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 4, 2016

HANCOCK FABRICS, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code:

(662) 365-6000

N/A

(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:

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

Ms. Flick, age 50, currently serves as the Chairman - Finance Committee of the Marcus Autism Center Board of Trustees and is a director of the National Monuments Foundation Board and a member of the University of Tennessee Finance Department Advisory Board. From 2013 to September 2014, she served as Global Vice President - Finance and Treasurer at Recall Corporation, a company listed on the Australian Securities Exchange, and from 2012 to 2013, she served as Enterprise Vice President - Finance and Treasurer at ServiceMaster Global Holdings, Inc., currently a public company listed on the New York Stock Exchange. From 2011 to 2012, Ms. Flick served as Senior Vice President and Chief Financial Officer at SecurAmerica, LLC, a private company. Prior to that, Ms. Flick had spent approximately 14 years at The Home Depot, Inc., which is listed on The New York Stock Exchange, in various positions, including Vice President - Finance and Treasurer.

Upon Ms. Flick’s appointment, O. Pierce Crockett, the Company’s interim Chief Financial Officer, no longer served in such position effective January 4, 2016. Mr. Crockett will resume his prior role as Divisional Vice President and Controller for the Company’s finance team.

There is no arrangement or understanding between Ms. Flick and any other person pursuant to which she is being appointed as Executive Vice President and Chief Financial Officer. There are no family relationships between Ms. Flick and any director or executive officer of the Company and there are no relationships or related transactions between Ms. Flick and the Company that would be required to be reported pursuant to Item 404(a) of Regulation S-K.

Item 7.01 Regulation FD Disclosure

The Company issued a press release on January 5, 2016, announcing Ms. Flick’s appointment, which is attached hereto as Exhibit 99.1 and is incorporated herein by reference. In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 10.1

December 17, 2015

Rebecca Flick

[Address]

Dear Rebecca:

It is with great pleasure and enthusiasm that we offer you the position of Executive Vice President & CFO of Hancock Fabrics, Inc. (“Hancock Fabrics” or the “Company”), reporting to the Company’s Chief Executive Officer, subject to final approval of your appointment by the Board of Directors of Hancock Fabrics (the “Board”). Unless we mutually agree otherwise, your employment is effective January 4, 2016. (The first day of your employment with Hancock Fabrics is referred to as your “Start Date.”) You will be classified as an exempt (Salaried) employee. Your compensation package includes an annual base salary of $250,000.00 (payable bi-weekly), which is subject to applicable payroll deductions. You will be eligible for participation in the Company’s incentive programs, with the type and amount of any award to be determined by the Board or a committee thereof in its sole discretion. Because your position is exempt from overtime pay, your salary will compensate you for all your hours worked. This offer is contingent on an acceptable outcome of a background check.

In connection with your relocation from Atlanta to the Tupelo area, Hancock Fabrics will allocate $2000.00 per month for temporary housing for six (6) months, beginning on January 1, 2016 through and including June 30, 2016. The allocation will apply to either corporate housing provided by Hancock or housing you secure on your own for the six month period. You agree that you will complete your relocation as soon as reasonably possible in 2016, and in all events you agree that you will be regularly present in the Company’s offices from your Start Date. Hancock Fabrics will reimburse you for mileage, tolls, meals (if you are staying in a hotel), hotel for six (6) round trips between Tupelo and Atlanta. These trips may be utilized to monitor and prepare for the sale of your existing home. Hancock Fabrics will pay for the loading and unloading of household goods. The moving company will be responsible for packing and unpacking your household goods. Hancock Fabrics will provide damage replacement coverage for household goods. Costs for the transportation, loading and unloading must be pre-approved and will be direct billed to Hancock Fabrics. If applicable, Hancock Fabrics will reimburse you for the reasonable costs of storing your household items for up to six (6) months. It is agreed that in the event of your voluntary termination of employment with Hancock Fabrics within [two years after your Start Date], that you will repay Hancock Fabrics in full for any reimbursed relocation expenses provided in this paragraph, including the temporary housing benefit, within thirty (30) days of your leaving Hancock Fabrics.

In addition, in connection with the sale of your home in Atlanta, Hancock Fabrics will reimburse you on or promptly after the first anniversary of your Start Date, subject to your continued employment with Hancock Fabrics through such anniversary date, for the realtors’ commission paid by you up to 6% of the selling price plus listed expenses exclusive of costs negotiated between you and the buyer. Hancock Fabrics will not pay for any costs for negative equity in the home. Hancock Fabrics will also reimburse you for the standard closing costs of buying a home. These costs include realtor’s commission, credit report, property appraisal, doc stamps, recording fees, and termite inspection. All amounts paid to you by Hancock Fabrics pursuant to this paragraph are subject to applicable tax withholding. Hancock Fabrics will not reimburse you for loan origination fees, loan points or pre-paid interest, pre-paid insurance, bank fees and home repairs. Hancock Fabrics will not reimburse you for costs agreed upon between you and the seller for the purchase of your home. It is agreed that in the event of your voluntary termination of employment with Hancock Fabrics at any time after your receipt of any reimbursement payment pursuant to this paragraph and prior to the third anniversary of your Start Date, that you will repay to Hancock Fabrics the gross amount of such payment (before giving effect to any taxes) within thirty (30) days of your leaving Hancock Fabrics.

Currently, medical and dental insurance is available to all salaried employees immediately upon hire, with no waiting period, and Hancock Fabrics pays approximately 70% of the total premium, with the employee paying the remainder. You will be eligible to participate in the company sponsored 401(k) plan following your one year anniversary with the Company. You are eligible for four weeks’ vacation per year, including your first anniversary year 2016-2017. If you have any questions regarding benefits, please contact Kimberly Potts-Benefits Manager at 662-365-6220. Your participation in all company benefit plans is subject in each case to the generally applicable terms and conditions of the plan in question and to the determinations of any person or committee administering such plan.

Employment with Hancock Fabrics is for no specific period of time.  Your employment with Hancock Fabrics will be “at will,” meaning that either you or Hancock Fabrics may terminate your employment at any time and for any reason, with or without cause, and with or without prior notice.  Any contrary representations which may have been made to you are superseded by this offer.  This is the full and complete agreement between you and Hancock Fabrics on this term.  Although your job duties, title, compensation and benefits, as well as Hancock Fabrics’ personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and Hancock Fabrics’ Chief Executive Officer. You hereby agree to comply with all applicable policies of Hancock Fabrics as in effect from time to time.

Please find enclosed a Non-Compete, Non-Solicitation, Non-Disparagement and Non-Disclosure Agreement. In accepting this position, you agree to execute and adhere to these contractual agreements set forth for a period of two (2) years from your date of separation from Hancock Fabrics, Inc., for any reason. Please review the agreement carefully and, if appropriate, have your attorney review it as well. In addition, please find enclosed a Severance Agreement, if a Change in Control of the Company occurs. At the EVP level, the benefit is equal to two times salary, plus prorated bonus, if applicable.

Rebecca, as we have discussed, we have our share of business challenges, however, we are ready to grow our business and I think you will agree that this is a great opportunity for you, personally, professionally and financially. We look forward to your acceptance of this agreement and joining the Hancock Fabrics’ leadership team. Upon acceptance of this agreement, please sign, date and return one copy in the enclosed envelope.

Sincerely yours,

/s/ Steven Morgan

Exhibit 99.1

HANCOCK FABRICS, INC. APPOINTS A NEW CHIEF FINANCIAL OFFICER

BALDWYN, MS, January 5, 2016 – Hancock Fabrics, Inc. (OTC symbol: HKFI) today announced that effective January 4, 2016, the Board appointed Rebecca I. Flick as Executive Vice President and Chief Financial Officer. Ms. Flick currently serves as the Chairman - Finance Committee of the Marcus Autism Center Board of Trustees and is a director of the National Monuments Foundation Board and a member of the University of Tennessee Finance Department Advisory Board. From 2013 to September 2014, she served as Global Vice President - Finance and Treasurer at Recall Corporation, a company listed on the Australian Securities Exchange, and from 2012 to 2013, she served as Enterprise Vice President - Finance and Treasurer at ServiceMaster Global Holdings, Inc., currently a public company listed on the New York Stock Exchange. From 2011 to 2012, Ms. Flick served as Senior Vice President and Chief Financial Officer at SecurAmerica, LLC, a private company. Prior to that she spent approximately 14 years at The Home Depot, Inc., which is listed on the New York Stock Exchange, in various positions, including Vice President - Finance and Treasurer.

Steve Morgan, President and Chief Executive Officer commented, “We are very excited to welcome Rebecca to our company. She brings a wealth of experience and we look forward to working with her as the leader of our finance team and as a key member of our senior management.”

Ms. Flick replaces Mr. James B. Brown who had resigned in August 2015 to accept an executive position with a retailer headquartered in the mid-west. Mr. O. Pierce Crockett had been serving as interim Chief Financial Officer prior to Ms. Flick’s appointment. Mr. Crockett will resume his prior role serving as Divisional Vice President and Controller for our finance team.

Hancock Fabrics, Inc. is committed to being the inspirational authority in fabric and sewing, serving creative enthusiasts with a complete selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. The Company currently operates 260 retail stores in 37 states and an Internet store at www.hancockfabrics.com.

Contact:

Steven R. Morgan

President and Chief Executive Officer

(662) 365-6000

Forward-looking Statements

Statements in this news release that are not historical facts are forward-looking statements. Forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward looking statements. These risks and uncertainties include, but are not limited to the following: our ability to continue as a going concern; our current cash resources might not be sufficient to meet our expected near-term cash needs; our significant indebtedness; our ability to successfully access funds through capital markets and financial institutions; adverse economic conditions; intense competition and adverse discounting actions taken by competitors; our merchandising initiatives and marketing emphasis may not provide expected results; changes in customer demands and failure to manage inventory effectively; our inability to effectively implement our growth strategy; our ability to attract and retain skilled people; interest rate increases; significant changes in discount rates, mortality rates, actual investment return on pension assets and other factors could affect our earnings, equity, and pension contributions in future periods; business matters encountered by our suppliers may adversely impact our ability to meet our customers’ needs; risks associated with obtaining merchandise from foreign suppliers; transportation industry challenges and rising fuel costs; delays or interruptions in the flow of merchandise between our suppliers and/or our distribution center and our stores; changes in the labor market and in federal, state, or local regulations; taxing authorities could disagree with our tax treatment of certain deductions or transactions, resulting in unexpected tax assessments; a disruption in our information systems; a failure to adequately maintain the security of confidential information; failure to comply with various laws and regulations as well as litigation developments; we may not be able to maintain or negotiate favorable lease terms for our retail stores; changes in accounting principles; serious disruptions or catastrophic events, including geo-political events and weather; changes in newspaper subscription rates may result in reduced exposure to our circular advertisement; unexpected or unfavorable consumer responses to our promotional or merchandising programs; risks associated with our common stock trading on the OTC Markets, formerly known as the “Pink Sheets”; our stock price has been volatile and could decrease in value; future sales of our common stock could adversely affect the market price and our future capital-raising activities could involve the issuance of equity securities, which could result in a decline in the trading price of shares of our common stock; we do not expect to pay cash dividends on shares of our common stock for the foreseeable future; and other risks and uncertainties discussed in the Company’s Securities and Exchange Commission (“SEC”) filings, including the risk factors set forth in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended January 31, 2015, as updated by the risk factors set forth in Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2015, and the Company’s other reports with the SEC. The Company undertakes no obligation to revise these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events.