Document:

EX-10.1

 Exhibit 10.1 

CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE 

THIS CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE (hereinafter, the “Agreement”) is knowingly and voluntarily made and
entered into effective this 15th day of September, 2017 by and between Thomas Shields (hereinafter, “Shields”) and Patriot National, Inc. (“Patriot”) (collectively, the
“Parties”). The term “Patriot” shall also collectively include, without limitation, Patriot National, Inc.’s past and present parents, successors in interest and assigns, affiliates, subsidiaries, divisions, departments,
wholly-owned corporations or partnerships, business associations, sole proprietorships, limited liability companies, and its current or former officers, agents, representatives, fiduciaries, administrators, directors, attorneys, stockholders,
members, partners, management, supervisors, or employees, in both their individual and official capacities. 
 WHEREAS,
the Parties executed an Employment Agreement dated January 5, 2015, in which, inter alia, Shields agreed to serve as the Executive Vice President and Chief Financial Officer of Patriot (the “Employment Agreement”), and Shields
has served in that role for Patriot from September 8, 2014 through the date of this Agreement (the “Employment Term”); 

WHEREAS, this Agreement sets forth the mutual agreement between Patriot and Shields with respect to the parties’ mutual decision
to separate and terminate their relationship; and 
 WHEREAS, Patriot has agreed to provide severance pay and other
consideration to Shields in exchange for his execution of this Agreement. 
 NOW, THEREFORE, intending to be legally bound
hereby, and in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 

1.    Mutual Termination of Employment. The Parties have mutually decided to separate and terminate their
relationship effective as of September 15, 2017 the “Effective Date”. Shields shall take no further action on behalf of Patriot and confirms that he has been paid for all wages or other sums due to him through and including the
Separation Date in accordance with Patriot’s usual payroll practices and as required by law. 
 The Parties agree that Shields’
separation from Patriot is due to a voluntary resignation by Shields, such separation shall be considered amicable, and there is no disagreement between Shields and Patriot on any matter related to Patriot’s financial condition or financial
reporting. 
 1.    Severance and Other Payments. Patriot agrees to pay Shields payments in the total sum
of NINE HUNDRED TWENTY THOUSAND AND 00/100 DOLLARS ($920,000) (collectively, the “Severance Payments”). The Severance Payments shall be paid in the following installments: 

 

	 	a.	$370,000 by September 15, 2017 

  

	 	b.	$91,700 by October 15, 2017 

  

	 	c.	$91,700 by November 15, 2017 

	 	d.	$91,700 by December 15, 2017 

  

	 	e.	$91,700 by January 15, 2018 

  

	 	f.	$91,700 by February 15, 2018; and 

  

	 	g.	$91,700 by March 15, 2018 

 Patriot shall withhold federal income tax and the employee share of payroll
taxes in accordance with its payroll practices in connection with these Severance Payments. Shields will be responsible for all income tax liabilities associated with the Severance Payments, if any, that may be due and payable. Shields agrees to
indemnify and hold harmless Patriot from any and all liens, actions, claims, fines, penalties, or interest of any kind, on the part of the Internal Revenue Service or any other taxation authority in connection with the income tax aspects of the
Severance Payments. It is further acknowledged and agreed.by Shields that neither Patriot nor its attorneys have expressed any opinions nor made any representations concerning any tax consequences associated with the Severance Payments described
above, and that Shields will seek advice from his own tax counsel or other advisors. Shields shall provide Patriot’s counsel written payment instructions at least one (1) week prior to the date of any installment payment as set forth
herein. If no new payment instructions are provided in a given month when an installment payment is due, Patriot is authorized to send the payment in the same manner as the prior month. Except as provided in Sections 18, 11 and 27 of this Agreement,
each side shall bear their own attorneys’ fees and costs. 
 2.    COBRA Health Plan Coverage.
Shields will be offered whatever benefits he is entitled to receive under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Information concerning the monthly premiums, rates and election criteria for the COBRA plan
will be provided via separate letter to Shields from Patriot. For two (2) years from the Effective Date, subject to Shields’s election of COBRA continuation coverage under Patriot’s group health plan, Patriot shall pay to Shields an
amount equal to the difference between the monthly COBRA premium cost for Shields and his qualified dependents and the monthly contribution paid by active employees for the same coverage. Any payments by Patriot under this Section shall cease
immediately if there is any breach of this Agreement by Shields or Shields becomes eligible to receive any health benefits with a new employer. 

3.    No Other Amounts Due or Payable. Other than the Severance Payments, group health plan coverage and
advanced stock vesting expressly provided in Sections 2, 3 and 6, and all accrued obligations due Shields through, and payable, on or before the 9th of August 2017, Shields shall not be entitled
to any additional consideration or any additional amounts from Patriot including, without limitation, any amounts with respect to (a) his employment by Patriot; and (b) the mutual termination of his employment with Patriot. The Severance
Payments are in consideration for the execution of this Agreement by Shields and Shields’ strict compliance with the terms and conditions of this Agreement. 

4.    No Admission of Liability. This Agreement, and compliance with this Agreement, shall not be construed
as an admission by Patriot or Shields of any liability whatsoever, or as an admission by either Party of any violation of the rights of Patriot or Shields 

  
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or any other person, or of any violation of any order, law, statute, duty, or contract, including without limitation the Employment Agreement. Shields represents that he (1) has no
information or evidence of any unlawful conduct on the part of Patriot; (2) has not filed nor made any complaints or charges against Patriot with any local, state or federal governmental agency; (3) is not aware of any regulatory or
administrative investigations of Patriot; (4) has no knowledge or any facts or circumstances that could give rise to any claims under any laws referenced in Section 7 of this Agreement; and (5) has no personal claims against Patriot
other than his request for a severance package from Patriot. Shields acknowledges that, bur for his execution of this Agreement and General Release, he would not be entitled to severance benefits from Patriot. Patriot specifically disclaims any
liability to Shields or any other person, and any alleged violation of any rights of Shields or any other person, or of any order, law, statute, duty, or contract, including without limitation the Employment Agreement. The Parties agree and
acknowledge that this Section 5 is a substantial material inducement for Patriot to enter into this Agreement. 

5.    Stock Vesting, Stock Restrictions and Waiver of Stock Options. Under the Employment Agreement, Shields
was entitled to restricted shares of common stock for each of the first three (3) years following his continued employment with Patriot. For 2016 and 2017, Shields received restricted shares of Patriot’s common stock as an Equity Award
under the Employment Agreement. 
 Under the Employment Agreement, Shields was to receive restricted shares of Patriot’s common stock,
vesting one-third (1/3) annually over a three year vesting period, for Shields’ continued employment with Patriot. As part of this Agreement, Patriot shall provide Shields with 23,529 restricted shares of Patriot’s common stock in
accordance with the vesting schedule established by the Employment Agreement as if Shields’ employment had not been terminated or, alternatively, provide Shields the cash equivalent of said shares on September 15, 2017. 

Except as expressly provided herein, Shields waives all rights to any stock options of any shares of Patriot’s stock and waives any
rights for any other equity awards of stock in connection with his employment with Patriot. 
 6.    Releases;
Covenants Not to Sue. With the exception of the rights arising under this Agreement, Shields hereby unconditionally and irrevocably releases and forever discharges Patriot (as defined above) of and from, and agrees not to sue and not to
assert against Patriot any causes of action, claims and demands whatsoever, at law, in equity, in any state or federal court or other tribunal or before any agency or commission of local, state and federal governments, arising, or alleged to have
arisen, or which may arise under any common law theory, any state, county and/or any federal law including, but not limited to, the Family and Medical Leave Act, the Equal Pay Act, federal, state, or municipal anti-discrimination and/or
anti-retaliation laws such as the Americans with Disabilities Act (“ADA”), the Age Discrimination in Employment Act (the “ADEA”), the Older Workers Benefit Protection Act (the “OWBPA”), Title VII of the Civil Rights
Act, as amended, and the Florida Civil Rights Act of 1992, that Shields ever had, now has, or which his heirs, executors, administrators, or assigns, or any of them, hereafter can, shall or may have, based on any set of facts known or unknown,
occurring prior to, and including, the date of the execution of this Agreement. This release expressly includes, without limitation, any claims related to Shields’ employment with Patriot, the mutual termination of

  
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Shields’ employment, any tort or contract claim, and/or any claims arising under the Employment Agreement. This release does not include any claims by Shields asserting a breach of this
Agreement by Patriot.1 
 With the exception of the rights arising under this
Agreement, Patriot (as defined above) hereby unconditionally and irrevocably releases and forever discharges Shields, of and from, and agrees not to sue and not to assert against Shields any causes of action, claims and demands whatsoever, at law,
in equity, in any state or federal court or other tribunal or before any agency or commission of local, state and federal governments, arising, or alleged to have arisen, or which may arise under any common law theory, any state, county and/or any
federal law, that Patriot ever had, now has, or which its successors or assigns, or any of them, hereafter can, shall or may have, based on any set of facts known or unknown, occurring prior to, and including, the date of the execution of this
Agreement. This release expressly includes, without limitation, any claims related to Shields’ employment with Patriot, the mutual termination of Shields’ employment, any tort or contract claim, and/or any claims arising under the
Employment Agreement. This release does not include any claims by Patriot asserting a breach of this Agreement by Shields. 

7.    Waiver of Rights and Claims Under the ADEA/OWBPA. Because Shields is over the age of forty (40),
Patriot understands that Shields is part of a protected class under the ADEA, as amended by the OWBPA. Patriot further understands that pursuant to the OWBPA, Shields may waive any and all potential claims that he may have against Patriot relative
to age discrimination pursuant to the ADEA. Shields confirms and agrees that: 
 a)    in consideration for the amount
described in Section 2 of this Agreement, Shields specifically and voluntarily waives such rights and/or claims under the ADEA, as amended by the OWBPA, which Shields has or might have against Patriot to the extent such rights and/or claims
arose prior to the date this Agreement was executed; 
 b)    Shields understands that rights or claims under the ADEA,
as amended by the OWBPA, which may arise after the date this Agreement is executed are not waived by him; 

c)    Shields is advised to consider the terms and provisions of this Agreement carefully and to consult with or seek
advice from an attorney of his choice or any other person of his choosing prior to executing this Agreement; 

d)    Shields has been, and is herein, informed and understands that he has twenty-one (21) days within which to consider
this Agreement; 
  

	1 	Notwithstanding any other provision herein, nothing in this Agreement is intended in any way to limit Shields’ right or ability to initiate or participate in any investigation or proceeding conducted by any
federal, state or local agency, including the U.S. Equal Employment Opportunity Commission (“EEOC”) and/or the U.S, Securities and Exchange Commission (“SEC”). Further, in accordance with the SEC’s whistleblower regulations,
nothing in this agreement is intended to limit any communication with or disclosures of confidential information to the SEC. Notwithstanding the foregoing, Shields agrees to waive any right to recover monetary damages in any suit, complaint, charge
or other proceeding filed by Shields or anyone else on Shields’ behalf. Shields further represents that he is not aware of facts or evidence that would form the basis of a whistleblower claim against Patriot. 

  
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 e)    Shields has been, and is herein, informed and understands that for a
period of seven (7) calendar days following the execution of this Agreement, Shields may revoke the Agreement, and the Agreement shall not become effective or enforceable until the revocation period has expired; 

f)    Shields has carefully read and fully understands all of the terms and provisions of this Agreement, and he knowingly
and voluntarily agrees to all of the terms and provisions set forth in this Agreement; 
 g)    in entering into this
Agreement, Shields is not relying on any representation, promise, assurance or inducement made by Patriot, or by any officer, employee, representative or agent of Patriot, with the exception of those matters set forth or described in this Agreement;
and 
 h)    the twenty-one (21) day review period will not be affected by or extended by any revisions which might
be made to this Agreement. 
 i)    Shields knowingly and voluntarily waives the 21 day review period provided by OWBPA,

 8.    Continued Consulting. For the first six (6) months after the Effective Date, Shields shall
serve as a consultant to his successor as Patriot’s Chief Financial Officer, assist in any manner reasonably requested concerning any audits by BDO and provide guidance as may be reasonably requested (not to exceed 10 hours in any given week,
unless otherwise agreed to by the Parties in writing). The Parties jointly recognize that Shields’ departure from Patriot is amicable and such consulting work is for the purpose of providing a smooth transition of leadership. For any month in
which Shields provides such consulting work, Patriot shall pay to Shields Thirty-Five Thousand and 00/100 Dollars ($35,000), in a lump sum within fifteen (15) days of the final day of any such month. By way of example, if Shields
provides consulting work to Patriot during the month of September 2017, Patriot shall make such payment to Shields by the 15th day of October. 

9.    Cooperation. With respect to any third party claims (including, without limitation, ongoing
litigations) that implicate Patriot (or its officers or directors) during the time Shields was employed with Patriot, Shields shall use all commercially reasonable efforts to cooperate fully and assist Patriot in its defense of any such claims. Upon
reasonable request, Shields shall make himself available to Patriot’s designated counsel (including counsel for any officers or directors of Patriot) to discuss facts and other issues concerning any transactions or matters for which Shields has
personal knowledge. Any such communications shall maintain a privileged status that may only be waived by written consent of Patriot. Shields also agrees that if is subpoenaed by any person or entity (including any governmental entity) to give
testimony or provide documents (in a deposition, court proceeding or otherwise), that in any way relates to his employment with Patriot, Shields shall give prompt notice of such request to Patriot (24 hours or less) and shall make no disclosure
until Patriot has had a reasonable opportunity to contest the right of the requesting person or entity to such disclosure. In the event Shields’ cooperation under this Section results in reasonable out of pocket expenses for Shields, Patriot
shall reimburse Shields for such reasonable expenses after submission by Shields of proof of the expenses. Time is of the essence with respect to any requests made for Shields to cooperate under this section. 

  
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 10.    Indemnity and Liability Insurance. The Parties agree
that notwithstanding the release in Section 7, above, Shields shall remain entitled to receive and Patriot shall remain obligated to provide indemnification and liability insurance to the fullest extent under Section 145 of the Delaware
General Corporate Law Code and the Amended and Restatement By-Laws of Patriot, including Article IV thereof, as filed by Patriot with the SEC in 2015 as an Exhibit 3.2, and that a claim, suit, or proceeding against Shields by reason of the fact
that he served as a legal representative, officer, employee or agent of Patriot or agreed to serve as such at the request of Patriot, includes any claim, suit, or proceeding against Shields for breach of fiduciary duty in connection with
compensation that he received from Patriot while employed by Patriot and compensation that he is entitled to receive pursuant to this Agreement. Notwithstanding the foregoing, Patriot does not purport to indemnify Shields with respect to any funds
that Shields may be ordered to return to Patriot in connection with any enforcement action by the SEC concerning compensation or other consideration Shields received while employed by Patriot. 

11.    Strict Confidentiality. Shields agrees that he will not publicize nor disclose the terms of this
Agreement with any person except, as necessary: (1) to his spouse or significant other; (2) to taxing authorities; (3) to his attorneys, tax advisors or accountants; (4) in deposition or in response to requirements of law or
subpoenas; or (5) to enforce the terms of this Agreement. If the subject of this Agreement arises, Shields will respond with, “I can’t talk about that”, “that’s confidential”, or the substantive equivalent of one
of these. In addition, Shields agrees not to disclose to or communicate to any third parties any business information with respect to Patriot (as defined above), including its business practices, operations, insurance arrangements, legal matters,
financial situation, financial condition, financial statements and/or any other matter he learned in connection with his role as an employee with or attorney for Patriot. If the subject of Shields’ separation from Patriot arises, Shields will
respond with, “the matter has been resolved”, “we resolved that”, “I can’t talk about that”, “that’s confidential”, or the substantial equivalent of one of these. This confidentiality provision
expressly prohibits Shields from making any statements about Patriot, the Severance Payments or this Agreement on any social network site, other interne site or to the media. The Parties agree and acknowledge that this Section is a substantial,
material inducement for Patriot to enter into this Agreement. In the event that Shields breaches this confidentiality provision, Patriot may seek, subject to applicable legal standards and requirements, any and all appropriate relief, both legal and
equitable, including, without limitation, injunctive relief and the immediate return of the Severance Payments already made and a forfeiture by Shields of any payments due and owing hereunder. 

12.    No Rehire and Employment Reference. Shields agrees not to seek any future employment with Patriot. In
the event that a prospective employer contacts Patriot for an employment reference for Shields, the Parties agree that Patriot will only provide dates of employment and/or positions held (i.e., General Counsel) and/or rates of pay, and will not
disclose the existence of this Agreement. Nothing in this Section shall prevent Shields from referring any potential future employer to publicly available information related to his departure including any SEC filings which reference his departure.

  
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 13.    Mutual Non-Disparagement. Shields and the executive team
of Patriot mutually agree that they will not make any disparaging, denigrating, demeaning, or untrue statements about the other Party or any person or entity associated with the other Party, including any officer, director, member, consultant,
expert, or legal representative of the other Party. Shields further agrees that he will not make any statements or offer any opinion of the financial condition of Patriot (as defined above). Disparaging statements include statements that are false,
statements that are misleading, and statements that might tend to cast the other Party in a negative light, regardless of their truth or falsity. In the event that Shields breaches this non-disparagement provision, Patriot may seek any and all
appropriate relief, both legal and equitable, including, without limitation, injunctive relief and the immediate return of the Severance Payments already made and a forfeiture by Shields of any payments due and owing hereunder. 

14.    Non-Solicitation. For a period of one consecutive year from the Effective Date, Shields shall not,
directly or indirectly, (i) employ, solicit for employment or otherwise contract for services of any individuals who is or was an employee of Patriot or any of its subsidiaries during the Employment Term; (ii) otherwise induce or attempt
to induce any employee of Patriot or its subsidiaries to leave the employ of Patriot or such subsidiary, or in any way knowingly interfere with the relationship between Patriot or any such subsidiary and any employee respectively thereof; or
(iii) induce or attempt to induce any customer, supplier, broker, agent, licensee or other business relation of Patriot or such subsidiary, or interfere in any way with the relationship between any such customer, supplier, broker, agent,
licensee or business relation and Patriot or any subsidiary thereof. 
 15.    Non-Competition. In
consideration of the payment to Shields of the Severance Payments, Shields agrees that, for one consecutive year from the Effective Date of this Agreement, Shields shall not participate as a partner, joint venture, proprietor, shareholder, employee
or consultant, or have any other direct or indirect financial interest (other than a less than 10% interest in a corporation whose shares are regularly traded on a national securities exchange or in the over-the-counter market), including, without
limitation, the interest of a creditor in any form, in, or in connection with, any business competing directly or indirectly with the business of Patriot or its subsidiaries in any geographic area where Patriot and its subsidiaries are actively
engaged in conducting business as of the Effective Date. The purpose of this restrictive covenant is to protect Patriot’s trade secrets and other confidential information, including, without limitation, its business plans, processes and
customer information. Shields consents that the scope and length of the restrictive covenant herein are reasonable and covenants not to challenge the reasonableness of such restrictive covenant. 

16.    Restrictive Covenants. Shields acknowledges and consents to the reasonableness of any restrictive
covenants set forth in this Agreement in all respects. Shields further acknowledges that the restrictions and limitations set forth in this Agreement will not materially interfere with his ability to earn a living following his termination of
employment with Patriot and that his ability to earn a livelihood without violating such restrictions is a material condition. Patriot shall be entitled to seek injunctive relief, specific performance, or other equitable relief by a court of
appropriate jurisdiction in the event of any breach or threatened breach of the terms of any restrictive covenant in this Agreement without the necessity of proving irreparable harm or injury as a result of such breach or threatened breach and
without the posting of a bond. 

  
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 17.    Default for Non-Payment and Entry of Final Judgment. In
the event that Patriot fails to timely make any of the Severance Payment as required under this Agreement, Shields shall provide Patriot with a written notice of default, by email to Patriot’s counsel, Paul Ranis, Esq. (ranisp@gtlaw.com), at
Greenberg Traurig. In the event the default is not cured within five (5) business days of Patriot’s receipt of the notice of default, Shields shall be entitled to initiate an action and secure a Final Judgment against Patriot
National, Inc., less the amount of all payments already made to Shields hereunder, plus reasonable attorney’s fees and costs incurred in obtaining and enforcing collection of the Final Judgment. An affidavit of Shields’ counsel shall
be sufficient proof as to Patriot’s default as well as the amounts due and owing by Patriot to Shields under this Agreement. All defenses of Patriot, other than payment or a prior material breach of this Agreement by Shields, shall be expressly
waived in the event Patriot fails to timely cure any default for non-payment. The action to enforce this Agreement and obtain a Final Judgment shall be submitted to a state or federal court in Broward County, Florida, which the Parties stipulate has
exclusive venue and jurisdiction for any dispute arising under this Agreement. Notwithstanding any other provision of this Agreement, if Shields violates any restrictive covenants in this Agreement, then Patriot shall have no obligation to pay the
Severance Payments or any remaining installment thereof. 
 18.    Change in Control. In the event of a
Change of Control of Patriot, the severance payments set forth in Section 2, to the extent they have not previously been paid to Shields, shall be accelerated and paid to Shields in a lump sum within fifteen (15) days of the effective date
of any Change of Control agreement. “Change in Control” means (i) the sale of all or substantially all the assets of Patriot; or (ii) any sale of more than fifty percent (50%) of the outstanding shares of Patriot (whether
effectuated by merger, consolidation or acquisition). 
 19.    Opportunity to Review. The Parties
represent and agree that they have had the opportunity to discuss this Agreement with counsel of their choosing, have carefully read and fully understand all of the provisions of this Agreement, and that they are voluntarily entering into this
Agreement. 
 20.    Entire Agreement/Amendments - Merger. The Parties hereto represent and acknowledge
that in executing this Agreement they do not rely and have not relied on any representation or statement made by the other Party or by any of the Parties’ agents, representatives, or attorneys with regard to the subject matter, basis, or effect
of this Agreement or otherwise other than those specifically stated in this Agreement. This Agreement contains the entire agreement of the Parties in regard to the arrangements between the Parties and supersedes all negotiations, representations,
warranties, commitments, offers, contracts and writings prior to the date hereof including, without limitation, the Employment Agreement. No modification or amendment of any provision of this Agreement shall be effective unless made in a written
instrument, duly executed by all of the Parties to be bound thereby, which refers specifically to this Agreement and states that an amendment or modification is being made in the respects set forth in such instrument. 

  
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 21.    Headings. The headings in this Agreement are for the
convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
 22.    Successors and
Assigns. This Agreement shall inure to the benefit of Patriot and be binding upon it and its legal representatives, successors and assigns, and upon Shields, his heirs, administrator, executor and assigns. 

23.    Mutual Drafting and Construction. The Parties understand and agree that this Agreement is purely
voluntary and was prepared for the mutual benefit of the Parties. Neither Party shall be considered to be a unilateral or singular drafter of this Agreement. The Parties understand and agree that this Agreement shall be interpreted in accordance
with the plain meaning of its terms and shall not be construed strictly for or against any of the Parties. 

24.    Jury Trial Waiver. THE PARTIES AGREE THAT IN ANY ACTION OR PROCEEDING ARISING FROM, UNDER OR PURSUANT
TO THIS AGREEMENT, THE PARTIES TO THIS AGREEMENT SHALL, AND DO HEREBY, ABSOLUTELY WAIVE AND UNCONDITIONALLY WAIVE TRIAL BY JURY. 

25.    Governing Law. This Agreement will be governed by and interpreted in accordance with the laws of the
State of Florida, without regard to choice of law principles. 
 26.    Venue. Venue for any litigation
arising under or in reference to this Agreement shall be exclusively in state or federal court in Broward County, Florida. The Parties expressly waive any objection to venue and/or jurisdiction. 

27.    Attorneys’ Fees. The prevailing Party in any litigation or dispute arising out of this Agreement
shall be entitled to recovery from the other Party its reasonable attorneys’ fees and costs, whether at pretrial, trial, or appellate levels. 

28.    Severability. Should any provision of this Agreement be declared or be determined by any court of
competent jurisdiction to be illegal, invalid, unethical or unenforceable, the legality, validity and enforceability of the remaining parts, terms, or provisions shall not be affected thereby, and said illegal, unenforceable, unethical or invalid
part, term, or provision shall be deemed not to be part of this Agreement. In the event that a court determines that any restrictive covenant herein is unenforceable by reason of too great a period of time in length, too great a geographical area or
too extensive in any other respect, the restrictive covenant shall be extended to the maximum extent in all respects to which a court may find such restrictive covenant enforceable. 

29.    Return of Patriot Property. All files, records, correspondence, memoranda, notes or other documents
(including, without limitation, those in computer-readable form) or property relating or belonging to Patriot or its subsidiaries or affiliates, whether prepared by Shields or otherwise coming into Shields’ possession in the course of the
performance of his services under the Employment Agreement, shall be the exclusive property of Patriot and shall be delivered to Patriot, and not retained by Shields (including, without limitation, any copies thereof) within fourteen (14) days of
the Effective Date. Shields shall certify, in writing, his compliance with Section 29 of this Agreement. 

  
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 30.    Execution. The Parties to this Agreement may execute
their signatures in counterpart, each document of which may be considered as an original when executed. 
 [SIGNATURE PAGE TO FOLLOW]

  
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 EACH SIGNATORY AGREES AND REPRESENTS THAT HE OR SHE HAS READ THE CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL
RELEASE, HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL OF THEIR CHOOSING ABOUT THE MEANING AND CONSEQUENCES OF THIS AGREEMENT, AND FREELY AND VOLUNTARILY SIGNS THIS AGREEMENT. 

 

					
	AGREED, ACKNOWLEDGED AND ACCEPTED BY:	 	

					
			
	Date:	 	 8/10/17
	 	

					
		
	 /s/ Thomas Shields
	    	
	THOMAS SHIELDS	    	
		
	AGREED, ACKNOWLEDGED AND ACCEPTED BY:	    	Date: 8/11/17
	
	PATRIOT NATIONAL INC.
			
	By:	 	 /s/ Gex F. Richardson
	    	
		 	Authorized Individual’s Signature	    	
			
		 	 Gex F. Richardson, EVP of Admin.
	    	
		 	Print Authorized Individual’s Name / Title	    	

  
 11EX-10.1

 Exhibit 10.1 

Sears Hometown and Outlet Stores, Inc. 

5500 Trillium Boulevard, Suite 501 

Hoffman Estates, IL 60192 

August 15, 2017 

Mr. E. J. Bird 
 15 Blazing Star Trail 

Landrum, SC 29356 
 Dear E. J.: 

We are pleased to extend our offer for you to serve as the Senior Vice President and Chief Financial Officer of Sears Hometown and Outlet
Stores, Inc. (“SHO”). In this position you will report to Will Powell, Chief Executive Officer and President of SHO. The start date of your employment as Senior Vice President and Chief Financial Officer will be August 15, 2017
(the “Effective Date”). This letter, the terms of which have been mutually agreed upon by you and SHO, will govern the terms of your employment with SHO as of the Effective Date (this “Offer Letter”). 

The key elements of your employment and compensation are as follows: 

1. Responsibilities. During your employment as Senior Vice President and Chief Financial Officer you will be responsible for the
financial (including accounting and treasury), risk management, real estate, and procurement operations of SHO and such other responsibilities as the Chief Executive Officer or the Board of Directors assigns to you from time to time. 

2. Base Salary. Your base salary will be $650,000 per year payable to you in accordance with SHO’s regular payroll practices
including withholdings required by law. 
 3. Annual Incentive Plan Participation. You will be eligible to participate in SHO’s
Annual Incentive Plan (the “SHO AIP”) in accordance with, and subject to, its terms. Your annual incentive opportunity will be 75% of your base salary. Your participation will begin with SHO’s 2017 fiscal year, which
participation will be prorated in accordance with the SHO AIP and reflect your June 1, 2017 SHO employment start date. SHO AIP awards are made in the sole discretion of the Compensation Committee of SHO’s Board of Directors (the
“Compensation Committee”). Awards earned under the SHO AIP will be paid by April 15th of the fiscal year following the year to which they relate provided that you are actively employed by SHO as of the payment date. 

4. Long-Term Incentive Program Participation. You will be eligible to participate in SHO’s Long-Term Incentive Program (the
“SHO LTIP”) in accordance with, and subject to, its terms. Your incentive opportunity will be 100% of your base salary. Your participation will begin with respect to the 2017 LTIP approved by the Compensation Committee on
January 30, 2017 (the “2017 LTIP”) except that your 2017 LTIP award (a) will be prorated in accordance with the SHO LTIP and reflect your June 1, 2017 SHO employment start date and (b) will not include any Stock Units.
SHO LTIP awards are made in the sole discretion of the Compensation Committee. 
 5. Stock-Units Award. Upon your execution and
delivery to SHO of SHO’s form of Stock Units Agreement attached as Appendix A to this Offer Letter, you will receive 40,000 Stock Units to be issued to you in accordance with, and subject to the terms and conditions of, the Company’s
Amended and Restated 2012 Stock Plan and the Stock-Units Agreement. As more fully described in the Stock-Units Agreement, the Stock Units will vest in three installments. 

 6. Incentive/Retention Award. Upon your execution and delivery to SHO of SHO’s form
of Incentive/Retention Agreement attached as Appendix B to this Offer Letter, you will eligible to receive in three installments a cash incentive/retention award totaling $400,000, subject to the terms and conditions of the Incentive/Retention
Agreement. As more fully described in the Incentive/Retention Agreement, the $400,000 cash incentive/retention award will be reduced to reflect SHO AIP payments and a SHO LTIP payment. 

7. Executive Severance Agreement. You acknowledge that, as a condition of your employment as SHO’s Senior Vice President and Chief
Financial Officer, you will execute and deliver to SHO prior to the Effective Date the form of Executive Severance Agreement attached as Appendix C. As more fully described in the Executive Severance Agreement, you will be entitled to twelve months
of severance. 
 8. Signing Bonus. As soon as practicable following the Effective Date SHO will pay to you a $60,000 signing bonus
less all applicable withholdings and deductions required by law. 
 9. Office; Local Accommodations and Weekly Travel to and from Your
Home. You will perform your responsibilities as Senior Vice President and Chief Financial Officer primarily at SHO’s Hoffman Estates offices. SHO will reimburse you for your reasonable housing arrangements in the Hoffman Estates area (with
a vendor that we will select) and your reasonable airfare and commuting costs (such as airport parking and mileage to and from the airport) to and from your home or to Texas on a weekly basis in accordance with our corporate travel program. 

10. Paid Time Off: Each year, you will receive four weeks of paid vacation, six paid national holidays, and four paid personal days.

 11. Benefits: You will be eligible to participate in all retirement, health, and welfare programs made available or sponsored by
SHO on a basis no less favorable than other SHO executive officers, in accordance with the applicable terms, conditions, and availability of those programs. 

12. Service on SHO’s Board of Directors. Management will inform SHO’s Board of Directors that management believes that it is
in SHO’s best interests that you continue to serve as a member of the Board of Directors. 
 13. Representations and Additional
Agreements. You represent to SHO that (a) you are not subject to any obligation, written or oral, containing any non-competition provision or any other restriction (including, without limitation, any confidentiality provision) that would
result in any restriction on your ability to perform as SHO’s Senior Vice President and Chief Financial Officer or any other position with SHO or any of its affiliates, and (b) you are not (i) a member of any board of directors, board
of trustees or similar governing body of any for-profit, non-profit or not-for-profit entity, or (ii) a party to any agreement, written or oral, with any entity under which you would receive remuneration for your services, except as already
disclosed to and approved by SHO. You agree that you will not (A) become a member of any board or body described in clause (b)(i) of the preceding sentence or (B) become a party to any agreement described in clause (b)(ii) of the preceding
sentence, in each case without the prior written consent of SHO (which consent with respect to the board of directors of one for-profit entity described in (b)(i) SHO will not unreasonably withhold). You agree to continue to refrain from disclosing
or using, in violation of an obligation of confidentiality, any information that you acquired as a result of any previous employment or otherwise. 

 14. Board Approval. This Offer Letter is subject to the approval of SHO’s Board of
Directors. SHO is required by the rules of the Securities and Exchange Commission to make public disclosures regarding your employment by SHO and the terms and conditions of this Offer Letter, and to file this Offer Letter as an exhibit to
appropriate SEC reports that will be publicly available. 
 15. Governing Law. The laws of the State of Illinois (without regard to
its conflicts-of-law principles) govern this Offer Letter. 
 We look forward to you starting your new position and to your continued success with SHO. This
offer is also subject to your successful completion of a criminal background check. By signing where indicated below, you accept this position and the terms, subject to the conditions described above. 

 

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

Sears Hometown and Outlet Stores, Inc.

 Accepted and agreed to as of the date first stated above: 

 

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

 
 Appendix A 

Sears Hometown and Outlet Stores, Inc. 

Stock Units Agreement 

August     , 2017 

This is a Stock Units Agreement between Sears Hometown and Outlet Stores, Inc. (the “Company”) and the individual who has executed
this Stock Units Agreement following the words “Grant Holder’s Signature” (the “Grant Holder”). The term “this Agreement” means collectively this Stock Units Agreement and each Grant
Supplement (defined in section 1 of this Agreement) relating to this Agreement. 
 Preliminary Statement 

This Agreement is made pursuant to the Company’s Amended and Restated 2012 Stock Plan, as amended from time to time (the “Plan”).
Capitalized terms used but not defined in this Agreement are defined in the Plan. 
 Terms and Conditions 

The Company and the Grant Holder agree as follows: 
 1.
Stock Unit Grants. This Agreement is a “Stock Agreement” referred to in Section 2.20 of the Plan. For each of the Company’s Stock Unit grants to the Grant Holder pursuant to the Plan, each of this Agreement, the Plan,
and each Grant Supplement to this Agreement (which Supplement need not be signed by the Grant Holder), will govern unless the Stock Unit grant is subject to a separate stock units agreement between the Company and the Grant Holder (a
“Separate Agreement”). The Company’s Stock Unit grants to the Grant Holder pursuant to the Plan, excluding those that are subject to a Separate Agreement, are together referred to in this Agreement as the
“Stock Units.” The Company will evidence each grant of Stock Units to the Grant Holder by an agreement entitled “Supplement to Stock Units Agreement” to be attached to this Agreement from time to time (each a
“Grant Supplement” and together the “Grant Supplements”). Grant Supplements will indicate the number of Stock Units granted to the Grant Holder and the restrictions, forfeiture conditions, and other
terms that are applicable to the Stock Units granted. This Agreement governs all Stock Units granted to the Grant Holder on or after the date of this Agreement. All Grant Supplements, whenever delivered to the Grant Holder, are incorporated into and
form a part of this Agreement. 

 2. Restrictions; Forfeiture Conditions. Each grant of Stock Units is subject to each of the
restrictions and each of the forfeiture conditions described in this Agreement and in the Grant Supplement applicable to the grant until they have been satisfied or have otherwise expired or been terminated. Failure to satisfy the forfeiture
conditions by the times specified on the Grant Supplement will result in the forfeiture of the number of unvested Stock Units specified on the Grant Supplement. Unvested Stock Units may not be sold, transferred, exchanged, assigned, pledged,
hypothecated, or otherwise encumbered. If the Grant Holder’s employment with the Company or its subsidiary terminates for any reason other than as provided in section 3 of this Agreement, then the Grant Holder will forfeit all of the Grant
Holder’s right, title, and interest in and to the then-unvested Stock Units as of the date of employment termination, and the unvested Stock Units will revert to the Company immediately following the event of forfeiture. The Grant Holder will
forfeit all unvested Stock Units if (a) in the opinion of the Committee, the Grant Holder, without the written consent of the Company, engages directly or indirectly in any manner or capacity as principal, agent, partner, officer, director,
employee, or otherwise, in any business or activity competitive with the business conducted by the Company or any of its subsidiaries or (b) the Grant Holder performs any act or engages in any activity or conduct that in the opinion of the
Chief Executive Officer of the Company or the Committee is inimical to the best interests of the Company. The restrictions and forfeiture conditions imposed by this section 2 will apply to all cash and other consideration received by the Grant
Holder with respect to the Stock Units in connection with mergers, reorganizations, consolidations, recapitalizations, stock dividends, and other changes in corporate structure affecting the common stock of the Company. 

3. Expiration and Termination of Restrictions and Forfeiture Conditions. The restrictions and forfeiture conditions imposed by this Agreement on
each grant of Stock Units, or portion of the grant specified in the applicable Grant Supplement, will expire on the earliest to occur of the following: 

(a) upon the passage of time or upon the achievement of performance goals or upon both the passage of time and the achievement of performance goals, together
with such other conditions, all as provided in the Grant Supplement for the grant; 

 

  
 4 

 (b) on the date of termination of the Grant Holder’s employment with the Company or one of its subsidiaries
by reason of disability (as determined by the Company) or death, but (i) if the grant includes performance goals then only to the extent the Committee determines that the goals have been satisfied as of the date of termination and (ii) if
the grant includes one or more passage-of-time forfeiture conditions all of them that expire in accordance with the terms of the Grant Supplement will be deemed to have expired on the day immediately preceding the date of termination; 

(c) on the date the Company terminates the Grant Holder’s employment with the Company or one of its subsidiaries without Cause (as defined in the
Executive Severance Agreement between the Company and the Grant Holder dated August __, 2017 (the “Severance Agreement”); and 
 (d)
on the date the Grant Holder terminates the Grant Holder’s employment with the Company or one of its subsidiaries for Good Reason (as defined in the Severance Agreement). 

4. Limitations on Rights. The Stock Units are bookkeeping entries only. In accordance with, and subject to, this Agreement and the Grant
Supplements the Company only will make cash payments with respect to the Stock Units, as to which the Grant Holder will have no rights to receive Stock or other securities of the Company, no rights as a stockholder of the Company, no dividend
rights, and no voting rights.  
 5. Timing and Manner of Cash Payment. As soon as practicable, and in no event more than twenty days, after
the date all, or portion specified in the applicable Grant Supplement or Grant Supplements, of the Stock Units vest in accordance with this Agreement and the Grant Supplement or Grant Supplements, the Company will make to the Grant Holder the lump
sum cash payment to be made in satisfaction of the Stock Units, or specified portion, in accordance with, and subject to, this Agreement and the Grant Supplement or Grant Supplements. The Grant Holder and the Grant Holder’s successors, heirs,
assigns, and personal representatives will have no continuing rights or interests in the Stock Units that have been paid by the Company in accordance with this section 5.

 6. Adjustments. Section 12 of the Plan is applicable to this Agreement and the Stock
Units. 
 7. No Right of Continued Employment. Nothing in this Agreement will (a) interfere with or limit in any way the right of
the Company or any of the Company’s subsidiaries to terminate the Grant Holder’s employment at any time or (b) confer upon the Grant Holder any right to continue in the employ of the Company or any of the Company’s subsidiaries.

 8. Payment of Taxes. 
 Whenever the law
requires the Company to withhold federal, state, or local taxes of any kind (including the Grant Holder’s FICA obligation) on behalf of the Grant Holder, the Grant Holder will pay the required withholding amount to the Company no later than the
date due, or to make other arrangements satisfactory to the Company regarding payment of the withholding amount. The obligations of the Company under this Agreement will be conditional on the Grant Holder’s compliance with these withholding
payment requirements. The Company and its affiliates will, to the extent permitted by law, have the right to deduct the withholding amount from any payment of any kind otherwise due from the Company or its subsidiary to the Grant Holder, including
without limitation any payment referred to in section 5 of this Agreement. 
 9. Grants Subject to Clawback. All cash and other consideration received
by the Grant Holder with respect to the Stock Units are subject to forfeiture, recovery by the Company, and each other action pursuant to clawback or recoupment policies that the Company may adopt from time to time, including without limitation
policies that the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder or as otherwise required by law. 

10. Amendment. This Agreement may not be modified, amended, or waived in any manner except in writing signed by the Company and the Grant Holder.
The waiver by the Company or the Grant Holder of compliance with any term of this Agreement will not operate or be construed as a waiver of any other term of this Agreement or any subsequent breach of a term of this Agreement.

 

  
 5 

 11. The Plan Controls. The terms of the Plan are incorporated into and made a part of this
Agreement. This Agreement will be governed by and construed in accordance with the Plan. If any actual or alleged conflict among (a) the terms of the Plan, the terms of this Agreement, and the terms of the Grant Supplement, or (b) between
the terms of the Plan and the terms of this Agreement or the terms of any Grant Supplement, the terms of the Plan will be controlling and determinative. 

12. Successors. This Agreement will be binding upon all successors of the Company in accordance with the terms of this Agreement and the Plan.

 13. Severability. If any one or more of the provisions contained in this Agreement are invalid, illegal or unenforceable, the other
provisions of this Agreement will be construed and enforced as if the invalid, illegal, or unenforceable provision had not been included. 
 14.
Notice. Notices and communications under this Agreement must be in writing and delivered personally, by overnight courier, or by registered or certified United States mail, return receipt requested, postage prepaid. Notices to the Company
must be addressed to: 
 Human Resources Department 

Sears Hometown and Outlet Stores, Inc. 

5500 Trillium Boulevard, Suite 501 

Hoffman Estates, Illinois 60192 

Attn: Vice President, Human Resources 
 or any
other address designated by the Company in a written notice to the Grant Holder. Notices to the Grant Holder will be directed to the address of the Grant Holder then currently on file with the Company, or at any other address given by the Grant
Holder in a written notice to the Company. 
 15. Administration. The authority to manage and control the operation and administration of this
Agreement will be vested in the Committee. The Committee will have all powers with respect to this Agreement that it has with respect to the Plan. All interpretations of this Agreement and the Plan by the Committee and all decisions made by it with
respect to this Agreement are final and binding on the Grant Holder and all other persons.

 16. Governing Law. Illinois law, other than its conflict of laws principles, will govern
interpretation, performance, and enforcement of this Agreement. 
  

			
	Sears Hometown and Outlet Stores, Inc.

			
		
	By: 	 	 

			
	Philip Etter
	Vice President, Human Resources

 Grant Holder’s Name: E. J. Bird 

Grant Holder’s Signature:
                                

 

  
 6 

 Sears Hometown and Outlet Stores, Inc. 

Supplement to Stock Units Agreement 

Supplement Date: August     , 2017 

Name of Grant Holder: E. J. Bird 
 Grant Date: August
    , 2017 
 Number of Stock Units: 40,000 

Dear Grant Holder: 
 I am pleased to inform you
that Sears Hometown and Outlet Stores, (the “Company”) has granted to you the number of Stock Units indicated above (the “Stock Units”). The Stock Units are granted to you pursuant, and subject, to the
terms of (1) the Sears Hometown and Outlet Stores, Inc. Amended and Restated 2012 Stock Plan (the “Plan”), (2) the Stock Units Agreement between the Company and you (the “Stock Units
Agreement”), and (3) this Supplement to Stock Units Agreement. This Supplement to Stock Units Agreement is a “Grant Supplement” referred to in the Stock Units Agreement. 

Unless the restrictions and forfeiture conditions expire earlier in accordance with section 3 of the Stock Units Agreement and subject to the
sentences below following the table, the restrictions and forfeiture conditions imposed by the Stock Units Agreement will expire with respect to the Stock Units, and the Stock Units will vest, on a three-installment basis in accordance with the
following table. For each Stock Unit that vests, the Company will make a cash payment to you equal to the “Close/Last” price of the Company’s common stock, $0.01 par value, on the Nasdaq Stock Market (or substitute or successor stock
exchange) on the applicable Vesting Date. 
  

			
	 Percentage of Stock Units Vesting for each

“Installment”
	  	 Dates of Expiration of Restrictions and Forfeiture

Conditions for each Installment (each a “Vesting

Date”)

	33.3%	  	January 30, 2018
	33.3%	  	January 30, 2019
	33.4%	  	January 30, 2020

 If your employment with the Company terminates as described in section 3(b), (c), or (d) of the Stock Units Agreement on
a date that is prior to the next Vesting Date (the “Final Vesting Date”), two events will occur. First, the percentage of Stock Units indicated above that will vest as a result of the termination of your employment will be
limited to the percentage of Stock Units that would have vested on the Final Vesting Date but for the termination of your employment. Second, and assuming your employment termination date is prior to January 30, 2019, you will forfeit all of
your right, title, and interest in and to all Stock Units that in accordance with the above table would vest after the Final Vesting Date, and these unvested Stock Units will revert to the Company immediately following your employment termination.
Here’s an example, which is subject to the terms of the Stock Units Agreement. As described above in the table, 13,320 of your Stock Units would vest on January 30, 2018, 13,320 would vest on January 30, 2019, and 13,360 would vest on
January 30, 2020. Assume also that your employment with the Company terminates as described in section 3(b), (c), or (d) of the Stock Units Agreement on January 15, 2019. As a result, (a) 13,320 of your Stock Units would have
vested on January 30, 2018 (and you 

  
 7 

 
would have received at that time the cash proceeds from the Company, which you would keep), (b) the 13,320 Stock Units that are scheduled to vest on January 30, 2019 (which becomes the
Final Vesting Date) instead would vest on January 15, 2019 (and you would keep the cash proceeds received from the Company), and (c) you would forfeit completely the 13,360 Stock Units scheduled to vest on January 30, 2020 and would
receive nothing for them. 
  

			
	Sears Hometown and Outlet Stores, Inc.

 
			
		
	By: 	 	 

 
			
	Philip Etter
	Vice President, Human Resources

  
 8 

 Appendix B 

August     , 2017 
 Mr. E. J.
Bird 
 15 Blazing Star Trail 
 Landrum, SC 29356 

Dear E. J. 
 Incentive/Retention Agreement

 We consider your continued service and dedication to Sears Hometown and Outlet Stores, Inc. (the “Company” or “we”)
as Senior Vice President and Chief Financial Officer to be important to our business. We are pleased to offer you a cash incentive/retention award as provided in this Incentive/Retention Agreement, to which we and you agree. 

1. In recognition of your continued, uninterrupted service with the Company from the date of this Incentive/Retention Agreement, we offer you, and you accept,
a cash incentive/retention award in the total amount of $400,000 less all applicable withholdings and deductions required by law (the “Incentive/Retention Award”). Subject to the next sentences of this paragraph and to the other
paragraphs of this Incentive/Retention Agreement, the Incentive/Retention Award will vest in three installments. The first installment of the Incentive/Retention Award will be in the amount of $100,000 and vest and become payable to you in cash as
soon as administratively possible following April 15, 2018 (the “2018 Installment”), the second installment of the Incentive/Retention Award will be in the amount of $125,000 and vest and become payable to you in cash as soon
as administratively possible following April 15, 2019 (the “2019 Installment”), and the third installment of the Incentive/Retention Award will be in the amount of $175,000 and vest and become payable to you as soon as
administratively possible following April 15, 2020 (the “2020 Installment,” and together with the 2018 Installment and the 2019 Installment the “Installments”). If an Event Vesting Date occurs, each of the
Installments that is unpaid as of the Event Vesting Date will become immediately payable to you in cash as soon as administratively possible following the Event Vesting Date. “Event Vesting Date” means the earlier of the following
dates: (a) the date on which the Company terminates your employment without Cause and (b) the date on which you terminate your employment with the Company for Good Reason. “Cause” and “Good Reason” are
defined in the Executive Severance Agreement between the Company and you dated August     , 2017 (the “Severance Agreement”) 

2. Subject to the next sentences of this paragraph, you will receive the Installments in accordance with, and subject to, paragraph 1 if all of the following
eligibility conditions are satisfied as of the payment dates specified in paragraph 1: (a) you have executed this Incentive/Retention Agreement and delivered it to the Company and (b) until April 15, 2018 with respect to the 2018
Installment, until April 15, 2019 with respect to the 2019 Installment, and until April 15, 2020 with respect to the 2020 Installment, you have continuously served as a full-time employee of the Company. If the Company makes any payment to
you in accordance with its Annual Incentive Plan (“AIP”), then (y) for the Company’s 2017 fiscal year, the 2018 Installment will be reduced (but to not less than zero) by the amount of the 2017 AIP payment and (z) for
the Company’s 2018 fiscal year, the 2019 Installment will be reduced (but to not less than zero) by the amount of the 2018 AIP payment. If the Company makes any payment to you in accordance with its 2017 LTIP approved by the Compensation
Committee of SHO’s Board of Directors on January 30, 2017 (the “2017 LTIP”) (other than with respect to Stock Units), the 2020 Installment will be reduced (but to not less than zero) by the amount of the 2017 LTIP payment.
If you die or experience a Disability (as defined in the Severance Agreement) before you have received all of the Installments, your estate or personal representative (if your death occurs) or you (if your Disability occurs) will receive an amount
equal to the total dollar amount 

 
of the Installments that are unpaid as of the date of your death or Disability multiplied by a fraction the numerator of which is the number of months from and including June 2017 to and
including the month in which your death or Disability occurs (but not more than 32 months) and the denominator of which is 32 months, and you will cease to be entitled to receive the unpaid Installments. 

3. Your employment with the Company and its wholly owned subsidiaries remains at-will, meaning that you and the Company may terminate your employment at any
time with or without Cause and with or without notice to you. Neither this Incentive/Retention Agreement nor the Incentive/Retention Award has any effect on the at-will nature of your employment. 

4. This Incentive/Retention Agreement contains all of the agreements, understandings, and representations between the Company and you relating to the subject
matter of this Incentive/Retention Agreement. This Incentive/Retention Agreement supersedes all prior and contemporaneous written and oral understandings, discussions, agreements, representations, and warranties with respect to the subject matter.

 5. This Incentive/Retention Agreement may not be amended or modified except in writing signed by the Company and you. This Incentive/Retention Agreement,
for all purposes, will be construed in accordance with the laws of Illinois without regard to conflicts-of-law principles. 
 6. This Incentive/Retention
Agreement is intended to comply with, or be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended, and will be construed and administered in accordance with Section 409A. 

 

			
	 SEARS HOMETOWN AND OUTLET

STORES, INC.

			
		
	By:	 	 

			
	 Philip Etter

	 Vice President, Human Resources

  

	
	Agreed to and accepted:
	
	   

	 E. J. Bird

  
 2 

 Appendix C 

Executive Severance Agreement 

August     , 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     , 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 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. 

  
 4 

 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 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. 

  
 5 

 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. 

  
 6 

 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. 
 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. 

  
 7 

 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. 

  
 8 

 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 such breach. Accordingly, if Executive breaches or threatens to breach this Agreement, Executive consents to injunctive relief in
favor 

  
 9 

 
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. 

  
 10 

 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 

  
 11 

 
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	 	
		
	 	 	
	E. J. Bird	 	
		 	

 

					
	 SEARS HOMETOWN AND OUTLET

STORES, INC.

					
		
	By:	 	 

					
	Philip Etter
	Vice President, Human Resources

 
 

  
 12 

 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 

 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. 
 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. 
 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:
                        ,

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