EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of the 16th day of October, 1997, is by
and between CFX, Inc., a Florida corporation (the "Company") and a wholly owned
subsidiary of USA Floral Products, Inc. ("USAF"), a Delaware corporation, and
Xxxxxx Xxxxxx ("Employee").
RECITALS
The Company desires to continue to employ Employee and to have the benefit
of his skills and services, and Employee desires to continue employment with the
Company, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein, and the performance of each, the parties
hereto, intending legally to be bound, hereby agree as follows:
AGREEMENTS
1. Employment; Term. The Company hereby employs Employee to perform the
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duties described herein, and Employee hereby accepts employment with the
Company, for a term beginning on the date hereof and continuing for a period of
two years (the "Term").
2. Position and Duties. The Company hereby employs Employee as President.
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As such, Employee shall have responsibilities, duties and authority reasonably
accorded to and expected of a president of the Company. Employee will report
directly to the Board of Directors of the Company (the "Board"). Employee
hereby accepts this employment upon the terms and conditions herein contained
and agrees to devote a majority of his professional time, attention, and efforts
to promote and further the business of the Company. Employee shall faithfully
adhere to, execute, and fulfill all policies established by the Company.
3. Compensation. For all services rendered by Employee, the Company shall
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compensate Employee as follows:
(a) Base Salary. Effective on the date hereof, the base salary payable to
Employee shall be $216,000 per year, payable on a regular basis in accordance
with the Company's standard payroll procedures, but not less than monthly. On
at least an annual basis, the Board will review Employee's performance and may
make increases to such base salary if, in its sole discretion, any such increase
is warranted.
(b) Incentive Bonus. During the Term, Employee shall be eligible to
receive an incentive bonus up to the amount, based upon the criteria, and
payable at such times as are, specified in Exhibit A attached hereto. The
amount, manner of payment, and form of consideration, if any, shall be
determined by the Board in its sole and absolute discretion, and such
determination shall be binding and final. To the extent that such bonus is to
be determined in light of financial performance
during a specified fiscal period and this Agreement commences on a date after
the start of such fiscal period, any bonus payable in respect of such fiscal
period's results may be prorated. In addition, if the period of Employee's
employment hereunder expires before the end of a fiscal period, and if Employee
is eligible to receive a bonus at such time (such eligibility being subject to
the restrictions set forth in Section 6 below), any bonus payable in respect of
such fiscal period's results may be prorated.
(c) Perquisites, Benefits, and Other Compensation. During the Term,
Employee shall be entitled to receive all perquisites and benefits as are
customarily provided by the Company to its employees, subject to such changes,
additions, or deletions as the Company may make generally from time to time, as
well as such other perquisites or benefits as may be specified from time to time
by the Board.
4. Expense Reimbursement. The Company shall reimburse Employee for (or,
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at the Company's option, pay) all business travel and other out-of-pocket
expenses reasonably incurred by Employee in the performance of his services
hereunder during the Term. All reimbursable expenses shall be appropriately
documented in reasonable detail by Employee upon submission of any request for
reimbursement, and in a format and manner consistent with the Company's expense
reporting policy, as well as applicable federal and state tax record keeping
requirements.
5. Place of Performance. Employee understands that he may be requested by
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the Company to relocate from his present residence to another geographic
location in order to more efficiently carry out his duties and responsibilities
under this Agreement or as part of a promotion or a change in duties and
responsibilities. In such event, if Employee agrees to relocate, the Company
will provide Employee with a relocation allowance, in an amount determined by
the Company, to assist Employee in covering the costs of moving himself, his
immediate family, and their personal property and effects. The total amount and
type of costs to be covered shall be determined by the Company, in light of
prevailing Company policy at the time.
6. Termination; Rights on Termination. Employee's employment may be
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terminated in any one of the followings ways, prior to the expiration of the
Term:
(a) Death. The death of Employee shall immediately terminate the Term, and
no severance compensation shall be owed to Employee's estate.
(b) Disability. If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been unable to perform the material
duties of his position on a full-time basis for a period of four consecutive
months, or for a total of four months in any six-month period, then 30 days
after written notice to the Employee (which notice may be given before or after
the end of the aforementioned periods, but which shall not be effective earlier
than the last day of the applicable period), the Company may terminate
Employee's employment hereunder if Employee is unable to resume his full-time
duties at the conclusion of such notice period. Subject to Section 6(f) below,
if Employee's employment is terminated as a result of Employee's disability, the
Company shall
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continue to pay Employee his base salary at the then-current rate for the lesser
of (i) 12 months from the effective date of termination, or (ii) whatever time
period is remaining under the then-current period of the Term (without regard to
renewals thereof). Such payments shall be made in accordance with the Company's
regular payroll cycle.
(c) Termination by the Company "For Cause." The Company may terminate the
Term 10 days after written notice to Employee "for cause," which shall be: (i)
Employee's material breach of this Agreement, which breach is not cured within
10 days of receipt by Employee of written notice from the Company specifying the
breach; (ii) Employee's gross negligence in the performance of his duties
hereunder, intentional nonperformance or mis-performance of such duties, or
refusal to abide by or comply with the directives of the Board, his superior
officers, or the Company's policies and procedures, which actions continue for a
period of at least 10 days after receipt by Employee of written notice of the
need to cure or cease; (iii) Employee's willful dishonesty, fraud, or misconduct
with respect to the business or affairs of the Company or USAF, and that in the
judgment of the Company or USAF materially and adversely affects the operations
or reputation of the Company or USAF; (iv) Employee's conviction of a felony or
other crime involving moral turpitude; or (v) Employee's abuse of alcohol or
drugs (legal or illegal) that, in the Company's judgment, materially impairs
Employee's ability to perform his duties hereunder. In the event of a
termination "for cause," as enumerated above, Employee shall have no right to
any severance compensation.
(d) Without Cause. At any time after the commencement of employment, the
Company may, without cause, terminate the Term and Employee's employment,
effective 30 days after written notice is provided to the Employee. Should
Employee be terminated by the Company without cause, subject to Section 6(f)
below, Employee shall receive from the Company the base salary at the rate then
in effect for whatever time period is remaining under the then-current period of
the Term (without regard to renewals thereof). Such payments shall be made in
accordance with the Company's regular payroll cycle. If Employee resigns or
otherwise terminates his employment for any reason or for no reason, Employee
shall receive no severance compensation.
(e) Payment Through Termination. Upon termination of Employee's employment
for any reason provided above, Employee shall be entitled to receive all
compensation earned and all benefits and reimbursements (including payments for
accrued vacation and sick leave, in each case in accordance with applicable
policies of the Company) due through the effective date of termination.
Additional compensation subsequent to termination, if any, will be due and
payable to Employee only to the extent and in the manner expressly provided
above in this Section 6. With respect to incentive bonus compensation, Employee
shall be entitled to receive any bonus declared but not paid prior to
termination. In addition, in the event of a termination by the Company under
Section 6(b) or 6(d), Employee shall be entitled to receive incentive bonus
compensation through the end of the Company's fiscal year in which termination
occurs, calculated as if Employee had remained employed by the Company through
the end of such fiscal year, and paid in such amounts, at such times, and in
such forms as are determined pursuant to Section 3(b) above and Exhibit A
attached hereto. Except as specified in the preceding two sentences, Employee
shall not be entitled
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to receive any incentive bonus compensation after the effective date of
termination of his employment. All other rights and obligations of USAF, the
Company, and Employee under this Agreement shall cease as of the effective date
of termination, except that Employee's obligations under Sections 7, 8, 9 and
10 below shall survive such termination in accordance with their terms.
(f) Right to Offset. In the event of any termination of Employee's
employment under this Agreement, the Employee shall have no obligation to seek
other employment; provided that, in the event that Employee secures employment
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or any consulting or other similar arrangement during the period that any
payment is continuing pursuant to the provisions of this Section 6, the Company
shall have the right to reduce the amounts to be paid hereunder by the amount of
Employee's earnings from such other employment, except that no such reduction
shall be made for Employee's earnings from the companies referred to by name in
Section 7(b) hereof.
7. Restriction on Competition.
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(a) During the Term, and thereafter, if Employee continues to be employed
by the Company and/or any other entity owned by or affiliated with the Company
or USAF on an "at will" basis, for the duration of such period, and thereafter
for a period equal to the longer of (x) two years, or (y) the period during
which Employee is receiving any severance pay from the Company, Employee shall
not, directly or indirectly, for himself or on behalf of or in conjunction with
any other person, company, partnership, corporation, business, group, or other
entity (each, a "Person"):
(i) engage, as an officer, director, shareholder, owner, partner, joint
venturer, or in a managerial capacity, whether as an employee, independent
contractor, consultant, advisor, or sales representative, in any business
selling any products or services in direct competition with the Company or USAF,
within 100 miles of any location where the Company or USAF conducts business
(the "Territory");
(ii) call upon any Person who is, at that time, within the Territory, an
employee of the Company or USAF for the purpose or with the intent of enticing
such employee away from or out of the employ of the Company or USAF;
(iii) call upon any Person who or that is, at that time, or has been,
within one year prior to that time, a customer of the Company or USAF within the
Territory for the purpose of soliciting or selling products or services in
direct competition with the Company or USAF within the Territory; or
(iv) on Employee's own behalf or on behalf of any competitor, call upon
any Person who or that, during Employee's employment by the Company or USAF was
either called upon by the Company or USAF as a prospective acquisition candidate
or was the subject of an acquisition analysis conducted by the Company or USAF.
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(b) The foregoing covenants shall not be deemed to prohibit Employee from
acquiring as an investment not more than one percent of the capital stock of a
competing business whose stock is traded on a national securities exchange or
through the automated quotation system of a registered securities association or
owning or engaging in any business, acting in any capacity for, or otherwise
operating H&H Flowers, Inc., d/b/a LaFleurette, Flying High Venture, Floraltech,
Inc., Day One Fresh, LLC, Cultivitos Miramonte and its subsidiaries, C.I.
Colombiana De Bouquets or Agropecuaria Pamputik, S.A. and its subsidiaries.
(c) It is further agreed that, in the event that Employee shall cease to be
employed by the Company or USAF and enters into a business or pursues other
activities that, at such time, are not in competition with the Company or USAF,
Employee shall not be chargeable with a violation of this Section 7 if the
Company or USAF subsequently enters the same (or a similar) competitive business
or activity or commences competitive operations within 100 miles of the
Employee's new business or activities. In addition, if Employee has no actual
knowledge that his actions violate the terms of this Section 7, Employee shall
not be deemed to have breached the restrictive covenants contained herein if,
promptly after being notified by the Company or USAF of such breach, Employee
ceases the prohibited actions.
(d) For purposes of this Section 7, references to "USAF" shall mean USA
Floral Products, Inc., together with its subsidiaries and affiliates.
(e) The covenants in this Section 7 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. If any provision of this Section 7 relating to the time period
or geographic area of the restrictive covenants shall be declared by a court of
competent jurisdiction to exceed the maximum time period or geographic area, as
applicable, that such court deems reasonable and enforceable, said time period
or geographic area shall be deemed to be, and thereafter shall become, the
maximum time period or largest geographic area that such court deems reasonable
and enforceable and this Agreement shall automatically be considered to have
been amended and revised to reflect such determination.
(f) All of the covenants in this Section 7 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company or
USAF, whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by USAF or the Company of such covenants; provided,
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that upon the failure of the Company to make any payments required under this
Agreement, the Employee may, upon 30 days' prior written notice to the Company,
waive his right to receive any additional compensation pursuant to this
Agreement and engage in any activity prohibited by the covenants of this Section
7. It is specifically agreed that the period of two years stated at the
beginning of this Section 7, during which the agreements and covenants of
Employee made in this Section 7 shall be effective, shall be computed by
excluding from such computation any time during which Employee is in violation
of any provision of this Section 7.
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(g) If the time period specified by this Section 7 shall be reduced by law
or court decision, then, notwithstanding the provisions of Section 6 above,
Employee shall be entitled to receive from the Company his base salary at the
rate then in effect solely for the longer of (i) the time period during which
the provisions of this Section 7 shall be enforceable under the provisions of
such applicable law, or (ii) the time period during which Employee is not
engaging in any competitive activity, but in no event longer than the applicable
period provided in Section 6 above. If Employee is subject to a restriction on
competitive activity as a party to that certain Amended and Restated Agreement
and Plan of Contribution, dated as of August 5, 1997, by and among USA Floral
Products, Inc., Floral Acquisition Corporation, CFX, Inc. and the Stockholders
of CFX, Inc. (the "Merger Agreement"), then Employee shall abide by, and in all
cases be subject to, the restrictive covenants (whether in this Section 7 or in
the Merger Agreement) that, in the aggregate, impose restrictions on Employee
for the longest duration and the broadest geographic scope (taking into account
the effect of any applicable court decisions limiting the scope or duration of
such restrictions), it being agreed that all such restrictive covenants are
supported by separate and distinct consideration. This Section 7(g) shall be
construed and interpreted in light of the duration of the applicable restrictive
covenants.
(h) Employee has carefully read and considered the provisions of this
Section 7 and, having done so, agrees that the restrictive covenants in this
Section 7 impose a fair and reasonable restraint on Employee and are reasonably
required to protect the interests of the Company and USAF, and their respective
officers, directors, employees, and stockholders. It is further agreed that the
Company and Employee intend that such covenants be construed and enforced in
accordance with the changing activities, business, and locations of the Company
and USAF throughout the term of these covenants.
8. Confidential Information. Employee hereby agrees to hold in strict
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confidence and not to disclose to any third party any of the valuable,
confidential, and proprietary business, financial, technical, economic, sales,
and/or other types of proprietary business information relating to the Company
and/or USAF (including all trade secrets), in whatever form, whether oral,
written, or electronic (collectively, the "Confidential Information"), to which
Employee has, or is given (or has had or been given), access as a result of his
employment by the Company. It is agreed that the Confidential Information is
confidential and proprietary to the Company and/or USAF because such
Confidential Information encompasses technical know-how, trade secrets, or
technical, financial, organizational, sales, or other valuable aspects of the
Company's and USAF's business and trade, including, without limitation,
technologies, products, processes, plans, clients, personnel, operations, and
business activities. This restriction shall not apply to any Confidential
Information that (a) becomes known generally to the public through no fault of
the Employee; (b) is required by applicable law, legal process, or any order or
mandate of a court or other governmental authority to be disclosed; (c) is
reasonably believed by Employee, based upon the advice of legal counsel, to be
required to be disclosed in defense of a lawsuit or other legal or
administrative action brought against Employee; or (d) becomes known to Employee
through his affiliation with the entities set forth in Section 7(b); provided
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that, in the case of clauses (b) or (c), Employee shall give the Company
reasonable advance written notice of the Confidential Information intended to be
disclosed and the
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reasons and circumstances surrounding such disclosure, in order to permit the
Company to seek a protective order or other appropriate request for confidential
treatment of the applicable Confidential Information.
9. Return of Company Property. Promptly upon termination of Employee's
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employment by the Company for any reason or no reason, Employee or Employee's
personal representative shall return to the Company (a) all Confidential
Information; (b) all other records, designs, patents, business plans, financial
statements, manuals, memoranda, lists, correspondence, reports, records, charts,
advertising materials, and other data or property delivered to or compiled by
Employee by or on behalf of the Company, USAF or their respective
representatives, vendors, or customers that pertain to the business of the
Company or USAF, whether in paper, electronic, or other form; and (c) all keys,
credit cards, vehicles, and other property of the Company or USAF. Employee
shall not retain or cause to be retained any copies of the foregoing. Employee
hereby agrees that all of the foregoing shall be and remain the property of the
Company or USAF, as the case may be, and be subject at all times to their
discretion and control.
10. No Prior Agreements. Employee hereby represents and warrants to the
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Company that the execution of this Agreement by Employee, his employment by the
Company, and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client, or any other Person.
Further, Employee agrees to indemnify and hold harmless the Company and its
officers, directors, and representatives for any claim, including, but not
limited to, reasonable attorneys' fees and expenses of investigation, of any
such third party that such third party may now have or may hereafter come to
have against the Company or such other persons, based upon or arising out of any
non-competition agreement, invention, secrecy, or other agreement between
Employee and such third party that was in existence as of the date of this
Agreement. To the extent that Employee had any oral or written employment
agreement or understanding with the Company, this Agreement shall automatically
supersede such agreement or understanding, and upon execution of this Agreement
by Employee and the Company, such prior agreement or understanding automatically
shall be deemed to have been terminated and shall be null and void.
11. Assignment; Binding Effect. Employee understands that he has been
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selected for employment by the Company on the basis of his personal
qualifications, experience, and skills. Employee agrees, therefore, that he
cannot assign all or any portion of his performance under this Agreement. This
Agreement may not be assigned or transferred by the Company without the prior
written consent of Employee. Subject to the preceding two sentences, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Notwithstanding the foregoing, if Employee accepts
employment with a subsidiary or affiliate of USAF other than the Company, unless
Employee and his new employer agree otherwise in writing, this Agreement shall
automatically be deemed to have been assigned to such new employer (which shall
thereafter be an additional or substitute beneficiary of the covenants contained
herein, as appropriate), with the consent of Employee, such assignment shall be
considered a condition of employment by such new employer, and references to the
"Company" in this Agreement shall be deemed to refer to such new employer.
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If the Company is merged with or into another subsidiary or affiliate of USAF,
such action shall not be considered to cause an assignment of this Agreement,
and the surviving or successor entity shall become the beneficiary of this
Agreement and all references to the "Company" shall be deemed to refer to such
surviving or successor entity. It is intended that USAF will be a third-party
beneficiary of the rights of the Company under this Agreement. No other Person
shall be a third-party beneficiary.
12. Complete Agreement; Waiver; Amendment. This Agreement is not a
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promise of future employment. Employee has no oral representations,
understandings, or agreements with the Company or any of its officers,
directors, or representatives covering the same subject matter as this
Agreement. This Agreement together with the Merger Agreement, is the final,
complete, and exclusive statement and expression of the agreement between the
Company and Employee with respect to the subject matter hereof and thereof, and
cannot be varied, contradicted, or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of the Company and Employee, and no term of this Agreement may be waived except
by a writing signed by the party waiving the benefit of such term.
13. Notice. Whenever any notice is required hereunder, it shall be in
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writing and shall be given by overnight courier service or by delivering the
same in person to an officer or agent of such party.
If to the Company: CFX, Inc.
0000 XX 00 Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
with a copy to: USA Floral Products, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
and a copy to: Xxxx X. Xxxxxxxx, Esq.
Xxxxxx, Xxxxx & Xxxxxxx LLP
5300 First Union Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000-0000
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If to Employee: Xxxxxx Xxxxxx
c/o CFX, Inc.
0000 X.X. 00 Xxxxxx
Xxxxx, XX 00000
and a copy to: Xxxxxxx X. Xxxxxxxxx, Esq.
Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx, XX
Xxxxxxx Tower, 18th Floor
000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Notice shall be deemed given and effective when actually received. Either party
may change the address for notice by notifying the other party of such change in
accordance with this Section 14.
15. Severability; Headings. If any portion of this Agreement is held
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invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. This
severability provision shall be in addition to, and not in place of, the
provisions of Section 7(e) above. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent or intent of the Agreement or of any part hereof.
16. Equitable Remedy. Because of the difficulty of measuring economic
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losses to the Company and/or USAF as a result of a breach of the restrictive
covenants set forth in Sections 7, 8, 9 and 10, and because of the immediate and
irreparable damage that would be caused to the Company and/or USAF for which
monetary damages would not be a sufficient remedy, it is hereby agreed that in
addition to all other remedies that may be available to the Company or USAF at
law or in equity, the Company and USAF shall be entitled to specific performance
and any injunctive or other equitable relief as a remedy for any breach or
threatened breach of the aforementioned restrictive covenants.
17. Arbitration. Any unresolved dispute or controversy arising under or
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in connection with this Agreement shall be settled exclusively by arbitration
conducted in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to, detract
from, or modify any provision hereof nor to award punitive damages to any
injured party. A decision by a majority of the arbitration panel shall be final
and binding. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. The direct expense of any arbitration proceeding shall be
borne by the Company. Each party shall bear its own counsel fees. The
arbitration proceeding shall be held in the city where the Company is located.
Notwithstanding the foregoing, the Company and/or USAF shall be entitled to seek
injunctive or other equitable relief, as contemplated by Section 17 above, from
any court of competent jurisdiction, without the need to resort to arbitration.
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18. Governing Law. This Agreement shall in all respects be construed
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according to the laws of the State of Florida, without regard to its conflict of
laws principles.
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed as of the date first written above.
CFX, INC.
By: /s/ Xxxxxx Xxxxxx
_______________________________
Name: Xxxxxx Xxxxxx
Title: President
EMPLOYEE:
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
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EXHIBIT A
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Under USAF's Incentive Bonus Plan, Employee will be eligible to earn up to 100%
of Employee's base salary in bonus compensation, payable out of a bonus pool
determined by the Board of Directors of USAF or a compensation committee
thereof, depending upon the achievement of specified criteria and payable in the
form of cash, stock options, or other non-cash awards, in such proportions, and
in such forms, as are determined by the Board of Directors of USAF or a
compensation committee thereof. Bonuses under the Incentive Bonus Plan will be
determined by measuring Employee's performance, the Company's performance and
USAF's performance based on the following criteria, weighted as indicated, and
measured against target performance levels established by the Board of Directors
of USAF or such compensation committee: (i) USAF's profit - 25%, (ii) the
profit of the Company - 50% and (iii) revenue growth of the Company due to
acquisitions -25%.
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