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) August 1, 2005
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Duckwall-ALCO Stores, Inc.
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(Exact name of registrant as specified in its charter)
Kansas 0-20269 48-0201080
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(State or other (Commission File (IRS Employer
jurisdiction Number) Identification No.)
of incorporation)
401 Cottage, Abilene, KS 67410-2832
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (785) 263-3350
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(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 (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act
(17 CFR 240.14a-12(b))
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
On August 1, 2005, the Company entered into an employment agreement with
Bruce Dale ("Employment Agreement"), replacing the previous memorandum of
understanding dated March 15, 2005 under which Mr. Dale became the Company's
President and Chief Executive Officer. The Employment Agreement was signed on
August 1, 2005 but is effective as of March 28, 2005. The initial term of the
Employment Agreement ends on April 7, 2007 unless earlier terminated under
certain circumstances. This term automatically extends for successive one year
periods absent written notice to the contrary.
During the initial term of the Employment Agreement, Mr. Dale receives a
base salary of $325,000.00. During any extended term, the Company may increase
or decrease Mr. Dale's base salary. Under the Employment Agreement, if the
Company meets certain performance criteria, Mr. Dale will be entitled to an
annual cash bonus of up to 50% of his base salary. Generally, Mr. Dale is
entitled to participate in the executive-level benefit arrangements available to
other executive officers. He is also entitled to four weeks of paid vacation per
year. Under the Employment Agreement, the Company granted Mr. Dale the right to
receive stock options (governed by the Company's 2003 Incentive Stock Option
Plan) to purchase 100,000 shares of the Company's common stock. The Company also
agreed to pay Mr. Dale up to $66,000.00 as reimbursement of real estate
commissions incurred by Mr. Dale in connection with the sale of his house in
Bloomfield, Michigan.
During the term of the Employment Agreement, Mr. Dale is prohibited from
competing with the Company or disclosing confidential information about the
Company. If terminated, Mr. Dale will be bound by the prohibition against
disclosure of confidential information thereafter and against competing with the
Company until the second anniversary of the termination of employment. If
terminated, Mr. Dale will receive all earned obligations and benefits as of the
date of Termination. If Mr. Dale is terminated due to disability, the Company
will maintain existing health and dental benefits for Mr. Dale and his
dependents for a period of twelve months.
Subject to the next sentence, if Mr. Dale is terminated without cause, for
good reason, or for the Company's failure to extend the term of employment, Mr.
Dale will receive one additional year of base salary and all benefits coverage
for the unexpired portion of any remaining term of employment. However, the
Company has the right to deduct, dollar for dollar, from the amount payable to
Mr. Dale, the gross aggregate amount of compensation Mr. Dale receives from
other employment violating the non-compete agreement. A copy of the Employment
Agreement is attached hereto as Exhibit 10.1 and incorporated by reference
herein.
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Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
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10.1 Employment Agreement, signed August 1, 2005,
effective as of March 28, 2005, between
Duckwall-ALCO Stores, Inc. and Bruce Dale
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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.
(Registrant)
Duckwall-ALCO Stores, Inc.
Date: August 1, 2005 By: /s/ Richard A. Mansfield
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Name: Richard A. Mansfield
Title: Vice President - Finance
Chief Financial Officer
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