On April 15, 2019, ESL Investments, Inc. announced that partners and Edward S. Lampert acted by written consent to remove William K. Phelan and David Robbins without cause as directors of Sears Hometown and Outlet Stores, Inc. and to appoint Alberto Franco and John Tober as directors of the Company, and also amended the amended and restated bylaws of the Company to (i) set the size of the Board at 7 members, or such other number of members as the Board may determine from time to time in the future, (ii) impose certain procedural requirements with respect to the Board’s deliberation, consideration and approval of the liquidation, sale or disposal of certain assets and lines of business or the closing of certain stores (the ‘Approval Procedure Bylaw’), and (iii) impose certain procedural requirements with respect to the Board’s adoption, amendment, alteration, change or repeal of the Approval Procedure Bylaw. In connection with the ESL Action, ESL issued a letter to the stockholders of the Company and a letter to the Board explaining the rationale for the ESL Action. In the letter to the Board, ESL encouraged the Board to consider whether the Company should terminate its NASDAQ listing and the registration of its common stock under the Securities Exchange Act of 1934, which steps ESL believes would provide significant cost savings to the Company. ESL also proposed that Transform Holdco and the Company cooperate to reduce their collective cost structure, including by sharing technology and other operational resources.