Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement
of Certain Officers.
(b)
and
(e)
On April 19, 2018 (the “Separation
Date”), Andrew D. Perlman resigned as Chief Executive Officer of XpresSpa Group, Inc. (the “Company”) and as
a Director of the Company, effective as of that date. Mr. Perlman’s resignation was not as a result of any disagreement with
the Company on any matters related to the Company’s operations, policies or practices.
On April 19, 2018, the Company entered into
a separation agreement (the “Separation Agreement”) with Mr. Perlman related to his resignation from the Company. The
Separation Agreement includes a release by Mr. Perlman of claims against the Company and certain related parties. In connection
with the entry into the Settlement Agreement, Mr. Perlman agreed that he would continue to be subject to the Non-Disclosure Agreement
between Mr. Perlman and the Company that contains a covenant protecting the Company’s confidential information. In addition,
Mr. Perlman agreed to be subject to a covenant not to compete with the Company for a two-year period following the Separation Date,
a covenant prohibiting Mr. Perlman from soliciting or hiring the Company’s employees for a two-year period following the
Separation Date, and a covenant not to disparage the Company or any of its businesses, services, products, affiliates or current,
former or future directors and named executive officers (in their capacity as such). The Separation Agreement also includes certain
affirmative covenants binding on Mr. Perlman, including, without limitation, a covenant to reasonably cooperate with the Company
in connection with any action, suit, or proceeding, whether or not by or in the right of the Company and whether civil, criminal,
administrative, investigative or otherwise.
In consideration of the foregoing release
and covenants, the Company will pay Mr. Perlman, severance in an amount equal to $125,000 (the “Deferred Cash”), payable
in monthly installments of $20,833.34 over the six (6) month period following the date that the Company achieves both of the following
objectives at the end of an applicable calendar quarter as shown in the Form 10-Q or Form 10-K reporting such quarter (the “Cash
Objectives”): (i) the Company’s Working Capital exceeds $6,368,000, and (ii) Free Cash exceeds $6,368,000; provided
that if the Company does not achieve the Cash Objectives prior to the second (2
nd
) anniversary of the Separation Date,
the Deferred Cash shall be forfeited and no amounts shall be payable under the Separation Agreement. For purposes of the Separation
Agreement, “Free Cash” means cash and cash equivalents as defined in the Company’s Form 10-K and calculated consistently,
less (i) any cash or cash equivalents that are restricted in any way, and (ii) any cash received by the Company from a debt, equity
or other capital raise subsequent to the Separation Date. For purposes of the Separation Agreement, “Working Capital”
shall mean (i) current assets less current liabilities, prepared in accordance with GAAP and consistent with the Company’s
prior filings of Form 10-K, less (ii) any cash received by the Company from a debt, equity or other capital raise subsequent to
the Separation Date.
Further, in consideration of the foregoing
release and covenants, an aggregate of 153,301 of Mr. Perlman’s restricted stock units that will vest in May 2018 (the “Current
RSUs”) will be subject to a restriction
on sale until the earlier of: (i) the one (1) year anniversary of the Separation Date; and (ii) the date upon which the volume
weighted average price (“VWAP”) for the Company’s common stock for thirty (30) consecutive trading days exceeds
$1.50 (as adjusted by the Company in its discretion for any stock split, subdivision, dividend or distribution). In addition, immediately
following the Effective Date of the Separation Agreement, the Company will grant to Mr. Perlman an additional grant of 150,000
restricted stock units which shall be fully vested as of the date of grant (the “Granted RSUs”); provided, however,
that such Granted RSUs will be subject to a restriction on sale until the earlier of: (i) the one (1) year anniversary of the Separation
Date; and (ii) the date upon which the VWAP for the Company’s common stock for thirty (30) consecutive trading days exceeds
$1.50 (as adjusted by the Company in its discretion for any stock split, subdivision, dividend or distribution).
The foregoing summary of the Separation
Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Separation
Agreement, which is attached as Exhibit 10.1 and incorporated herein by reference.
(
c
)
Effective as of April 19, 2018, Edward Jankowski,
Senior Vice President and Chief Executive Officer of the Company’s wholly-owned subsidiary, XpresSpa, was appointed by the
Board as the Chief Executive Officer of the Company and as a Director of the Company. There are no arrangements or understandings
between Mr. Jankowski and any other persons pursuant to which he was selected as a director, he has no direct or indirect material
interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K and there are no family relationships
between Mr. Jankowski and any director or executive officer of the Company. No new compensatory arrangements were entered into
with Mr. Jankowski in connection with his appointment as Chief Executive Officer.
Mr. Jankowski has served as the Company’s
Senior Vice President since December 2016 and as the Chief Executive Officer of the Company’s XpresSpa business since June
2016. From 2012 to 2016, Mr. Jankowski was the Vice President and General Manager of Luxury Retail at Luxottica, where he oversaw
the Ilori and Optical Shop of Aspen and Persol retail stores. From 2007 to 2012, Mr. Jankowski was Senior Vice President and General
Manager for Godiva Chocolatier, responsible for the $400 million North America multi-channel business, consisting of 240 retail
stores, plus wholesale, direct, and interactive business. From 2001 to 2007, Mr. Jankowski was the Chief Operating Officer of Safilo
Group’s Solstice sunglasses stores, where he opened 120 stores, oversaw store operations, merchandising, finance, planning/distribution,
marketing and communications, loss prevention, real estate, visual and store design/development/construction. From 1999 to 2001,
Mr. Jankowski was the President of Airport Shops Division of World Duty Free Americas, a division of B.A.A., where he was a member
of the Senior Executive Committee, with responsibility for the $120 million Airport Division. From 1993 to 1999, Mr. Jankowski
served as the Vice President/Director of Stores for Liz Claiborne, where he was a member of the Retail Executive Committee and
led execution of business strategies, sales results and store profit. Mr. Jankowski began his career in 1975 as an Executive Trainee
for R.H. Macy’s. Mr. Jankowski currently serves on the Board of Directors of the Accessories Council on the Foundation Board
of Directors for LIM College. Mr. Jankowski received his B.Sc. in management and commerce marketing from Rider University.