Exhibit 10.13
FRANK'S NURSERY & CRAFTS, INC.
000 XXXXX XXXX., XXXXX 000
XXXX, XXXXXXXX 00000
December 1, 2002
Xx. Xxxxxx Xxxxx
0000 Xxxxxxx Xxxxxxxx
Xxxx 000
Xxxxx, Xxx Xxxxxx 00000
RE: CONSULTING ARRANGEMENT WITH FRANK'S NURSERY & CRAFTS, INC. ("FRANK'S")
Dear Xxx:
This letter sets forth the arrangement between you and Frank's with
respect to your provision of consulting services to Frank's.
As you know, Xxxxx Xxxxxxx, Frank's Chairman and Chief Executive
Officer, has determined to resign from Frank's. The Board of Directors of
Frank's, of which you are a member, has begun the search for a new chief
executive officer. You have agreed to consult with the Board and with management
of Frank's during Frank's period of transition to a new chief executive officer.
During the period from December 1, 2002, until the earlier of (i) the
date on which Frank's hires a new chief executive officer and (ii) November 30,
2003 (the "Initial Period"), you will assist Frank's in the formulation and
execution of its business strategy, including merchandizing, advertising, store
operations and the establishment and operation of strategic alliances with other
retailers. You and Frank's anticipate that you will spend, on average, one day
per week at Frank's offices in Troy, Michigan, and you will generally otherwise
be available to management of Frank's by telephone. For those services, you will
be paid a consulting fee of $20,000 per month, in arrears.
During the one-year period following the Initial Period, you will
continue to assist Frank's in the formulation and execution of its business
strategy, and you will assist Frank's new chief executive officer in his or her
transition in that office. You and Frank's anticipate that you will spend, on
average, two days per month at Frank's offices in Troy, Michigan, and you will
generally otherwise be available to management of Frank's by telephone. For
those services, you will be paid a consulting fee of $8,000 per month, in
arrears.
For your consulting services, including your work in establishing and
operating any strategic alliances, you will receive as full payment the
consulting fees described above, and on December 5, 2002, you will be granted
non-qualified options to purchase 25,000 shares of
Frank's common stock, with an exercise price equal to the fair market value of
Frank's common stock on that date.
Frank's will reimburse you for reasonable business expenses related to
travel which has been pre-approved, in accordance with the reimbursement
policies of Frank's. You will be an independent contractor, and not an employee
or agent, of Frank's. You will have no authority to sign binding agreements on
behalf of Frank's. As an independent contractor, you will not be entitled to any
employee benefits and you will be responsible for the payment of all taxes on
your consulting fees. You understand that Frank's will not withhold any such
taxes on your behalf. This consulting arrangement will have no effect on your
rights to fees and stock options payable to non-employee directors of Frank's.
The arrangement described in this letter will continue until
terminated, either by your death or disability, by expiration of your consulting
periods, or by mutual agreement of you and Frank's.
During the period of your consulting and thereafter, you will keep
secret and retain in strictest confidence all confidential information of
Frank's, and you will not interfere with the relationships between Frank's and
its employees, vendors or lenders. Any proprietary ideas or rights created by
you, alone or with others, as part of your consulting services will belong
solely to Frank's.
This letter sets forth the entire agreement between Frank's and you
with respect to your consultation with Frank's. It is personal to you, and
cannot be assigned by you, nor can your duties be delegated to another. This
letter will inure to the benefit of and be binding upon any successor to
Frank's.
We look forward to working with you in this new role, as you help
Frank's to continue to grow and prosper.
Very truly yours,
/s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx
President and Chief Operating Officer
Accepted and agreed to:
/s/ Xxxxxx Xxxxx
-------------------------
Xxxxxx Xxxxx
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