##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 (Amendment No. 1)
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended January 3, 2009
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 000-23157
 A.C. MOORE ARTS & CRAFTS, INC.
 (Exact name of registrant as specified in its charter)
 Pennsylvania
    
    22-3527763(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 130 A.C. Moore Drive, Berlin, New Jersey
    
    08009(Address of principal executive offices)
    
    (Zip Code)
 (856) 768-4930
  Common stock, no par value
 (Title of class)
 (Name of each exchange on which registered)
 None
 o Yes þ No
 o Yes þ No
 þ o
 o o
 þ
  o Large accelerated filer
    
    þ Accelerated filer
    
    o Non-accelerated filer(Do not check if a smaller reporting company)
    
    o Smaller reporting company
 o þ
 o Yes o No
 (1)
  DOCUMENTS INCORPORATED BY REFERENCE
  
 (1)
    
    The aggregate market value of the voting stock equals the number of shares of the
registrants common stock outstanding, reduced by the number of shares of common stock held by
executive officers, directors and shareholders owning in excess of 10 percent of the
registrants common stock, multiplied by the last reported sale price for the registrants
common stock on the last business day of the registrants most recently completed second
fiscal quarter. The information provided shall in no way be construed as an admission that
any person whose holdings are excluded from this figure is an affiliate of the registrant or
that any person whose holdings are included in this figure is not an affiliate of the
registrant and any such admission is hereby disclaimed. The information provided herein is
included solely for record keeping purposes of the Securities and Exchange Commission.




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TABLE OF CONTENTS  PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESSIGNATURESExhibit IndexExhibit 31.1Exhibit 31.2    Table of Contents  EXPLANATORY NOTE
  CAUTIONARY STATEMENT RELATING TO FORWARD-LOOKING STATEMENTS




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PART III
 
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
  Director/Name
    
    Age
    
    Position with A.C. Moore
    
    Officer SinceMichael J. Joyce
    
    
    67
    
    
    Chairman of the Board
    
    
    2004Rick A. Lepley
    
    
    59
    
    
    President, Chief Executive Officer and Director
    
    
    2006Joseph F. Coradino
    
    
    57
    
    
    Director
    
    
    2006Neil A. McLachlan
    
    
    52
    
    
    Director
    
    
    2007Thomas S. Rittenhouse
    
    
    67
    
    
    Director
    
    
    2007Lori J. Schafer
    
    
    46
    
    
    Director
    
    
    2005Joseph A. Jeffries
    
    
    43
    
    
    Executive Vice President and Chief Operating Officer
    
    
    2007Amy Rhoades
    
    
    37
    
    
    Vice President and General Counsel
    
    
    2006
     3




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4




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Audit Committee and Audit Committee Financial Expert
  Code of Ethical Business Conduct
 Code of Ethical Business Conduct www.acmoore.com
 Section 16(a) Beneficial Ownership Reporting Compliance
   
 
 ITEM 11. EXECUTIVE COMPENSATION.
 COMPENSATION DISCUSSION AND ANALYSIS
 Our Philosophy
  
    
    We structure our compensation program to target the median of the market in which we
compete for executive talent.
 
    
    We develop compensation programs that emphasize pay-for-performance.
 
    
    We seek to retain and motivate a talented management team to continually maximize
shareholder value.
 
    
    We strive to ensure the compensation programs maintain an appropriate balance
between base salary, annual and long-term stock-based incentive compensation.
 
    
    We motivate our executives to achieve financial and operational goals by providing
them with opportunities to earn annual incentive payments, at market amounts, based on
above-market performance.
 
    
    We strive to align the earnings prospects and interests of executives with those of
our shareholders.
 
    
    We believe our executives should have meaningful levels of ownership of A.C. Moore
Common Stock.
  5




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Compensation Committee Process
        6




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##### Table of Contents



Components of Compensation
  Base Salary
 th th
  7




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Annual Incentives
   Fiscal 2008
 .
   8




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Fiscal 2009
  Long-Term Equity Incentives
   9




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Fiscal 2008
  Fiscal 2009
  Retirement and Other Benefits
  10




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Employment, Change-in-Control and Severance Agreements
  Special Retention Award Opportunity
      11




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Stock Ownership Guidelines
  Ownership MultipleExecutive
    
    of Base SalaryChief Executive Officer
    
    Three (3) timesAll Other Officers at the Vice President level and above
    
    One (1) times
  
  COMPENSATION COMMITTEE REPORT
   THE COMPENSATION COMMITTEE
 
  12




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##### Table of Contents



EXECUTIVE COMPENSATION
 Summary Compensation Table for Fiscal 2008
  Non-equityStock
    
    
    Option/SARs
    
    
    incentive plan
    
    
    All OtherName and
    
    
    
    
    
    Salary
    
    
    Bonus
    
    
    Awards
    
    
    Awards
    
    
    compensation
    
    
    Compensation
    
    
    TotalPrincipal Position
    
    Year
    
    
    ($)
    
    
    ($)
    
    
    ($)(1)
    
    
    ($)(1)
    
    
    ($)
    
    
    ($)
    
    
    ($)(a)
    
    (b)
    
    
    (c)
    
    
    (d)*
    
    
    (e)
    
    
    (f)
    
    
    (g)*
    
    
    (h)
    
    
    (i)Rick A. Lepley,
President and Chief
Executive Officer
(2)
    
    
    2008
    
    
    
    564,583
    
    
    
    137,500
    (3)
    
    
    166,448
    
    
    
    765,388
    
    
    
    
    
    
    
    116,211
    (4)
    
    
    1,750,1302007
    
    
    
    550,000
    
    
    
    320,000
    
    
    
    78,033
    
    
    
    736,800
    
    
    
    
    
    
    
    6,315
    
    
    
    1,691,1482006
    
    
    
    320,833
    
    
    
    280,000
    
    
    
    
    
    
    
    276,578
    
    
    
    
    
    
    
    35,986
    
    
    
    913,397Michael G.
Zawoysky, Executive
Vice President and
Chief Financial
Officer (5)
    
    
    2008
    
    
    
    215,929
    
    
    
    43,750
    (3)
    
    
    15,945
    
    
    
    37,832
    
    
    
    
    
    
    
    1,313
    (6)
    
    
    314,769Joseph A. Jeffries,
Executive Vice
President and Chief
Operating Officer
(7)
    
    
    2008
    
    
    
    296,158
    
    
    
    87,500

(8)
    
    
    15,227
    
    
    
    27,755
    
    
    
    
    
    
    
    
    
    
    
    426,6402007
    
    
    
    3,231
    
    
    
    120,000
    
    
    
    1,699
    
    
    
    833
    
    
    
    
    
    
    
    12,720
    
    
    
    138,483Amy Rhoades, Vice
President and
General Counsel
(9)
    
    
    2008
    
    
    
    189,069
    
    
    
    44,895
    (3)
    
    
    8,589
    
    
    
    58,026
    
    
    
    16,544
    
    
    
    982
    (6)
    
    
    318,1052007
    
    
    
    176,211
    
    
    
    
    
    
    
    4,778
    
    
    
    50,548
    
    
    
    
    
    
    
    224
    
    
    
    231,7612006
    
    
    
    74,123
    
    
    
    
    
    
    
    
    
    
    
    14,167
    
    
    
    
    
    
    
    
    
    
    
    88,290Marc Katz, former
Executive Vice
President and Chief
Financial Officer
(5)
    
    
    2008
    
    
    
    199,054
    
    
    
    
    
    
    
    
    
    
    
    43,442
    
    
    
    
    
    
    
    
    
    
    
    242,4962007
    
    
    
    280,833
    
    
    
    42,500
    
    
    
    36,628
    
    
    
    260,653
    
    
    
    
    
    
    
    9,539
    
    
    
    716,1532006
    
    
    
    82,500
    
    
    
    90,000
    
    
    
    
    
    
    
    50,111
    
    
    
    
    
    
    
    1,500
    
    
    
    224,111
 
 *
    
    Column (d) reflects non-equity discretionary bonuses. Generally, unless otherwise described
below, amounts reflected in column (d) represent new hire bonuses. Column (g) reflects
non-equity incentive-based bonuses paid under our Annual Incentive Plan.(1)
    
    Represents the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended January 3, 2009 in accordance with Financial Accounting
Standards Board Statement of Financial Accounting Standards (referred to as “FAS”) No. 123 (revised
2004), “Share-Based Payment,” as modified or supplemented (referred to as “FAS 123R”) based on
assumptions set forth in Note 1 to the consolidated financial statements included in A.C. Moore’s Annual Report
on Form 10-K for the fiscal year ended January 3, 2009 (referred to as the “2008 Form 10-K”) and
disregarding estimates of forfeitures related to service-based vesting conditions. These dollar amounts include amounts
for awards granted in and prior to 2008, as applicable.  13




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(2)
    
    Mr. Lepley was appointed A.C. Moores Chief Executive Officer effective June 1, 2006. He was
appointed President effective June 13, 2007.(3)
    
    Represents payment pursuant to retention award agreement. The terms of the retention award
are described above under Special Retention Award Opportunity.(4)
    
    Represents (i) $114,995 in relocation benefits related to the sale of Mr. Lepleys house in
Florida per his employment agreement, and (ii) $1,216 A.C. Moore contribution to 401(k) plan.(5)
    
    Mr. Zawoysky was appointed Acting Chief Financial
Officer upon Mr. Katzs resignation, and became Executive Vice President and Chief Financial Officer effective
September 24, 2008. He resigned from A.C. Moore effective April 24, 2009.(6)
    
    Represents A.C. Moore contribution to 401(k) plan.(7)
    
    Mr. Jeffries was appointed A.C. Moores Executive Vice President of Operations effective
November 28, 2007. He was appointed Executive Vice President and Chief Operating Officer
effective August 6, 2008.(8)
    
    Represents (i) $17,500 in guaranteed bonus required per his
employment letter, and (ii)
$70,000 payment pursuant to retention award agreement. The terms of the retention award are
described above under Compensation Discussion and Analysis Special Retention Award Opportunity.(9)
    
    Ms. Rhoades was appointed A.C. Moores Vice President and General Counsel effective July 24,
2006.(10)
    
    Mr. Katz resigned from A.C. Moore effective June 27, 2008.  14




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Grants of Plan-Based Awards in Fiscal 2008
  Stock
    
    
    Options/SARsAwards:
    
    
    Awards:Number of
    
    
    Number of
    
    
    Exercise or
    
    
    Grant DateEstimated possible payouts under
    
    
    Shares of
    
    
    Securities
    
    
    Base Price of
    
    
    Fair Value ofnon-equity incentive plan awards (1)
    
    
    Stock or
    
    
    Underlying
    
    
    Options/SARs
    
    
    Stock andApproval
    
    
    Threshold
    
    
    Target
    
    
    Maximum
    
    
    Units
    
    

Options/SARs
    
    
    Awards
    
    
    Options/SARsName
    
    Grant Date
    
    
    Date
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    (#)(2)
    
    
    (#)(3)
    
    
    ($/Sh)
    
    
    Awards ($)(4)Rick A. Lepley
    
    
    03/31/08
    
    
    
    03/31/08
    
    
    
    143,750
    
    
    
    575,000
    
    
    
    1,150,000
    
    
    
    19,166
    
    
    
    50,000
    
    
    
    6.82
    
    
    
    271,212
    (5)12/03/08
    
    
    
    12/03/08
    (6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    1.0
    
    
    
    60,000Michael G. Zawoysky
    
    
    03/31/08
    
    
    
    03/31/08
    
    
    
    47,000
    
    
    
    187,500
    
    
    
    328,250
    
    
    
    2,981
    
    
    
    8,516
    
    
    
    6.82
    
    
    
    44,260
    (7)09/24/08
    
    
    
    09/24/08
    (6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,500
    
    
    
    25,000
    
    
    
    6.31
    
    
    
    118,325
    (8)Joseph A. Jeffries
    
    
    03/31/08
    
    
    
    03/31/08
    
    
    
    57,848
    
    
    
    230,775
    
    
    
    404,010
    
    
    
    13,413
    
    
    
    38,322
    
    
    
    6.82
    
    
    
    199,162
    (9)Amy Rhoades
    
    
    03/31/08
    
    
    
    03/31/08
    
    
    
    17,160
    
    
    
    68,250
    
    
    
    119,535
    
    
    
    3,726
    
    
    
    10,645
    
    
    
    6.82
    
    
    
    55,323
    (10)Marc Katz
    
    
    03/31/08
    
    
    
    03/31/08
    
    
    
    63,920
    
    
    
    255,000
    
    
    
    446,420
    
    
    
    13,413
    
    
    
    38,322
    
    
    
    6.82
    
    
    
    199,162
    (11)
 
 (1)
    
    No payments were made to our Named Executive Officers under the Annual Incentive Plan for
2008 performance, with the exception of Ms. Rhoades, who received $16,544 for achievement of
her individual performance goal. See above under Compensation Discussion and Analysis -
Annual Incentives. Threshold, target and maximum potential payout levels are represented as
a percentage of base salary. For Messrs. Zawoysky, Jeffries and Katz, the percentages of base
salary at threshold, target and maximum were, respectively, 18.8%, 75% and 131.3%. For Mr.
Lepley, the percentages of base salary at threshold, target and maximum were, respectively,
25%, 100% and 200%. For Ms. Rhoades, the percentages of base salary at threshold, target and
maximum were, respectively, 8.8%, 35% and 61.3%.(2)
    
    Except for Mr. Lepleys grant, represents grants of performance accelerated restricted stock
(PARS). The PARS vest in four equal installments upon A.C. Moores achievement of certain
financial performance targets. The PARS vest in full on the date that is five years from the
grant date, if not earlier vested. Mr. Lepley received restricted stock that vests in three
equal annual installments, beginning one year from the date of grant.(3)
    
    Represents grants of stock appreciation rights (SARs). Grants vest and become exercisable
in three equal installments each year beginning on the first anniversary of the date of grant.
All SARs have a seven-year term.(4)
    
    Grant date fair value of stock and option/SARs awards is computed in accordance with FAS 123R
based on assumptions set forth in Note 1 to the consolidated financial statements included in
A.C. Moores 2008 Form 10-K.(5)
    
    Includes a grant date fair value of $130,712 and $140,500 for the grants of, respectively,
PARS and SARs.(6)
    
    Reflects the date on which the Board or the Compensation Committee approved the terms of the
agreements with Mr. Lepley or Mr. Zawoysky.  15




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(7)
    
    Includes a grant date fair value of $20,330 and $23,930 for the grants of, respectively, PARS
and SARs.(8)
    
    Includes a grant date fair value of $47,325 and $71,000 for the grants of, respectively, PARS
and SARs.(9)
    
    Includes a grant date fair value of $91,477 and $107,685 for the grants of, respectively,
PARS and SARs.(10)
    
    Includes a grant date fair value of $25,411 and $29,912 for the grants of, respectively, PARS
and SARs.(11)
    
    Includes a grant date fair value of $91,477 and $107,685 for the grants of, respectively,
PARS and SARs. Outstanding Equity Awards at Fiscal Year-End 2008
  Option/SARs Awards
    
    
    Stock AwardsNumber of
    
    
    Number ofSecurities
    
    
    SecuritiesUnderlying
    
    
    Underlying
    
    
    Option/
    
    
    
    
    
    
    Number of
    
    
    Market ValueUnexercised
    
    
    Unexercised
    
    
    SARs
    
    
    
    
    
    
    Shares or
    
    
    of Shares orOptions/
    
    
    Options/
    
    
    Exercise
    
    
    Option/
    
    
    Units of Stock
    
    
    Units of StockSARs
    
    
    SARs
    
    
    or Base
    
    
    SARs
    
    
    That Have
    
    
    That Have(#)(1)
    
    
    (#)(1)
    
    
    Price
    
    
    Expiration
    
    
    Not Vested
    
    
    Not VestedName
    
    Exercisable
    
    
    Unexercisable
    
    
    ($)
    
    
    Date
    
    
    (#)(2)
    
    
    ($)(3)Rick A. Lepley
    
    
    106,667
    
    
    
    53,333
    
    
    
    17.74
    
    
    
    06/01/2016
    
    
    
    43,666
    
    
    
    60,25933,333
    
    
    
    66,667
    
    
    
    20.37
    
    
    
    02/20/2014
    
    
    
    50,000
    
    
    
    6.82
    
    
    
    03/31/2015
    
    
    
    150,000
    
    
    
    1.20
    
    
    
    12/03/2015Michael G. Zawoysky
    
    
    3,333
    
    
    
    6,667
    
    
    
    21.81
    
    
    
    03/26/2014
    
    
    
    11,981
    
    
    
    22,718
    
    
    
    8,516
    
    
    
    6.82
    
    
    
    03/31/2015
    
    
    
    25,000
    
    
    
    6.31
    
    
    
    09/24/2015Joseph A. Jeffries
    
    
    1,667
    
    
    
    3,333
    
    
    
    16.31
    
    
    
    11/28/2014
    
    
    
    18,413
    
    
    
    25,41012,774
    
    
    
    25,548
    
    
    
    6.82
    
    
    
    03/31/2015Amy Rhoades
    
    
    8,333
    
    
    
    4,167
    
    
    
    16.38
    
    
    
    07/24/2016
    
    
    
    5,226
    
    
    
    7,2122,100
    
    
    
    4,200
    
    
    
    20.37
    
    
    
    02/20/2014
    
    
    
    10,645
    
    
    
    6.82
    
    
    
    03/31/2015Marc Katz
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  16




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(1)
    
    All stock options and SARs vest and become exercisable in three equal installments each year
beginning on the first anniversary of the date of grant. Awards expiring June 1, 2016,
February 20, 2014, March 26, 2014 and July 24, 2016 are stock options. Stock options expiring
June 1, 2016 and July 24, 2016 have a ten-year term. Stock options expiring February 20, 2014
and March 26, 2014 have a seven-year term. All other awards reflected in the table under
Option/SARs Awards are SARs. All SARs have a seven-year term.(2)
    
    Except as stated in the next sentence, represents grants of
PARS, which vest in either three or four equal
installments upon A.C. Moores achievement of certain financial performance targets and vest
in full on the date that is either four or five years from the grant date, if not earlier vested. Of Mr.
Lepleys shares, 19,166 are shares of restricted stock which vest in three equal annual
installments beginning on the first anniversary of the date of grant.(3)
    
    Market value is calculated using $1.38 per share, the NASDAQ Stock Market closing price per
share of A.C. Moore common stock on January 2, 2009. Option/SARs Exercises and Stock Awards Vested in Fiscal 2008
   17




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Equity Incentive Plans
 Old Plans
    Stock Incentive Plan
   18




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Annual Incentive Plan
    19




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Agreements with Named Executive Officers
   Employment Agreement with Rick A. Lepley
    20




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Letter Agreement with Joseph A. Jeffries
    21




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Letter Agreement with Michael G. Zawoysky
      22




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Employment Agreement with Amy Rhoades
      23




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##### Table of Contents



Employment Agreement with Marc Katz, Former Chief Financial Officer
   Tabular Information Relating to Potential Payments or Benefits upon Termination and Change in
Control
    Employment Agreement with Rick A. Lepley
 Terminationfor Cause orResignationTermination
    
    
    
    
    
    
    Termination
    
    
    w/o Goodfor Cause or
    
    
    
    
    
    
    w/o Cause or
    
    
    Reason
    
    
    TerminationTermination
    
    
    Resignation
    
    
    
    
    
    
    Resignation
    
    
    (including
    
    
    due to Death orw/o Cause or
    
    
    w/o Good
    
    
    
    
    
    
    for Good
    
    
    Retirement)
    
    
    DisabilityResignation
    
    
    Reason
    
    
    Termination
    
    
    Reason upon a
    
    
    upon a
    
    
    upon afor Good
    
    
    (including
    
    
    due to Death
    
    
    Change in
    
    
    Change in
    
    
    Change inItem of Compensation
    
    Reason(1)
    
    
    Retirement)
    
    
    or Disability
    
    
    Control
    
    
    Control
    
    
    ControlCash Payment (Salary and Bonus)
    
    $
    1,725,000
    (2)
    
    
    
    
    
    $
    575,000
    (3)
    
    $
    2,300,000
    (4)
    
    
    
    
    
    $
    575,000
    (3)Equity Grants (5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    87,259
    (6)
    
    $
    60,259
    (7)
    
    $
    60,259
    (7)Health Insurance Premiums
    
    $
    23,808
    (8)
    
    
    
    
    
    
    
    
    
    $
    23,808
    (8)
    
    
    
    
    
    
    Excise Tax and Gross-Up
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    1,748,808
    
    
    
    
    
    
    $
    575,000
    
    
    $
    2,411,067
    
    
    $
    60,259
    
    
    $
    635,259
  24




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##### Table of Contents



(1)
    
    Amounts reflect payments assuming triggering event within the first 12 months of the current
term of Mr. Lepleys employment agreement. See the narrative above under    Agreements
with Named Executive Officers for information on provisions relating to the last 12 months of
the current term of his employment agreement.(2)
    
    Reflects (i) $1,150,000 for 24 months of base salary paid on a monthly basis and (ii)
$575,000 under the annual incentive plan for fiscal 2008 performance, calculated as if the
target under such plan had been reached.(3)
    
    Reflects a lump sum payment under the annual incentive plan for 2008 performance, calculated
as if the target under such plan had been reached.(4)
    
    Reflects lump sum payment equal to two times annual base salary ($1,150,000) plus two times
$575,000 ($1,150,000) under the annual incentive plan for 2008 performance, calculated as if
the target under such plan had been reached.(5)
    
    Mr. Lepley receives immediate vesting and exercisability of all stock options, SARs, PARS and
restricted stock held at the time of a change of control irrespective of any subsequent
termination and will have until the end of the term of the option or SAR to exercise such
option or SAR. In the event his employment is terminated for any reason (other than cause)
after the change in control, he will have until the earlier of (a) the end of the original
option or SAR term and (b) 18 months after termination to exercise these options and SARs. If
he is terminated for cause following the change in control, his options, SARs and unvested
restricted stock terminate effective immediately.(6)
    
    Reflects $33,810 in immediately vested PARS and $26,449 in immediately vested restricted
stock based on $1.38, the NASDAQ closing price per share of A.C. Moore Common Stock on January
2, 2009, plus $27,000 in immediately vested and exercisable SARs.(7)
    
    Reflects $33,810 in immediately vested PARS and $26,449 in immediately vested restricted
stock based on $1.38, the NASDAQ closing price per share of A.C. Moore Common Stock on January
2, 2009.(8)
    
    Reflects 24 months of health insurance premiums paid on a monthly basis.  25




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##### Table of Contents



Letter Agreement with Joseph A. Jeffries
 Terminationfor Cause orResignationw/o GoodTermination w/o
    
    
    ReasonCause or
    
    
    (including
    
    
    TerminationResignation for
    
    
    Retirement)
    
    
    due to DeathGood Reason
    
    
    upon a
    
    
    or DisabilityTermination
    
    
    Termination
    
    
    upon a Change
    
    
    Change in
    
    
    upon a ChangeItem of Compensation*
    
    w/o Cause
    
    
    for Cause
    
    
    in Control
    
    
    Control
    
    
    in ControlCash Payment (Salary)
    
    $
    153,850
    (1)
    
    
    
    
    
    $
    538,475
    (2)
    
    
    
    
    
    $
    230,775
    (3)Equity Grants (4)
    
    
    
    
    
    
    
    
    
    $
    25,410
    (5)
    
    $
    25,410
    (5)
    
    $
    25,410
    (5)Health Insurance Premiums
    
    $
    5,952
    (6)
    
    
    
    
    
    $
    11,904
    (7)
    
    
    
    
    
    
    Total
    
    $
    159,802
    
    
    
    
    
    
    $
    575,789
    
    
    $
    25,410
    
    
    $
    256,185
 
 *
    
    Mr. Jeffries letter agreement does not contain provisions relating to termination with or
without good reason or termination for retirement, death or disability prior to a change in
control or a gross-up or excise tax provision.(1)
    
    Reflects six months of base salary paid on a monthly basis. Mr. Jeffries is entitled to
receive an additional $25,642 per month for each month he remains unemployed up to a maximum
of six months.(2)
    
    Reflects a lump sum payment equal to 12 months of base salary of $307,700 plus $230,775 under
the annual incentive plan for 2008 performance, calculated as if the target under such plan
had been reached.(3)
    
    Reflects $230,775 under the annual incentive plan for 2008 performance, calculated as if the
target under such plan had been reached.(4)
    
    Mr. Jeffries receives immediate vesting and exercisability of all stock options, stock
appreciation rights (SARs), performance accelerated restricted stock (PARS) and restricted
stock held at the time of a change of control irrespective of any subsequent termination and
will have until the end of the term of the option or SAR to exercise such option or SAR. In
the event his employment is terminated for any reason (other than cause) after the change in
control, he will have until the earlier of (a) the end of the original option or SAR term and
(b) 18 months after termination to exercise these options and SARs. If he is terminated for
cause following the change in control, his options, SARs and unvested restricted stock
terminate effective immediately.(5)
    
    Reflects value of immediately vested PARS based on $1.38, the NASDAQ closing price per share
of A.C. Moore Common Stock on January 2, 2009.(6)
    
    Reflects six months of health insurance premiums paid on a monthly basis. Mr. Jeffries is
entitled to receive an additional $992 per month for each month he remains unemployed up to a
maximum of six months.(7)
    
    Reflects 12 months of health insurance premiums paid on a monthly basis.  26




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##### Table of Contents



Letter Agreement with Michael G. Zawoysky
 Terminationfor Cause orResignationTermination
    
    
    w/o Goodw/o Cause or
    
    
    ReasonResignation
    
    
    (including
    
    
    Terminationfor Good
    
    
    Retirement)
    
    
    due to Death orReason upon a
    
    
    upon a
    
    
    Disability uponTermination
    
    
    Termination
    
    
    Change in
    
    
    Change in
    
    
    a Change inItem of Compensation*
    
    w/o Cause
    
    
    for Cause
    
    
    Control
    
    
    Control
    
    
    ControlCash Payment (Salary)
    
    $
    125,000
    (1)
    
    
    
    
    
    $
    437,500
    (2)
    
    
    
    
    
    $
    187,500
    (3)Equity Grants (4)
    
    
    
    
    
    
    
    
    
    $
    16,534
    (5)
    
    $
    16,534
    (5)
    
    $
    16,534
    (5)Health Insurance Premiums
    
    $
    5,952
    (6)
    
    
    
    
    
    $
    5,952
    (7)
    
    
    
    
    
    
    Total
    
    $
    130,952
    
    
    
    
    
    
    $
    459,986
    
    
    $
    16,534
    
    
    $
    204,034
 
 *
    
    Mr. Zawoyskys letter agreement does not contain provisions relating to termination with or
without good reason or termination for retirement, death or disability prior to a change in
control, a retention bonus or a gross-up or excise tax provision.(1)
    
    Reflects six months of base salary paid on a monthly basis. Mr. Zawoysky is entitled to
receive an additional $20,833 per month for each month he remains unemployed up to a maximum
of six months.(2)
    
    Reflects a lump sum payment equal to 12 months of base salary of $250,000 plus $187,500 under
the annual incentive plan for 2008 performance, calculated as if the target under such plan
had been reached.(3)
    
    Reflects $187,500 under the annual incentive plan for 2008 performance, calculated as if the
target under such plan had been reached.(4)
    
    Mr. Zawoysky receives immediate vesting and exercisability of all stock options, stock
appreciation rights (SARs), performance accelerated restricted stock (PARS) and restricted
stock held at the time of a change of control irrespective of any subsequent termination and
will have until the end of the term of the option or SAR to exercise such option or SAR. In
the event his employment is terminated for any reason (other than cause) after the change in
control, he will have until the earlier of (a) the end of the original option or SAR term and
(b) 18 months after termination to exercise these options and SARs. If he is terminated for
cause following the change in control, his options, SARs and unvested restricted stock
terminate effective immediately.(5)
    
    Reflects value of immediately vested PARS based on $1.38, the NASDAQ closing price per share
of A.C. Moore Common Stock on January 2, 2009.(6)
    
    Reflects six months of health insurance premiums paid on a monthly basis. Mr. Zawoysky is
entitled to receive an additional $992 per month for each month he remains unemployed up to a
maximum of six months.(7)
    
    Reflects 12 months of health insurance premiums paid on a monthly basis.  27




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##### Table of Contents



Employment Agreement with Amy Rhoades
 Terminationfor Cause orTermination
    
    
    
    
    
    
    Termination
    
    
    Resignationfor Cause or
    
    
    
    
    
    
    w/o Cause or
    
    
    w/o Good
    
    
    TerminationTermination
    
    
    Resignation
    
    
    
    
    
    
    Resignation
    
    
    Reason
    
    
    due to Deathw/o Cause or
    
    
    w/o Good
    
    
    
    
    
    
    for Good
    
    
    (including
    
    
    or DisabilityResignation
    
    
    Reason
    
    
    Termination
    
    
    Reason upon a
    
    
    Retirement)
    
    
    upon afor Good
    
    
    (including
    
    
    due to Death
    
    
    Change in
    
    
    upon a Change
    
    
    Change inItem of Compensation*
    
    Reason
    
    
    Retirement)
    
    
    or Disability
    
    
    Control
    
    
    in Control
    
    
    ControlCash Payment (Salary and Bonus)
    
    $
    263,250
    (1)
    
    
    
    
    
    $
    68,250
    (2)
    
    $
    263,250
    (3)
    
    
    
    
    
    $
    68,250
    (2)Equity Grants (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    7,219
    (5)
    
    $
    7,219
    (5)
    
    $
    7,219
    (5)Health Insurance Premiums
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    11,904
    (6)
    
    
    
    
    
    
    Total
    
    $
    263,250
    
    
    
    
    
    
    $
    68,250
    
    
    $
    282,373
    
    
    $
    7,219
    
    
    $
    75,469
 
 *
    
    Ms. Rhoades employment agreement does not provide for a retention bonus or contain a
gross-up or excise tax reduction provision.(1)
    
    Reflects 12 months of base salary paid on a monthly basis of $195,000 plus $68,250 under the
annual incentive plan for 2008 performance, calculated as if the target under such plan had
been reached.(2)
    
    Reflects $68,250 under the annual incentive plan for 2008 performance, calculated as if the
target under such plan had been reached.(3)
    
    Reflects a lump sum payment equal to 12 months of base salary of $195,000 plus $68,250 under
the annual incentive plan for 2008 performance, calculated as if the target under such plan
had been reached.(4)
    
    Ms. Rhoades receives immediate vesting and exercisability of all stock options, stock
appreciation rights (SARs), performance accelerated restricted stock (PARS) and restricted
stock held at the time of a change of control irrespective of any subsequent termination and
will have until the end of the term of the option or SAR to exercise such option or SAR. In
the event her employment is terminated for any reason (other than cause) after the change in
control, she will have until the earlier of (a) the end of the original option or SAR term and
(b) 18 months after termination to exercise these options and SARs. If she is terminated for
cause following the change in control, her options, SARs and unvested restricted stock
terminate effective immediately.(5)
    
    Reflects value of immediately vested PARS based on $1.38, the NASDAQ closing price per share
of A.C. Moore Common Stock on January 2, 2009.(6)
    
    Reflects 12 months of health insurance premiums paid on a monthly basis.  28




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##### Table of Contents



DIRECTOR COMPENSATION
  FeesEarned orPaid in
    
    
    Stock
    
    
    Option
    
    
    All OtherCash
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    TotalName
    
    ($)
    
    
    ($)(1)(2)(3)
    
    
    ($)(1)(2)(3)
    
    
    ($)
    
    
    ($)Joseph F. Coradino
    
    
    47,500
    
    
    
    24,997
    
    
    
    
    
    
    
    
    
    
    
    72,497Michael J. Joyce
    
    
    105,000
    
    
    
    24,997
    
    
    
    21,222
    
    
    
    
    
    
    
    151,219Neil A. McLachlan
    
    
    45,000
    
    
    
    24,997
    
    
    
    4,264
    
    
    
    
    
    
    
    74,261Thomas S. Rittenhouse
    
    
    50,000
    
    
    
    24,997
    
    
    
    4,264
    
    
    
    
    
    
    
    79,261Lori J. Schafer
    
    
    55,000
    
    
    
    24,997
    
    
    
    21,222
    
    
    
    
    
    
    
    101,219
 
 (1)
    
    Represents the dollar amount recognized for financial statement reporting purposes for the
fiscal year ended January 3, 2009 in accordance with Financial Accounting Standards Board
Statement of Financial Accounting Standards (referred to as FAS) No. 123 (revised 2004),
Share-Based Payment, as modified or supplemented (referred to as FAS 123R) based on
assumptions set forth in Note 2 to the consolidated financial statements included in A.C.
Moores Annual Report on Form 10-K for the fiscal year ended January 3, 2009 (referred to as
the 2008 Form 10-K) and disregarding estimates of forfeitures related to service-based
vesting conditions. These dollar amounts include amounts for awards granted in and prior to
2008, as applicable.(2)
    
    Each of the current directors was granted 6,024 shares of restricted Common Stock on June 19,
2008 under A.C. Moores 2007 Stock Incentive Plan (referred to as the Stock Incentive Plan).
The shares of restricted Common Stock vest in three equal annual installments beginning on
the first anniversary of the date of grant. The grant date fair value, as computed in
accordance with FAS 123R based on assumptions set forth in Note 2 to the consolidated
financial statements included in A.C. Moores 2008 Form 10-K, of each of these restricted
Common Stock awards was $49,999.(3)
    
    The following tables set forth information concerning unexercised options and unvested stock
awards for the directors as of January 3, 2009. With the exception of the grants expiring on
February 20, 2014 and August 3, 2016, all stock options vest and become exercisable in three
equal installments each year beginning on the first anniversary of the date of grant. The
grants expiring on February 20, 2014 and August 3, 2016 vested in full on the first
anniversary of the date of grant. Except for the options expiring February 20, 2014, which
have a seven-year term, all options have a 10-year term. Option AwardsNumber of
    
    
    Number ofSecurities
    
    
    SecuritiesUnderlying
    
    
    UnderlyingUnexercised
    
    
    UnexercisedOptions(#)
    
    
    Options(#)
    
    
    Option Exercise
    
    
    OptionName
    
    Exercisable
    
    
    Unexercisable
    
    
    Price($)
    
    
    Expiration DateJoseph F. Coradino
    
    
    10,000
    
    
    
    
    
    
    
    16.88
    
    
    
    08/03/2016Michael J. Joyce
    
    
    10,000
    
    
    
    
    
    
    
    21.95
    
    
    
    08/26/201410,000
    
    
    
    
    
    
    
    23.51
    
    
    
    08/25/201510,000
    
    
    
    
    
    
    
    16.88
    
    
    
    08/03/2016Neil A. McLachlan
    
    
    3,500
    
    
    
    
    
    
    
    20.37
    
    
    
    02/20/2014Thomas S. Rittenhouse
    
    
    3,500
    
    
    
    
    
    
    
    20.37
    
    
    
    02/20/2014Lori J. Schafer
    
    
    10,000
    
    
    
    
    
    
    
    23.51
    
    
    
    08/25/201510,000
    
    
    
    
    
    
    
    16.88
    
    
    
    08/03/2016
  29




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##### Table of Contents



Stock AwardsNumber of Shares
    
    
    Market Value ofor Units of Stock
    
    
    Shares or Units ofThat Have Not
    
    
    Stock That HaveVested
    
    
    Not VestedName
    
    (#)
    
    
    ($)*Joseph F. Coradino
    
    
    7,550
    
    
    
    10,419Michael J. Joyce
    
    
    7,550
    
    
    
    10,419Neil A. McLachlan
    
    
    7,550
    
    
    
    10,419Thomas S. Rittenhouse
    
    
    7,550
    
    
    
    10,419Lori J. Schafer
    
    
    7,550
    
    
    
    10,419
  Process and Procedures for Determining Director Compensation
   Director Compensation
 Fees.
 
    
    an annual cash retainer of $35,000;
  30




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##### Table of Contents




    
    an additional annual cash retainer of $50,000 for the Chairman of the Board;
    
    an additional annual cash retainer of $15,000 for the chair of the Audit Committee
and $10,000 for each other member of the Audit Committee;
    
    an additional annual cash retainer of $10,000 for the chair of the Compensation
Committee and $5,000 for each other member of the Compensation Committee;
    
    an additional annual cash retainer of $7,500 for the chair of the Nominating and
Corporate Governance Committee and $5,000 for each other member of the Nominating and
Corporate Governance Committee; and
    
    an annual grant of restricted stock with a market value of approximately $50,000 on
the date of grant.
 Stock Ownership Guidelines for Directors.
 Directors Subject to Guidelines
    
    Ownership Multiple of Annual Cash RetainerAll Non-Employee Directors
    
    Three (3) times
  Stock Grant to Non-Employee Directors.
 Compensation Committee Interlocks and Insider Participation
   31




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##### Table of Contents



ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  Shares Beneficially Owned (1)Amount andNature ofBeneficial
    
    
    Percent ofName of Beneficial Owner
    
    Ownership
    
    
    ClassRick A. Lepley
    
    
    380,116
    (2)
    
    
    1.8Joseph A. Jeffries
    
    
    80,196
    (3)
    
    
    
    *Amy Rhoades
    
    
    20,838
    (4)
    
    
    
    *Michael G. Zawoysky
    
    
    67,430
    (5)
    
    
    
    *Marc Katz
    
    
    0
    (6)
    
    
    
    *Joseph F. Coradino
    
    
    23,313
    (7)
    
    
    
    *Michael J. Joyce
    
    
    53,313
    (8)
    
    
    
    *Neil A. McLachlan
    
    
    17,813
    (9)
    
    
    
    *Thomas S. Rittenhouse
    
    
    12,813
    (10)
    
    
    
    *Lori J. Schafer
    
    
    28,313
    (11)
    
    
    
    *All executive officers and directors as a group (10 persons)
    
    
    684,145
    (12)
    
    
    3.3Robert Atchinson
    
    
    1,321,000
    (13)
    
    
    6.4Phillip Gross
    
    
    1,321,000
    (13)
    
    
    6.4Adage Capital Advisors, L.L.C
    
    
    1,321,000
    (13)
    
    
    6.4Adage Capital Partners GP, L.L.C
    
    
    1,321,000
    (13)
    
    
    6.4Adage Capital Partners, L.P.
    
    
    1,321,000
    (13)
    
    
    6.4Chilton Investment Company, LLC
    
    
    1,150,186
    (14)
    
    
    5.6Dimensional Fund Advisors LP
    
    
    1,842,020
    (15)
    
    
    8.9Glenn J. Krevlin
    
    
    1,199,912
    (16)
    
    
    5.8Glenhill Advisors, LLC
    
    
    1,199,912
    (16)
    
    
    5.8Glenhill Capital Management, LLC
    
    
    1,199,912
    (16)
    
    
    5.8Royce & Associates, LLC
    
    
    2,226,100
    (17)
    
    
    10.8Schneider Capital Management Corporation
    
    
    1,092,150
    (18)
    
    
    5.3T. Rowe Price Associates, Inc.
    
    
    1,978,860
    (19)
    
    
    9.6
  32




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##### Table of Contents



*
    
    Denotes less than 1%.(1)
    
    Beneficial ownership is determined in accordance with the rules of the SEC and includes
voting or investment power with respect to Common Stock. Shares of Common Stock issuable upon
the exercise of securities currently exercisable or exercisable within 60 days of April 28,
2009 and shares of restricted stock which vest within 60 days of April 28, 2009 are deemed
outstanding for computing the share ownership and percentage ownership of the person holding
such securities, but are not deemed outstanding for computing the percentage of any other
person. The address for all current directors and executive officers is c/o A.C. Moore Arts &
Crafts, Inc., 130 A.C. Moore Drive, Berlin, New Jersey 08009.(2)
    
    Includes (i) 153,449 shares of Common Stock held by Mr. Lepley directly; and (ii) options to
purchase 226,667 shares of Common Stock exercisable within 60 days of April 28, 2009.
Excludes shares of Common Stock that potentially could be acquired upon the exercise of 16,667
SARs exercisable within 60 days of April 28, 2009, which SARs were out-of-the-money as of
April 28, 2009.(3)
    
    Represents 80,196 shares of Common Stock held by Mr. Jeffries directly. Excludes shares of
Common Stock that potentially could be acquired upon the exercise of 14,441 SARs exercisable
within 60 days of April 28, 2009, which SARs were out-of-the-money as of April 28, 2009.(4)
    
    Includes (i) 8,305 shares of Common Stock held by Ms. Rhoades directly; and (ii) options to
purchase 12,533 shares of Common Stock exercisable within 60 days of April 28, 2009. Excludes
shares of Common Stock that potentially could be acquired upon the exercise of 3,548 SARs
exercisable within 60 days of April 28, 2009, which SARs were out-of-the-money as of April 28,
2009.(5)
    
    Includes (i) 60,764 shares of Common Stock held by Mr. Zawoysky directly; and (ii) options to
purchase 6,666 shares of Common Stock exercisable within 60 days of April 28, 2009. Excludes
shares of Common Stock that potentially could be acquired upon the exercise of 2,838 SARs
exercisable within 60 days of April 28, 2009, which SARs were out-of-the-money as of April 28,
2009.(6)
    
    In June 2008, Mr. Katz resigned from the Company and to the Companys knowledge, he owns no
Common Stock.(7)
    
    Includes (i) 13,313 shares of Common Stock held by Mr. Coradino directly; and (ii) options to
purchase 10,000 shares of Common Stock exercisable within 60 days of April 28, 2009.(8)
    
    Includes (i) 23,313 shares of Common Stock held by Mr. Joyce directly; and (ii) options to
purchase 30,000 shares of Common Stock exercisable within 60 days of April 28, 2009.(9)
    
    Includes (i) 14,313 shares of Common Stock held by Mr. McLachlan directly; and (ii) options
to purchase 3,500 shares of Common Stock exercisable within 60 days of April 28, 2009.(10)
    
    Includes (i) 8,313 shares of Common Stock held by Mr. Rittenhouse directly; (ii) 1,000 shares
of Common Stock held jointly by Mr. Rittenhouse and his spouse; and (iii) options to purchase
3,500 shares of Common Stock exercisable within 60 days of April 28, 2009.  33




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##### Table of Contents



(11)
    
    Includes (i) 8,313 shares of Common Stock held by Ms. Schafer directly; and (ii) options to
purchase 20,000 shares of Common Stock exercisable within 60 days of April 28, 2009.(12)
    
    Includes options to purchase 312,866 shares of Common Stock exercisable within 60 days of
April 28, 2009. Excludes shares of Common Stock that potentially could be acquired upon the
exercise of 37,494 SARs exercisable within 60 days of April 28, 2009, which SARs were
out-of-the-money as of April 28, 2009.(13)
    
    Based solely on a Schedule 13G/A filed with the SEC on February 17, 2009 by Adage Capital
Partners, L.P. (referred to as ACP), Adage Capital Partners GP, L.L.C. (referred to as
ACPGP), Adage Capital Advisors, L.L.C. (referred to as ACA), Robert Atchinson and Phillip
Gross. The filing indicates ACP, ACPGP, ACA and Messrs. Atchinson and Gross have shared
voting power and shared dispositive power over 1,321,000 shares of Common Stock owned by ACP
directly. ACPGP is the general partner of ACP. ACA is the managing member of ACPGP and the
general partner of ACP. Messrs. Atchinson and Gross are managing members of ACA and general
partners of ACP. The address of ACP, ACPGP, ACA and Messrs. Atchinson and Gross is 200
Clarendon Street, 52nd Floor, Boston, Massachusetts 02116.(14)
    
    Based solely on a Schedule 13G filed with the SEC on February 13, 2009 by Chilton Investment
Company, LLC (referred to as CIC). The filing indicates CIC has sole voting power and sole
dispositive power over 1,150,186 shares of Common Stock. These securities are owned by
various individual and institutional investors, which CIC serves as investment adviser. The
address of CIC is 1266 East Main Street, 7th Floor, Stamford, Connecticut 06902.(15)
    
    Based solely on Schedule 13G/A filed with the SEC on February 9, 2009 by Dimensional Fund
Advisors LP (referred to as Dimensional). These securities are owned by various investment
companies and certain commingled group trusts and separate accounts, which Dimensional serves
as investment adviser. For purposes of the reporting requirements of the Exchange Act,
Dimensional is deemed to be a beneficial owner of such securities; however, Dimensional
expressly disclaims that it is, in fact, the beneficial owner of such securities. The address
of Dimensional is Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas 78746.(16)
    
    Based solely on a Schedule 13G/A filed with the SEC on February 17, 2009 by Glenhill
Advisors, LLC (referred to as GA), Glenn J. Krevlin and Glenhill Capital Management, LLC
(referred to as GCM). The filing indicates GA and Mr. Krevlin have sole voting power and
sole dispositive power over 1,999,912 shares of Common Stock. The filing also indicates GCM
has shared voting power and shared dispositive power over 1,999,912 shares of Common Stock.
Mr. Krevlin is the managing member and control person of GA. GA is the managing member of GCM.
GCM is the general partner and investment advisor of Glenhill Capital, LP, our security holder
and sole shareholder of Glenhill Capital Overseas GP, Ltd. (referred to as GCOGP). GCOGP is
general partner of Glenhill Capital Overseas Master Fund, LP, our security holder. The address
of GA, Mr. Krevlin and GCM is 598 Madison Avenue, 12th Floor, New York, New York 10022.(17)
    
    Based solely on a Schedule 13G/A filed with the SEC on January 23, 2009 by Royce &
Associates, LLC (referred to as R&A). The filing indicates R&A has sole voting power and
sole dispositive power over 2,226,100 shares of Common Stock. These securities are owned by
various individual and institutional investors, which R&A serves as investment adviser,
including 1,883,100 shares owned directly by Royce Value Fund Plus, an investment company
managed by R&A. The address of R&A is 1414 Avenue of the Americas, New York, New York 10019.(18)
    
    Based solely on a Schedule 13G filed with the SEC on February 13, 2009 by Schneider Capital
Management Corporation (referred to as SCMC). The filing indicates SCMC has sole voting
power over 922,600 shares of Common Stock and sole dispositive power over 1,092,150 shares of
Common Stock. These securities are owned by various individual and institutional investors,
which SCMC serves as investment adviser. The address of SCMC 460 E. Swedesford Rd., Suite
2000, Wayne, Pennsylvania 19087.(19)
    
    Based solely on a Schedule 13G/A filed with the SEC on February 12, 2009 by T. Rowe Price
Associates, Inc. (referred to as Price Associates). The filing indicates Price Associates
has sole voting power over 556,500 shares of Common Stock and sole dispositive power over
1,978,860 shares of Common Stock. These securities are owned by various individual and
institutional investors, which Price Associates serves as investment adviser. The address of
Price Associates is 100 E. Pratt Street, Baltimore, Maryland 21202.  34




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##### Table of Contents



Equity Compensation Plan Information
  (c)(a)
    
    
    
    
    
    
    Number of securitiesNumber of securities
    
    
    (b)
    
    
    remaining available forto be issued upon
    
    
    Weighted-average
    
    
    future issuance underexercise of outstanding
    
    
    exercise price of
    
    
    equity compensationoptions, warrants and
    
    
    outstanding options,
    
    
    plans (excluding securitiesPlan Category
    
    rights
    
    
    warrants and rights
    
    
    reflected in column (a))Equity compensation
plans approved by
security holders
(1)
    
    
    1,500,454
    
    
    $
    15.34
    
    
    
    734,262Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    1,500,454
    
    
    $
    15.34
    
    
    
    734,262
 
 (1)
    
    These plans are our 1997 Employee, Director and Consultant Stock Option Plan, 2002
Stock Option Plan and fiscal 2007 Stock Incentive Plan. 
 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
 Related Party Transactions Policy and Procedures
   35




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##### Table of Contents



Related Party Transactions
  Independence
  
 
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
  Services Rendered(1)
    
    01/03/2009
    
    
    12/31/2007Audit Fees
    
    $
    729,110
    
    
    $
    975,605Audit Related Fees
    
    
    
    
    
    
    Tax Fees
    
    
    8,000
    
    
    
    2,500All Other Fees
    
    
    
    
    
    
    Total
    
    $
    737,110
    
    
    $
    978,105
 
 (1)
    
    The aggregate fees included are fees billed for the fiscal years.      36




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##### Table of Contents



PART IV
 
 
 ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 (a)
    
    (1) Financial Statements:
  (2)
    
    Financial Statement Schedules:The Financial Statements Schedules required are included in the Original Filing.(3)
    
    Exhibits:The exhibits filed as part of this report are listed under exhibits at
subsection (b) of this Item 15.
 (b)
    
    Exhibits:
 Exhibit Number
    
    Description3.1
    (1)
    
    Articles of Incorporation.3.1.1
    (2)
    
    Amendment to Articles of Incorporation.3.1.2
    (3)
    
    Amendment to Articles of Incorporation.3.2
    (4)
    
    Amended and Restated Bylaws.+10.1
    (1)
    
    1997 Employee, Director and Consultant Stock Option Plan.+10.2
    (1)
    
    Form of Incentive Stock Option Agreement under the 1997 Employee, Director and Consultant Stock Option Plan.+10.3
    (5)
    
    2002 Stock Option Plan.+10.4
    (6)
    
    Form of Incentive Stock Option/Non-Qualified Option Agreement under the 2002 Stock Option Plan.+10.5
    (7)
    
    2007 Annual Incentive Plan.+10.6
    (8)
    
    2007 Stock Incentive Plan.+10.7
    (8)
    
    Form of Stock Unit Agreement under the 2007 Stock Incentive Plan.+10.8
    (8)
    
    Form of Nonqualified Stock Option Agreement under the 2007 Stock Incentive Plan.+10.9
    (8)
    
    Form of Incentive Stock Option Agreement under the 2007 Stock Incentive Plan.+10.10
    (8)
    
    Form of Stock Appreciation Rights Agreement under the 2007 Stock Incentive Plan.
  37




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##### Table of Contents



Exhibit Number

    
    Description+10.11
    (8)
    
    Form of Restricted Stock Agreement under the 2007 Stock Incentive Plan.10.12
    (9)
    
    Amended and Restated Loan Agreement, dated as of May 31, 2008,
between the Company and Wachovia Bank, National Association (Wachovia).10.13
    (9)
    
    Amendment to Loan Documents, dated as of May 31, 2008, between the Company and Wachovia.10.14
    (9)
    
    Amended and Restated Promissory Note, dated as of May 31, 2008, between the Company and Wachovia.10.15
    (10)
    
    Promissory Note and Loan Modification, dated as of September 18, 2008, between the Company and Wachovia Bank, National Association.10.16
    (11)
    
    Amended and Restated Swap Transaction Confirmation, signed on December 8, 2006 and effective as of November 27, 2006.10.17
    (11)
    
    Amended and Restated Swap Transaction Confirmation, signed on December 8, 2006 and effective as of November 27, 2006.10.18
    (12)
    
    Credit Agreement, dated as of January 15, 2009, among A.C. Moore Incorporated, as the Lead Borrower, the Borrowers now or
hereafter party thereto, the Guarantors now or hereafter party
thereto, each lender from time to time party thereto, and Wells
Fargo Retail Finance, LLC, as Administrative Agent, Collateral Agent and Swing Line Lender.10.19
    (12)
    
    Security Agreement, dated as of January 15, 2009, by and among
A.C. Moore Incorporated, A.C. Moore Arts & Crafts, Inc.,
Moorestown Finance, Inc., Blackwood Assets, Inc., and Wells
Fargo Retail Finance, LLC, as collateral agent.10.20
    (12)
    
    Guaranty, dated as of January 15, 2009, by A.C. Moore Arts &
Crafts, Inc., Moorestown Finance, Inc., and Blackwood Assets,
Inc. in favor of Wells Fargo Retail Finance, LLC, as
administrative agent and collateral agent, and the Credit
Parties.+10.21
    (13)
    
    Employment Agreement, effective as of June 1, 2006, between the
Company and Rick A. Lepley.+10.22
    (13)
    
    Form of Option Agreement between the Company and Rick A. Lepley.+10.23
    (14)
    
    First Amendment, dated as of November 15, 2006, to the
Employment Agreement, dated as of June 1, 2006, between the
Company and Rick A. Lepley.
  38




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##### Table of Contents



Exhibit Number

    
    Description+10.24
    (3)
    
    Second Amendment, dated as of November 19, 2007, to the
Employment Agreement, dated as of June 1, 2006, between the
Company and Rick A. Lepley, as amended by the First Amendment,
dated as of November 15, 2006.+10.25
    *
    
    Third Amendment, dated as of December 3, 2008, to the Employment
Agreement, dated as of June 1, 2006, between the Company and
Rick A. Lepley, as amended by the First Amendment, dated as of
November 15, 2006, and by the Second Amendment, dated as of
November 19, 2007.+10.26
    (15)
    
    Letter Agreement, dated November 28, 2007, between the Company
and Joseph A. Jeffries.+10.27
    (9)
    
    First Amendment, dated August 6, 2008, to Employment Letter
dated November 28, 2007, between the Company and Joseph A.
Jeffries.+10.28
    (10)
    
    Amendment and Restatement, dated as of September 24, 2008, of
Employment Letter, dated as of March 21, 2007, between the
Company and Michael G. Zawoysky.+10.29
    (2)
    
    Employment Agreement, effective as of July 24, 2006, between the
Company and Amy Rhoades.+10.30
    (2)
    
    First Amendment, dated as of November 15, 2006, to the
Employment Agreement, dated as of July 24, 2006, between the
Company and Amy Rhoades.+10.31
    (3)
    
    Second Amendment, dated as of November 19, 2007, to the
Employment Agreement, dated as of July 24, 2006, by and between
the Company and Amy Rhoades, as amended by the First Amendment,
dated as of November 15, 2006.+10.32
    (16)
    
    Form of Special Retention Award Agreement.+10.33
    (17)
    
    Letter Agreement, dated July 3, 2007, between the Company and Craig R. Davis.+10.34
    (18)
    
    Separation Agreement, dated July 17, 2007, between the Company and Lawrence H. Fine.18.1
    (19)
    
    Preferability letter provided by PricewaterhouseCoopers LLC, our
independent registered public accounting firm to change our
method of accounting for valuing store inventories to weighted
average cost.21.1
    *
    
    Subsidiaries of the Company.23.1
    *
    
    Consent of PricewaterhouseCoopers LLP.31.1
    **
    
    Certification of Principal Executive Officer pursuant to Rule
13a - 14(a) promulgated under the Securities Exchange Act of
1934, as amended (the Exchange Act).
  39




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##### Table of Contents



Exhibit Number

    
    Description31.2
    **
    
    Certification of Principal Financial Officer pursuant to Rule 13a - 14(a) promulgated under the Exchange Act.32.1
    *
    
    Certification of the Companys Principal Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    *
    
    Certification of the Companys Principal Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 +
    
    Management contract or compensatory plan or arrangement.*
    
    Filed with Original Filing.**
    
    Filed with this Amendment No. 1 to Form 10-K.(1)
    
    Incorporated by reference to the Companys Registration Statement on Form S-1 (File No.
333-32859) filed on August 5, 1997.(2)
    
    Incorporated by reference to the Companys Form 10-K for the year ended December 31, 2006.(3)
    
    Incorporated by reference to the Companys Form 8-K filed on November 21, 2007.(4)
    
    Incorporated by reference to the Companys Form 8-K filed on August 27, 2004.(5)
    
    Incorporated by reference to the Companys Definitive Proxy Statement filed on April 22,
2002.(6)
    
    Incorporated by reference to the Companys Form 8-K filed on August 9, 2006.(7)
    
    Incorporated by reference to the Companys Definitive Proxy Statement filed on April 30, 2007.(8)
    
    Incorporated by reference to the Companys Registration Statement on Form S-8 (File No.
333-143612) filed on June 8, 2007.(9)
    
    Incorporated by reference to the Companys Form 10-Q for the quarter ended June 30, 2008.(10)
    
    Incorporated by reference to the Companys Form 10-Q for the quarter ended September 30,
2008.(11)
    
    Incorporated by reference to the Companys Form 8-K filed on December 14, 2006.(12)
    
    Incorporated by reference to the Companys Form 8-K filed on January 22, 2009.(13)
    
    Incorporated by reference to the Companys Form 8-K filed on June 7, 2006.(14)
    
    Incorporated by reference to the Companys Form 8-K filed on November 16, 2006.(15)
    
    Incorporated by reference to the Companys Form 8-K filed on November 28, 2007.(16)
    
    Incorporated by reference to the Companys Form 8-K filed on April 4, 2008.(17)
    
    Incorporated by reference to the Companys Form 10-Q for the quarter ended June 30, 2007.(18)
    
    Incorporated by reference to the Companys Form 8-K filed on July 20, 2007.(19)
    
    Incorporated by reference to the Companys Form 10-Q for the quarter ended March 31, 2008.  40




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##### Table of Contents



SIGNATURES
  Date:      May 4, 2009
    A. C. MOORE ARTS & CRAFTS, INC.By:
    /s/ Rick A. LepleyRick A. LepleyPresident and Chief Executive OfficerBy:
    /s/ Rodney B. SchriverRodney B. SchriverVice President and Controller  41




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##### Table of Contents



Exhibit Index
 Exhibit Number

    
    Description3.1
    (1)
    
    Articles of Incorporation.3.1.1
    (2)
    
    Amendment to Articles of Incorporation.3.1.2
    (3)
    
    Amendment to Articles of Incorporation.3.2
    (4)
    
    Amended and Restated Bylaws.+10.1
    (1)
    
    1997 Employee, Director and Consultant Stock Option Plan.+10.2
    (1)
    
    Form of Incentive Stock Option Agreement under the 1997 Employee, Director and Consultant Stock Option Plan.+10.3
    (5)
    
    2002 Stock Option Plan.+10.4
    (6)
    
    Form of Incentive Stock Option/Non-Qualified Option Agreement under the 2002 Stock Option Plan.+10.5
    (7)
    
    2007 Annual Incentive Plan.+10.6
    (8)
    
    2007 Stock Incentive Plan.+10.7
    (8)
    
    Form of Stock Unit Agreement under the 2007 Stock Incentive Plan.+10.8
    (8)
    
    Form of Nonqualified Stock Option Agreement under the 2007 Stock Incentive Plan.+10.9
    (8)
    
    Form of Incentive Stock Option Agreement under the 2007 Stock Incentive Plan.+10.10
    (8)
    
    Form of Stock Appreciation Rights Agreement under the 2007 Stock Incentive Plan.+10.11
    (8)
    
    Form of Restricted Stock Agreement under the 2007 Stock Incentive Plan.10.12
    (9)
    
    Amended and Restated Loan Agreement, dated as of May 31, 2008,
between the Company and Wachovia Bank, National Association (Wachovia).10.13
    (9)
    
    Amendment to Loan Documents, dated as of May 31, 2008, between the Company and Wachovia.10.14
    (9)
    
    Amended and Restated Promissory Note, dated as of May 31, 2008, between the Company and Wachovia.10.15
    (10)
    
    Promissory Note and Loan Modification, dated as of September 18, 2008, between the Company and Wachovia Bank, National Association.10.16
    (11)
    
    Amended and Restated Swap Transaction Confirmation, signed on December 8, 2006 and effective as of November 27, 2006.
  42




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##### Table of Contents



Exhibit Number
    
    Description




10.17
    (11)
    
    Amended and Restated Swap Transaction Confirmation, signed on December 8, 2006 and effective as of November 27, 2006.10.18
    (12)
    
    Credit Agreement, dated as of January 15, 2009, among A.C. Moore Incorporated, as the Lead Borrower, the Borrowers now or
hereafter party thereto, the Guarantors now or hereafter party
thereto, each lender from time to time party thereto, and Wells
Fargo Retail Finance, LLC, as Administrative Agent, Collateral Agent and Swing Line Lender.10.19
    (12)
    
    Security Agreement, dated as of January 15, 2009, by and among
A.C. Moore Incorporated, A.C. Moore Arts & Crafts, Inc.,
Moorestown Finance, Inc., Blackwood Assets, Inc., and Wells
Fargo Retail Finance, LLC, as collateral agent.10.20
    (12)
    
    Guaranty, dated as of January 15, 2009, by A.C. Moore Arts &
Crafts, Inc., Moorestown Finance, Inc., and Blackwood Assets,
Inc. in favor of Wells Fargo Retail Finance, LLC, as
administrative agent and collateral agent, and the Credit
Parties.+10.21
    (13)
    
    Employment Agreement, effective as of June 1, 2006, between the
Company and Rick A. Lepley.+10.22
    (13)
    
    Form of Option Agreement between the Company and Rick A. Lepley.+10.23
    (14)
    
    First Amendment, dated as of November 15, 2006, to the
Employment Agreement, dated as of June 1, 2006, between the
Company and Rick A. Lepley.+10.24
    (3)
    
    Second Amendment, dated as of November 19, 2007, to the
Employment Agreement, dated as of June 1, 2006, between the
Company and Rick A. Lepley, as amended by the First Amendment,
dated as of November 15, 2006.+10.25
    *
    
    Third Amendment, dated as of December 3, 2008, to the Employment
Agreement, dated as of June 1, 2006, between the Company and
Rick A. Lepley, as amended by the First Amendment, dated as of
November 15, 2006, and by the Second Amendment, dated as of
November 19, 2007.+10.26
    (15)
    
    Letter Agreement, dated November 28, 2007, between the Company
and Joseph A. Jeffries.+10.27
    (9)
    
    First Amendment, dated August 6, 2008, to Employment Letter
dated November 28, 2007, between the Company and Joseph A.
Jeffries.+10.28
    (10)
    
    Amendment and Restatement, dated as of September 24, 2008, of
Employment Letter, dated as of March 21, 2007, between the
Company and Michael G. Zawoysky.+10.29
    (2)
    
    Employment Agreement, effective as of July 24, 2006, between the
Company and Amy Rhoades.+10.30
    (2)
    
    First Amendment, dated as of November 15, 2006, to the
Employment Agreement, dated as of July 24, 2006, between the
Company and Amy Rhoades.
  43




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##### Table of Contents



Exhibit Number
    
    Description+10.31
    (3)
    
    Second Amendment, dated as of November 19, 2007, to the
Employment Agreement, dated as of July 24, 2006, by and between
the Company and Amy Rhoades, as amended by the First Amendment,
dated as of November 15, 2006.+10.32
    (16)
    
    Form of Special Retention Award Agreement.+10.33
    (17)
    
    Letter Agreement, dated July 3, 2007, between the Company and Craig R. Davis.+10.34
    (18)
    
    Separation Agreement, dated July 17, 2007, between the Company and Lawrence H. Fine.18.1
    (19)
    
    Preferability letter provided by PricewaterhouseCoopers LLC, our
independent registered public accounting firm to change our
method of accounting for valuing store inventories to weighted
average cost.21.1
    *
    
    Subsidiaries of the Company.23.1
    *
    
    Consent of PricewaterhouseCoopers LLP.31.1
    **
    
    Certification of Chief Executive Officer pursuant to Rule
13a - 14(a) promulgated under the Securities Exchange Act of
1934, as amended (the Exchange Act).31.2
    **
    
    Certification of  Chief Financial Officer pursuant to Rule 13a - 14(a) promulgated under the Exchange Act.32.1
    *
    
    Certification of the Companys  Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    *
    
    Certification of the Companys  Chief  Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 +
    
    Management contract or compensatory plan or arrangement.*
    
    Filed with Original Filing.**
    
    Filed with this Amendment No. 1 to Form 10-K.(1)
    
    Incorporated by reference to the Companys Registration Statement on Form S-1 (File No.
333-32859) filed on August 5, 1997.(2)
    
    Incorporated by reference to the Companys Form 10-K for the year ended December 31, 2006.(3)
    
    Incorporated by reference to the Companys Form 8-K filed on November 21, 2007.(4)
    
    Incorporated by reference to the Companys Form 8-K filed on August 27, 2004.  44




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##### Table of Contents



(5)
    
    Incorporated by reference to the Companys Definitive Proxy Statement filed on April 22,
2002.(6)
    
    Incorporated by reference to the Companys Form 8-K filed on August 9, 2006.(7)
    
    Incorporated by reference to the Companys Definitive Proxy Statement filed on April 30, 2007.(8)
    
    Incorporated by reference to the Companys Registration Statement on Form S-8 (File No.
333-143612) filed on June 8, 2007.(9)
    
    Incorporated by reference to the Companys Form 10-Q for the quarter ended June 30, 2008.(10)
    
    Incorporated by reference to the Companys Form 10-Q for the quarter ended September 30,
2008.(11)
    
    Incorporated by reference to the Companys Form 8-K filed on December 14, 2006.(12)
    
    Incorporated by reference to the Companys Form 8-K filed on January 22, 2009.(13)
    
    Incorporated by reference to the Companys Form 8-K filed on June 7, 2006.(14)
    
    Incorporated by reference to the Companys Form 8-K filed on November 16, 2006.(15)
    
    Incorporated by reference to the Companys Form 8-K filed on November 28, 2007.(16)
    
    Incorporated by reference to the Companys Form 8-K filed on April 4, 2008.(17)
    
    Incorporated by reference to the Companys Form 10-Q for the quarter ended June 30, 2007.(18)
    
    Incorporated by reference to the Companys Form 8-K filed on July 20, 2007.(19)
    
    Incorporated by reference to the Companys Form 10-Q for the quarter ended March 31, 2008.  45