| Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Resignation of Julie Wainwright as Chief Executive Officer, Chairperson and Director
On June 6, 2022, Founder of The RealReal, Inc. (the “Company”) Julie Wainwright resigned from her role as Chief Executive Officer, Chairperson and member of the board of directors (the “Board) of the Company, effective June 7, 2022. Ms. Wainwright’s decision to resign was not due to any disagreements with the Company.
On June 6, 2022, Ms. Wainwright also entered into a transition and separation agreement (the “Transition Agreement”) with the Company, effective June 7, 2022. Ms. Wainwright will continue to serve as an employee of the Company in the role of Founder through, and her employment will automatically terminate on, the earlier of December 31, 2022 or the date on which Ms. Wainwright’s employment ends for any reason (the “Separation Date”). While Ms. Wainwright serves as Founder, she will continue to receive her current base salary of $440,000 per year, remain eligible to receive an annual bonus for the 2022 fiscal year (based on actual performance during the 2022 fiscal year) and continue to participate in the Company’s employee benefit plans, and her outstanding Company equity awards will continue to vest according to their terms.
In the event that the Separation Date occurs either (i) on December 31, 2022 or (ii) as a result of any earlier termination of Ms. Wainwright’s employment due to a termination by the Company without “cause” or due to Ms. Wainwright’s “disability” (each as defined in the Transition Agreement), subject to Ms. Wainwright’s execution and non-revocation of a general release of claims in favor of the Company and compliance with applicable restrictive covenants, the Company has agreed to provide Ms. Wainwright with the following payments and benefits: (A) a lump sum cash payment equal to the sum of (i) twelve (12) months of her current annual base salary and (ii) her target annual performance bonus for 2022; (B) a lump sum cash payment equal to the cost of twelve (12) months of Ms. Wainwright’s current health plan coverage; (C) extension of the period during which Ms. Wainwright’s outstanding options remain exercisable following termination from ninety (90) days or three (3) months (as applicable) following the Separation Date to six (6) months following the Separation Date; and (D) accelerated vesting of (i) 50% of Ms. Wainwright’s unvested time-based restricted stock unit awards that are outstanding on the Separation Date or, (ii) if a “change in control” of the Company (as defined in the Company’s 2019 Equity Incentive Plan) occurs prior to the Separation Date, that number of time-based restricted stock units that would vest upon termination of Ms. Wainwright’s employment without “cause” within twelve (12) months following a change in control pursuant to the applicable award agreements governing the restricted stock unit awards.
The foregoing description of the Transition Agreement does not purport to be complete and is qualified in its entirety by the full text of the Transition Agreement, a copy of which is filed herewith as Exhibit 10.1 and incorporated by reference herein.
Appointment of Co-Interim Chief Executive Officers
Also effective June 7, 2022, the Board appointed Rati Sahi Levesque and Robert Julian as Co-Interim Chief Executive Officers. Ms. Levesque will continue to serve as the Company’s President and Chief Operating Officer, and Mr. Julian will also continue to serve as the Company’s Chief Financial Officer, and, in each case, their existing annual base salaries and bonus opportunities will remain in effect. The Board will retain an executive search firm to commence a comprehensive search process to identify a new Chief Executive Officer.
As of the date of this Current Report on Form 8-K, none of Ms. Levesque, Mr. Julian nor any of their respective immediate family members is a party, either directly or indirectly, to any transaction that would be required to be reported under Item 404(a) of Regulation S-K, nor is Ms. Levesque or Mr. Julian a party to any understanding or arrangement pursuant to which they are to be selected as Co-Interim Chief Executive Officers.
Rati Sahi Levesque has served as the President of the Company since 2021 and Chief Operating Officer since 2019. She previously served as the Company’s Chief Merchant from 2012 to 2019 and before that as Director of Merchandise from 2011 to 2012. Before joining the Company in 2011, Ms. Levesque was the owner of Anica Boutique, a fashion and home store.