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Item 5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
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(b) On January 30, 2021, Mr. Andrew Clarke resigned from the
Board of Directors (the “Board”) of the Company as a Class II director of the Board and from his positions as President
and Chief Executive Officer of the Company and from all other positions he holds with the Company and each of its subsidiaries,
effective upon the closing of the Asset Sale. The resignation of Mr. Clarke was not the result of a disagreement with the Company
or on any matter relating to the Company’s operations, policies or practices. Following the closing of the Asset Sale, Mr.
Clarke was appointed as Chief Executive Officer of Francesca’s Acquisition, the purchaser in the Asset Sale, which is
an entity unaffiliated with the Company.
On January 30, 2021, Ms. Cindy Thomassee resigned from her position
as Executive Vice President and Chief Financial Officer of the Company and from all other positions she holds with the Company
and each of its subsidiaries, effective upon the closing of the Asset Sale. The resignation of Ms. Thomassee was not the result
of a disagreement with the Company or on any matter relating to the Company’s operations, policies or practices. Following
the closing of the Asset Sale, Ms. Thomassee was appointed as Chief Financial Officer of Francesca’s Acquisition, the
purchaser in the Asset Sale, which is an entity unaffiliated with the Company.
On
February 1, 2021, Mr. Joseph O’Leary and Ms. Patricia Bender resigned from their positions as Class I directors of the
Board and Ms. Susan McGalla resigned from her position as a Class II director of the Board, in each case, effective
immediately. The resignation of Mr. O’Leary, Ms. Bender and Ms. McGalla was not the result of a disagreement with the
Company or on any matter relating to the Company’s operations, policies or practices.
(c) On January 30, 2021, the Board approved the
appointment Mr. Anthony Saccullo as the Company’s Wind-down Officer, effective on the first business day following the closing
of the Asset Sale (February 1, 2021). Mr. Saccullo, 44, is the founder and managing member of A.M. Saccullo Legal, LLC, a Delaware-based
law firm rendering services in commercial bankruptcy, corporate and commercial litigation, and corporation transactions and formation
and is also the founding member of Saccullo Business Consulting, a business consulting firm that offers non-legal bankruptcy services
to companies and commercial bankruptcy estates, positions he has held since May 2010. Mr. Saccullo has also previously served as
liquidating trustee in the wind numerous other retail cases and Saccullo Business Consulting has served, and currently serves,
in a number of other retail bankruptcy cases of similar size and complexity to the Chapter 11 Cases.
(e) In
connection with the appointment of Mr. Saccullo as Chief Wind-down Officer, on January 28, 2021, the Company entered into an engagement
letter with Mr. Saccullo effective on the first business day following the closing of the Asset Sale, to provide for, among other
things, a monthly fee of $20,000 and hourly compensation for certain employees of Saccullo Business Consulting who assist Mr.
Saccullo in providing wind-down services to the Company (the “Engagement Letter”). The Engagement Letter also provides
for customary indemnification provisions.
The foregoing
summary of the Engagement Letter for Mr. Saccullo is qualified in its entirety by the full text of the Engagement Letter. A copy
of the Engagement Letter is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.
Except as described
above, there are no arrangements or understandings between Mr. Saccullo and any other person pursuant to which Mr. Saccullo was
appointed as Chief Wind-down Officer and there are no transactions between the Company and Mr. Saccullo that would require disclosure
under Item 404(a) of Regulation S-K. No family relationship exists between Mr. Saccullo and any director or other executive
officer of the Company.
