Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
SUPPLEMENT TO PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
June 27, 2019
The following information supplements the Trans World Entertainment
Corporation (the “Company”) definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission
on May 29, 2019 (the “Proxy Statement”) for the Company’s Annual Meeting of Shareholders (the “Annual
Meeting”) to be held on Thursday, June 27, 2019, at 10:00 a.m., EDT, at Trans World Entertainment Corporation, 38 Corporate
Circle, Albany, NY 12203. This Supplement, which should be read in conjunction with the Proxy Statement, is first being made available
to shareholders of the Company on or about May 29, 2019.
Only shareholders of record at the close of business on May
10, 2019 are entitled to notice of and to vote at the meeting or any adjournment or postponement thereof.
On May 24, 2019, Mark R. Higgins filed preliminary proxy
materials with the Securities and Exchange Commission (the “SEC”) indicating his intent to solicit proxies from the
Company’s shareholders, including with respect to casting votes to elect Mark J. Freiman, Jeff Hastings, Mark R. Higgins
and Philip Knowles as directors of the Company. We are not responsible for the accuracy of any information provided by or relating
to Mr. Higgins contained in any proxy solicitation materials filed or disseminated by, or on behalf of, Mr. Higgins or any other
statements that Mr. Higgins may otherwise make. Mr. Higgins will choose which of the Company’s shareholders will receive
Mr. Higgins’ solicitation materials.
The Company’s Board of Directors (the “Board”)
and management are deeply committed to enhancing value for all shareholders and overseeing the Company’s strategy. Our Board
is comprised of six highly qualified directors who bring expansive experience concerning retail operations, accounting and finance,
management and leadership, risk assessment and corporate governance. Specifically, the Board has extensive knowledge of the
challenges faced by the Company in the turbulent physical retail and physical media industries, and has been instrumental in identifying
opportunities to improve results. The Board recognizes the importance of having the right mix of skills, expertise and
experience to effectively oversee the Company and regularly reviews the Board’s composition and its refreshment to ensure
alignment with the interests of shareholders.
In the fye segment, over the past four years, the Company
has changed its merchandise point of view based on unique, relevant, collaborative and exclusive merchandise. These efforts
have been well received by our customers and will drive the continued reinvention of the fye brand throughout 2019. These changes
have resulted in an increase in contribution from our lifestyle categories to 55% of revenue in 2018 as compared to 25% in 2014.
In the etailz segment, during fiscal 2018, the Company implemented strategic initiatives, operational efficiencies and other
considerations directed towards improving the segment’s performance, operations, and cash flow. In the first quarter
ended May 4, 2019, we saw the benefits of the strategic initiatives, highlighted by improved gross margins, lower SG&A expenses
and improved supply chain efficiency. As a result of these initiatives in etailz and disciplined
inventory management in the fye
segment, we were able to reduce cash used in operations by over $10 million for the first quarter as compared to the first quarter
of 2018. The Company is committed to taking steps to improve operating results as management diligently executes its strategy
to deliver value for shareholders.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS REJECT
MR. HIGGINS’ PROXY SOLICITATION. THE BOARD URGES SHAREHOLDERS TO VOTE FOR THE ELECTION OF THE BOARD’S NOMINEES NAMED
IN THE COMPANY’S PROXY STATEMENT.
YOU CAN VOTE YOUR SHARES BY SIGNING AND DATING THE
WHITE
PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID RETURN ENVELOPE. YOU MAY ALSO VOTE BY INTERNET OR TELEPHONE BY FOLLOWING THE INSTRUCTIONS
SET FORTH ON THE
WHITE
PROXY CARD. IF YOUR SHARES ARE HELD THROUGH A BROKER, BANK OR NOMINEE, YOU MUST PROVIDE VOTING INSTRUCTIONS
TO THE BROKER, BANK OR NOMINEE ON HOW TO VOTE YOUR SHARES.
IF AT ANY TIME YOU VOTE ON MR. HIGGINS’ PROXY CARD,
YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE. YOUR LATER DATED
WHITE
PROXY CARD OR YOUR VOTE AT A LATER DATE BY INTERNET OR
TELEPHONE WILL REVOKE ANY PRIOR PROXY. ATTENDING THE ANNUAL MEETING WILL NOT REVOKE YOUR PROXY UNLESS YOU SPECIFICALLY REQUEST
IT. IT IS YOUR LATEST DATED PROXY WHICH COUNTS. IF YOUR SHARES ARE HELD FOR YOU BY A BROKER, BANK OR NOMINEE, YOU MUST CONTACT
THE BROKER, BANK OR NOMINEE TO REVOKE A PREVIOUSLY AUTHORIZED PROXY.
YOUR VOTE IS VERY IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE
ANNUAL MEETING, WE REQUEST THAT YOU READ THE PROXY STATEMENT, AS SUPPLEMENTED, AND VOTE YOUR SHARES AS SOON AS POSSIBLE.
Broker Non-Votes
Under New York Stock Exchange (“NYSE”) rules,
brokerage firms may vote in their discretion on certain matters on behalf of clients who do not provide voting instructions. Given
the contested nature of the Annual Meeting, for any accounts to which brokers deliver competing sets of proxy materials, the NYSE
rules governing brokers’ discretionary authority will not permit such brokers to exercise discretionary authority regarding
any of the proposals to be voted on at the Annual Meeting.
If you hold your shares in street name, it is critical that
you cast your vote by instructing your bank, broker or other nominee on how to vote if you want your vote to be counted at the
Annual Meeting.
Note Regarding Proxy Materials
If shareholders have any questions, require assistance with
voting the
WHITE
proxy card, or need additional copies of the proxy materials, please contact the Company at 518-452-1242.
Important Notice Regarding the Availability of Proxy
Materials for the Annual Meeting of Shareholders to be Held on June 27, 2019: The Notice, the Proxy Statement, this Proxy
Statement Supplement and Annual Report are available at
www.envisionreports.com/TWEC
.
MISCELLANEOUS INFORMATION
Participants in the Solicitation
Under applicable regulations of the SEC, members of the Board
and certain executive officers of the Company may be deemed to be “participants” with respect to the Company’s
solicitation of proxies in connection with the Annual Meeting. Certain information concerning participants is set forth in the
Proxy Statement, this Supplement and in Annex A hereto.
Method and Cost of Proxy Solicitation
As a result of the proxy contest initiated by Mr. Higgins,
the Company may incur substantial additional costs in connection with its solicitation of proxies. Proxies may be solicited by
mail, facsimile, telephone, telegraph, Internet, in person and by advertisements. The Company may also retain a proxy solicitor
to assist in the solicitation of proxies.
Expenses related to the solicitation of proxies from shareholders,
excluding salaries and wages of the Company’s employees, could aggregate up to approximately $300,000, excluding expenses
the Company would typically incur in connection for the election of directors in an uncontested election. These expenses are expected
to include fees of outside counsel and other advisors to advise the Company in connection with the solicitation; increased mailing
costs, such as the costs of additional mailings of solicitation material to shareholders, including printing costs, mailing costs
and the reimbursement of reasonable expenses of banks, brokerage houses and other agents incurred in forwarding solicitation materials
to beneficial owners of the Company’s common stock, as described above; and possibly the costs of retaining a proxy solicitor
and an independent inspector of election. To date, the Company has incurred approximately $25,000 of these solicitation costs.
Members of the Board, officers and employees of the Company will not be paid any additional compensation for soliciting proxies
from shareholders.
ANNEX A TO 2019 PROXY STATEMENT SUPPLEMENT
ADDITIONAL INFORMATION REGARDING PARTICIPANTS
IN THE SOLICITATION
Under applicable SEC rules and regulations, members of the
Board, the Board’s nominees, and certain officers of the Company are “participants” with respect to the Company’s
solicitation of proxies in connection with the 2019 Annual Meeting. The following sets forth certain information about the persons
who are “participants.”
Directors and Nominees
The following table sets forth the names of the Company’s
directors, all of whom are nominees at the 2019 Annual Meeting. The principal occupations or employment of the Company’s
directors are set forth under the heading “Item 1.— Election of Directors” in the Proxy Statement. The business
address of each of the Company’s directors is c/o Trans World Entertainment Corporation, 38 Corporate Circle, Albany, New
York 12203.
Michael Feurer
Martin Hanaka
Robert E. Marks
Michael Nahl
W. Michael Reickert
Michael B. Solow
Executive Officers
The following table sets forth the names of the Company’s
Executive Officers who are considered “participants” in the Company’s solicitation of proxies. Their principal
occupations are set forth under the heading “Executive Officers” in the Proxy Statement, other than Michael Feurer,
the Company’s Chief Executive Officer, whose biographical information is set forth under the heading “Item 1.—
Election of Directors” in the Proxy Statement. The principal occupation refers to such person’s position with the Company,
and the business address for each person is c/o Trans World Entertainment Corporation, 38 Corporate Circle, Albany, New York 12203.
Michael Feurer
Bruce J. Eisenberg
Edwin J. Sapienza
Information Regarding Ownership of the Company’s Securities by Participants
The number of Company securities beneficially owned by directors
and named executive officers as of May 10, 2019 is set forth under the heading “Equity Ownership by Directors and Executive
Officers” in the Proxy Statement. Except as described in this Annex A or the Proxy Statement, none of the persons listed
above under “Directors and Nominees” or “Executive Officers” owns any Company securities of record that
they do not own beneficially.
Information Regarding Transactions in Company Securities
by Participants
The following table sets forth purchases and sales of the
Company’s securities during the past two years by the persons listed above under “Directors and Nominees” and
“Executive Officers.” Unless otherwise indicated, all transactions were in the public market or pursuant to the Company’s
equity compensation plans and none of the purchase price or market value of the securities listed below is represented by funds
borrowed or otherwise obtained for the purpose of acquiring or holding such securities.
Company Securities Purchased or Sold (May
10, 2017 through May 10, 2019)
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Name
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Date
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# of Securities
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Transaction Description
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Robert E. Marks
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5/1/2018
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64,000
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Acquisition - Grant of Annual Deferred Shares
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Michael Nahl
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5/1/2018
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1,484
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Acquisition - Grant of Annual Deferred Shares
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W. Michael Reickert
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5/1/2018
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64,000
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Acquisition - Grant of Annual Deferred Shares
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Michael Feurer
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5/19/2017
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150,000
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Acquisition - Grant of Stock Options
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Michael Feurer
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5/19/2017
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50,000
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Acquisition - Grant of Restricted Stock Units
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Michael Feurer
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10/13/2017
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50,000
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Acquisition – Vesting of Restricted Stock Units
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Michael Feurer
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10/13/2017
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18,485
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Disposition – Payment of Tax Liability in Shares
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Michael Feurer
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5/21/2018
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12,500
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Acquisition – Vesting of Restricted Stock Units
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Michael Feurer
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5/21/2018
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4,246
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Disposition – Payment of Tax Liability in Shares
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Michael Feurer
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6/27/2018
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150,000
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Acquisition - Grant of Stock Options
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Michael Feurer
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6/27/2018
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50,000
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Acquisition - Grant of Restricted Stock Units
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Michael Feurer
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10/13/2018
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50,000
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Acquisition – Vesting of Restricted Stock Units
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Michael Feurer
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10/13/2018
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18,485
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Disposition – Payment of Tax Liability in Shares
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Bruce Eisenberg
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5/19/2017
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35,000
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Acquisition – Grant of Stock Options
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Bruce Eisenberg
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10/3/2018
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10,545
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Disposition – Charitable Gift of Common Shares
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Bruce Eisenberg
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6/27/2018
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35,000
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Acquisition – Grant of Stock Options
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Edwin J. Sapienza
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5/19/2017
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25,000
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Acquisition – Grant of Stock Options
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Edwin J. Sapienza
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5/19/2017
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5,000
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Acquisition – Grant of Restricted Stock Units
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Edwin J. Sapienza
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5/21/2018
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1,250
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Acquisition – Vesting of Restricted Shares
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Edwin J. Sapienza
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6/27/2018
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25,000
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Acquisition – Grant of Stock Options
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Edwin J. Sapienza
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6/27/2018
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5,000
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Acquisition – Grant of Restricted Stock Units
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Edwin J. Sapienza
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10/23/2018
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50,000
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Acquisition – Grant of Stock Options
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Edwin J. Sapienza
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10/23/2018
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20,000
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Acquisition – Grant of Restricted Stock Units
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Miscellaneous Information Concerning Participants
Except as described in this Annex A or in the Proxy Statement,
neither any participant nor any of their respective associates or affiliates (together, the “Participant Affiliates”)
is either a party to any transaction or series of transactions since January 1, 2017 or has knowledge of any current proposed
transaction or series of proposed transactions (i) to which the Company or any of its subsidiaries was or is to be a participant,
(ii) in which the amount involved exceeds $120,000 and (iii) in which any participant or Participant Affiliate had, or
will have, a direct or indirect material interest. Furthermore, except as described in this Annex A or in the Proxy Statement,
(a) no participant or Participant Affiliate, directly or indirectly, beneficially owns any securities of the Company or any
securities of any subsidiary of the Company, and (b) no participant owns any securities of the Company of record but not beneficially.
Except as described in this Annex A or in the Proxy Statement,
no participant or Participant Affiliate has entered into any agreement or understanding with any person with respect to any future
employment by the Company or any of its affiliates or any future transactions to which the Company or any of its affiliates will
or may be a party.
Except as described in this Annex A or in the Proxy Statement,
there are no contracts, arrangements or understandings by any participant or Participant Affiliate since January 1, 2018 with
any person with respect to any securities of the Company, including, but not limited to, joint ventures, loan or option arrangements,
puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of
proxies.
Except as described in this Annex A or in the Proxy Statement,
and excluding any director or executive officer of the Company acting solely in that capacity, no person who is a party to an arrangement
or understanding pursuant to which a nominee for election as director is proposed to be elected has any substantial interest, direct
or indirect, by security holdings or otherwise, in any matter to be acted upon at the Annual Meeting.