UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 8, 2010
__________
HOOKER FURNITURE CORPORATION
(Exact name of registrant as specified in its charter)
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Virginia
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000-25349 |
54-0251350
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(State or other jurisdiction of incorporation or organization)
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(Commission File No.) |
(IRS Employer Identification No.)
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440 East Commonwealth Boulevard, Martinsville, Virginia
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24112 |
(276) 632-0459
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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)
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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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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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On June 8, 2010, Hooker Furniture Corporation (the “Company”) entered into an employment agreement with Bruce R. Cohenour, the Company’s Executive Vice President of Marketing, in connection with Mr. Cohenour’s promotion to president of the Company’s casegoods division. Under the agreement, Mr. Cohenour will receive:
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an initial annual base salary of $300,000 for the remainder of 2010, an increase from $252,000 a year, subject to adjustment by the Compensation Committee of the Company’s Board of Directors;
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a single lump-sum payment of $200,000, which was paid on June 8, 2010 and which is subject to forfeiture if Mr. Cohenour ceases to be employed by the Company before December 31, 2010 for any reason other than death, disability or termination by the Company without cause;
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an annual bonus determined by the Compensation Committee; and
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other benefits as provided under the Company’s benefit plans.
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For the Company’s fiscal year ending January 30, 2011 (fiscal 2011), the amount of Mr. Cohenour’s bonus will be determined in accordance with the Company’s annual cash incentive compensation plan, and will be:
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A base incentive of 0.60% of the pre-tax income of the Company’s wood and metal furniture division in excess of a specified threshold amount, based on the Company’s audited year-end financial statements for fiscal 2011;
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Plus or minus an individual performance factor of up to 12.5% of his base incentive, based on his performance with respect to individual performance goals.
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If Mr. Cohenour is terminated without cause during the term of the agreement, he will be entitled to receive his then current salary for twelve months and may be entitled to receive a pro-rated payment under the Company’s annual cash incentive compensation plan. Upon Mr. Cohenour’s disability, his compensation will continue for six months, and up to an additional 23 months (for a total of 29 months) at the Company’s discretion. Upon Mr. Cohenour’s death, the Company will be obligated to pay his estate an amount equal to his pro-rated annual bonus.
The agreement includes certain confidentiality, non-disclosure, non-compete and non-solicitation requirements. The foregoing description of Mr. Cohenour’s employment agreement is qualified in its entirety by reference to the agreement, a copy of which is filed as Exhibit 10.1 to this report and is incorporated herein by reference.
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Item 9.01.
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Financial Statements and Exhibits.
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(d) Exhibits.
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Exhibit 10.1
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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.
| HOOKER FURNITURE CORPORATION | |||
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Date: June 10, 2010
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By:
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/s/ Paul A. Huckfeldt | |
| Paul A. Huckfeldt | |||
| Corporate Controller and Chief Accounting Officer | |||
Exhibit 10.1
EMPLOYMENT AGREEMENT
This agreement is made and entered into this 8th day of June 2010, by and between Hooker Furniture Corporation (“Employer”) and Bruce R. Cohenour (“Executive”) (each a “Party” and collectively, the “Parties”).
WHEREAS, Executive has substantial expertise in management of the sales and marketing of home furnishings; and
WHEREAS, Employer desires to continue to secure Executive’s service and expertise in connection with Employer’s business, beginning June 8, 2010 (the “Effective Date”); and
WHEREAS, the Parties agree that a covenant not to compete is essential to the growth and stability of the Employer’s business and to the continuing viability of such business whenever the employment to which this Agreement relates is terminated;
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, Employer and Executive hereby agree as follows:
1. Employment. Upon the Effective Date, Employer shall employ and Executive agrees to be employed as President – Casegoods Division of Employer to oversee all sales, marketing and operations of the Employer’s casegoods business and to perform such different or other duties as may be assigned to him by Employer from time to time by Employer’s Chief Executive Officer. Executive will devote his full working time and best efforts to the diligent and faithful performance of such duties as may be entrusted to him from time to time by Employer, and shall observe and abide by the corporate policies and decisions of Employer in a
ll business matters.
2. Term. Executive’s employment shall continue under this Agreement for an indefinite period following the Effective Date.
3. Compensation. Employer shall pay and Executive shall accept as full consideration for the services to be rendered hereunder compensation consisting of the items listed below. Employer shall have no obligation to pay any such compensation for any period after the termination of Executive’s employment, except as otherwise expressly provided.
(a) Base salary, paid pursuant to Employer’s normal payroll practices, at an annual rate of $300,000 per year or such other rate as may be established prospectively by the Compensation Committee of Employer’s Board of Directors (the “Compensation Committee”) from time to time (“Salary”). All such Salary payments shall be subject to deduction and withholding authorized or required by applicable law.
(b) A single lump sum payment of $200,000.00 payable on the Effective Date (the “Special Bonus”), subject to deduction and withholding authorized or required by applicable law. Notwithstanding the forgoing, Executive shall repay to Employer the full amount of the Special Bonus if Executive’s employment terminates on or before December 31, 2010 for any reason except (1) his death, (2) his disability (as defined in Section 4) or (3) by Employer without Cause pursuant to Section 5(b).
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(c) As determined in the discretion of the Compensation Committee, an Annual Bonus with respect to each fiscal year of Employer (the “Performance Year”) during the term of this Agreement, beginning with the Performance Year that began on February 1, 2010. The terms and conditions of the Annual Bonus, including the applicable performance criteria for a Performance Year, and the amount of the Annual Bonus payable to the Executive for a Performance Year (if any) shall be determined by the Compensation Committee. The Annual Bonus with respect to a Performance Year will be paid during the period that begins on the first day immediately following the last day of the Performance Year an
d that ends on April 15 of the calendar year in which the Performance Year ends.
(d) Such other benefits, payments, or items of compensation as are provided under the employee benefit plans of the Employer, or as are made available from time to time under compensation policies set by Employer for management employees of Employer having similar salary and level of responsibility; provided, that Executive shall be entitled to four weeks of vacation each fiscal year, which shall be pro-rated for the portion of any fiscal year Executive is employed by the Company during the Term of this Agreement.
(e) Employer shall reimburse Executive, in accordance with the general policies and practices of Employer as in effect from time to time, for normal out-of-pocket expenses incurred by Executive in the ordinary course of business, including without limitation, Employer’s standard mileage allowance for business use of any personal vehicle, business related travel, customer entertainment, and professional organizations.
4. Disability or Death.
(a) Disability. If at any time during the Term of this Agreement, Executive becomes disabled and he has not breached any of the provisions of this Agreement, compensation shall continue to be paid to him according to the Employer’s normal payroll schedule while he is still living, but only for the first six (6) month period during which he shall be so disabled. Such payments shall be in lieu of any other disability benefit payable for such period under any other employee benefit plan, policy or practice of the Employer. In such event,
Employer may, at its sole option, retain Executive in its employment and continue payment of Executive’s compensation for an additional period of up to 23 months (for maximum of 29 months total) until he is able to return to work, or Employer may terminate this Agreement. If the Employer exercises its discretion to terminate the Agreement on account of the Executive’s disability, the Executive shall not be entitled to any further compensation or benefits under this Agreement (except for such compensation or benefits to which the Executive may be entitled under the terms of any employee benefit plan of the Employer). For purposes of this Section 4(a), Executive shall be considered “disabled” if he has suffered any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of
his position of employment or any substantially similar position of employment with the Employer.
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(b) Death. If Executive should die during the Term of this Agreement, Executive’s employment and Employer’s obligations hereunder (other than pro rata payment of Salary) shall terminate as of his death. In such event, the Employer shall pay the Executive’s Estate an Annual Bonus for the Performance Year in which the Executive died, which shall be prorated for the period ending on the date of the Executive’s death. Such Annual Bonus, if any, shall be paid by no later than April 15 of the calendar year in which such Performance Year ends.
5. Termination by Employer.
(a) Cause. Employer may terminate the employment of Executive under this Agreement during its Term for Cause. “Cause” shall include Executive’s fraud, dishonesty, theft, embezzlement, misconduct by Executive injurious to the Employer or any of its affiliates, conviction of, or entry of a plea of guilty or nolo contendere to, a crime that constitutes a felony or other crime involving moral turpitude, competition with Employer or any of its affiliates, unauthorized use of any trade secrets of Employer or any of its affiliates or Confidential Information (
as defined below), a violation of any policy, code or standard of ethics generally applicable to employees of the Employer, Executive’s material breach of fiduciary duties owed to Employer, Executive’s excessive and unexcused absenteeism unrelated to a disability, or, following written notice and a reasonable opportunity to cure, gross neglect by Executive of the duties assigned to him. In such event no further Salary shall be paid to Executive after the date of termination and no Annual Bonus shall be paid to Executive after the date of termination, including any Annual Bonus with respect to any fiscal year or the portion of any fiscal year preceding the date of termination. Executive shall retain only such rights to participate in other benefits as are required by the terms of those plans, Employer’s polices, or applicable law.
(b) Without Cause. Employer may terminate the employment of Executive under this Agreement during its Term without Cause. In such event, however, Executive, while living, shall be entitled to continue to receive his then current Salary for a period of twelve (12) months following such termination of employment. Notwithstanding the foregoing, the total amount payable under this Section 5(b) shall not exceed the applicable dollar limit imposed under Treasury Regulation Section 1.409A-1(b)(9)(iii), or any successor or replacement section thereto.
6. Confidential Information and Return of Property. “Confidential Information” means any written, oral, or other information obtained by Executive in confidence from Employer, or any of its affiliates, including without limitation information about their respective operations, financial condition, business commitments or business strategy, as a result of his employment with Employer unless such information is already publicly known through no fault of any person bound by a duty of confidentiality to Employer or any of its affiliates. Executive will not at any time, during or after his employment with Employer, direc
tly or indirectly disclose Confidential Information to any person or entity other than authorized officers, directors and employees of Employer. Executive will not at any time, during or after his employment with Employer, in any manner use Confidential Information on behalf of himself or any other person or entity other than Employer, or accept any position in which he would have a duty to any person to use Confidential Information against the interests of Employer or any of its affiliates. Upon termination of his employment for any reason, Executive will promptly return to Employer all property of Employer, including documents and computer files, especially where such property contains or reflects Confidential Information. Nothing in this Agreement shall be interpreted or shall operate to diminish such duties or obligations of Executive to Employer that arise or continue in effect after the termination of Executive’s employment hereunder, including without limitation
any such duties or obligations to maintain confidentiality or refrain from adverse use of any of Employer’s trade secrets or other Confidential Information that Executive may have acquired in the course of Executive’s employment.
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7. Disclosure and Ownership of Work Related Intellectual Property. Executive shall disclose fully to Employer any and all intellectual property (including, without limitation, inventions, processes, improvements to inventions and processes, and enhancements to inventions and processes, whether or not patentable, formulae, data and computer programs, related documentation and all other forms of copyrightable subject matter) that Executive conceives, develops or makes during the term of his employment, whether or not within the original Term of this Agreement, and that in whole or in part result from or relate to Executive’s work for
Employer (collectively, “Work Related Intellectual Property”). Any such disclosure shall be made promptly after each item of Work Related Intellectual Property is conceived, developed or made by Executive, whichever is sooner. Executive acknowledges that all Work Related Intellectual Property that is copyrightable subject matter and which qualifies as “work made for hire” shall be automatically owned by Employer. Further, Executive hereby assigns to Employer any and all rights which Executive has or may have in Work Related Intellectual Property that is copyrightable subject matter and that, for any reason, does not qualify as “work made for hire.” If any Work Related Intellectual Property embodies or reflects any preexisting rights of Executive, Executive hereby grants to Employer the irrevocable, perpetual, nonexclusive, worldwide, and royalty-free license to use, reproduce, display, perform, distribute copies of and prepare de
rivative works based upon such preexisting rights and to authorize others to do any or all of the foregoing.
8. Covenants Not to Compete or Interfere. Executive and Employer agree that after the Effective Date, Employer’s business will depend to a considerable extent on the individual efforts of Executive. Moreover, Executive recognizes that, by virtue of his employment with Employer, he will have access to confidential and/or proprietary information relating to the Employer’s business. Accordingly, and in consideration of Employer’s agreement to employ Executive, Executive covenants and agrees that during the Restricted Period, as defined below, Executive shall not, within any state, district or territory of the Uni
ted States in which the Employer has sold wood, metal or upholstered residential furniture products within the two (2) year period before the termination of Executive’s employment:
(a) directly or indirectly, in the same or similar capacity as that with Employer, be employed by, affiliated with, direct the business of, or act on behalf of, a business that directly competes with Employer by developing, designing, manufacturing, distributing, promoting, importing, selling or providing the same or substantially similar wood, metal or upholstered residential furniture products;
(b) directly or indirectly, on behalf of himself or any other person, partnership, company, corporation or other entity, solicit or attempt to solicit, accept or otherwise engage in business in competition with Employer from any (i) clients of Employer or any of its affiliates who were serviced by Executive while at Employer; (ii) clients of Employer or any of its affiliates who were clients of Employer or any of its affiliates at the time of the termination of Executive’s employment, or who were clients during the two (2) year period preceding such termination, or (iii) prospective clients of the Employer or any of its affiliates who, within two (2) years prior to Executive’s termination, had been so
licited directly by Executive or where Executive supervised, had responsibility for, or participated in such solicitation activities;
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(c) directly or indirectly, on behalf of himself or any other person, partnership, company, corporation or other entity, solicit, induce, recruit, or attempt to solicit, induce or recruit, any of Employer’s or any of its affiliates’ employees to terminate his or her employment for the purpose of joining, associating or becoming employed with any other business or activity; or
(d) directly or indirectly, on behalf of himself or any other person, partnership, company, corporation or entity, solicit, persuade, induce or attempt to solicit, persuade or induce any individual or entity who is, or was at any time during the last two (2) years of Executive’s employment with Employer, a supplier, vendor, consultant, or independent contractor to Employer or any of its affiliates, to terminate, reduce or refrain from renewing or extending his, her or its contractual relationship with Employer or any of its affiliates.
For purposes of this Agreement, the Restricted Period will be a period beginning on the Effective Date of this Agreement and ending two (2) years after this Agreement terminates, regardless of the reason for the termination.
Executive may own not more than two percent (2%) of any class of securities registered pursuant to the Securities Exchange Act of 1934, as amended, of any corporation engaged in competition with the Company, so long as Executive does not otherwise (i) participate in the management or operation of any such business, or (ii) violate any other provision of this Agreement.
Executive acknowledges that the restrictions, prohibitions and other provisions herein, including, without limitation, the Restricted Period, are reasonable, fair and equitable in terms of duration and scope, are necessary to protect the legitimate business interests of Employer, and are a material inducement to Employer to enter into this Agreement.
9. Remedies for Breach. Executive acknowledges and agrees that a breach of any of the covenants made by him in Sections 6, 7 and 8 above would cause irreparable harm to Employer or any of its affiliates for which there would be no adequate remedy at law. Accordingly, the parties agree that in the event of any breach or attempted breach by Executive of any of the provisions of Sections 6, 7 and/or 8, Employer shall be entitled to institute and prosecute proceedings at law or in equity with respect to such breach, and, if successful, to recover such costs, expenses, and reasonable attorney’s fees as may be incurred in connection with
such proceedings. The parties further agree that, to the extent Employer institutes and prosecutes proceedings at law or in equity against Executive for an alleged breach, and such action is unsuccessful, Executive is entitled to recover such costs, expenses, and reasonable attorneys’ fees as may be incurred in connection with such proceedings. If Executive breaches Section 8 above, the duration of the period identified shall be computed from the date he resumes compliance with the covenant or from the date Employer is granted injunctive or other equitable relief by a court of competent jurisdiction enforcing the covenant, whichever shall first occur, reduced by the number of days Executive was not in breach of the covenant after termination of employment, or any delay in filing suit, whichever is greater.
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10. Survival of Obligations. Executive’s obligations under Sections 6, 7 and 8 of this Agreement shall survive the termination of his employment and this Agreement, regardless of the reason for or method of termination. Each of the provisions in these Sections shall be enforceable independently of every other provision, and the existence of any claim or cause of action Executive may have against Employer, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement of these Sections of the Agreement by Employer.
11. Non-disparagement. To the maximum extent permitted by law, Executive agrees that he will not disparage or denigrate to any person any aspect of his past relationship with Employer, nor the character of Employer, nor Employer’s employees, agents, representatives, products, operating methods, suppliers, customers, or service providers, whether past, present, or future, and whether or not based on or with reference to Executive’s relationship with Employer.
12. Actions After Termination. Executive agrees that following his termination from Employer, regardless of the reason for the termination, he will continue to make himself available for reasonable consultation with Employer and Employer’s agents and employees regarding his prior work for Employer. Such consultation shall include Executive’s making himself reasonably available for interviews by Employer’s counsel, depositions, and/or appearances before courts or administrative agencies upon Employer’s reasonable request. Executive agrees that if he is contacted by any government agency with re
ference to Employer’s business, or by any person contemplating or maintaining any claim or legal action against Employer, or by any agent or attorney of such person, he will promptly notify Employer of the substance of his communications with such person. In no event shall such services exceed 20% of the average level of services performed by Executive over the 36-month period immediately preceding the date on which Executive’s employment terminated.
13. Assignment. Employer may assign this Agreement to any other entity acquiring all or substantially all of the assets or stock of Employer or to any other entity into which or with which Employer may be merged or consolidated. Upon such assignment, merger, or consolidation, the rights of Employer under this Agreement, as well as the obligations and liabilities of Employer hereunder, shall inure to the benefit of and be binding upon the assignee, successor-in-interest, or transferee of Employer and Employer shall have no further obligations or liabilities hereunder. This Agreement is not assignable in any respect by
Executive.
14. Invalid Provisions. It is not the intention of either Party to violate any public policy, or any statutory or common law. If any sentence, paragraph, clause or combination of the same in this Agreement is in violation of the law of any State where applicable, such sentence, paragraph, clause or combination of the same shall be void in the jurisdictions where it is unlawful, and the remainder of the Agreement shall remain binding on the Parties. However, the Parties agree, and it is their desire that a court should substitute for each such illegal, invalid or unenforceable covenant a reasonable and judicially-enfo
rceable limitation in its place, and that as so modified the covenant shall be as fully enforceable as if set forth herein by the Parties themselves in the modified form.
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15. Entire Agreement; Amendments. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, if any, relating to the subject matter hereof. This Agreement may be amended in whole or in part only by an instrument in writing setting forth the particulars of such amendment and duly executed by both Parties.
16. Multiple Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument.
17. Governing Law; Jurisdiction. The validity, construction, interpretation and enforceability of this Agreement and the capacity of the parties shall be determined and governed by the laws of the Commonwealth of Virginia, without regard to the conflict of law rules contained therein. The parties hereby agree and consent that any and all causes of action arising under this Agreement shall only have jurisdiction and venue in the United States District Court for the Western District of Virginia, Danville Division and/or the Circuit Court for Henry County, Commonwealth of Virginia.
18. Taxes. All payments made under this Agreement shall be subject to Employer’s withholding of all required foreign, federal, state and local income and employment/payroll taxes, and all payments shall be net of such tax withholding. The parties intend that any payment under this Agreement shall, to the extent subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”), be paid in compliance with Code Section 409A and the Treasury Regulations thereunder such that there shall be no adverse tax consequences, interest, or penalties as a result of the payments. The pa
rties shall interpret the Agreement in accordance with that intent, and to the extent applicable, with Code Section 409A and the Treasury Regulations thereunder. The parties agree to modify this Agreement or the timing (but not the amount) of any payment to the extent necessary to comply with Section 409A of the Code and avoid application of any taxes, penalties, or interest thereunder. However, in the event that the payments under the Agreement are subject to any taxes (including, without limitation, those specified in Code Section 409A), Executive shall be solely liable for the payment of any such taxes.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first written above.
EMPLOYER
By: /s/ Paul B. Toms, Jr.
Paul B. Toms, Jr.
Chairman, President and Chief Executive Officer
Hooker Furniture Corporation
EXECUTIVE
/s/ Bruce R. Cohenour
Bruce R. Cohenour
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