’s
employment under clause (i) of this definition, Executive’s annual base salary
rate for purposes of Section 1 hereof will be Executive’s annual base salary
rate in effect prior to the reduction that triggered the applicability of such
Good Reason event.

d. “SHO Affiliate” means any person with whom SHO is considered to be a single
employer under Section 414 (b) of the Internal Revenue Code (the “Code”) and all
persons with whom SHO would be considered a single employer under Code
Section 414 (c), substituting “50%” for the “80%” standard that would otherwise
apply.

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e. “Section 409A Threshold” means an amount equal to two (2) times the lesser of
(i) Executive’s base salary for services provided to SHO as an employee for the
calendar year preceding the calendar year in which Executive has a Separation
from Service; or (ii) the maximum amount that may be taken into account under a
qualified plan in accordance with Code Section 40l (a)(17) for the calendar year
in which Executive has a Separation from Service. In all events, this amount
will be limited to the amount specified under Treasury Regulation
Section 1.409A-1(b)(9)(iii)(A) or any successor thereto.

f. “Separation from Service” means a “Separation from Service” from SHO within
the meaning of Code Section 409A (and regulations issued thereunder).
Notwithstanding anything herein to the contrary, the fact that Executive is
treated as having incurred a Separation from Service under Code Section 409A and
the terms of this Agreement will not be determinative, or in any way affect the
analysis, of whether Executive has retired, terminated employment, separated
from service, incurred a severance from employment or become entitled to a
distribution, under the terms of any retirement plan (including pension plans
and 401(k) savings plans) maintained by SHO.

g. “Specified Employee” has the meaning set forth under Code Section 409A (and
regulations issued thereunder).

3. Intellectual Property Rights. Executive acknowledges that Executive’s
development work or research on any and all inventions or expressions of ideas
that may or may not be eligible for patent, copyright, trademark or trade secret
protection, hereafter made or conceived solely or jointly within the scope of
employment at SHO, provided such invention or expression of an idea relates to
the business of SHO, or relates to actual or demonstrably anticipated research
or development of SHO, or results from any work performed by Executive for or on
behalf of SHO, are hereby assigned to SHO, including Executive’s entire rights,
title and interest. Executive will promptly disclose such invention or
expression of an idea to Executive’s management and will, upon request, promptly
execute a specific written assignment of title to SHO. If Executive currently
holds any inventions or expressions of an idea, regardless of whether they were
published or filed with the U.S. Patent and Trademark Office or the U.S.
Copyright Office, or is under contract to not so assign, Executive will list
them on the last page of this Agreement.

4. Protective Covenants. Executive acknowledges that this Agreement provides for
additional consideration beyond what SHO is otherwise obligated to pay to
Executive. In consideration of the opportunity to receive the Severance
Benefits, and other good and valuable consideration, Executive agrees to the
following:

a. Non-Disclosure of SHO Confidential Information. Executive acknowledges and
agrees to be bound by the following, whether or not Executive receives any
Severance Benefits under this Agreement:

i. Non-Disclosure. Subject to Section 11, Executive will not, during the term of
Executive’s employment with SHO or thereafter, other than in the performance of
Executive’s duties and obligations to SHO, including under the Offer Letter,
during Executive’s employment with SHO, as required by law or legal process, or
as SHO may otherwise consent to or direct in writing, reveal, disclose, sell,
use, lecture upon or publish any SHO Confidential Information (as defined in
Section 4(a)(iii) below) until such time as the information becomes publicly
known other than as a result of its disclosure, directly or indirectly, by
Executive.

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ii. Proprietary Information. Subject to Section 11, Executive understands that
if Executive possesses any proprietary information of another person or company
as a result of prior employment or otherwise, SHO expects and requires that
Executive will honor any and all legal obligations that Executive has to that
person or company with respect to proprietary information, and Executive will
refrain from any unauthorized use or disclosure of such information.

iii. SHO Confidential Information. For purposes of this Agreement, “SHO
Confidential Information” means trade secrets and non-public information which
SHO designates as being confidential or which, under the circumstances, should
be treated as confidential, including any information received in confidence
from or developed by SHO, its long and short term goals, vendor and supply
agreements, databases, methods, programs, techniques, business information,
financial information, marketing and business plans, proprietary software,
personnel information and files, client information, pricing, and other
information relating to the business of SHO that is not known generally to the
public or in the industry.

iv. Return of SHO Property. All documents and other property that relate to the
business of SHO are the exclusive property of SHO, even if Executive authored or
created them. Executive agrees to return all such documents and tangible
property to SHO upon termination of employment or at such earlier time as SHO
may request that Executive do so.

v. Conflict of Interest. During Executive’s employment with SHO and during any
Salary Continuation Period (which for purposes of this Section 4(a)(v) will not
exceed twelve (12) months), except as may be approved in writing by SHO, neither
Executive nor members of Executive’s immediate family (which will refer to
Executive, any spouse, and any child) will have financial investments or other
interests or relationships with SHO or any customers, suppliers or competitors
which might impair Executive’s independence of judgment on behalf of SHO. Also
during Executive’s employment with SHO during any Salary Continuation Period,
Executive agrees not to engage in any activity in competition with SHO and to
avoid any outside activity that could adversely affect the independence and
objectivity of Executive’s judgment, interfere with the timely and effective
performance of Executive’s duties and responsibilities to SHO, or that could
otherwise conflict with the best interests of SHO.

b. Non-Solicitation of Employees. During Executive’s employment with SHO and for
twelve (12) months following the Date of Termination, whether or not Executive
receives any Severance Benefits under this Agreement, Executive will not,
directly or indirectly, solicit or encourage any SHO employee to leave the
employee’s employment with SHO, or assist in any way with the hiring of any SHO
employee by any future employer or other entity.

c. Non-Competition. Executive acknowledges that as a result of Executive’s
position at SHO, Executive has learned or developed, or will learn or develop,
SHO Confidential Information and that use or disclosure of SHO Confidential
Information is likely to occur if Executive were to render advice or services to
any SHO Competitor.

i. Therefore, for twelve (12) months following the Date of Termination, whether
or not Executive receives any Severance Benefits under this Agreement, Executive
will not, directly or indirectly, aid, assist, participate in, consult with,
render services to, accept a position with, become employed by, or otherwise
enter into any relationship with (other than having a passive ownership interest
in or being a customer of) any SHO Competitor.

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ii. For purposes of this Agreement, “SHO Competitor” means those companies
listed on Appendix A, each of which Executive acknowledges is a SHO Competitor.

d. Restriction on Post-Employment Affiliation with SHO Vendors. Executive
acknowledges that as a result of Executive’s position at SHO, Executive has
learned or developed, or will learn or develop, SHO Confidential Information and
that use or disclosure of SHO Confidential Information is likely to occur if
Executive were to render advice or services to any SHO Vendor (as defined
herein).

i. Therefore, for twelve (12) months from the Date of Termination, whether or
not Executive receives any Severance Benefits under this Agreement, Executive
will not, directly or indirectly, aid, assist, participate in, consult with,
render services to, accept a position with, become employed by, or otherwise
enter into any relationship with (other than having a passive ownership interest
in or being a customer of) any SHO Vendor.

ii. For purposes of this Agreement, “SHO Vendor” means, the vendors, if any,
listed in Appendix A as well as any other vendor with combined annual gross
sales of services or merchandise to SHO in excess of $200 million.

e. Compliance with Protective Covenants. Executive will provide SHO with such
information as SHO may from time to time reasonably request to determine
Executive’s compliance with this Section 4. Executive authorizes SHO to contact
Executive’s future employers and other entities with which Executive has any
business relationship to determine Executive’s compliance with this Agreement or
to communicate the contents of this Agreement to such employers and entities.
Executive releases SHO, their agents and employees, from all liability for any
damage arising from any such contacts or communications.

f. Necessity and Reasonableness. Executive agrees that the restrictions set
forth herein are necessary to prevent the use and disclosure of SHO Confidential
Information and to otherwise protect the legitimate business interests of SHO.
Executive further agrees and acknowledges that the provisions of this Agreement
are reasonable.

g. General Release and Waiver. In connection with Executive’s termination of
employment with SHO (whether initiated by SHO or Executive in accordance with
Section (1)(a) above), Executive will execute a binding general release and
waiver of claims in a form to be provided by SHO (the “General Release and
Waiver”), which is incorporated by reference in this Agreement. The General
Release and Waiver will be in a form substantially similar to the form attached
as Appendix B to this Agreement. If the General Release and Waiver is not signed
within the time articulated therein, or is signed but subsequently revoked,
Executive will cease to be entitled to receive Severance Benefits and will be
obligated to reimburse SHO for the portion, if any, of the Severance Benefits
already paid to Executive by SHO in its sole discretion prior to the expiration
of the Revocation Period.

h. Exception Request. Notwithstanding the foregoing, Executive may request a
waiver or a specific exception to the non-competition provisions of this
Agreement by written request to the Vice President of Human Resources or Vice
President, General Counsel (or the equivalent) of SHO. Such a request will be
given reasonable consideration and may be granted, in whole or in part, or
denied by SHO in its absolute discretion.

5. Irreparable Harm. Executive acknowledges that irreparable harm would result
from any breach by Executive of the provisions of this Agreement, including
Sections 4(a), 4(b), 4(c) and 4(d), and that monetary damages alone would not
provide adequate relief for any

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such breach. Accordingly, if Executive breaches or threatens to breach this
Agreement, Executive consents to injunctive relief in favor of SHO without the
necessity of SHO posting a bond. Moreover, any award of injunctive relief will
not preclude SHO from seeking or recovering any lawful compensatory damages on
account of any harm which result from a breach of this Agreement, including a
forfeiture of any future payments otherwise due hereunder, and a return of any
payments and benefits already received by Executive under this Agreement.

6. Non-Disparagement. Subject to Section 11, Executive will not take any actions
that would reasonably be expected to be detrimental to the interests of SHO nor
make derogatory statements, either written or oral to any third party, or
otherwise publicly disparage SHO or its products, services, or present or former
employees, officers or directors, and will not authorize others to make such
derogatory or disparaging statements on Executive’s behalf. This provision does
not, and is not intended to, preclude Executive from entering into any
relationship with a SHO Competitor or SHO Vendor if such relationship is
permissible under Section 4(c) or 4(d) and does not, and is not intended to,
preclude Executive from providing truthful testimony in response to legal
process or governmental inquiry.

7. Cooperation. Executive agrees, without receiving additional compensation, to
fully and completely cooperate with SHO both during and after the period of
employment with SHO (including any Salary Continuation Period), with respect to
matters that relate to such period of employment, in all investigations,
potential litigation or litigation in which SHO is involved or may become
involved other than any such investigations, potential litigation or litigation
between SHO and Executive. SHO will reimburse Executive for reasonable travel
and out-of-pocket expenses incurred in connection with any such investigations,
potential litigation or litigation, except in the case of litigation between SHO
and Executive.

8. Future Enforcement or Remedy. Any waiver, or failure to seek enforcement or
remedy for any breach or suspected breach of any provision of this Agreement by
SHO or Executive in any instance will not be deemed a waiver of such provision
in the future.

9. Acting as Witness. Subject to Section 11, Executive agrees that both during
and after the period of employment with SHO (including any Salary Continuation
Period), Executive will not voluntarily act as a witness, consultant or expert
for any person or party in any action against or involving SHO unless subject to
judicial enforcement to appear as a fact witness only.

10. Breach by Executive. In the event of a breach by Executive of any of the
provisions of this Agreement, including the non-competition provisions (Section
4) and the non-disparagement provision (Section 6) of this Agreement, the
obligation of SHO to pay Salary Continuation Amount or to provide other
Severance Benefits under this Agreement will immediately cease and any Salary
Continuation Amount payments already received and the value of any other
Severance Benefits already received will be returned by Executive to SHO.
Further, Executive agrees that SHO will be entitled to recovery of its
attorneys’ fees and other associated costs incurred as a result of any attempt
to redress a breach by Executive or to enforce its rights and protect its
interests under this Agreement.

11. No Prohibition. Subject to the next sentence, nothing in this Agreement will
be construed to prohibit Executive from filing a charge with, reporting possible
violations to, or participating or cooperating with any governmental agency or
entity, including the Equal Employment Opportunity Commission, the Department of
Justice, the Securities and Exchange Commission, Congress, or any agency
Inspector General, or making other disclosures that are protected under the
whistleblower, anti-discrimination, or anti-retaliation provisions of federal,
state, or local law or regulation. Executive may not disclose SHO Confidential
Information that is protected by the attorney-client privilege except as
expressly authorized by law. Executive does not need the prior authorization of
SHO to make any such reports or disclosures, and Executive is not required to
notify SHO that Executive has made such reports or disclosures.

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12. Severability. If any provision or provisions of this Agreement is found
invalid, illegal, or unenforceable, in whole or in part, then such provision or
provisions will be modified or restricted so as to effectuate as nearly as
possible in a valid and enforceable way the provisions hereof, or will be deemed
excised from this Agreement, as the case may require, and this Agreement will be
construed and enforced to the maximum extent permitted by law, as if such
provision or provisions had been originally incorporated herein as so modified
or restricted or as if such provision or provisions had not been originally
incorporated herein, as the case may be.

13. Employment-at-Will. This Agreement does not constitute a contract of
employment, and Executive acknowledges that Executive’s employment with SHO is
terminable “at-will” by either party at any time with or without cause and with
or without notice.

14. Other Plans, Programs, Policies and Practices. If any provision of this
Agreement conflicts with any other plan, programs, policy, practice or other SHO
document, then the provisions of this Agreement will control, except as
otherwise precluded by law. Executive will not be eligible for any benefits
under any transition or severance plan or program maintained by SHO.

15. Entire Agreement. This Agreement, including the appendices hereto, contains
and comprises the entire understanding and agreement between Executive and SHO
(except for the Offer Letter) and fully supersedes any and all other prior
agreements or understandings between Executive and SHO (except for the Offer
Letter), in each case with respect to the subject matter contained herein, and
may be amended only by a writing signed by (a) one of the Vice President of
Human Resources or the Vice President, General Counsel, and Secretary (or
equivalent) of SHO and (b) Executive.

16. Tax Withholding. Any compensation paid or provided to Executive under this
Agreement will be subject to any applicable federal, state or local income and
employment tax withholding requirements.

17. Notices. All notices and other communications hereunder will be in writing
and will be given by hand delivery to the other parties or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Executive: At the most recent address on file at SHO.

If to SHO: 5500 Trillium Blvd, Hoffman Estates, Illinois 60192, Attention to
both: VP, Human Resources and VP, General Counsel.

18. Assignment. SHO may assign its rights under this Agreement to any successor
in interest, whether by merger, consolidation, sale of assets, or otherwise.
This Agreement will be binding whether it is between SHO and Executive or
between any successor or assignee of SHO and Executive.

19. Section 409A Compliance. To the extent that a payment or benefit under this
Agreement is subject to Code Section 409A, it is intended that this Agreement as
applied to that payment or benefit comply with the requirements of Code
Section 409A, and the Agreement will be administered and interpreted consistent
with this intent. If the Sixty (60)-Day Period following a Separation from
Service begins in one calendar year and ends in a second calendar year (a
“Crossover 60-Day Period”) and if there are any payments due Executive under
this Agreement that are: (i) conditioned on Executive signing and not revoking a
release of claims and (ii) otherwise due to be paid during the portion of the
Crossover 60-Day Period that falls within the first year thereof, then such

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payments will be delayed and paid in a lump sum during the portion of the
Crossover 60-Day Period that falls within the second year. Executive’s right to
receive installment payments pursuant to this Agreement will be treated as a
right to receive a series of separate and distinct payments.

20. Construction and Interpretation. In this Agreement (1) “includes” and
“including” are inclusive and mean, respectively, “includes without limitation”
and “including without limitation,” (2) “or” is disjunctive but not necessarily
exclusive, (3) “will” expresses an imperative, an obligation, and a requirement,
(4) numbered “Section” references refer to sections of this Agreement unless
otherwise specified, (5) section headings are for convenience only and will have
no interpretive value, and (6) unless otherwise indicated all references to a
number of days will mean calendar (and not business) days and all references to
months or years will mean calendar months or years.

21. Counterparts. This Agreement may be executed in one or more counterparts,
which together will constitute a valid and binding agreement.

22. Right to Jury. Executive agrees to waive any right to a jury trial on any
claim contending that this Agreement or the General Release and Waiver is
illegal or unenforceable in whole or in part, and Executive agrees to try any
claims brought in a court or tribunal without use of a jury or advisory jury.
Further, should any claim arising out of Executive’s employment, termination of
employment or Salary Continuation Period (if any) be found by a court or
tribunal of competent jurisdiction to not be released by the General Release and
Waiver, Executive agrees to try such claim to the court or tribunal without use
of a jury or advisory jury.

23. Governing Law. This Agreement will be governed under the internal laws of
the state of Illinois without regard to principles of conflicts of laws.
Executive agrees that the state and federal courts located in the state of
Illinois will have exclusive jurisdiction in any action, lawsuit or proceeding
based on or arising out of this Agreement, and Executive hereby (a) submits to
the personal jurisdiction of such courts, (b) consents to the service of process
in connection with any action, suit, or proceeding against Executive, and
(c) waives any other requirement (whether imposed by statute, rule of court, or
otherwise) with respect to personal jurisdiction, venue or service of process.

 

EXECUTIVE   /s/ E. J. BIRD   E. J. Bird    

 

SEARS HOMETOWN AND OUTLET

STORES, INC.

By:   /s/ PHILIP ETTER Philip Etter Vice President, Human Resources

 

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Appendix A to Executive Severance Agreement

SHO Competitors

The following companies (including affiliates and subsidiaries within the same
controlled group of corporations) are included within the definition of SHO
Competitors as referred to under Section 4(c)(ii)(l) of the Executive Severance
Agreement between SHO and Executive:

Ace Hardware

Lowe’s Home Improvement

The Home Depot

Menard

Whirlpool

ServiceMaster

Rent-A-Center, Inc.

Aaron’s, Inc.

ABT

Amazon

Conn’s, Inc.

Best Buy

Sears Holdings Corporation

Tractor Supply Co.

True Value Company

Wal-Mart

Target

Caterpillar

John Deere

SHO Vendors

The following companies (including affiliates and subsidiaries within the same
controlled group of corporations) are included within the definition of SHO
Vendors as referred to under Section 4(d) of the Executive Severance Agreement
between SHO and Executive:

Sears Holdings Corporation

Bosch

Electrolux

General Electric

LG

Samsung

Whirlpool

MTD

Techtronic Industries Company Limited

Husqvarna

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Appendix B to Executive Severance Agreement

GENERAL RELEASE AND WAIVER

NOTICE

YOU MAY CONSIDER THIS GENERAL RELEASE AND WAIVER FOR UP TO TWENTY ONE (21) DAYS.
IF YOU DECIDE TO SIGN IT, YOU MAY REVOKE THIS GENERAL RELEASE AND WAIVER WITHIN
SEVEN (7) DAYS AFTER SIGNING IT (THE “REVOCATION PERIOD”). ANY REVOCATION WITHIN
THE REVOCATION PERIOD MUST BE IMMEDIATELY SUBMITTED, IN WRITING, TO PHILIP
ETTER, HUMAN RESOURCES, SEARS HOMETOWN AND OUTLETS STORES, INC., 5500 TRILLIUM
BOULEVARD, SUITE 501, HOFFMAN ESTATES, IL 60192, AND STATE THAT, “I HEREBY
REVOKE MY ACCEPTANCE OF THE GENERAL RELEASE AND WAIVER.” THE EXECUTIVE SEVERANCE
AGREEMENT AND GENERAL RELEASE AND WAIVER SHALL NOT BECOME EFFECTIVE OR
ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED. YOU SHOULD CONSIDER
CONSULTING WITH AN ATTORNEY BEFORE SIGNING THIS GENERAL RELEASE AND WAIVER.

I, E. J. Bird, acknowledge that there are various state, local, and federal laws
that prohibit, among other things, employment discrimination on the basis of
age, gender, race, color, national origin, religion, disability, sexual
orientation or veteran status and that these laws are enforced through the Equal
Employment Opportunity Commission, Department of Labor and state or local human
rights agencies. Such laws include, without limitation, the following: Title VII
of the Civil Rights Act of 1964; the Americans with Disabilities Act; the Age
Discrimination in Employment Act; the Older Workers Benefit Protection Act; the
Employee Retirement Income Security Act; 42 U.S.C. Section 1981; and all
applicable state and local human and civil rights laws as well as other statutes
or laws which regulate employment; and the common law of contracts and torts. I
hereby waive and release all rights I may have under these or any other laws
with respect to my employment and termination of employment and acknowledge that
none of the SHO Parties (as defined below) has (a) discriminated against me,
(b) breached any contract with me, (c) committed any civil wrong (tort) against
me, or (d) otherwise acted unlawfully against me.

I also waive any right to become, and promise not to consent to become, a member
of any class or collective in any case in which claims are asserted against any
or all of the SHO Parties that are related in any way to my employment or the
termination of my employment with Sears Hometown and Outlet Stores Inc., Sears
Holdings Corporation, or any subsidiary of either of them, and that involve
claims which have accrued as of the date I sign this General Release and Waiver.
If I, with or without my knowledge, become a member of a class in any
proceeding, I will opt out of the class at the first opportunity afforded to me
to do so. In this regard, I agree that I will execute, without objection or
delay, an “opt-out” form presented to me either by the court in which such
proceeding is pending or by counsel for any or all of the SHO Parties.

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In consideration of the benefits I will receive that are described in the
attached Executive Severance Agreement, I, E. J. Bird, for myself, my heirs,
administrators, representatives, executors, successors and assigns, do hereby
release, waive, and forever discharge Sears Hometown and Outlet Stores, Inc.,
Sears Holdings Corporation, and the current and former agents, parents,
subsidiaries, affiliates, related organizations, employees, officers, directors,
shareholders, attorneys, successors, and assigns of each of Sears Hometown and
Outlet Stores, Inc. and Sears Holdings Corporation (collectively, the “SHO
Parties”) from any and all liability, actions, charges, causes of action,
demands, damages, or claims for relief or remuneration, sums of money, accounts,
or expenses (including attorneys’ fees and costs) of any kind whatsoever,
whether known or unknown at this time, arising out of, or connected with, my
employment with Sears Hometown and Outlet Stores Inc., Sears Holdings
Corporation, or any subsidiary of either of them and the termination of my
employment. The foregoing release, discharge, and waiver includes, but is not
limited to, all claims and any obligations or causes of action arising from such
claims, including but not limited to, all matters in law, in equity, in contract
(oral or written, express or implied), in tort, or pursuant to statute,
including claims under any federal, state or local statute or state or federal
constitution, including, but not limited to, Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1866 and 1871 (42 U.S.C. § 1981), the Civil
Rights Act of 1991, the Age Discrimination in Employment Act, the Fair Labor
Standards Act, the Employee Retirement Income Security Act, the Americans with
Disabilities Act, the Rehabilitation Act of 1973, the Worker Adjustment and
Retraining Notification Act, the Family and Medical Leave Act, the National
Labor Relations Act, the Equal Pay Act, and all other discrimination and
employment laws of Illinois and of all other states and municipalities, to the
fullest extent permitted under the law. This General Release and Waiver does not
apply to any claims or rights that may arise from events occurring after the
date of this General Release and Waiver. Also excluded from this General Release
and Waiver are any claims which cannot be waived by law, including my right to
file a charge with or participate in an investigation conducted by the Equal
Employment Opportunity Commission, and my rights specified in paragraph 11 of
the Executive Severance Agreement. I do, however, waive all rights (other than
my rights specified in paragraph 11 of the Executive Severance Agreement) to any
monetary or other relief of any kind flowing out of any agency or third-party
claims or charges, including any charge I might file with any state, local or
federal agency. Subject to my rights specified in paragraph 11 of the Executive
Severance Agreement, I warrant and represent that I have not filed any
complaint, charge, or lawsuit against the SHO Parties or any of them with any
governmental agency or with any court.

I have read this General Release and Waiver and understand all of its terms.

I have signed this General Release and Waiver voluntarily with full knowledge of
its legal significance and consequences.

I have had the opportunity to seek, and I have been advised in writing of my
right to seek, legal counsel prior to signing this General Release and Waiver.

I was given at least twenty-one (21) days to consider signing this General
Release and Waiver. Any non-material modification of this General Release and
Waiver Agreement does not restart the twenty-one (21) day consideration period.

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I understand that if I sign this General Release and Waiver, I can change my
mind and revoke it within seven (7) days after signing. I understand this
General Release and Waiver will not be effective until after the seven (7) day
revocation period has expired.

I understand that the delivery of the benefits I will receive that are described
in the attached Executive Severance Agreement does not constitute an admission
of liability by the SHO Parties or any of them and that each of the SHO Parties
expressly denies any wrongdoing or liability.

THIS IS A RELEASE. READ BEFORE SIGNING.

Signed by:                                          
                                       

E. J. Bird

Date:                         ,