UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 26, 2005
(April 20, 2005)
Friedman's Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-22356 58-20583
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
171 Crossroads Parkway
Savannah, Georgia 31422
(Address of Principal Executive Offices)
(912) 233-9333
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Friedman's Inc. ("Friedman's" or the "Company") and Pamela J. Romano
entered into an Employment Agreement, dated as of April 20, 2005 (the
"Employment Agreement"), setting forth the terms of Ms. Romano's employment as
President and Chief Operating Officer of the Company, effective as of April
20, 2005.
The Employment Agreement provides that Ms. Romano will receive an
annual base salary of $500,000, and a signing bonus of $200,000. During her
term of employment, Ms. Romano will be entitled to participate in the
Company's annual incentive bonus plan, having a target amount of 75% of Ms.
Romano's annual base salary and which may be up to 100% of her annual base
salary, provided that, in addition to the signing bonus, Ms. Romano will be
entitled to a minimum annual incentive bonus payment of $150,000 for calendar
year 2005.
Ms. Romano will also be entitled to participate in the Company's Key
Employee Compensation Program ("KECP"). Under the KECP, Ms. Romano will be
entitled to receive a grant of stock options equal to 1.75% of the total
amount of Friedman's common stock (the "Emergence Grant") on the effective
date of a plan of reorganization under chapter 11 of the United States
Bankruptcy Code (the "Emergence Date") as approved by the U.S. Bankruptcy
Court for the Southern District of Georgia, in Savannah. The Emergence Grant
will be vested at grant with respect to 50% of the options. The remaining
options will vest with respect to 25% of the total grant on each of the first
and second anniversaries of the Emergence Date. Upon the Company's emergence
from chapter 11, Ms. Romano will also be entitled to received a cash bonus of
$700,000, of which 50% will be paid on the Emergence Date, 25% will be paid on
the six-month anniversary of the Emergence Date, and 25% will be paid on the
one-year anniversary of the Emergence Date. Ms. Romano will also be eligible
to participate in the retirement, medical, dental and other benefit plans
which the Company makes available to its senior executive officers.
The Employment Agreement is for an initial term of two years
commencing on April 20, 2005, subject to earlier termination by Friedman's
with or without cause. The Employment Agreement may also be terminated by Ms.
Romano voluntarily or for good reason. If Ms. Romano's employment is
terminated (a) by the Company without cause, (b) by Ms. Romano for good reason
upon the non-performance by the Company of the Employment Agreement in
accordance with it its terms, or (c) upon non-renewal of the Employment
Agreement by the Company, Ms. Romano will be entitled to receive as severance,
an amount equal to two times the sum of (x) her then current annual salary and
(y) the greater of (i) Ms. Romano's most recent annual incentive bonuses and
(ii) the arithmetic mean of Ms. Romano's annual incentive bonuses for the two
most recent years, provided, however, that if the Company liquidates its
business operations in its pending chapter 11 cases at any time prior to
December 31, 2006, Ms. Romano shall only be entitled to receive a severance
payment equal to two times her annual base salary. If Ms. Romano voluntarily
terminates her employment or is terminated by the Company for cause, she will
not be entitled to any severance, termination pay or other compensation or
benefits.
Ms. Romano's employment may be terminated by the Company within
twelve months of certain events involving a change of control of the Company.
In the event of such termination following a change of control, Ms. Romano
will be entitled to a lump sum payment in the amount of 299% of the sum of her
base salary (as in effect for the year prior to the date of termination) plus
annual incentive bonus (as in effect on the date of termination). Ms. Romano
is also entitled to receive a gross-up payment from the Company in respect of
any excise tax imposed on any change in control payment to the extent that
such payment constitutes an "excess parachute payment" within the meaning of
section 280G of the Internal Revenue Code. The Company's emergence from
chapter 11 and any transactions contemplated by the Company's plan of
reorganization will not constitute a change in control for purposes of any
change in control benefits under the Employment Agreement.
Ms. Romano is also subject to various restrictive covenants
throughout the term of her employment as well as post-employment
non-competition and non-solicitation covenants.
The foregoing descriptions are qualified in their entirety by
reference to the Employment Agreement, a copy of which is included with this
Current Report on Form 8-K as Exhibit 10.1.
Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
As described in Item 1.01 of this Current Report on Form 8-K and in a
press release issued by Friedman's on April 25, 2005 (the "Press Release"),
Ms. Romano was named President and Chief Operating Officer of the Company
effective as of April 20, 2004. From 1997 to January 2005, Ms. Romano served
as President of Zales Jewelers. From February 2003 to January 2005 Ms. Romano
also served as Group Senior Vice President of Zale Corporation, and from 1997
to January 2003 was Senior Vice President of Zale Corporation. Ms. Romano is
47 years old.
There are no arrangements or understandings between Ms. Romano and
any other person pursuant to which Ms. Romano was selected President and Chief
Operating Officer. There are no transactions to which the Company is a party
and in which Ms. Romano had a material interest that are required to be
disclosed under Item 404(a) of Regulation S-K. Ms. Romano and the Company have
entered into an Employment Agreement as described in Item 1.01 of this Current
Report and which is incorporated herein by reference.
The text of the Press Release is included with this Current Report on
Form 8-K as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
Number Description
------ -----------
Exhibit 10.1 Employment Agreement, dated as of April 20, 2005, by
and between Friedman's Inc. and Pamela J. Romano
Exhibit 99.1 Press release dated April 25, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FRIEDMAN'S INC.
Date: April 26, 2005 By: /s/ Steven Moore
--------------------------
C. Steven Moore
Chief Administrative Officer
and General Counsel
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
Exhibit 10.1 Employment Agreement, dated as of April 20, 2005, by and
between Friedman's Inc. and Pamela J. Romano
Exhibit 99.1 Press release dated April 25, 2005