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Title: |
Employment Agreement |
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Entities: |
Hancock Fabrics, Inc.; Jo-Ann Stores, Inc.; Michaels Stores, Inc.; Baker, Donelson, Bearman & Caldwell |
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Date: |
2005 |
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Size: |
Preview shows 14KB of 43KB total |
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Price: |
$45 |
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ID: |
#1164589 |
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EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made and entered into by and between HANCOCK FABRICS, INC., a Delaware corporation (Company), and JANE F. AGGERS (Executive) as of December 15, 2004.
WHEREAS, Company wishes to employ Executive as Chief Executive Officer ("CEO") and upon the terms and conditions hereinafter set forth, and Executive desires to serve in such capacities upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:
Section 1. Position and Duties. From December 15, 2004 through January 30, 2005, the Company agrees to employ Jane F. Aggers as a consultant, with salary at the rate of $37,500 per month, and benefits as provided for in Paragraphs 2 and 3 of Enclosure 1 to this Agreement. Commencing on the Effective Date, Executive shall be employed by Company as President and CEO, reporting to Companys Board of Directors (the Board). As its CEO, Executive agrees to devote her full business time, energy and skill to her duties at Company. These duties shall include all those duties customarily performed by a CEO as well as any duties as may be reasonably determined and specified in the future by the Board. During the term of Executives employment, Executive shall be permitted to serve on boards of directors of for-profit or not-for-profit entities provided that the Board has approved such service in writing, and only so long as such service does not adversely affect the performance of Executives duties to Company under this Agreement. If the Board requests Executive to resign from such position at any time, Executive shall resign immediately. Executive has been elected to the Board as of the Effective Date.
Section 2. Term of Employment. Executive's employment with Company pursuant to this Agreement shall commence on the Effective Date, and this Agreement shall remain in effect for a period of three (3) years from the Effective Date and will on each anniversary date of the Effective Date be automatically extended for additional one (1) year periods, unless either party provides written notice prior to such anniversary date that it does not agree to such automatic extension (the "Term"). Any other extension or modification of this Agreement shall be subject to future agreement by the parties. Upon the termination of Executives employment for any reason, neither party shall have any further obligation or liability under this Agreement to the other, except as explicitly set forth herein.
Section 3. Compensation. Executive shall be compensated by Company for her services as follows:
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(a) Base Salary. As CEO, Executive shall be paid a monthly Base Salary of $37,500 per month ($450,000 on an annualized basis), subject to all applicable withholding, in accordance with Companys normal payroll procedures. Executives Base Salary shall be in effect during the Term of this Agreement and in the sole discretion of the Company may be increased from time to time during the Term of this Agreement.
(b) Benefits. Executive shall have the right, on the same basis as other employees of Company, to participate in and to receive benefits under any of Companys employee benefit plans, as such plans may be modified from time to time. In addition, Executive shall be entitled to the specific benefits set out on Enclosure 1, which is attached hereto and incorporated herein by reference.
(c) Performance Bonuses. Executive shall have the opportunity to earn a performance bonus in accordance with Companys Bonus Plan (the "Bonus Plan"), as such plan may be modified or supplanted over time. For the fiscal year ending January 2006, Executive shall be paid a guaranteed bonus of $225,000, payable during the first calendar quarter of 2006, concurrently with the payment of other management bonuses for such fiscal year. Bonus criteria for Executive for years after the fiscal year ending January 2006 shall be established by the Board in consultation with Executive.
Section 4. Equity Compensation Grants. All equity compensation grants, including, but not limited to, stock options and restricted stock (Equity Grants) shall be governed by the terms of an agreement setting forth the terms and conditions of the Equity Grant. The initial Equity Grants for Executive are set out on Enclosure 2, which is attached hereto and incorporated herein by reference. Notwithstanding any other provision to the contrary contained in any agreement evidencing any current or future Equity Grant, each such agreement shall be deemed to include each of the additional provisions set forth below. The rights provided by this Section 4 shall be in addition to any rights granted to Executive under any such agreement. In the event of an inconsistency or conflict between the provisions of this Section 4 or Section 5 and another agreement or plan of the Company, the provisions of this Section 4 or Section 5, as applicable, shall apply and be given priority.
(a) Acceleration of Equity Compensation Vesting Upon Non-Assumption. In the event of a Change in Control, each Equity Grant held by Executive, to the extent then outstanding, shall become fully vested and exercisable immediately prior to but conditioned upon the consummation of the Change in Control, except to the extent that the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be (the Acquiror), (A) assumes or continues in effect Companys rights and obligations under such Equity Grant, (B) substitutes for such Equity Grant a substantially equivalent right for the Acquirors stock or (C) replaces such Equity Grant with a cash incentive program pursuant to which Executive is to be paid for each share of Companys common stock that is subject to such option or award immediately prior to the consummation of the Change in Control and in accordance with the same vesting schedule applicable to such Equity Grant (including any subsequent acceleration of vesting determined under any other Section of this Agreement) an amount equal to the excess of the fair market value of the consideration paid by the Acquiror for each share of the common
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stock of Company outstanding immediately prior to the consummation of the Change in Control over the per share exercise price of such option.
(b) Acceleration of Equity Compensation Grant Vesting Upon an Involuntary Termination During a Change in Control Period. If Executives employment with Company terminates as a result of an Involuntary Termination During a Change in Control Period, then each Equity Grant held by Executive, to the extent then outstanding, (i) shall become fully vested and exercisable (and any forfeiture provision shall lapse) in full as of the later of (x) the date of termination of Executives employment or (y) the last day following Executives execution of the Release on which Executive may revoke such Release under its terms and (ii) shall remain exercisable in full until the earlier of (x) the expiration of a period of three (3) months following the date on which Executives employment terminated or (y) the expiration of the term of such Equity Grant.
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