UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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):
 
January 29, 2020
Kirkland's, Inc.
(Exact name of registrant as specified in its charter)
Tennessee
000-49885
62-1287151
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
  
 
 
5310 Maryland Way, Brentwood, Tennessee
 
37027
(Address of principal executive offices)
 
(Zip Code)
 
 
 
Registrant’s telephone number, including area code:
 
615-872-4800
 
Not Applicable
 
 
Former name or former address, if changed since last report
 
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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common stock
KIRK
NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨    
 


Top of Form

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January 29, 2020, Kirkland’s Inc. (the “Company”) entered into Stock Option Cancellation Agreements (the “Cancellation Agreements”) with certain members of its management team pursuant to which such individuals surrendered and cancelled certain previously granted stock options (the “Cancelled Options”) to purchase shares of the Company’s common stock in order to make additional shares available under the Company’s Amended and Restated 2002 Equity Incentive Plan for future equity grants to Company personnel. Pursuant to the terms of the Cancellation Agreements, these individuals and the Company acknowledged and agreed that the surrender and cancellation of the Cancelled Options was without any expectation to receive, and was without any obligation on the Company to pay or grant, any cash, equity awards or other consideration presently or in the future in regard to the cancellation of the Cancelled Options.
The Cancelled Options that were surrendered had an exercise price that ranged from $7.14 to $25.52 per share. The aggregate number of shares underlying the Cancelled Options held by each of the individuals surrendering the Cancelled Options was as follows: Steven Woodward, Chief Executive Officer - 122,549; Nicole Strain, Executive Vice President and Chief Financial Officer - 37,258; Carter Todd, Vice President and General Counsel - 38,760; Tracy Parker, Vice President Store Operations and Visual Presentation - 35,106; Anthony Price, Vice President Marketing - 33,426; Amy Sullivan, Vice President Merchandising - 33,256; John Stacy, Senior Vice President Supply Chain - 22,006; Keith Watkins, Vice President and Chief Information Officer - 15,406.
Under applicable accounting standards, the Company will account for the cancellation as a settlement for no consideration, and the Company will record the previously unrecognized compensation cost related to the Cancelled Stock Options of $861,000 during the three months ended February 1, 2020.
The foregoing description of the Cancellation Agreements is qualified in its entirety by reference to the form of Stock Option Cancellation Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporations herein by reference.
Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is furnished as part of this Report:

Exhibit No.
 
Description
 



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.
 
 
Kirkland's, Inc.
  
 
 
 
 
January 31, 2020
 
By:
 
/s/ Carter R. Todd
 
 
 
 
Name: Carter R. Todd
 
 
 
 
Title: Vice President and General Counsel




Exhibit 10.1

FORM OF KIRKLAND’S, INC.
STOCK OPTION CANCELLATION AGREEMENT


This STOCK OPTION CANCELLATION AGREEMENT (the “Agreement”) is by and between Kirkland’s, Inc., a Tennessee corporation (the “Company”), and ____________ (the “Employee”).

WHEREAS, the Employee believes that it is in the best interest of the Company and its shareholders to voluntarily cancel existing Company stock options held by Employee set forth on Exhibit A (the “Cancelled Options”) that have relatively low incentive or retention value at this time so that additional shares become available for grant under the Company’s Amended and Restated 2002 Equity Incentive Plan (the “2002 Plan”) which the Company may use for future equity grants to Company personnel in order to recruit, retain and motivate such personnel; and

WHEREAS, the Company is relying upon the Employee’s surrender and cancellation of the Cancelled Options in making determinations about the future grant of equity awards pursuant to the 2002 Plan and otherwise in regard to the administration of the 2002 Plan;

NOW, THEREFORE, the parties hereby agree as follows:

Section 1.    Cancellation of Options. The Employee hereby surrenders the Cancelled Options for cancellation, and the Company hereby accepts such surrender and cancellation. By execution of this Agreement, the parties have taken all steps necessary to cancel the Cancelled Options.

Section 2.    No Expectation or Obligation. The Company and Employee acknowledge and agree that the surrender and cancellation of the Cancelled Options described herein shall be without any expectation of the Employee to receive, and without imposing any obligation on the Company to pay or grant, any cash, equity awards or other consideration presently or in the future in regard to the cancellation of the Cancelled Options.
    
Section 3.    Miscellaneous. This Agreement contains all of the understandings between the Company and Employee concerning the cancellation of the options. The Company and Employee have made no promises, agreements, conditions, or understandings relating to this subject matter, either orally or in writing, that are not included in this Agreement. This Agreement may be executed in counterparts, each of which when signed by the Company and the Employee will be deemed an original and all of which together will be deemed the same agreement. This Agreement shall be governed and construed exclusively in accordance with the law of the State of Tennessee applicable to agreements to be performed in the State of Tennessee to the extent it may apply.





[signature page of Stock Option Cancellation Agreement]

The Company and the Employee have caused this Agreement to be signed and delivered as of the 29th day of January, 2020.



KIRKLAND’S, INC.


__________________________
By:    _______________________________
Name of Employee
Title:    _______________________________    




    
Exhibit A

Description of Cancelled Options

[Table]


TOTAL OPTIONS CANCELLED - ____________