Exhibit
10.1
CONSULTATION
AGREEMENT
This
Consultation Agreement, dated as of January 1, 2009 (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, 2009.
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, 2009 or termination of the
Consultant’s service pursuant to this
Agreement. The period commencing as of January 1, 2009
and ending on December 31, 2009 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.
3.1
Base Salary. The Consultant shall be entitled to
receive a base salary (“Base Salary”) at a rate of
$25,000 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.
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.
In
the event of termination of service by reason of Permanent
Disability (as hereinaft
