8-K

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) November 15, 2006                              

A.C. Moore Arts & Crafts, Inc.

(Exact name of registrant as specified in its charter)

Pennsylvania	000-23157	22-3527763
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

130 A.C. Moore Drive, Berlin, NJ	08009
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (856) 768-4930

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 (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 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.

On November 15, 2006, A.C. Moore Arts & Crafts, Inc. (the “Company”) entered into the First Amendment (the “Amendment”) to the Employment Agreement, dated June 1, 2006 (the “Agreement”), with Rick A. Lepley, the Company’s Chief Executive Officer. The Amendment amends the Agreement to provide for the following changes:

• The Company is not relieved of its obligation to pay severance to Mr. Lepley in the event of non-renewal of the Agreement.

• Upon a termination without cause following a change of control, all options to purchase common stock to which Mr. Lepley would be entitled to receive will immediately be deemed granted and vested and Mr. Lepley will have 18 months after the termination date to exercise these options.

• All options held by Mr. Lepley on the date of a change of control will immediately vest. If Mr. Lepley’s employment is terminated without cause following the change of control, he will have until the earlier of the end of the original option term and 18 months after the termination date to exercise the options.

• Under the Agreement, Mr. Lepley is entitled to receive annual grants of an option to purchase 100,000 shares of the Company’s common stock. The Amendment provides that Mr. Lepley will receive each annual grant on the date in each calendar year that the Company’s Board of Directors otherwise grants equity to management. In the event that the Board does not grant equity to management and Mr. Lepley remains employed by the Company on June 1 of that year, Mr. Lepley will receive the annual grant on December 31 regardless of whether he is still employed with the Company on December 31 for that year.

The foregoing summary of the Amendment is not intended to be complete, and is qualified in its entirety by reference to the Amendment, which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated by reference into this Item 1.01.

Item 9.01 Financial Statements and Exhibits.

(d)      Exhibits.

Exhibit No.	Description
10.1	First Amendment, dated as of November 15, 2006, to the Employment Agreement, dated as of June 1, 2006, between the Company and Rick A. Lepley.

SIGNATURE

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.

	A.C. MOORE ARTS & CRAFTS, INC.
Date: November 16, 2006	By:	/s/ Amy Rhoades
		Name:	Amy Rhoades
		Title:	Vice President and General Counsel

EXHIBIT INDEX

Exhibit No.	Description
10.1	First Amendment, dated as of November 15, 2006, to the Employment Agreement, dated as of June 1, 2006, between the Company and Rick A. Lepley.

EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT

FIRST AMENDMENT, dated as of November 15, 2006 (this “Amendment”) to EMPLOYMENT AGREEMENT, dated as of June 1, 2006 (as heretofore amended, the “Employment Agreement”) between A. C. Moore Arts & Crafts, Inc., a Pennsylvania corporation (“Company”), and Rick A. Lepley (“Executive”). Capitalized terms used herein and not defined herein shall have the respective meanings set forth for such terms in the Employment Agreement.

R E C I T A L S:

WHEREAS, Company and Executive have mutually agreed that certain provisions of the Employment Agreement be amended, as set forth herein.

NOW, THEREFORE, intending to be legally bound hereby, it is agreed as follows:

Section 1.      Amendment to Paragraph 4(b). Immediately after the tenth word of the first sentence, which is the word “terminated”, Paragraph 4(b) is amended to include the following parenthetical:

“(including, without limitation, pursuant to the six month notice under Paragraph 4(a))”

Section 2.      Amendment to Section 6(a)(iii) of Appendix I. Section 6(a)(iii) of Appendix I is hereby amended and restated to read as follows:

“(iii)      all options to purchase common stock in the Company to which Executive would be entitled to be granted pursuant to the terms of this Agreement shall immediately be deemed granted, vested and become exercisable on the Date of Termination. Executive shall have 18 months after the Date of Termination to exercise such options, subject to the provisions of the plans under which they were granted.”

Section 3.      Amendment to Appendix I. Appendix I is amended to include the following Section 9:

“Options. All options to purchase common stock in the Company held by Executive on the date of a Change of Control shall immediately be deemed vested and become exercisable on the date of the Change in Control and Executive shall have until the end of the applicable original term of each such option to exercise such options; provided, however, that in the event that Executive’s employment with the Company is terminated for any reason (other than Cause) after the Change in Control, Executive shall have until the earlier of (1) the end of the applicable original term of each such option and (2) 18 months after the Date of Termination to exercise such options post-termination. In the event that Executive’s employment with the Company is terminated for Cause, all options held by Executive shall terminate immediately.”

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Section 4.      Amendment to Paragraph 3(i)(2). Paragraph 3(i)(2) is amended and restated to read as follows:

“(2)      For each calendar year, after December 31, 2006, during the Employment Term (each, an “Annual Option Year”), Executive shall be granted a non-qualified option to purchase 100,000 shares of common stock of the Company (each, an “Annual Option”) on the day (each, a “Management Grant Date”) of each such calendar year that the Board otherwise annually grants options or other equity to management of the Company, if Executive is employed by Company pursuant to this Agreement on such Management Grant Date of such calendar year; provided however, if Executive is employed by the Company pursuant to this Agreement on June 1 of an Annual Option Year (each, an “Option Entitlement Date”), Executive shall be granted an Annual Option on the Management Grant Date of such year, irrespective of whether Executive is employed by the Company pursuant to this Agreement on the Management Grant Date of such year; and if there is no Management Grant Date of such year, Executive shall be granted an Annual Option on December 31 of such year, irrespective of whether Executive is employed by the Company pursuant to this Agreement on December 31 of such year. In accordance with Executive’s Stock Option Agreements evidencing the Annual Options and Appendix I of this Agreement, Executive shall have the right to exercise the Annual Options within certain time periods (each, a "Period") after death, disability or other terminations of employment, including without limitation for three months after the date of termination of employment without Cause. If the grant date of an Annual Option is made after both (x) the Option Entitlement Date and (y) the date of termination of Executive’s employment under the Agreement, then notwithstanding anything to the contrary in this Agreement or the Stock Option Agreements, the grant date of such Annual Option, rather than the date of termination of employment, shall serve as the first day of the applicable Period for such Annual Option.”

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Section 5.      Effectiveness. This Amendment shall be become effective as of the date hereof.

Section 6.      Status of Employment Agreement. This Amendment is limited solely for the purposes and to the extent expressly set forth herein, and, except as expressly set forth herein all of the terms, provisions and conditions of the Employment Agreement shall continue in full force and effect and are not effected by this Amendment.

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Employment Agreement to be duly executed and delivered as of the date first written above.

/s/ Rick A. Lepley
RICK A. LEPLEY
A.C. MOORE ARTS & CRAFTS, INC.
By:	/s/ Michael J. Joyce
	Michael J. Joyce
	Chairman of the Board of Directors

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