Attached files
| file | filename |
|---|---|
| EX-10.1 - FREDERICK'S OF HOLLYWOOD GROUP INC /NY/ | v189912_ex10-1.htm |
| EX-10.3 - FREDERICK'S OF HOLLYWOOD GROUP INC /NY/ | v189912_ex10-3.htm |
| EX-10.2 - FREDERICK'S OF HOLLYWOOD GROUP INC /NY/ | v189912_ex10-2.htm |
| EX-10.4 - FREDERICK'S OF HOLLYWOOD GROUP INC /NY/ | v189912_ex10-4.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): June 29,
2010
FREDERICK’S OF HOLLYWOOD
GROUP INC.
(Exact
Name of Registrant as Specified in Charter)
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New York
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1-5893
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13-5651322
|
||
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
|
1115 Broadway, New York, New
York
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10010
|
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (212)
798-4700
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
5.02
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Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers
|
Thomas
J. Lynch Employment Agreement
On June
29, 2010, Frederick’s of Hollywood Group Inc. (“Company”) entered into an
employment agreement with Thomas J. Lynch, which provides for Mr. Lynch to
continue to serve as the Company’s Chief Executive Officer through January 2,
2014 at a base salary of $540,000 per year. Mr. Lynch voluntarily reduced his
salary by $60,000 per year (or an aggregate of $210,000 over the term of the
agreement) in support of the Company’s continuing efforts to reduce
expenses.
In
addition to his base salary, Mr. Lynch is eligible to receive a target annual
incentive bonus of up to 65% of his base salary in accordance with the terms of
the Company’s 2010 Annual Incentive Bonus Plan (“Annual Bonus Plan”) described
below. The incentive bonus for the fiscal year ending July 26, 2014 will be
prorated for the partial year during which Mr. Lynch is employed. No incentive
bonus will be paid to Mr. Lynch for the fiscal year ending July 31, 2010. From
time to time, Mr. Lynch also will be eligible to receive such discretionary
bonuses as the Compensation Committee deems appropriate.
On June
29, 2010, the Company granted Mr. Lynch a ten-year, non-qualified option to
purchase 600,000 shares of common stock under the Company’s 2010 Long-Term
Incentive Equity Plan (“2010 Equity Plan”) at an exercise price of $0.78 per
share (the closing price of the Company’s common stock on such date), with
150,000, 200,000 and 250,000 shares vesting on each of January 2, 2012, 2013 and
2014, respectively. The grant of the option is subject to and conditioned upon
approval by the Company’s shareholders of the 2010 Equity Plan, which is
anticipated to be sought at the Company’s next shareholders meeting. If
shareholder approval is not obtained, the option shall be deemed null and
void.
On June
29, 2010, the Company also issued Mr. Lynch 150,000 shares of restricted stock
under the Company’s 2000 Performance Equity Plan, with 50,000 shares vesting on
each of January 2, 2012, 2013 and 2014, provided that Mr. Lynch is employed by
the Company on each such date.
The
employment agreement provides that if, during the employment term, the Company
terminates Mr. Lynch without “cause” or he terminates his employment for “good
reason” (as such terms are defined in the employment agreement), or if the
Company does not continue his employment at the end of the employment term upon
substantially similar terms, the Company will be required to pay to him (i) his
base salary through the end of the employment term, (ii) any bonus that would
have become payable to him through the end of the employment term, (iii) the
insurance benefits provided in his employment agreement through the end of the
employment term, (iv) the lump sum of $450,000 and (v) medical coverage at the
Company’s expense for one year commencing on either (a) the last day of the
employment term if his employment is terminated during the employment term or
(b) the date of termination if his employment is terminated after the end of the
employment term; provided that medical coverage will terminate upon becoming
covered under a similar program by reason of employment
elsewhere.
2
The
employment agreement provides for the Company to pay the premiums on a life
insurance policy for Mr. Lynch providing a death benefit of $1,500,000 to his
designated beneficiary and a disability insurance policy for Mr. Lynch providing
a non-taxable benefit of at least $10,000 per month payable to him in the event
of his disability. Under the employment Agreement, Mr. Lynch is prohibited from
disclosing confidential information about the Company and employing or
soliciting any of its current employees to leave the Company during his
employment and for a period of one year thereafter. The employment agreement
does not contain any change of control or non-competition
provisions.
The
foregoing description is qualified in its entirety by the text of the employment
agreement, stock option agreement and restricted stock agreement, which are
attached hereto as Exhibits 10.1, 10.2 and 10.3 and incorporated herein by
reference.
2010
Annual Incentive Bonus Plan
On June
29, 2010, the Company’s Board of Directors adopted the Annual Bonus Plan, in
which employees selected by the Company’s Compensation Committee will
participate. The Compensation Committee has initially determined that
Thomas Lynch and Thomas Rende, named executive officers of the Company, will
participate in the Annual Bonus Plan. Under the Annual Bonus Plan,
participants will be eligible to receive a cash bonus of up to a percentage of
the participant’s base salary as determined by the Compensation Committee.
The maximum cash bonus award for the named executive officers participating in
the Annual Bonus Plan, expressed as a percentage of base salary as set forth in
their respective employment agreements, is as follows: Thomas J. Lynch,
65%; and Thomas Rende, 35%.
The bonus
payment for each participant is calculated based on two components: (1) the
Company’s annual financial performance (“Company Performance Component”),
representing up to 80% of the total eligible bonus; and (2) the participant’s
individual performance (“Individual Performance Component”), representing up to
20% of the total eligible bonus. If the Company achieves less than 80% of
the Target Adjusted EBITDA (as defined below), no participant will be eligible
to receive any bonus.
Company Performance Component.
The Company Performance Component is based upon an evaluation of the
Company’s Adjusted EBITDA (defined as earnings before interest, taxes,
depreciation, amortization, stock compensation expense, any bonus awarded under
the Annual Bonus Plan and adjustments for non-recurring items as determined by
the Board) against a target Adjusted EBITDA approved annually by the Board
(“Target Adjusted EBITDA”). If the Company achieves 100% or more of the
Target Adjusted EBITDA, each participant’s total eligible bonus will range from
10% of the total eligible bonus upon achievement of 100% of the Target Adjusted
EBITDA up to a maximum of 80% of the total eligible bonus upon achievement of
140% or more of the Target Adjusted EBITDA.
Individual Performance
Component. The Individual Performance Component is based on an
individual’s achievement of performance objectives, as approved annually by the
Compensation Committee. If the Company achieves 80% or more of the Target
Adjusted EBITDA, up to 20% of the participant’s total eligible bonus may be paid
out upon the achievement of such individual performance
objectives.
3
The
foregoing description is qualified in its entirety by the text of the Annual
Bonus Plan, which is attached hereto as Exhibit 10.4 and is incorporated herein
by reference.
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Item
9.01.
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Financial
Statements, Pro
Forma Financial Information and
Exhibits.
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(c)
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Exhibits:
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10.1
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Employment
Agreement between the Company and Thomas J. Lynch, dated as of June 29,
2010
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10.2
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Stock
Option Agreement between the Company and Thomas J. Lynch, dated as of June
29, 2010
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10.3
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Restricted
Stock Agreement between the Company and Thomas J. Lynch, dated as of June
29, 2010
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10.4
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2010
Annual Incentive Bonus Plan
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4
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
| Dated: July 6, 2010 | FREDERICK’S OF HOLLYWOOD GROUP INC. | |
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By:
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/s/
Thomas Rende
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Thomas
Rende
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Chief
Financial Officer
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