Document:

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                                                                   EXHIBIT 10.10

                         FRANK'S NURSERY & CRAFTS, INC.
                  KEY EMPLOYEE RETENTION AND INCENTIVE PROGRAM

1.       APPLICABILITY

                  The Frank's Nursery & Crafts, Inc. Key Employee Retention and
Incentive Program (the "Program") applies to eligible employees of Frank's
Nursery & Crafts, Inc. (the "Company").

2.       PURPOSE AND EFFECTIVE DATE

                  (a) The purpose of this Program is to encourage the Company's
eligible employees to continue their employment with the Company during the
Company's restructuring by establishing a binding written Company policy
governing the circumstances under which certain retention payments ("Retention
Payments") and additional incentive payments will be paid.

                  (b) The Program is adopted and effective as of March 8, 2001
(the "Effective Date"), in accordance with an order issued by the United States
Bankruptcy Court for the District of Maryland (the "Bankruptcy Court"), such
court having jurisdiction over chapter 11 cases currently pending with respect
to the Company (collectively, the "Chapter 11 Case").

3.       ELIGIBILITY

                  (a) Participants are limited to employees of the Company who
have received written notice from the Plan Administrator that they have been
selected for coverage under the Program (each a "Participant").

                  (b) Each Participant shall receive written notification of
participation in the Program, as soon as practicable after the Effective Date,
specifying whether they will participate as a Tier 1, Tier 2, Tier 3, Tier 4,
Tier 5 or Tier 6 Participant.

4.       AMOUNT, PAYMENT AND FUNDING OF RETENTION PAYMENTS

                  (a) Subject to Section 5 below, Retention Payments shall be
equal to a percentage of a Participant's "Base Salary", as set forth in the
table below:

<TABLE>
<CAPTION>
                ------------------------- ---------------------------
                          TIER                 % OF BASE SALARY
                ------------------------- ---------------------------
<S>                                       <C>
                           1                         50%
                ------------------------- ---------------------------
                           2                         40%
                ------------------------- ---------------------------
                           3                         30%
                ------------------------- ---------------------------
                           4                         25%
                ------------------------- ---------------------------
                           5                         20%
                ------------------------- ---------------------------
                           6                         10%
                ------------------------- ---------------------------
</TABLE>

<PAGE>   2

                  (b) For purposes of this Program, the term "Base Salary" shall
mean the Participant's base annual salary as of the Effective Date, or such
later date as may be determined by the Plan Administrator and communicated to
the Participant, excluding any shift premiums, overtime, bonuses, commissions,
other special payments or any other allowance.

                  (c) Subject to Section 5 below, and unless otherwise agreed to
between the Company and a Participant, the Retention Payments for those
Participants in Tier 1 shall accrue and be earned daily, on a pro-rata basis
from March 8, 2001 through March 8, 2002, and shall be paid upon the date of
confirmation of a Plan of Reorganization in the Chapter 11 Case.

                  (d) Subject to Section 5 below, the Retention Payments for
those Participants in Tier 2 through Tier 6 shall be paid in three installments
as follows: 33% of the Retention Payment on June 29, 2001; 27% of the Retention
Payment on December 2, 2001, and 40% of the Retention Payment on March 8, 2002
(each a "Payment Date"), provided that such Participant is employed by the
Company on each Payment Date.

                  (e) In addition to the Retention Payments described in Section
4(a) above, to the extent the Company's EBITDA for fiscal year 2001 exceeds that
projected in the Company's fiscal year 2001 Business Plan (as defined in the
Company's motion seeking Bankruptcy Court approval of this Program), the Company
shall allocate eighteen (18%) percent of such amount to a pool for the benefit
of Tier 1 and Tier 2 Participants. Such Participants shall be entitled to
receive a percentage of the pool, as determined by the Plan Administrator, in
its sole discretion, but subject to the approval of the Company's Board of
Directors, based on performance; provided, however, that in no event shall any
Participant's allocation from the pool exceed 35% of his/her Base Salary.
Payments under this Section 4(c) shall be made as soon as practicable after the
Company's EBITDA for fiscal year 2001 has been finally determined.

                  (f) In addition to the Retention Payments described in Section
4(a) above, and any benefits described in Section 4(c) above, certain key
financial personnel who are Participants in Tiers 2 through 6 shall be eligible
for an additional payment, to be allocated by the Company, in its sole
discretion, provided such Participant is employed by the Company on March 8,
2002; further, provided however that in no event shall the payments made
pursuant to this Section 4(d) of the Plan, in the aggregate, exceed $27,451.
Such payments shall be made on March 8, 2002.

5.       TERMINATION OF EMPLOYMENT

                  (a) If a Tier 1 Participant is terminated by the Company
without "Cause" (as defined below), prior to March 8, 2002, such Tier 1
Participant shall be entitled to payment of a pro-rata portion of his/her
Retention Payment calculated in accordance with Section 4 of this Program, based
on the number of days elapsed within the period of days that begins on March 8,
2001 and ends on March 8, 2002. If a Tier 1 Participant's employment with the
Company is terminated because of death or disability, in either case, prior to
March 8, 2002, such Tier 1 Participant (or his/her beneficiary in the event of
death) shall be entitled to payment of a pro-rata portion of his/her Retention
Payment calculated in accordance with Section 4 of this Program, based on the
number of days elapsed within the period of days that begins on March 8, 2001
and ends on March 8, 2002.

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<PAGE>   3

                  (b) In the event the Company terminates the employment of a
Participant in Tier 2 - Tier 6 without Cause or such Participant's employment
with the Company is terminated on account of death or disability, in either
case, prior to a Payment Date, such Participant (or his/her beneficiary in the
event of death) shall be ineligible to receive any further Retention Payments on
any Payment Dates following the date of termination, death or disability or any
other benefit under this Program.

                  (c) In the event any Participant voluntarily terminates
employment with the Company, or his/her employment is terminated by the Company
for Cause, in either case, prior to March 8, 2002, with respect to a Tier 1
Participant, or any Payment Date, with respect to a Participant in Tier 2 - Tier
6, such Participant shall be ineligible to receive a Retention Payment or any
other benefit under this Program.

                  (d) Notwithstanding anything contained herein to the contrary,
any Retention Payment earned prior to the Participant's effective date of
termination but not yet paid to such Participant, shall be paid as soon as
practicable following termination of employment.

                  (e) The Company shall have "Cause" to terminate a
Participant's employment if such Participant has: (i) refused or repeatedly
failed to perform the duties assigned to him/her; (ii) engaged in a willful or
intentional act that has the effect of injuring the reputation or business of
the Company in any material respect; (iii) continually or repeatedly been absent
from the Company, unless due to serious illness or disability; (iv) committed an
act of gross misconduct, fraud, embezzlement or theft against the Company; or
(v) violated a material company policy.

6.       GENERAL PROVISIONS

                  (a) Payments under this Program shall not constitute wages and
shall be paid by the Company from the general assets of the Company; provided
that no director, officer, agent or employee of the Company shall be personally
liable in the event the Company is unable to make any payments under this
Program due to a lack of, or inability to access, funding or financing, legal
prohibition (including statutory or judicial limitations) or failure to obtain
any required consent.

                  (b) Payments under this Program are subject to Federal, state
and local income tax withholding and all other applicable Federal, state and
local taxes. The Company, as applicable, shall withhold, or cause to be
withheld, from any payments made hereunder all applicable Federal, state and
local withholding taxes and may require the employee to file any certificate or
other form in connection therewith.

                  (c) Nothing contained herein shall give any employee the right
to be retained in the employment of the Company or any successor, or affect the
Company's right to dismiss any employee at will.

                  (d) This Program is not a term or condition of any
individual's employment and no employee shall have any legal right to payments
hereunder except to the extent all conditions relating to the receipt of such
payments have been satisfied in accordance with the terms of this Program as set
forth herein.

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<PAGE>   4

                  (e) Nothing contained herein shall give an employee any right
to any employee benefit upon termination of employment with the Company, except
as specifically provided herein, required by law or provided by the terms of
another employee benefit plan document relating to the treatment of former
employees generally.

                  (f) No person having a benefit under this Program may assign,
transfer or in any other way alienate the benefit, nor shall any benefit under
this Program be subject to garnishment, attachment, execution or levy of any
kind.

                  (g) Receipt of all benefits under this Program by any
Participant shall be (i) in lieu of all other retention payments of any kind
whatsoever due to such Participant under any other plan or agreement of the
Company, including, without limitation, any benefits payable under any
employment agreement between the Company and the Participant, and (ii) deemed a
waiver of a Participant's rights with respect to any and all such payments.

7.       ADMINISTRATION

                  (a) The Program shall be administered by the Company's Vice
President of and the term "Plan Administrator" shall refer to the Company's Vice
President of Human Resources; provided, however that with respect to benefits to
be provided to the Vice President of Human Resources, the Company's Chief
Financial Officer shall administer the Program and the term "Plan Administrator"
shall refer to the Chief Financial Officer. For purposes hereof, the Plan
Administrator is authorized to establish the Retention Payment amounts each
Participant will have the opportunity to earn hereunder, subject to any
aggregate amounts available under the Program. If either of such positions is
vacant, an acting Plan Administrator shall be appointed by the Company's Board
of Directors.

                  (b) There is no requirement that the amount of any award for
any eligible employee be uniform as to particular individuals or as to one or
more classes of eligible employees or Participants.

                  (c) Subject to the express provisions of this Program, the
Plan Administrator shall have sole authority to interpret the Program (including
any vague or ambiguous provisions) and to make all other determinations deemed
necessary or advisable for the administration of the Program. All determinations
and interpretations of the Plan Administrator shall be final, binding and
conclusive as to all persons. The Plan Administrator may designate the
executives to be covered under the Program upon, and following, the effective
date of the Program.

                  (d) Neither the Plan Administrator nor any employee, officer,
agent, or director of the Company shall be personally liable by reason of any
action taken with respect to the Program for any mistake of judgment made in
good faith, and the Company shall indemnify and hold harmless each employee,
officer or director of the Company, including the Plan Administrator, to whom
any duty or power relating to the administration or interpretation of the
Program may be allocated or delegated, against any reasonable cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Board of Directors of the Company) arising out of
any act or omission to act in connection with the Program unless arising out of
such person's own fraud, bad faith or gross negligence.

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<PAGE>   5

8.       APPLICABLE LAW

                  This Program and all action taken under it shall be governed
as to validity, construction, interpretation and administration by the laws of
the State of Michigan and applicable federal law.

9.       AMENDMENT OR TERMINATION

                  The Board of Directors of the Company may amend, suspend or
terminate the Program or any portion thereof at any time; provided, however,
that unless the written consent of a Participant is obtained, no such amendment
or termination shall adversely affect the rights of such Participant; and,
further provided that, during the pendency of the Chapter 11 Case, no amendment
may be made which, except as provided herein, increases or decreases the amount
of benefits payable to any Participant without the approval of the Bankruptcy
Court. Notwithstanding the foregoing, the Program shall not terminate until all
Plan Participants are no longer eligible to receive any Retention Payments or
any other benefit payments under this Program.

                           IN WITNESS WHEREOF, the Company has caused the
Program to be executed as of the 7th day of June, 2001.

                                       FRANK'S NURSERY & CRAFTS, INC..

                                       By:   /s/ Larry T. Lakin
                                          ---------------------
                                           Larry T. Lakin
                                           Chief Financial Officer

                                       5<PAGE>   1
                                                                   EXHIBIT 10.11

                         FRANK'S NURSERY & CRAFTS, INC.
                                 SEVERANCE PLAN
                     SUMMARY PLAN DESCRIPTION/PLAN DOCUMENT

         1. GENERAL INFORMATION

         (a) The Frank's Nursery & Crafts, Inc. Severance Plan (the "Plan")
provides eligible full-time and part-time employees and officers in the
Company's Home Office and Field Supervision, and salaried employees in the
Company's Distribution Centers, with separation pay if they are separated from
service with Frank's Nursery & Crafts, Inc. (the "Company") for the reasons
described herein.

         (b) Notwithstanding any other provision of the Plan, the Plan
supersedes any and all prior plans, policies or practices, written or oral,
which may have previously applied governing the payment of severance to
terminated employees, other than the Frank's Nursery & Crafts Retention
Incentive Program.

         (c) This Summary Plan Description/Plan Document is intended to comply
with the requirements of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").

         2. ELIGIBILITY

         (a) You are an "Employee," for purposes of this Plan, if (i) you are a
regular, full-time or part-time employee of the Company employed in the
Company's Home Office, or Field Supervision; or (ii) you are a salaried employee
of the Company employed in the Company's Distribution Centers.

         (b) You are a "Participant," for purposes of this Plan, if you are an
Employee whose employment is terminated for either of the following reasons:

         (i) Termination by the Company without "Cause." For this purpose,
     "Cause" means any of the following: (a) your refusal or repeated failure to
     perform the duties assigned to you; (b) your continued or repeated absence
     from the Company, unless due to serious illness or disability; (c) your
     commission of an act of gross misconduct, fraud, embezzlement or theft
     against the Company; or (d) your violation of a material company policy.

         (ii) The consummation of the Company's sale of substantially all of its
     stock or assets, reorganization or merger of the Company, or any other
     arrangement or corporate reorganization whereby control of the Company is
     transferred to another employer (a "Change in Control") and you are not
     offered a comparable position with the Company's successor following a
     Change in Control; provided that with respect to the

                                       1

<PAGE>   2

     Company's Chairman and Chief Executive Officer, Vice Chairman and Chief
     Financial Officer, and President and Chief Operating Officer (the
     "Executive Officers"), any change in position, title, salary, or
     responsibilities from such Employee's position, title, salary, or
     responsibilities as of the date of the Change in Control, shall not be
     considered a comparable position.

         (c) Notwithstanding anything in this Plan to the contrary, no
Participant will be eligible to receive any severance benefit or payment under
the Plan unless, prior to the receipt of a severance payment, the Participant
executes a release in the form attached as an exhibit to the Plan (the
"Release"), and the seven (7) day revocation period described in such Release
has expired.

         (d) You are not entitled to severance benefits under the Plan if you:

         (i) Are terminated for "Cause" (as defined in Section 2(b)(i) above);

         (ii) Voluntarily resign;

         (iii) Cease to be an Employee due to death, disability or retirement;.

         (iv) Have had your employment terminated as a result of a Change in
     Control and you are offered a comparable position with the Company's
     successor following a Change in Control, whether or not you accept such
     offer; or,

         (v) Fail to continue as a satisfactory Employee after receiving notice
     of layoff or termination until released by the Company (provided such
     termination is within six (6) months after you are notified of
     termination).

         3. SEVERANCE BENEFITS

        (a)      Severance Benefit Amounts.

         (i) The amount of severance pay for those Participants who are
     part-time hourly Employees shall be equal to one (1) week of the
     Participant's average weekly base salary, excluding shift premiums,
     overtime, bonuses, or any other allowance ("Base Salary") for the six month
     period preceding the Participant's date of termination, for each full year
     of service with the Company, with a minimum of two (2) weeks of Base Salary
     and up to a maximum of four (4) weeks of Base Salary;

         (ii) The amount of severance pay for those Participants who are
     full-time hourly Employees (those employees who work more than an average
     of thirty-five (35) hours per week during any six month period), shall be
     equal to one (1) week of the Participant's average weekly Base Salary for
     the six month period preceding the Participant's date of termination, for
     each full year of service with the Company, with a minimum of three (3)
     weeks of Base Salary and up to a maximum of eight (8) weeks of Base Salary;

<PAGE>   3

         (iii) The amount of severance pay for those Participants who are
     considered salaried employees but who are not designated as Merchants,
     Managers, District Managers, DC Managers, Assistant Vice Presidents,
     Directors, Vice Presidents and above, shall be equal to one (1) week of the
     Participant's current Base Salary, on a weekly basis, for each full year of
     service with the Company, with a minimum of either four (4) or six (6)
     weeks of Base Salary and up to a maximum of sixteen (16) weeks of Base
     Salary, as specified, in writing, from the Plan Administrator as soon as
     practicable following the effective date of this Policy;

         (iv) The amount of severance pay for those Participants who are
     designated as Merchants, Managers, District Managers, and DC Managers,
     shall be equal to one (1) week of the Participant's current Base Salary, on
     a weekly basis, for each full year of service with the Company, with a
     minimum of ten (10) weeks of Base Salary and up to a maximum of twenty-six
     (26) weeks of Base Salary;

         (v) Except as provided in Section 3(a)(vi) below, the amount of
     severance pay for those Participants who are at the level of Assistant Vice
     President, Director, and above, shall be equal to two (2) weeks of the
     Participant's current Base Salary, on a weekly basis, for each full year of
     service with the Company, with a minimum of fourteen (14) weeks of Base
     Salary and up to a maximum of twenty-six (26) weeks of Base Salary;
     provided, however, that the Executive Officers shall receive severance pay
     in the amount of twelve (12) months of the Executive Officer's current Base
     Salary, on a weekly basis;

         (vi) Notwithstanding anything in this Section 3 to the contrary, the
     Plan Administrator may provide certain Participants at the level of Vice
     President and above with twelve (12) months of such Participant's current
     Base Salary, on a weekly basis, by notifying such Participants, in writing,
     that they have been selected to receive a greater benefit in lieu of the
     benefits described in Section 3(v) above. Such notification shall be
     delivered to those Participants as soon as practicable following the
     effective date of this Policy.

         (b) COBRA Continuation Coverage. In addition to the benefits described
in Section 3(a) above, the Company shall pay, on behalf of each Participant, any
amounts necessary for continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"), for the Participant and
his or her covered dependents during the period that a Participant is receiving
severance benefits as described in Section 3(a) above; provided that such
Participant and his or her covered dependents are eligible for COBRA coverage;
further provided, that the Company's obligation to make such payments shall
terminate in accordance with the termination provisions of COBRA.

         (c) How your service is calculated. The Company will use your hire date
to calculate your total service period with the Company as of the date of your
termination of employment. Only full years of service will be used to determine
your total service period with the Company.

<PAGE>   4

         (d) Taxes on your severance pay. Severance payments are considered
taxable income. All appropriate federal, state and local taxes will be withheld
from all severance pay.

         (e) Severance Benefit Offset. Notwithstanding anything herein to the
contrary, the amount of the severance benefit which any Participant is entitled
to receive under the Plan shall be the amount calculated in accordance with
Section 3 of the Plan, less all amounts, if any, which such Participant is
entitled to receive as a result of the circumstances of his or her termination
under the Federal Worker Adjustment and Retraining Notification Act (Pub. L.
100-379) or other similar federal, state or local statute. In no event shall
accrued vacation pay, unemployment compensation and pension benefits reduce the
amount of your severance pay.

         (f) When severance pay is paid. Severance payments will be made either
(i) on normal pay dates, commencing with the first pay period following the
Employee's termination of employment and continuing thereafter, on successive
pay periods, until the allowance is exhausted or (ii) in a lump sum payment, as
determined by the Plan Administrator in its sole discretion. Your last day
worked is defined as your termination date. However, with supporting evidence,
if it becomes apparent to the Company that an employee on severance is acting in
a manner detrimental to the best interest of the Company, all rights to receive
further severance payments will be forfeited.

         4. GROUP BENEFIT COVERAGE

         (a) Your medical and dental coverage as an active employee will
terminate on your date of termination. As set forth in Section 3(b) above, if
you are eligible to continue such coverage in accordance with COBRA, the Company
will pay, on your behalf, any amounts necessary for such continuation coverage,
subject to Section 3(b) above. At the time that your severance benefits cease,
you will be responsible for any amounts necessary for COBRA continuation
coverage.

         (b) Your basic and supplemental life insurance terminates on your date
of termination. You may be able to convert to a personal policy. Contact Human
Resources for further information.

         (c) Any short term disability, long term disability, accidental death
and dismemberment insurance, or supplemental life insurance coverage on your
spouse, which you may have elected, will terminate on your date of termination.

         (d) Your participation in the Frank's Nursery & Crafts, Inc. 401(k)
Plan will terminate on your date of termination. Therefore, no further
contributions or matching contributions will be made following your date of
termination.

<PAGE>   5

         5. ADMINISTRATIVE INFORMATION

         (a) Plan Name. The full name of the Plan is the Frank's Nursery &
Crafts, Inc. Severance Plan.

         (b) Plan's Sponsor. The Plan is sponsored by Frank's Nursery & Crafts,
Inc., 1175 West Long Lake Road, Troy, Michigan 48098, (248) 712-7000.

         (c) Plan Number and Employer Identification Number. The employer
identification number (EIN) assigned by the Internal Revenue Service to the Plan
Sponsor is 13-0762080. The Plan number assigned by the Company pursuant to
instructions of the United States Department of Labor is 510.

         (d) Type of Plan and Funding. The Plan is an employee welfare benefit
plan. The benefits provided under the Plan are paid from the Company's general
assets. No fund has been established for the payment of Plan benefits. No
contributions are required under the Plan.

         (e) Plan Administrator.

         (i) This Plan shall be administered by the Company's Vice President
     Human Resources ("VPHR"), provided that with respect to benefits provided
     under the Plan to the VPHR, the Company's Chairman & Chief Executive
     Officer shall administer the Plan. The term "Plan Administrator" shall
     refer to the VPHR, except as described in the preceding sentence, in which
     case the "Plan Administrator" shall refer to the Company's Chairman & Chief
     Executive Officer.

         (ii) The Plan Administrator has full responsibility for the operation
     of the Plan. Your supervisor or other officers of the Company are not
     authorized to interpret provisions of the Plan or make representations
     which are contrary to the provisions of the Plan document as interpreted by
     the Plan Administrator. All correspondence and requests for information
     should be directed as follows: Frank's Nursery & Crafts, Inc., Plan
     Administrator, Frank's Nursery & Crafts, Inc. Severance Plan, 1175 West
     Long Lake Road, Troy, Michigan 48098.

         (f) Agent for Service of Process. Should it ever be necessary, legal
process may be served on the Plan Administrator at: Frank's Nursery & Crafts,
Inc., Vice President, Human Resources, 1175 West Long Lake Road, Troy, Michigan
48098

         (g) Type of Administration. The Plan is administered by Frank's Nursery
& Crafts, Inc.

         (h) Plan Year. January 1 - December 31.

<PAGE>   6

         6. PLAN AMENDMENT OR TERMINATION

         (a) The Company reserves the right to amend, modify or terminate the
Plan, in whole or in part, at any time for any reason; provided, however, that
any such amendment, modification or termination shall not affect the right of
any Participant to claim benefits under the provisions of Section 3 above if the
Participant's termination of employment occurred prior to the date of such
amendment, modification or termination. During the pendency of the Company's
chapter 11 proceedings, no amendment or modification of the Plan that materially
increases the cost of the Plan to the Company shall be adopted without formal
authorization from the Bankruptcy Court upon notice, and thereafter, from the
Company's Board of Directors.

         (b) No other amendment or modification and no termination of the Plan
shall be effective unless the action to be taken is set forth in a written
document, which is ratified or approved by the Company's Board of Directors.

         7. OTHER IMPORTANT PLAN INFORMATION

         (a) Employment Rights Not Implied. Participation in the Plan neither
gives you the right to be retained in the employ of the Company, nor does it
guarantee your right to claim any benefit except as outlined in the Plan.

         (b) Governing Law. The construction and administration of the Plan will
be governed by ERISA.

         (c) No Liability. No director, officer, agent or employee of the
Company shall be personally liable in the event the Company is unable to make
any payments under this Policy due to a lack of, or inability to access, funding
or financing, legal prohibition (including statutory or judicial limitations) or
failure to obtain any required consent.

         8. CLAIMS APPEAL PROCEDURE

The following information is intended to comply with the requirements of ERISA
and provides the procedures an employee may follow if he or she disagrees with
any decision about eligibility for Plan payments.

         (a) An eligible employee entitled to benefits under the Plan will be so
informed on or before the last day worked. Eligible employees who believe they
are entitled to benefits under the Plan and do not receive notice, or who have
questions about the amounts they receive, must write to the Plan Administrator
within thirty (30) days of the date of his or her termination.

         (b) If the Plan Administrator denies a Participant's claim for benefits
under the Plan, the Participant will be sent a letter within ninety (90) days
(in special cases, more than 90 days may be needed and you will be notified if
this is the case) explaining:

         (i) the specific reason or reasons for the denial;

         (ii) the specific provisions on which the denial is based;

<PAGE>   7

         (iii) any additional material or information necessary for the
     Participant to perfect the claim and an explanation of why such material or
     information is necessary; and

         (iv) an explanation of the Plan's claim review procedure.

         (c) If payment is denied or the Participant disagrees with the amount
of the payment, he or she may file a written request for review within sixty
(60) days after receipt of such denial. This request should be filed with the
Plan Administrator. The letter which constitutes the filing of an appeal should
ask for a review and include the reasons why the Participant believes the claim
was improperly denied, as well as any other appropriate data, questions, or
comments. In addition, a Participant is entitled to:

         (i) review documents pertinent to his or her claim at such reasonable
     time and location as shall be mutually agreeable to the Participant and the
     Plan Administrator; and

         (ii) submit issues and comments in writing to the Plan Administrator
     relating to its review of the claim.

         (d) A final decision will normally be reached within sixty (60) days,
unless special circumstances require an extension of time for processing, in
which case a decision will be rendered as soon as possible. The Participant will
receive a written notice of the decision on the appeal, indicating the specific
reasons for the decision as well as specific references to the pertinent Plan
provisions on which the decision is based.

         9. STATEMENT OF ERISA RIGHTS

The following statement of ERISA rights is required by federal law and rulings:

         (a) As a person covered under the Plan, you are entitled to certain
rights and protections under ERISA. This law provides that all people covered by
the Plan are entitled to:

         (i) Receive information about your plan and benefits.

         (ii) Examine, without charge, all plan documents, including copies of
     all documents filed by the Plan with the U.S. Department of Labor at the
     Plan Administrator's offices.

         (iii) Obtain copies of all plan documents and other plan information by
     writing to the Plan Administrator and asking for them. The Plan
     Administrator may make a reasonable charge for the copies.

         (iv) Receive a summary of the Plan's annual financial report. The Plan
     Administrator is required by law to furnish each participant with a copy of
     this summary annual report.

         (b) In addition to creating rights for persons covered by the Plan,
ERISA imposes duties upon the people who are responsible for the operation of
the Plan. The people

<PAGE>   8

who operate the Plan, called "fiduciaries" of the Plan, have a duty to do so
prudently and in your interest and in the interest of the other people covered
by the Plan. The law provides that no one may fire you or otherwise discriminate
against you in any way to prevent you from getting a benefit or exercising your
rights under ERISA. The law provides that if your claim for a benefit is denied
in whole or in part, you will receive a written notice explaining why your claim
was denied. You have the right to have your claim reviewed and reconsidered.

         (c) Under ERISA, there are steps you can take to enforce your rights.
For instance, if you request copies of documents from the Plan Administrator and
do not receive them within 30 days, you may file suit in federal court. In such
a case, the court may require the Plan Administrator to provide the documents
and pay up to $110 a day until you receive them, unless they were not sent
because of reasons beyond the control of the Plan Administrator.

         (d) If you have a claim for benefits which is denied or ignored, in
whole or in part, you may file suit in a state or federal court. If it should
happen that the people who operate the Plan misuse the Plan's money or if you
are discriminated against for asserting your rights, you may ask the U.S.
Department of Labor for help, or you may file suit in a federal court. The court
will decide who should pay court costs and legal fees. If your suit is
successful, the court may order the person you have sued to pay costs and fees.
If you lose, the court may order you to pay these costs and fees, for example,
if it finds your claim is frivolous. If you have any questions about your rights
under ERISA, you should contact the nearest office of the Pension and Welfare
Benefits Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance and Inquiries, Pension and
Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution
Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications
about your rights and responsibilities under ERISA by calling the publications
hotline of the Pension and Welfare Benefits Administration.

<PAGE>   9

                                     EXHIBIT

                        RELEASE AND SEPARATION AGREEMENT

This Release and Separation Agreement ("Release") is between

--------------------------------------------------------------------------------

(print name) First     Middle     Last                  Social Security Number

and Frank's Nursery & Crafts, Inc. and all subsidiaries and affiliates of
Frank's Nursery & Crafts, Inc. (individually and collectively referred to as
"Frank's").

         1.       COMPLETE RELEASE.

                  In consideration for the severance payment and the benefits
                  stated in the Severance Agreement provided to me by Frank's on
                  (date), which I agree is sufficient consideration and is in
                  excess of any earned wages or benefits due and owing me, I
                  release, waive and fully discharge Frank's and all present and
                  former employees, officers, directors, shareholders and agents
                  of Frank's, from any and all charges, causes of action,
                  damages, claims or demands, whether known or unknown at this
                  time, arising out of, connected with, or based on my
                  employment and separation from employment with Frank's,
                  including, but not limited to those based on contract,
                  personal injury, tort, common law, employment discrimination,
                  and/or any other federal, state or local law.

         2.       (NUMBER) -DAY PERIOD FOR REVIEW AND CONSIDERATION OF
                  AGREEMENT.

                  I understand that Frank's has provided me with (number) days
                  to review and consider the Severance Agreement and Release
                  before signing it.

         3.       ENCOURAGEMENT TO CONSULT WITH ATTORNEY.

                  I acknowledge that Frank's has advised me both verbally and in
                  writing that I may consult an attorney regarding the
                  Separation Agreement and Release before signing the Release.

          4.      EMPLOYEE'S RIGHT TO REVOKE AGREEMENT.

                  Frank's has advised me and I understand that

<PAGE>   10

                  -        I may revoke this Release for a period of seven (7)
                           calendar days after signing it.

                  -        This Release is not effective or enforceable until
                           the 7-day revocation period expires.

                  -        Revocation must be made by either

                             (1)    hand-delivering the written revocation to
                                    Keith Oreson during Frank's corporate
                                    business hours at 580 Kirts Blvd., Suite
                                    300, Troy, Michigan 48084 within seven days
                                    after I sign and send the Release; or by

                             (2)    mailing a written notice of revocation to
                                    Keith Oreson, Vice President of Human
                                    Resources, Frank's Nursery & Crafts Inc. 580
                                    Kirts Blvd., Suite 300, Troy, Michigan 48084
                                    postmarked within seven days after I signed
                                    and send the Release.

                  -        Frank's recommends that if I do revoke this Release,
                           I do so by certified mail, return receipt requested.

                  -        In the case of revocation, this Release shall not be
                           effective or enforceable and I will not receive any
                           severance pay and/or benefits.

         5.   CONFIDENTIALITY.

                  I agree to keep strictly confidential, except if I am legally
                  required to disclose or where I must disclose to secure advice
                  from an attorney or accountant, the terms, conditions and/or
                  existence of this Release.

         6.   THIRD-PARTY CLAIMS.

                  I agree that I will not instigate, cause, advise or encourage
                  any other persons, groups of persons, corporations or any
                  other entity to file litigation or otherwise assert any claim
                  against the Frank's.

         7.   ENTIRE AGREEMENT.

                  Neither Frank's nor I have made any oral or written statements
                  that vary from the terms of this Release and Separation
                  Agreement.

<PAGE>   11
         8.   VOLUNTARY AGREEMENT.

                  I acknowledge that I have read and understand the Separation
                  Agreement and Release. Further, I acknowledge that I
                  understand its terms and its binding effect, and that I am
                  acting voluntarily and of my own free will in signing it.

WITNESS
                                          --------------------------------------
                                          Employee (Print Name)

---------------------------------         --------------------------------------
                                          Employee (Signature)

                                          --------------------------------------
                                          Dated

                                          FRANK'S NURSERY & CRAFTS, INC.

                                          By:
                                          --------------------------------------

                                          Its:
                                          --------------------------------------

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