Document:

Exhibit 10.1

Exhibit 10.1

AGREEMENT AND RELEASE

This Agreement and Release (“Agreement”) is being entered into between and among A.C. Moore
Arts & Crafts, Inc. ( hereinafter “Employer”), and Rick A. Lepley (“Employee”), (collectively the
“Parties”) to resolve with prejudice any and all differences or issues, whether known or presently
unknown, relating to Employee’s employment with the Employer or the termination of that employment.

NOW, THEREFORE, in consideration of the mutual promises, agreements and representations
contained herein, and intending to be legally bound hereby, the Parties agree as follows:

1. Employee’s employment with the Employer is deemed terminated, effective March 31, 2010.

2. In consideration of this Agreement and Employee’s commitments hereunder, and providing
Employee does not revoke this Agreement, Employer shall:

	 	a.	 	Pay to Employee the gross sum of Six Hundred Forty Five
Thousand Eight Hundred Ninety Dollars and Zero Cents ($645,890.00), less any
deductions required under federal, state or local laws (the “Salary and Pro
Rata Bonus Amount”), payable in twelve successive monthly payments. Due to Tax
Code restrictions, such payments will not be made until October 1, 2010, at
which time the amount accrued through such date shall be paid in one lump sum
within five business days after such date, with the remainder payable on a
monthly basis thereafter;
	 
	 	b.	 	Pay to Employee the cost of monthly COBRA health insurance
coverage for twelve successive months. Due to Tax
Code restrictions, such payments will not be made until October 1, 2010, at
which time the amount accrued through such date shall be paid in
one lump sum within five business days after such date, with the remainder
payable on a monthly basis thereafter;

 

 

 

	 	c.	 	Pay to Employee the gross sum of Fifty-Three Thousand Eight
Hundred and Twenty-Four Dollars and Zero Cents ($53,824.00 ), less any
deductions required under federal, state or local laws (the “Consulting Fee”),
payable in twelve successive monthly payments, with the first monthly payment
to be made within 10 days following the expiration of the revocation period;
	 
	 	d.	 	Effective 10 days following the expiration of the revocation
period, the Stock Appreciation Rights Agreement between Employer and Employee
dated December 3, 2008 (the “2008 SARs Agreement”) under Employer’s 2007 Stock
Incentive Plan, as amended (the “2007 Incentive Plan”) shall be deemed amended
as follows: (1) all outstanding Stock Appreciation Rights awards pursuant to
the 2008 SARs Agreement that have vested or vest pursuant to the following
clause (2) shall continue to remain exercisable until February 20, 2012 and (2)
all outstanding Stock Appreciation Rights pursuant to the 2008 SARs Agreement
that have not vested shall become vested as of March 31, 2010;
	 
	 	e.	 	The portion (i.e., one-third) of the Restricted Stock awards
under the 2007 Incentive Plan pursuant to the award agreement dated March 31,
2008 and the portion (i.e., one-third) of the Stock Appreciation Rights awards
under the 2007 Incentive Plan pursuant to the award agreement dated March 31,
2008, in each case, that are scheduled to vest on March 31, 2010 shall vest on
such date:
	 
	 	f.	 	Pay to Employee Twelve Thousand Dollars and Zero Cents
($12,000.00) for moving his household goods from his residence in New Jersey to
his home in Ohio. Such payment will be made within 10 days following the
expiration of the revocation period;
	 
	 	g.	 	Pay to Employee’s attorney a sum of up to Ten Thousand Dollars
and Zero Cents ($10,000.00) for legal review of the terms of this Agreement.
Such Payment will be made no later than May 15, 2010;
	 
	 	h.	 	Pay to Employee an amount equal to four weeks of his annual
base salary, less any deductions required under federal, state or local laws,
for his unused vacation time. Due to Tax Code restrictions such payment will
not be made until October 1, 2010, at which time the amount shall be paid in
one lump sum within five business days after such date;

 

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	 	i.	 	Reimburse Employee for his reasonable and necessary business
expenses incurred by Employee through March 31, 2010 in accordance with
Employer’s business expense reimbursement policy and practices. Such
reimbursement will be made no later than June 30, 2010;
	 
	 	j.	 	Pay to Employee any excess contribution refund under Employer’s
401(k) Plan to which he is entitled. Such payment will be made on the date in
2011 when such excess contribution refunds are paid generally to Employer’s
employees;
	 
	 	k.	 	Permit, provided there is no cost to Employer, Employee to
convert Employee’s participation in the Employer-sponsored group term life
insurance plan that Employer maintains with a third party insurer; and
	 
	 	l.	 	Transfer ownership of a Blackberry to Employee, for which
Employee shall be entirely responsible, including without limitation the
service after March 31, 2010

 

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3. In consideration of this Agreement and Employer’s commitment hereunder, simultaneously with
the execution of this Agreement and effective March 31, 2010, Employee shall resign as a member of
the Board of Directors of Employer and as a director and officer of every subsidiary or affiliate
of Employer, in the Form attached as Exhibit A hereto.

4. In addition to the consideration provided above and independent of this Agreement, Employee
acknowledges receipt of all other earned compensation and benefits due up through March 31, 2010
and the opportunity to continue health insurance coverage under COBRA. Employee understands that
should he elect COBRA continuation coverage, he shall be solely and exclusively responsible for the
cost of COBRA, with the exception of the cost of twelve months of benefits paid by Employer to
Employee pursuant to Paragraph 2.b. above.

5. Employee understands that except as enumerated in this Agreement, Employee shall receive no
other wages, bonus, severance, or any other payments or benefits from Employer.

6. Employee acknowledges that the consideration set forth in Paragraph 2 above is satisfactory
and adequate in exchange for his promises and release contained herein.

 

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7. (a) Upon Employee’s execution of this Agreement, and in consideration of the payments and
other benefits described above, and subject to the terms of Paragraph 7(b) below, Employee hereby
knowingly, voluntarily, and unconditionally releases and completely and forever discharges A.C.
Moore Arts & Crafts, Inc. and all its parents, subsidiaries and affiliates and, including, but not
limited to, past, current and future parents, subsidiaries, partnerships and affiliates, and
officers, directors, partners, owners, shareholders, agents, attorneys, consultants,
advisors, employees, trustees, fiduciaries, legal representatives, heirs, predecessors,
successors, and assigns (collectively, the “Employer Released Parties”) from any and all rights and
claims that Employee may have, including but not limited to, those relating to or based on his
employment with Employer or the termination of that employment for any and all reasons. Employee
specifically releases the Employer Released Parties from any rights or claims which Employee may
have based upon the Age Discrimination in Employment Act, which prohibits age discrimination in
employment; Title VII of the Civil Rights Act of 1964, as amended, which prohibits discrimination
in employment based on race, color, creed, national origin or sex; the Equal Pay Act, which
prohibits paying men and women unequal pay for equal work; the Americans with Disabilities Act of
1990, which prohibits discrimination against disabled persons; the Employee Retirement Income
Security Act, which regulates employment benefits; the New Jersey Law Against Discrimination or any
other federal, state, or local laws or regulations prohibiting employment discrimination or which
otherwise regulate employment terms and conditions. Employee also releases the Employer Released
Parties from any claim for wrongful discharge, unfair treatment, breach of public policy, express
or implied contract, or any other claims arising under common law which relate in any way to
Employee’s employment with the Employer or the termination thereof. This Release covers all
claims, obligations, suits, contracts, liens, agreements, promises, costs, charges, expenses,
judgments, damages, demands, debts, rights, action or actions, cause of action or causes of action,
executions and liabilities whatsoever, whether liquidated or unliquidated, fixed or contingent,
matured or unmatured, asserted or unasserted, foreseen or unforeseen, at law, in equity or
otherwise, whether presently known or
unknown, from the beginning of Employee’s employment with
Employer through the date and time when Employee signs this
Agreement.

 

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(b) The Release in Paragraph 7(a) does not release and discharge, and does not
otherwise cover: (i) any rights of Employee, or any claims that Employee may make for unemployment
compensation benefits or under any applicable workers’ compensation statute or its equivalent, (ii)
any rights or any claims which Employee may not release as a matter of law, (iii) any rights or
claims of Employee under this Agreement, including the right to sue for breach of, or to enforce,
this Agreement, (iv) any rights or claims of Employee to his accrued and vested benefits and rights
under the Employer 401(k) Plan, (v) Employee’s rights or claims as a participant under any ERISA
plan generally available to Employer’s eligible employees, or its officers or directors, (vi) any
rights or claims to healthcare continuation coverage under COBRA, (vii) Employee’s rights or
claims under any Employer-sponsored equity or incentive plan and any awards granted thereunder
through the ninetieth day after March 31, 2010, except that Employee’s rights or claims under the
2008 SARs Agreement as amended by Paragraph 2.d., and, solely in connection with the 2008 SARs
Agreement, under the 2007 Incentive Plan, shall not be released until February 21, 2012 as
contemplated under Paragraph 2.d., (viii) Employee’s rights or claims under Article IV, entitled
“Personal Liability and Indemnification”, of Employer’s Amended and Restated By-Laws and under
section 8, entitled “Personal Liability of Directors”, of the Articles of Incorporation, as amended
(to which the Parties acknowledge and agree that under Article IV of the Amended and Restated
By-Laws, entitled “Personal Liability and Indemnification”, the misstatements referring to a
“person covered by section 402” which references should be to “a person covered by section
401” and other misstatements of section numbers shall not impair Employee’s rights or claims
to the maximum specified or intended protections of Article IV), (ix) Employee’s rights or claims
under any or all the liability and indemnification insurance policies of Employer or any of its
parents, subsidiaries or affiliates, and (x) any rights or claims that may arise after this
Agreement is executed by the Employee.

 

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8. This Agreement does not prohibit Employee from participating in any investigation or
proceeding conducted by the Equal Employment Opportunity Commission.

9. All Parties confirm that they have not to date caused or permitted any charge, complaint,
lawsuit, or any other action or proceeding whatsoever to be filed against any other Party based on
Employee’s employment or the termination of that employment.

10. In conjunction with the execution of this Agreement and for the consideration received
herein, Employee further agrees as follows:

	 	a.	 	Not knowingly to apply for or seek employment with Employer or
any entity owned, purchased, or otherwise acquired by Employer at any time
hereafter;
	 
	 	b.	 	To return or confirm that he no longer has any material or
property belonging to Employer, including but not limited to, any credit cards,
keys, computers, templates, spreadsheets, flash drives, PDA, or computer files
in any media;

 

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	 	c.	 	To cooperate fully with any reasonable request of Employer to
provide information and/or materials to it or to otherwise assist it in matters
pertaining to the performance of his former duties. Employee will be
reimbursed any reasonable, documented expenses which he incurs in performing
such duties, all in addition to the payments called for in this Agreement.
Employee will be paid for the reasonable value of his time, for
his services under this Paragraph 10.c. provided after March 31, 2011. Such
payments will be made within 30 days from receipt of invoice from Employee,
the invoice to be forwarded to Employer each month following the performance
of his services;
	 
	 	d.	 	Other than his rights preserved under clause (vii) of Paragraph
7(b), Employee irrevocably waives and disclaims any right to any options, SARs,
PARs, shares of stock or equity of any kind in Employer or in any of the
Employer Released Parties; and,
	 
	 	e.	 	Employee agrees that he shall abide by the terms and conditions
of Paragraphs 5, 6, 7, 10, 11, 13, 15 and 16 of the Employment Agreement dated
June 1, 2006 between Employer and Employee, as amended by the First, Second and
Third Amendments to the Employment Agreement (the “Employment Agreement”).
Notwithstanding anything in the Employment Agreement to the contrary, Employer
agrees that the “Noncompete Period” defined in Paragraph 7 of the Employment
Agreement that shall be applicable to Employee is the period of twelve (12)
consecutive months starting from March 31, 2010, and any provision in the
Employment Agreement to the contrary or in any other agreement with the
Employer stating a different non-compete period shall have no force and effect.

 

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11. All Parties agree not to disclose the terms or provisions of this Agreement to anyone
other than their attorneys, financial and tax advisors, and immediate family members, who will be
informed of and bound by this confidentiality provision, until this Agreement is filed with the
Securities and Exchange Commission by the Employer, which is expected to occur on March 29, 2010.
All Parties agree that this Agreement may be used as evidence in a lawsuit in which either party
alleges a breach of the promises contained herein.

12. Employee acknowledges that he has been advised to consult with an attorney before signing
this Agreement.

13. Employee understands that he has twenty-one (21) days to review and consider this
Agreement before signing it. Employee understands that he may use as much of this twenty-one (21)
day period as he wishes prior to signing it.

14. Employee may revoke this Agreement within seven (7) days of him signing it. Revocation
can be made by delivering a written notice of revocation to Michael J. Joyce, c/o A.C. Moore Arts
& Crafts, Inc. 130 A.C. Moore Drive, Berlin, New Jersey 08009, Attention: Amy Rhoades, Esq.,
General Counsel. For this revocation to be effective, written notice must be received by Mr. Joyce
no later than the close of business on the seventh (7th) day after Employee signs the
Agreement. If Employee revokes this Agreement, it shall not be effective and enforceable and
Employee will not receive the consideration contained in Paragraph 2 or any other consideration set
forth herein.

 

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15. By entering into this Agreement, Employer does not admit and expressly denies that it has
violated any contract, rule, law, or regulation, including, but not limited to, any federal, state,
or local law or regulation relating to employment or employment discrimination. This Agreement
does not constitute an admission by the Employee that he has violated any contract, rule, law, or
regulation, and Employee denies any such violation.

16. This Agreement is the entire Agreement between Employee and Employer and any other prior
agreements between them are hereby terminated and shall have no force or effect, except for the
following which remain in effect: (a) the paragraphs of the Employment Agreement set forth in
Paragraph 10.e., (b) Employer’s 401(k) Plan or other ERISA plans, (c) Employer’s equity and/or
incentive plans and Employee’s award agreements thereunder, but only insofar as and as long as
necessary to govern Employee’s preserved rights under clause (vii) of Paragraph 7(b), (d) solely
with respect to a non-waiver of Employee’s rights and claims pursuant to Paragraph 7(b)(viii), Employer’s
Amended and Restated By-Laws, Articles of Incorporation, as amended, (e) liability and
indemnification insurance policies of the Employer or any of its parents, subsidiaries or affiliates,
and (f) the group life insurance policy referred to in
paragraph 2.k. above. Employer has made no promises to Employee other than those set forth in
this Agreement. This Agreement may be modified only upon an express written agreement between the
Parties. This Release will be governed and construed in accordance with the laws of the State of
New Jersey without regard to principles of conflicts of laws.

 

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17. The invalidity or unenforceability of any provision of this Agreement, whether in whole or
in part, shall not in any way affect the validity or enforceability of any other provision
contained herein.

18. Employee agrees not to make any negative comments or disparaging remarks, concerning or
relating to his employment with or his service as a director on the Board of Directors of Employer,
in writing, orally, or electronically, that would injure the business or reputation of all or any
of the Employer Released Parties. Employer agrees that it shall instruct its senior officers
(employees at the Vice President level or above) and members of its Board of Directors to refrain
from making any negative comments, or disparaging remarks in writing, orally, or electronically
that would injure the reputation of Employee and that Employer shall be responsible for any conduct
by them in the scope of their respective employment or Board service that violates the instructions
given to them pursuant to this provision. It is agreed and acknowledged that the breach of this
Paragraph 18 will cause the person or entity who is disparaged irreparable harm. This paragraph
does not apply to any testimony, any verified or sworn statement such as affidavits, or any
information provided in a lawsuit or in an administrative or adjudicatory proceeding, or in
connection with an activity or proceeding protected by federal, state or local law.

19. In consideration of this Agreement and Employee’s commitments in this Agreement and
providing Employee does not revoke this Agreement, Employer shall:

	 	a.	 	Maintain the confidentiality of Employee’s personnel file
pursuant to the
policy of the Employer;

 

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	 	b.	 	In accordance with the policy of the Employer, the Employer
shall provide only Employee’s job title and dates of employment with Employer
upon inquiry by any person or entity, and any such inquiry will be responded to
by Employer’s human resources officer;
	 
	 	c.	 	Not contest any claims which Employee may make for unemployment
compensation benefits. Said unemployment claims are specifically excepted from
the release of claims of Employee set forth above in Paragraph 7.

20. This Agreement shall inure to the benefit of Employer Released Parties and each of their
respective heirs, successors, executors, administrators and assigns. This Agreement shall also
inure to the benefit of Employee and his heirs, successors, executors, administrators and assigns.
In the event of the death of Employee, all of the amounts of monies payable to him under this
Agreement, and all of the money or shares of stock payable, awardable, or conferred upon Employee
pursuant to this Agreement, shall be paid to the Rick A. Lepley Living Revocable Trust. This
Agreement is binding upon the Employer and its successors and assigns and Employee and his heirs,
successors, administrators and assigns.

 

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EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT, UNDERSTANDS IT AND IS VOLUNTARILY ENTERING
INTO IT. EMPLOYEE UNDERSTANDS AND AGREES THAT THIS AGREEMENT CONTAINS A GENERAL RELEASE OF CLAIMS
RELATING TO HIS EMPLOYMENT AND THE TERMINATION OF THAT EMPLOYMENT.

IN WITNESS WHEREOF, and intending to be legally bound, the Parties agree to the terms of this
Agreement.

	 	 	 	 	 	 	 
	 	 	A.C. Moore Arts & Crafts, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 /s/ Amy Rhoades	 	Date: March 29, 2010
	 

	 	 	 	Amy Rhoades	 	 
	 
	 	 	 	 
	 	 	 	 	Senior Vice President and General
Counsel	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	/s/ Rick A. Lepley	 	Date: March 29, 2010
	 
	 	 	 	 	 	 
	 	 	 	 	Rick A. Lepley	 	 

 

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EXHIBIT A

As of March 31, 2010

Mr. Michael J. Joyce

Chairman of the Board

A.C. Moore Arts & Crafts, Inc.

130 A.C. Moore Drive

Berlin, NJ 08009-9500

Mike:

I hereby retire and resign effective March 31, 2010, as the President and Chief Executive
Officer and as a member of the Board of Directors of A.C. Moore Arts & Crafts, Inc. (the “Company”)
and as an officer or member of the Board of Directors of any or all of the Company’s direct and
indirect subsidiaries and as a trustee of any benefit plan related to the Company or its
subsidiaries.

	 	 	 	 	 
	 

	 	Sincerely,
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Rick A. Lepley	 	 

 

14Exhibit 10.2

Exhibit 10.2

March 29, 2010

Joseph A. Jeffries

Dear Joe:

The Company has awarded you a special cash retention award subject to the terms of this Award
letter. Subject to the requirements and limitations set forth in this Award letter, on September
30, 2010, you will receive a lump sum cash payment of $75,000, less applicable tax and withholdings
(the “Award”). For purposes of this Award letter, “Company” means A.C. Moore Arts & Crafts, Inc.
or A.C. Moore Incorporated, as appropriate.

1. Right to Receive Award. Your right to receive the Award is contingent on (i) your
agreeing to the terms of this Award by signing where indicated below, (ii) your remaining
continuously employed on a full-time active basis with the Company through September 30, 2010, and
(iii) your continuing to achieve a performance rating of “meets expectations” or higher. If you
satisfy these requirements, the Award will be paid to you in a single lump sum cash payment on
September 30, 2010.

2. Forfeiture. If prior to September 30, 2010, (i) your employment with the Company
terminates for any reason other than your death or permanent disability, or (ii) your employment
status with the Company changes to part-time, then the Award will be forfeited in full as of the
date of your termination or change in status, as the case may be. In such instance, you will not
be entitled to receive a pro rata portion of the Award.

If your employment with the Company terminates before September 30, 2010 because you die or
become permanently disabled, then the Award will vest as of the date of your death or termination
for permanent disability (assuming you otherwise meet the requirements under this Award letter).
The Board of Directors or the Compensation Committee of the Board will determine whether a
permanent disability exists for purposes of the foregoing, and such determination will be
conclusive and binding.

3. Change of Control. If you remain continuously employed on a full-time active basis
with the Company through and including the date on which a Change of Control of the Company occurs,
then notwithstanding any provision herein to the contrary, the Award shall automatically vest and
be payable to you upon the effective date of the Change of Control. For this purpose, “Change of
Control” has the meaning set forth in the Company’s 2007 Stock Incentive Plan.

4. Interpretation. The interpretation and construction of any provision or term of
this Award letter by the Committee will be final and conclusive. The terms of this Award letter
and all actions taken hereunder will be governed by the laws of the State of New Jersey, without
regard to the conflict of law provisions of any jurisdiction.

 

 

Page 2

March 29, 2010

5. Entire agreement. This Award agreement is the entire agreement between you and the
Company concerning the Award granted hereunder. In the case of a conflict between the Amended and
Restated Employment Letter, dated August 10, 2009, between you and the Company and this Award
agreement relating to the terms of this Award, the terms of this Award agreement will control.

6. Employment status. Nothing in this Award agreement confers any right to continued
employment with the Company, or affects the Company’s right to terminate your employment at any
time, with or without notice, and with or without cause.

[Signature page follows on next page.]

 

 

Page 3

March 29, 2010

IN WITNESS WHEREOF, the parties have caused this Award agreement to be duly executed and
delivered as of the date first written above.

	 	 	 	 	 
	 	Sincerely,

A.C. MOORE ARTS & CRAFTS, INC.

 	 
	 	By:  	/s/ Amy Rhoades	 
	 	 	Name:  	Amy Rhoades 	 
	 	 	Title:  	Senior Vice President and
General Counsel 	 

	 	 	 
	ACCEPTED:
	 	 
	 
	/s/ Joseph A. Jeffries
	 

Joseph A. Jeffries

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