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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1.
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Amended and Restated Employment Agreement with Michael Feurer
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On February 26, 2019 we entered into an Amended
and Restated Employment Agreement with Michael Feurer, our Chief Executive Officer. The Amended and Restated Employment Agreement
(the “Feurer Agreement”) amended Mr. Feurer’s current employment agreement to reflect his current base salary,
modify the definitions of “Cause” and “Good Reason” (as set forth in the Feurer Agreement), and provide
that severance payments otherwise payable upon termination of Mr. Feurer’s employment by Trans World Entertainment Corporation
(the “Company”) without Cause or by him for Good Reason will be made in a lump sum upon termination to the extent such
payments do not constitute deferred compensation for purposes of Section 409A of the Internal Revenue Code (in lieu of monthly
installments). In addition, provisions that, by their terms, were no longer applicable were deleted. The foregoing description
of the Feurer Agreement is qualified in its entirety by reference to the text of the Feurer Agreement, a copy of which is filed
herewith as Exhibit 10.1, and is incorporated herein by reference.
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2.
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Severance, Retention and Restrictive Covenant Agreements
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On February 26, 2019 we also entered into
Severance, Retention and Restrictive Covenant Agreements with Edwin J. Sapienza, our Chief Financial Officer, and Bruce J. Eisenberg,
our Executive Vice President of Real Estate (collectively, the “Executives”). The Severance, Retention and Restrictive
Covenant Agreements (the “Agreements”), provide for Retention Bonuses (the “Retention Bonuses”) payable
to each of the Executives in the amount of $200,000. In the case of Mr. Sapienza, one third of his Retention Bonus will be payable
to him on each of June 1, 2019, October 1, 2019, and March 1, 2020. In the case of Mr. Eisenberg, twenty-five percent of his Retention
Bonus will be payable to him on each of June 1, 2019 and October 1, 2019, and the remaining fifty percent will be payable to him
on March 1, 2020. In order to receive the payments, except as described below, the Executives are required to remain employed with
the Company through the applicable payment dates. However, upon consummation of a Change of Control of the Company (as defined
in the Agreements) at a time when the Executive remains employed by the Company, any unpaid portion of the Retention Bonus will
be paid to the Executive in full.
The Agreements also provide that if an Executive’s
employment is terminated by the Company without “Cause” or by the Executive for “Good Reason” (as those
terms are defined in the Agreements), the Executive will be entitled to the following: (i) the continuation of the Executive’s
base salary for a period of six (6) months from the date of termination, (ii) any unpaid portion of his Retention Bonus, (iii)
any unpaid annual bonus that was earned (as determined by the Board of Directors of the Company in accordance with the applicable
annual bonus plan) for the year preceding the year in which termination occurs, and (iv) payment for health insurance coverage
for up to six months following termination at the same rate as the Company pays for health insurance coverage for its active employees
(with the Executive required to pay for any employee-paid portion of such coverage). Payment of these amounts is contingent on
the Executive signing (and not revoking within any statutory revocation period) a release of claims reasonably acceptable to the
Company.
Mr. Sapienza’s Agreement provides that
his annual bonus for our fiscal year ending in 2020 will not be less than $100,000. It also provides that he will receive the minimum
bonus if his employment is terminated by the Company without Cause or by him for Good Reason prior to payment of the bonus.
The Agreements also include restrictive covenants
under which the Executives agree to confidentiality provisions, noncompetition and nonsolicitation covenants that apply for six
months after any termination of employment, and certain nondisparagement and cooperation covenants.
The foregoing description of the Agreement
with Mr. Sapienza is qualified in its entirety by reference to the text of the Agreement, a copy of which is filed herewith as
Exhibit 10.2, and is incorporated herein by reference. The foregoing description of the Agreement with Mr. Eisenberg is qualified
in its entirety by reference to the text of the Agreement, a copy of which is filed herewith as Exhibit 10.3, and is incorporated
herein by reference.