Exhibit 10.1
CONSULTATION
AGREEMENT
This
Consultation Agreement, dated as of January 1, 2008 (the
“Agreement”) between TANDY LEATHER FACTORY, INC.,
a Delaware corporation (and any successor entity thereto, the
“Company” or “TLF”) and J. WRAY
THOMPSON (the “Consultant”).
WHEREAS
the Company desires to retain the Consultant as Chairman of
the Board and as a Consultant and the Consultant desires to
serve in those positions.
NOW,
THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as
follows:
1.
EFFECTIVENESS OF
AGREEMENT
This
Agreement shall become effective as of January 1,
2008.
2.
SERVICE AND
DUTIES
2.1
General.
The Company hereby retains the Consultant, and the
Consultant agrees to serve as Chairman of the Board of the
Company, upon the terms and conditions herein
contained. The Consultant shall have all of the
responsibilities and powers normally associated with such
office. The Consultant shall perform such other
duties and services for the Company, commensurate with the
Consultant’s position, as may be designated from time to
time by the Board of Directors of the Company (the
“Board”). The Consultant agrees to
serve the Company faithfully and to the best of his ability
under the direction of the Board. It is understood
and agreed that the Consultant not be an employee of the
Company despite any title assigned to the
Consultant.
2.2
Services.
Except as may otherwise be approved in advance by
the Board and except during vacation periods and reasonable
periods of absence due to sickness, personal injury, or other
disability, the Consultant shall be available by telephone,
fax, or in person at all reasonable times for consultation
throughout the Term (as defined in Section
2.3). The Consultant shall render his services to
the Company during the Term and shall use his best efforts,
judgment and energy to improve and advance the business and
interest of the Company in a manner consistent with the duties
of his position. However, this Consultation
Agreement will be non-exclusive and the Consultant may engage
in other business or employment, not inconsistent with the
terms of Section 7 herein.
2.3
Term
of Service. The Consultant’s service
under this Agreement shall commence as of January 1, 2008 and
shall terminate on the earlier of December 31, 2008 or
termination of the Consultant’s service pursuant to this
Agreement. The period commencing as of January 1,
2008 and ending on December 31, 2008 is hereinafter referred
to as the “Term”.
2.4
Automatic
Renewal.
[deleted]
2.5
Company Credit
Card/Expenses. During the Term or Renewed
Term, the Consultant shall continue to be eligible to use his
Company-issued credit card for reasonable travel and other
business expenses incurred by him in the fulfillment of his
duties hereunder, in accordance with Company practices as in
effect during the Term.
3.
SALARY
3.1
Base
Salary. The Consultant shall be entitled to
receive a base salary (“Base Salary”) at a rate of
$50,000 per annum, payable in arrears in equal installments
not less frequently than monthly. Any increases
will be in accordance with the terms hereof. Once
increased, such higher shall constitute the Consultant’s
annual Base Salary.
3.2
Annual
Review. The Consultant’s Base Salary
shall be reviewed by the Board and its Compensation Committee,
based upon the Consultant’s performance, not less often
than annually. In addition to any increases
effected as a result of such review, the Board at any time may
in its sole discretion increase the Consultant’s Base
Salary if, in the Board’s opinion, it is in the best
interest of the Company to do so.
4.
BENEFITS
The
Consultant will, during the Term of this Agreement, be
included to the extent eligible in all Company medical, dental
and vision insurance which shall be established by the Company
for, or made available to Consultant. The
Company’s medical plan, dental plan and vision plan
shall provide benefits substantially similar to those provided
to the Company’s existing plans provided for other
employees. During the Term, the benefits described
in this Section 4 may only be reduced as a result of a general
reduction for Senior Consultants, where the Base Salary is
increased to offset benefits lost. In the event is
it necessary to purchase a separate health insurance policy
for the Consultant, then the cost of medical, dental or vision
insurance will be deducted from the Consultant’s Salary
as defined in Section 3.
5.
TERMINATION OF
SERVICE
5.1
General.
If, prior to the expiration of the Term, the
Consultant’s service is terminated by the Company, the
Company shall continue to pay the Consultant the Base Salary
(at the rate in effect on the date of such termination) for
the remainder of the Term (such period being referred to
hereinafter as the “Severance Period”), at such
intervals as the same would have been paid had the Consultant
remained in the active service of the Company. In
addition, the Consultant shall be entitled to continue to
participate during the Severance Period in any benefit plans
set forth herein. The Consultant shall have no
further right to receive any other compensation or benefits
after such termination or resignation of service except as
determined in accordance with the terms of the employee
benefits plans or programs of the Company established for
Consultant under the terms of this Agreement.
5.2
Death During
Term or Severance Period. In the event of
the Consultant’s death during the Term or the Severance
Period, payments of the Base Salary under this Section 5 shall
terminate.
5.3
Date
of Termination. The date of termination of
service shall be the date specified in a written notice of
termination to the Consultant. The date of
resignation shall be the date specified in the written notice
of resignation from the Consultant to the
Company.
6.
DISABILITY
In
the event of termination of service by reason of Permanent
Disability (as
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