10.1(h) - Employment Agreement
EMPLOYMENT AGREEMENT
 
This agreement is made and entered into this 15th day of June 2007, by and
between Hooker Furniture Corporation (“Employer”) and Alan D. Cole (“Executive”)
(each a “Party” and collectively, the “Parties”).
 
WHEREAS, Executive has substantial expertise in the management of the design,
manufacture and marketing of upholstered furniture; and
 
WHEREAS, Employer desires to secure Executive’s service and expertise in
connection with Employer’s upholstery business beginning July 16th, 2007 (the
“Effective Date”); and
 
WHEREAS, the Parties agree that a covenant not to compete is essential to the
growth and stability of the upholstery business of Employer during the first
years after its employment of the Executive and to the continuing viability of
such business whenever the employment to which this Agreement relates is
terminated;
 
1. Employment.  Upon the Effective Date, Employer shall employ and Executive
agrees to become employed as Executive Vice President – Upholstery Operations of
Employer to oversee the operations of Employer’s upholstery 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
all business matters.
 
2. Term.  Executive’s employment shall continue under this Agreement for a
period beginning on the Effective Date of this Agreement and ending three (3)
years thereafter.
 
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) Salary, paid pursuant to Employer’s normal payroll practices, at an annual
rate of $264,000 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 generally consistent with the range
of salaries for officers of Employer with a similar level of responsibility to
Executive.  All such payments shall be subject to deduction and withholding
authorized or required by applicable law.
 
(b) An Annual Bonus with respect to each fiscal year of the Employer (the
“Performance Year”) during the term of this Agreement , beginning with the
Performance Year that began on January 29, 2007.  The Annual Bonus shall be
computed as a percentage of Executive’s salary actually paid with respect to the
Performance Year, which percentage shall be at least 20% and shall not exceed
40% of such salary.  The terms and conditions of the Annual Bonus, including the
applicable performance criteria for a Performance Year, and the determination of
the amount of the Annual Bonus payable to the Executive for a Performance Year
(if any) shall be determined in the sole discretion of Employer’s Chief
Executive Officer or the Compensation Committee, as 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 and ends on April 15 of the
calendar year in which the Performance Year ends.
 
(c) 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.
 
(d) 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,
cellular telephone expense 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

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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. 
 
(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 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 (1) then current base
Salary for a period of twelve (12) months following such termination of
employment and (2) Annual Bonus for a period of twelve (12) months following
such termination of employment or the remaining Term of this Agreement,
whichever is less (the “Severance Period”). Annual Bonus payment(s), if
otherwise payable under the terms described and referenced in Section 3(b)
above, shall be made during the period(s) described in Section 3(b) above, for
any Performance Year that ends before or during the Severance Period and for any
portion of a Performance Year that falls during the Severance Period, in each
case if applicable.  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. Employment Upon Expiration of Agreement.  If Executive is still employed by
Employer when this Agreement expires by the conclusion of its Term, Executive’s
employment with Employer may or may not continue thereafter, but any such
employment shall be “at will,” and may be terminated by either Employer or
Executive at any time, with or without Cause, except as otherwise agreed in
writing by Employer and Executive; provided, that if after the expiration of the
Term of this Agreement Employer terminates the employment of Executive without
Cause, Executive, while living, shall be entitled to continue to receive his
then current base Salary for a period of twelve (12) months following such
termination of employment. Notwithstanding the foregoing, the total amount
payable under this Section 6 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.
 
7. 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, directly 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.
 
8. 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 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 derivative works based upon
such preexisting rights and to authorize others to do any or all of the
foregoing.
 
9. Covenant Not to Compete.  Executive and Employer agree that after the
Effective Date, Employer’s upholstery 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 he will not, for the period of
his employment hereunder and for two (2) years thereafter, whether or not within
the original Term of this Agreement, engage directly or indirectly (as
principal, agent, or consultant or through any corporation, firm or organization
in which he may be an officer, director, employee, shareholder, partner, member
or be otherwise affiliated) in the design, development, manufacture, import or
wholesale sale of upholstered furniture, in any position in which he has
responsibility for conducting, control over, influence over, or input into the
management, policies, or strategies of any business competing with that being
conducted by Employer or any of its affiliates in any U.S. state, territory or
district in which any of them is doing business upon the termination of his
employment under this Agreement; provided, however, that, subject to Executive’s
obligations under Section 8, this provision shall not, after the termination of
Executive’s employment under this Agreement, prohibit Executive from providing
consulting services to independent furniture retailers (“Retail Furniture
Consulting Services”) as long as any such furniture retailer is not affiliated,
directly or indirectly, whether through ownership or franchise or other
arrangement, with any entity engaged in the design, development, manufacture,
import or wholesale sale of upholstered furniture.  During the two-year period
after the termination of Executive’s employment under this Agreement, Executive
shall give written notice to Employer not more than five business days after
Executive is engaged to provide Retail Furniture Consulting Services. In
addition, this provision shall not, after the termination of Executive’s
employment under this Agreement, prohibit Executive from owning less than 2% of
the stock of any publicly held corporation.
 
10. Non-Solicitation of Customers.  Executive agrees that during the Term of
this Agreement, and for a period of two (2) years thereafter, whether or not
within the original Term of this Agreement, regardless of the circumstances of
the termination or any claim that Executive may have against Employer under this
Agreement or otherwise, Executive will not:
 
(a) Solicit or attempt to solicit, for purposes competitive with Employer or any
of its affiliates, any person or entity who was an existing customer or employee
of Employer or any of its affiliates within one (1) year prior to the
termination of Executive’s employment hereunder;
 
(b) Any person or entity from whom Employer or any of its affiliates or
Executive was, within the one (1) year period prior to the termination of
Executive’s employment hereunder, actively soliciting or preparing to solicit
for the purpose of establishing a customer, employment, or other business
relationship; or
 
(c) Solicit or encourage any vendor, supplier or employee of Employer or any of
its affiliates to cease doing business with Employer or any of its affiliates or
to divert goods or services previously provided to Employer or any of its
affiliates to any person or entity other than Employer or any of its affiliates.
 
11. Equitable Relief.  Executive acknowledges and agrees that a breach of any of
the covenants made by him in Sections 7, 8, 9 and 10 above would cause
irreparable harm to Employer or any of its affiliates for which there would be
no adequate remedy at law.  Accordingly, in the event of any threatened or
actual breach of any such covenant, Executive agrees that Employer shall be
entitled to enforce any such covenant by injunctive and other appropriate
equitable relief in any court of competent jurisdiction, in addition to all
other remedies available.  If Executive breaches Sections 9 or 10 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.
 
12. 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 no
further obligations or liabilities hereunder.  This Agreement is not assignable
in any respect by Executive.
 
13. 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-enforceable 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.
 
14. 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.
 
15. 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.

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16. Governing Law. 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.
 
17. Taxes.  All payments made under this Agreement shall be subject to the
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, and the
parties shall interpret the Agreement in accordance 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), the Executive shall be solely liable for
the payment of any such taxes.

 
[Signature Page Follows]
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/ Alan D Cole
Alan D. Cole