Note 11–Other Events

Separation Agreement

On August 30, 2013, the Company and Mark D. Ettenger mutually agreed to end his service as Chairman of the Board and principal executive officer, and he relinquished all of his officer titles and duties. He also resigned from the Board effective September 25, 2013. In connection with this separation, the Company and Mr. Ettenger entered into a separation agreement, dated as of September 5, 2013, pursuant to which (i) he agreed to provide transition services until September 25, 2013 at the reasonable request of the Company; (ii) the Company paid him $1.0 million in full satisfaction of any amounts that may be due or that may have become due to him (with the holder of the Company’s Series A Preferred Stock approving an increase in the Company’s overhead reserve to make this payment); and (iii) the Company and Mr. Ettenger exchanged mutual general releases of any and all claims.

Payment of Claims

During the quarter ending November 30, 2013, the Company made payments of the then Allowed Claims to the holders of Syms and Filene’s Class 3 (Convenience Claims) and the Syms Unsecured Creditors in Syms Class 4 General Unsecured Claims (all as defined in the Plan), together with other payments required under the Plan (including the $10.7 million payment to the former Majority Shareholder), in an aggregate amount of approximately $32.6 million.

New CEO Employment Agreement

On October 1, 2013, the Company entered into an employment agreement with Matthew Messinger (the “Employment Agreement”) to serve as President and Chief Executive Officer (“CEO”) of the Company effective immediately. Under the terms of the Employment Agreement, Mr. Messinger is entitled to receive an initial annual base salary of $700,000. In addition, Mr. Messinger will be entitled to receive restricted stock units, or the RSU Awards, covering an aggregate of 2,178,570 shares of common stock of the Company, which the Company expects will result in Mr. Messinger holding approximately 1,500,000 shares of common stock after settlement of all of the RSU Awards and netting for taxes. The restricted stock units will vest as follows: 250,000 of such restricted stock units vested immediately upon grant, and the remaining restricted stock units will vest in three equal annual installments, in each case, subject to other conditions, including Mr. Messinger’s continued employment on the applicable vesting dates, as set forth in the Employment Agreement and any RSU Award agreement.

Stock Purchase Agreement

On October 1, 2013, the Company entered into a stock purchase agreement (the “Purchase Agreement”) with Third Avenue Trust, on behalf of Third Avenue Real Estate Value Fund (“Third Avenue”) pursuant to which the Company sold to Third Avenue 3,369,444 shares of the Company’s common stock for a purchase price of $13,477,776, or $4.00 per share. Upon the effectiveness of an amended and restated Certificate of Incorporation that has been approved by a majority of the Company’s stockholders, one share of Special Stock, par value $.01 (“Special Stock”), will be issued and sold to Third Avenue for the par value of such share payable in cash. The share of Special Stock will enable Third Avenue or its affiliated designee to elect one member of the Board of Directors. The sale of shares of the common stock and the share of Special Stock were made in private placement transactions exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

The Purchase Agreement contains customary representations, warranties and covenants of the Company and Third Avenue, and the Company has agreed to indemnify Third Avenue, subject to certain limitations, in the event of a breach of the Company’s representations or warranties or the failure of the Company to fulfill any covenants in the Purchase Agreement. The Purchase Agreement also requires the Company to file and maintain the effectiveness of a registration statement covering Third Avenue’s resale of the shares of common stock acquired under the Purchase Agreement.

Under the Plan, the proceeds from the sale of the common stock to Third Avenue can be used to fund operating expenses and other Company obligations in excess of the Company’s overhead and other reserves.

Amended and Restated Certificate of Incorporation

In connection with and as a condition to the Third Avenue transaction, the Board and the stockholders of the Company have approved an amended and restated Certificate of Incorporation of the Company providing for an increase in the total number of authorized shares of the Company’s capital stock to 40,000,000, an increase in the total number of authorized shares of common stock to 39,999,997, of which 19,999,998 are issued and outstanding, and the authorization of one share of special stock, which will give Third Avenue the right to designate one director to serve on the Board by reducing from three to two the number of directors elected by the holders of the Company’s common stock. The Company filed the amended and restated Certificate of Incorporation with the Secretary of State of Delaware in November 2013.