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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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On June 26, 2019,
Kelly Dilts resigned from her positions as Executive Vice President and Chief Financial Officer of Francesca’s Holdings
Corporation (the “Company”) and from all other positions she holds with the Company and each of its subsidiaries,
effective July 19, 2019. The resignation of Ms. Dilts was not the result of a disagreement with the Company or on any matter relating
to the Company’s operations, policies or practices.
On June 28, 2019,
the Company’s Board of Directors appointed Cynthia Thomassee, age 47, to serve as Executive Vice President and Chief Financial
Officer, effective July 19, 2019, in light of her long-standing service and contributions to the Company. Ms. Thomassee currently
serves as the Company's Senior Vice President of Accounting and Chief Accounting Officer, positions she has held since April 2016,
and previously served as Vice President of Accounting and Controller from December 2007 to April 2016. Ms. Thomassee previously
served as the Company’s Interim Chief Financial Officer from December 2015 to April 2016 and May 2012 to March 2013 and,
prior to that, served as Company’s Director of Finance from December 2007 to May 2010. Prior to joining the Company, Ms.
Thomassee served as Controller at LRG Furniture, LLC, a retail subsidiary of Bassett Furniture Industries, for over eight years.
On June 28, 2019, the
Compensation Committee of the Company’s Board of Directors approved the terms of a new employment letter agreement for Ms.
Thomassee, to become effective on the date that she assumes the role of Chief Financial Officer (the “Effective Date”).
The agreement does not have a specified term and provides that Ms. Thomassee will receive an annual base salary of $325,000. She
will also be eligible to receive an annual incentive bonus pursuant to the Company’s annual bonus plan as in effect from
time to time, with her target bonus to be set at 50% of her base salary. The agreement also provides for Ms. Thomassee to participate
in the Company’s savings and welfare benefit plans made available to employees generally. Pursuant to the employment letter
agreement, she will also be entitled to receive a grant of stock units, effective on the Effective Date and subject to her appointment
as Chief Financial Officer, that will have a value equal to (i) $200,000 less (ii) the aggregate value of certain time-based and
performance-based stock units granted to Ms. Thomassee in April 2019 (with such value in each case being determined as of the Effective
Date). One-half of stock units subject to such grant will be scheduled to vest on the third anniversary of the Effective Date,
and the remaining one-half of such stock units will be eligible to vest based on the Company’s performance during the three-year
period consisting of its 2019, 2020 and 2021 fiscal years, subject to Ms. Thomassee’s continued employment or service through
the third anniversary of the Effective Date. If Ms. Thomassee’s employment is terminated by the Company without cause, she
will be entitled to severance of six months (or twelve months if the termination occurs more than six months after her appointment
as CFO) of her base salary, subject to her providing a release of claims in favor of the Company. The employment letter agreement
also includes certain restrictive covenants, including provision that, during the period of Ms. Thomassee’s employment and
for a period of 12 months following a termination of her employment for any reason, she will not compete with the Company or its
affiliates or solicit any Company employees or customers.
The foregoing summary
of the new employment letter agreement for Ms. Thomassee is qualified in its entirety by the full text of the agreement. A copy
of the employment letter agreement will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal
quarter ending August 3, 2019.
In addition to the
compensation that Ms. Thomassee will receive for her service as Chief Financial Officer, the Company intends to enter into its
standard indemnification agreement with Ms. Thomassee, the form of which was previously filed by the Company as Exhibit 10.4 of
Amendment No. 5 to the Registration Statement on Form S-1 (File No. 333-173581) filed by the Company with the Securities and Exchange
Commission on July 14, 2011.
Except as described
above, there are no arrangements or understandings between Ms. Thomassee and any other person pursuant to which Ms. Thomassee was
appointed as Chief Financial Officer and there are no family relationships between Ms. Thomassee and any director or executive
officer of the Company, and she has no direct or indirect material interest in any transaction required to be disclosed pursuant
to Item 404(a) of Regulation S-K.
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Item 5.03.
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Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
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On July 1, 2019, the
Company filed a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Amended and Restated
Certificate of Incorporation (the “Certificate of Incorporation”) with the Secretary of State of the State of Delaware
to effect a 12-to-1 reverse stock split (the “Reverse Stock Split”) of the outstanding shares of the Company’s
common stock, par value $0.01 per share (the “Common Stock”). The Reverse Stock Split became effective at 4:00 p.m.
Eastern Standard Time on July 1, 2019 (the “Effective Time”) in accordance with the terms of the Certificate of Amendment.
The Company’s Common Stock is expected to begin trading on a split-adjusted basis on The Nasdaq Stock Market LLC (“Nasdaq”)
at market open on July 2, 2019 under the new CUSIP number: 351793 203. The trading symbol for the Company’s Common Stock
will remain “FRAN.”
As a result of the
Reverse Stock Split, at the Effective Time every twelve (12) shares of issued Common Stock were automatically combined and converted
into one (1) issued share of Common Stock. No fractional shares will be issued as a result of the Reverse Stock Split. Stockholders
who would otherwise be entitled to a fractional share of Common Stock are instead entitled to receive cash (rounded down to the
nearest cent, without interest and subject to applicable withholding taxes) in lieu of such fractional share.
The Reverse Stock Split
did not change the par value of the Common Stock or the authorized number of shares of Common Stock.
The foregoing description
of the Reverse Stock Split is qualified in its entirety by reference to the complete text of the Certificate of Amendment, a copy
of which is filed herewith as Exhibit 3.1 and is incorporated by reference herein.