UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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): January 29, 2009
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)
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(IRS Employer
Identification No.) |
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| 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) |
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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
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| 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 |
On January 29, 2008, Frederick’s of Hollywood Group Inc. (“Company”) entered into an
employment agreement with Thomas Lynch, a current member of the Company’s board of directors, which
provides for Mr. Lynch to be employed as the Company’s Chief Executive Officer for a two year term
which commenced on January 2, 2009 until January 2, 2011 at a base salary of $600,000 per year.
Pursuant to the terms of the employment agreement, in addition to his base salary, Mr. Lynch is
eligible to receive, for the fiscal years ending July 31, 2010 and July 30, 2011, an annual
performance bonus equal to 65% of his base salary based on achieving certain targeted performance
goals determined by the compensation committee after consultation with him. The bonus for the
fiscal year ending July 31, 2011 will be prorated for the partial year. No performance bonus will
be paid to Mr. Lynch for the fiscal year ending July 25, 2009.
In addition to his base salary, on January 29, 2009, the Company granted Mr. Lynch a ten-year,
non-qualified option to purchase 360,000 shares of common stock under the Company’s 1988 Stock
Option Plan at an exercise price of $0.38 per share. 120,000 option shares are immediately
exercisable and 120,000 shares will vest on each of January 2, 2010 and 2011.
Additionally, on January 29, 2009, the Company issued Mr. Lynch 100,000 shares of restricted
stock. 50,000 shares will vest on January 2, 2010, provided that Mr. Lynch is employed by the
Company and that he has purchased an aggregate of 250,000 shares of common stock in the open market
in accordance with the terms of a 10b5-1 trading plan to be entered into by Mr. Lynch during the
first open window period that such plan can be entered into in accordance with the terms of the
Company’s insider trading policy (the “stock purchase”). If Mr. Lynch does not complete the stock
purchase by January 2, 2010, then the 50,000 shares will not vest on such date; however, all
100,000 shares will vest on January 2, 2011 provided that Mr. Lynch is employed by the Company and
has completed the stock purchase by 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), the Company will be required to pay to him (i) his base
salary for (a) four months from the date of termination if such date is prior to July 2, 2009, (b)
six months from the date of termination if such date is between July 2, 2009 and January 2, 2010 or
(c) eight months from the date of termination if such date is after January 2, 2010 and prior to
the end of the employment term and (ii) his annual performance bonus, pro-rated to the date of
termination. In addition, the portion of the stock option that would otherwise have vested within
the one-year period following termination will immediately vest and the restricted stock would
continue to vest as scheduled, provided that the stock purchase requirement is met.
Mr. Lynch’s employment agreement also provides for the Company to pay the premiums on a life
insurance policy for him providing a death benefit of $1,500,000 to Mr. Lynch’s designated
beneficiary and a disability insurance policy for Mr. Lynch providing a non-taxable benefit of at
least $10,000 per month payable to Mr. Lynch 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 the Company’s 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 provisions.
The foregoing description is qualified in its entirely by the text of the employment
agreement, stock option agreement and restricted stock agreement, copies of which are attached
hereto as Exhibits 10.45, 10.46 and 10.47.