Sears Hometown and Outlet Stores, Inc.
Trading Begins Sept 7th 2012
Up To 23,100,000 Shares of Common Stock Issuable Upon the Exercise of Subscription Rights At
$15.00 Per Share
Subscription Rights to Purchase Shares of Common Stock
This prospectus is being furnished to you as a holder of common stock of Sears Holdings Corporation, or "Sears Holdings," in
connection with the planned distribution by Sears Holdings to each holder of its common stock as of the close of business on September 7,
2012, or the "record date," at no charge, transferable subscription rights, or the "subscription rights," to purchase up to an aggregate of
23,100,000 shares of common stock, par value $0.01 per share, of Sears Hometown and Outlet Stores, Inc., or "SHO," at a price of $15.00
per whole share, or the "rights offering." Sears Holdings will distribute to each holder of its common stock as of the record date one
subscription right for each full common share owned by that stockholder as of the record date, except that holders of Sears Holdings'
restricted stock that is unvested as of the record date will receive cash awards in lieu of subscription rights. Each subscription right will
entitle its holder to purchase from Sears Holdings 0.218091 of a share of SHO common stock. Additionally, holders of subscription rights
who fully exercise all of their basic subscription rights, after giving effect to any purchases or sales of subscription rights by them prior to
such exercise, may also make a request to purchase additional shares of SHO common stock, through exercise of the over-subscription
privilege, although we cannot assure you that any over-subscriptions will be filled.
The subscription rights will expire if they are not exercised by 5:00 p.m., New York City time, on October 8, 2012. Immediately prior
to the closing of the rights offering, Sears Holdings will hold all of SHO's common stock. As a result of the rights offering, Sears Holdings
will dispose of up to all of its shares of SHO common stock and SHO will become a publicly traded company independent from Sears
Holdings, or the "separation." In connection with the separation, we have entered into various agreements with Sears Holdings which,
among other things, (1) govern the principal transactions relating to this offering and aspects of our relationship with Sears Holdings
following the separation, (2) establish terms under which subsidiaries of Sears Holdings will provide us with services following the
separation and (3) establish terms pursuant to which subsidiaries of Sears Holdings will obtain merchandise for us, collectively, the