(e)

Annual Incentive Plan

On June 20, 2012 the Compensation Committee (the "Compensation Committee") of the Board of Directors of Orchard Supply Hardware Stores Corporation (the "Company") approved the Orchard Supply Hardware Stores Corporation Annual Incentive Plan (the "Annual Incentive Plan") for all full-time, exempt employees, including executive officers at the senior vice president level and above. The Annual Incentive Plan provides for cash awards (or cash equivalent awards) to be designated to eligible participants with the purpose of increasing stockholder value and the success of the Company by motivating participants to perform to the best of their abilities and to achieve the Company's objectives.

Under the Annual Incentive Plan, the Compensation Committee has the authority, among other things, to designate the participants, to award grants, to establish performance periods, to set performance goals and to determine the relative weight to be given to each performance goal. The performance goals to be utilized by the Compensation Committee in setting targets for the eligible participants include, but are not limited to, corporate financial measures, corporate strategic objectives and individual performance metrics. The Compensation Committee has the authority to determine whether any element of any established performance goal shall be included or excluded when determining whether any performance goal has been achieved and an award earned by a plan participant.

The foregoing summary is qualified in its entirety by reference to the full text of the Annual Incentive Plan, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.

Fiscal 2012 Executive Performance Criteria

On June 20, 2012 the Compensation Committee also established criteria for cash incentive awards that may be paid to our executive officers for fiscal year 2012 under the Annual Incentive Plan (the "2012 Criteria"). The 2012 Criteria establish the performance goals and potential payouts for eligible executives for fiscal year 2012. Under the 2012 Criteria, cash incentive awards will be earned by participants based upon the level of achievement of specified Company financial objectives as follows:

                                                                  Participant Payout
Metric                                     Weighting    Threshold       Target        Maximum
Adjusted EBITDA                               50%      85% of Goal   100% of Goal   125% of Goal
Revenue                                       20%      95% of Goal   100% of Goal   105% of Goal
Incentive Achievement Percentages for                  20% of Base   100% of Base   200% of Base
Adjusted EBITDA and Revenue:                             Salary         Salary         Salary
Individual Objectives                         30%      85% of Goal   100% of Goal        NA
Incentive Achievement Percentages for                  50% of Base   100% of Base        NA
Individual Objectives:                                   Salary         Salary

The Adjusted EBITDA threshold target must be met in order for any payments to occur. For achievement of Adjusted EBITDA and Revenue objectives between the threshold, target and maximum amounts, percentage payout will be based upon a scaled interpolated percentage.

                                           Target Award as a % of
                                             Base Salary During
                Position                     Performance Period
                CEO                                 100%
                Executive Vice President            75%
                Senior Vice President               50%

The Compensation Committee retains the authority to pay discretionary bonuses so long as no participant's payout is greater than what the participant would have received as the maximum target amount detailed above. In addition, the Compensation Committee retains the authority to pay bonus awards in cash or the Company's Class A Common Stock, or in any combination of both.

Executive Officer Base Salaries

In connection with an annual compensation review, and after review of executive performance, the Company's financial performance, current economic and market conditions, and relevant market peer group compensation data and other information provided by its compensation consultant, the Compensation Committee approved increases to the base salaries of certain of the Company's executive officers. The following table sets forth the new base salaries for the Company's named executive officers and the percentage increase, to be effective August 3, 2012, other than Mr. Newman, whose increase is to be effective October 19, 2012:

                                                                           Percentage
Name and Position                                           Base Salary     Increase
Mark R. Baker                                                $625,000             4.17 %
President and Chief Executive Officer
Chris D. Newman                                              $410,000              2.5 %
Executive Vice President, Chief Financial Officer and
Treasurer
Steven L. Mahurin                                            $410,000              2.5 %
Executive Vice President, Merchandising
Steve Olsen                                                  $360,000              2.9 %
Senior Vice President, Supply Chain, Information
Technology and Chief Strategy Officer
David I. Bogage                                              $270,000              3.8 %
Senior Vice President, Human Resources

Waiver of Term of Mark Baker's Offer Letter

On June 20, 2012, due to changed circumstances which negated the purpose for which the obligation was included, the Compensation Committee decided to waive the obligation of Mr. Baker included in his offer letter with the Company to purchase $500,000 of the Company's Class A Common Stock following the spin-out of the Company from Sears Holdings Corporation. In addition, as a result of the waiver, Mr. Baker will not be granted the option to which he would have been entitled upon completion of the above referenced stock purchase.

Amendment to Director Compensation Policy

On June 21, 2012 and June 25, 2012, the Board of Directors approved changes to the Orchard Supply Hardware Stores Corporation Director Compensation Policy (the "Policy") to: (i) provide that a non-employee Chairman of the Board shall be eligible to receive an additional annual retainer of $25,000; (ii) increase the amount the Chairman of the Audit Committee shall be eligible to receive as an additional retainer to $15,000; (iii) increase the amount the Chairman of the Compensation Committee shall be eligible to receive as an additional retainer to $10,000; (iv) increase the

Additionally, the Policy was amended to provide that eligible members of the Board of Directors shall have the option, prior to the close of trading on the trading day on which the annual meeting of the stockholders is held, to elect to take a grant of shares of the Company's Class A Common Stock in lieu of some or all of the base portion of their annual cash retainer. The shares of Class A Common Stock so granted will be issued and vest in the same manner as annual equity grants under the Policy.

Furthermore, the Policy was amended to provide that directors elected by the holders of the Class B Common Stock and the Class C Common Stock, voting as a separate class, would receive cash payments in lieu of an annual equity grant, payable in the same manner as the standard annual retainer.

The foregoing summary is qualified in its entirety to the full text of the Policy, a copy of which is filed herewith as Exhibit 10.2 and incorporated herein by reference.

(a) On June 21, 2012, the Company held its Annual Meeting of Stockholders (the "Annual Meeting").

(b) At the Annual Meeting, the matters on which the stockholders voted, in person or by proxy were:

(i) to elect eight nominees as directors to serve until the next Annual Meeting and until their successors have been elected and qualified;

(ii) to ratify the selection of Deloitte & Touche LLP as the Company's independent registered public accounting firm for the fiscal year ending February 2, 2013;

(iii) to vote on a non-binding advisory resolution regarding executive compensation; and

(iv) to vote on how frequently a non-binding advisory resolution regarding executive compensation will be submitted to stockholders in the future.

The eight nominees were elected, the appointment of the independent registered public accounting firm was ratified, the non-binding advisory resolution regarding executive compensation was approved and a majority of the votes cast at the Annual Meeting voted to hold an advisory vote on executive compensation every three (3) years. The results of the voting were as follows:

Proposal 1 - Election of Directors:



       Director              Votes For       Votes Withheld      Broker Non-Votes
       William C. Crowley     3,331,620              320,281               404,390
       Mark R. Baker          3,346,192              305,709               404,390
       Mark A. Bussard        3,338,472              313,429               404,390
       Kevin R. Czinger       3,631,601               20,300               404,390
       Susan L. Healy         3,318,410              333,491               404,390
       Steven L. Mahurin      3,338,399              313,502               404,390
       Karen M. Rose          3,632,307               19,594               404,390
       Bryant W. Scott        3,554,946               96,955               404,390

Proposal 2 - Ratification of Appointment of Independent Registered Public Accounting Firm:

Votes For Votes Against Abstentions Broker Non-Votes 5,242,691 3,858 3,742 -

Votes For Votes Against Abstentions Broker Non-Votes 4,834,521 7,331 4,049 -

Proposal 4 - Approval of a Three-Year Frequency of Future Non-Binding Resolutions Regarding Executive Compensation:

Every Three (3) Years Every Two (2) Years Every Year Abstentions Broker Non-Votes 4,432,083 5,501 399,467 8,850 -

The Board will take into account the outcome of the vote on Proposal 4 when considering how frequently to seek an advisory vote on executive compensation in future years.

Concurrently with the election of the Company's directors at the Annual Meeting, the holders of our Class B Common Stock and Class C Common Stock, voting as a separate class, have re-elected Matthew D. Cwiertnia and David B. Kaplan as Class B/C Directors in each case by written consent dated May 22, 2012, effective June 21, 2012.

(d) Exhibits

The following document is attached as an exhibit to this Current Report on Form 8-K:

Exhibit
Number       Description

10.1         Orchard Supply Hardware Stores Corporation Annual Incentive Plan.

10.2         Orchard Supply Hardware Stores Corporation Director Compensation
             Policy, as amended.