EXHIBIT 10.20
EXECUTION COPY
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into,
effective for all purposes and in all respects as of the 24th day of November,
1999, by and between U.S.A. FLORAL PRODUCTS, INC., a Delaware corporation (the
"Company"), and XXXXXXX X. XXXXXXXXXX ("Employee").
R E C I T A L S
The Company desires to obtain and have the benefit of the skills and
services of Employee, and Employee desires to make his skills and services
available to the Company, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:
1. Employment and Duties.
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(a) The Company hereby employs Employee as Chief Executive Officer of
the Company, effective as of January 3, 2000 or such later date to which the
Company and the Employee mutually agree ("Employment Commencement Date"). As
such, Employee shall have responsibilities, duties and authority reasonably
accorded to and expected of a chief executive officer and will report directly
to the Board of Directors of the Company (the "`Board") or such committee as may
be designated by the Board. Employee hereby accepts this employment upon the
terms and conditions herein contained and agrees to devote his time, attention
and efforts to promote and further the business of the Company.
(b) The Company shall use its reasonable efforts to cause Employee to
be elected to the Board throughout the Employment Period (as defined below) and
shall include him in the management slate for election as a director at every
stockholders' meeting at which his term as a director would otherwise expire. If
requested by the Board, Employee shall serve as a member of the board of
directors of any one or more subsidiaries (as defined below).
(c) Employee shall faithfully adhere to, execute and fulfill all
policies reasonably established by the Company.
(d) Employee shall not, during the Employment Period, be engaged in
any other business activity pursued for gain, profit or other pecuniary
advantage if such activity materially interferes with Employee's duties and
responsibilities hereunder, provided that, with
the approval of the Board (which approval shall not unreasonably be withheld),
from time to time, Employee may serve, or continue to serve, on the board of
directors of, and hold any other offices or positions, in for-profit companies
or organizations, which in the Board's judgment, will not present any conflict
of interest with the Company or its Subsidiaries, or materially interfere with
Employee's duties and responsibilities pursuant to this Agreement. The Company
consents to Employee's continuing to serve on those boards of directors for
which Employee is currently serving as disclosed in writing to the Company on
the date hereof. However, the foregoing limitations shall not be construed as
prohibiting Employee from serving on the boards of civic, non-profit or
charitable organizations or from making and managing personal investments in
such form or manner as will neither require his services in the operation or
affairs of the companies or enterprises in which such investments are made,
materially interfere with his responsibilities and duties hereunder, nor violate
the terms of paragraph 5 hereof.
2. Cash Compensation. For all services rendered by Employee hereunder,
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the Company shall compensate Employee as follows (reduced by any applicable
required tax withholdings):
(a) Base Salary. Effective as of the date hereof, the base salary
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payable to Employee during the Employment Period shall be at the per annum rate
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of Four Hundred Twenty Five Thousand Dollars ($425,000), 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 beginning January 1, 2001, the Board
will consider increases (but not decreases) to Employee's base salary.
(b) Signing Bonus. In addition to any other amounts due Employee
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hereunder, on January 3, 2000 the Company shall pay Employee a bonus ("Signing
Bonus") equal to Two hundred Thousand Dollars ($200,000). In the event (i)
Employee terminates his employment with the Company other than by reason of
death, disability or "good reason" (as defined below), or (ii) the Company
terminates Employee's employment with the Company with "cause" (as defined
below), in either case prior to the expiration of the Term. Employee shall pay
to the Company, within 30 days of the date of termination, that amount of the
Signing Bonus as is proportionate to the period of time remaining in the Term,
calculated on a monthly basis. Amounts payable under this paragraph 2(b) shall
not be included in the computation of base salary for purposes of paragraph
2(c).
(c) Incentive Bonus. For each calendar year that ends during the
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Employment Period, beginning with the 2000 calendar year, the Company shall pay
Employee an annual bonus of no less than 50% of Employee's base salary then in
effect, if the Company's Operating Income (as defined below) for such year
(after reduction for all annual bonuses paid or payable with respect to that
year) equals or exceeds the budgeted figure for Operating Income established or
approved by the Board in advance for such year reduced for all budgeted bonuses
(or as Employee and the Board otherwise agree). Additionally, for each calendar
year that ends during the Employment Period, beginning with the 2000 calendar
year, the Company shall pay
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Employee an additional annual bonus equal to 50% of Employee's base salary then
in effect based upon the achievement of reasonable annual or multi-year Company
and/or individual performance goals to be set by the Board or its Compensation
Committee in advance of each calendar year and communicated to the Employee at
such time (which bonus may be paid on a graduated scale of 0% to 50% depending
upon the range of achievement of the performance goals). For the 2000 calendar
year, the performance goal and bonus in the preceding sentence will consist of
an additional 10% of base salary for each $1 million of Operating Income
(reduced as provided above for bonuses) in excess of the budgeted figure for
Operating Income to a maximum of 50% of base salary. Notwithstanding anything
contained in this Agreement to the contrary (including paragraph 7 hereof), if
Employee's employment hereunder has terminated for any reason including death
and disability (but excluding termination by the Company for "cause" (as defined
below) or by Employee voluntarily without "good reason") prior to the end of a
given calendar year, Employee shall receive (at the time bonuses are normally
paid) the annual incentive bonus, if any, that would have been paid for such
calendar year had Employee remained employed until the end of such year,
multiplied by e fraction, the numerator of which is the number of complete
months of such calendar year during which Employee was employed with the
Company, and the denominator of which is twelve. The Company shall pay Employee
the annual incentive payments described in this paragraph 2 within two weeks
after receipt of final audited financial statements for the calendar year
covered by the bonus or, if sooner, within 90 days of the end of the calendar
year.
3. Stock Options. As provided below, the Company shall grant Employee two
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stock options to purchase a total of 350,000 shares of Company common stock
pursuant to, or equivalent in all material respects to options that would be
available for grant pursuant to, the USA Floral 1997 Long-Term Incentive Plan
("LTIP"), except as provided herein, including Section 7(g)(i) of the LTIP. The
options will vest at the rate of 25% as of the Employment Commencement Date and
an additional 6.25% on the last day of each succeeding calendar quarter
beginning as of March 31, 2000. The options will have an exercise price equal to
the closing sale price of Company common stock on their respective dates of
grant. The option for 200,000 shares shall be a nonqualified stock option and
shall have a date of grant as of the date hereof, and the option for 150,000
shares shall be an incentive stock option under Section 422 of the Internal
Revenue Code (the "Code") if and to the extent the tax rules permit such
treatment and shall have a date of grant as of the employment Commencement Date.
Absent the Company's consent, if Employee does not begin work for the Company on
or before January 10, 2000, any options described in this Agreement shall be
void and have no effect on either party. Employee may be eligible to receive
additional grants or awards under the Company's stock option plans and programs
to the extent that grants or awards thereunder are made to Employee by the
Compensation Committee of the Board in its discretion. In addition, Employee
shall be granted stock options or other awards during the Employment Period
pursuant to the LTIP as determined in the discretion of the Compensation
Committee. Upon a termination of Employee's employment by the Company "without
cause" pursuant to paragraph 7(b)(iv) or by the Employee for "good reason"
pursuant to paragraph 7(b)(v). all outstanding unvested options held by Employee
shall become fully vested on the date of termination and all options will remain
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exercisable for the term provided under paragraph 6(b)(iv) of the LTIP. Upon
Employee's termination of employment pursuant to paragraph 7(b)(v) without "good
reasons," the Employee's termination as a result of the conditions described in
paragraph 7(b)(vi), or, notwithstanding paragraph 6(b)(iv) of the LTIP, if
Employee's employment is terminated by the Company for "cause" under
circumstances described in clause (A) or (B) of paragraph 7(b)(iii), all
unvested options shall immediately terminate and all vested options will remain
exercisable for the term provided under paragraph 6(b)(iv) of the LTIP (without
regard to the immediate termination for cause otherwise provided in that
subparagraph). If Employee's termination is by reason of death or disability
pursuant to paragraph 7(b)(i) or (ii), all unvested options shall become fully
vested on the date of termination and notwithstanding paragraph 6(b)(iv) of the
LTIP, all options will remain exercisable for the one year period following such
termination. Upon termination of Employee's employment for "cause" under
circumstances described in clause (C), (D) or (E) of paragraph 7(b)(iii), all
outstanding options, whether or not vested, shall immediately terminate. All
exercisable options may be exercised through a broker-assisted "cashless"
exercise arrangement. Notwithstanding the foregoing, no option may be
exercisable beyond expiration of the term of such option. Upon a Change in
Control (as defined below), all outstanding unvested options held by Employee
shall become fully vested unless Section 7(g)(i) of the LTIP applies.
4. Benefits Executive Perquisites and Expense Reimbursement. During the
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Employment Period, Employee shall be entitled to receive additional benefits
from the Company in such form and to such extent as specified below.
(a) The Company shall provide Employee with executive perquisites as
may be available to or deemed appropriate for Employee by the Company and
participation in all Company-wide employee benefits as available from time to
time. Supplemental insurance coverages (i. e., life and disability) shall be
provided at such levels as shall be agreed between the Board and Employee.
(b) The Company shall reimburse Employee for all business travel and
other out-of pocket expenses reasonably incurred by Employee in the performance
of his services pursuant to this Agreement. 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.
(c) The benefits, payments or reimbursements provided for in this
paragraph 4 shall be subject to informational reporting and standard withholding
deductions as required by law as determined by the Company in its reasonable
discretion.
5. Non-Competition Agreement.
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(a) Employee will not, during the period of his employment by or with
the Company, and (except as provided under paragraph 5(h) below) for a period
equal to one (l) year following the termination of his employment under this
Agreement for any reason (or, if greater,
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for the period during which Employee continues to receive base salary pursuant
to paragraph 7(b)), for any reason whatsoever, 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 including without limitation the importing,
brokerage, shipping or marketing of floral products, or any business
engaging in the consolidation of the floral industry, within the United
States of America or the European Community (the "Territory");
(ii) call upon any Person who is, at that time, within the
Territory, an employee of the Company for the purpose or with the intent of
enticing such employee away from or out of the employ of the Company (other
than Employee's personal secretary);
(iii) call upon any Person who is, at that time, or has been,
within one year prior to that time, a customer of the Company within the
Territory for the purpose of soliciting or selling products or services in
direct competition with the Company within the Territory; or
(iv) on Employee's own behalf or on behalf of any competitor,
call upon any Person who during the one-year period prior to that time was
either called upon - by the Company as a prospective acquisition candidate
or was the subject of an acquisition analysis conducted by the Company.
No provision of this paragraph 5(a) shall be deemed to prohibit Employee from
acquiring as an investment not more than three percent (3%) of the capital stock
of a competing business, whose stock is traded on a national securities exchange
or on an over-the-counter market. Employee represents that he does not own more
than one percent (1%) of the capital stock of a competing business as of the
date hereof.
(b) Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to the Company for which
it would have no other adequate remedy, Employee agrees that the foregoing
covenant, in addition to and not in limitation of any other rights, remedies or
damages available to the Company at law, in equity or under this Agreement, may
be enforced by the Company in the event of the breach or threatened breach by
Employee, by injunctions and/or restraining orders.
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(c) It is agreed by the parties that the covenants contained in
paragraphs 5(a) and 5(b) hereof impose a reasonable restraint on Employee in
light of the activities and business of the Company on the date of the execution
of this Agreement and the current plans of the Company.
(d) The covenants in this paragraph 5 are severable and separate, and
the unenforceability of any specific covenant shall not affect the provisions
of any other covenant. Moreover, in the event any court of competent
jurisdiction shall determine that the scope, time or territorial restrictions
set forth herein are unreasonable, then it is the intention of the parties that
such restrictions be enforced to the fullest extent that such court deems
reasonable, and the Agreement shall thereby be reformed to reflect the same.
(e) All of the covenants in this paragraph 5 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,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is specifically
agreed that the period stated in paragraph 5(a) hereof, during which the
agreements and covenants of Employee made in this paragraph 5 shall be
effective, shall be computed by excluding from such computation any time during
which Employee is in violation of any provision of this paragraph 5.
(f) Notwithstanding any of the foregoing, if any applicable law,
judicial ruling or order shall reduce the time period during which Employee
shall be prohibited from engaging in any competitive activity described in
paragraph 5(a) hereof, the period of time for which Employee shall be prohibited
pursuant to paragraph 5(a) hereof shall be the maximum time permitted by law.
(g) For purposes of this paragraph 5, references to "the Company",
shall mean U.S.A. Floral Products, Inc., together with its Subsidiaries.
(h) The parties agree that this paragraph 5 shall cease to apply if
the Company, its successor or assigns (or its or their designate) fails to pay
amounts due under paragraph 7(b)(iv) or (v) within 15 days after a written
demand by Employee for such payment
6. Place of Performance. During the Term, Employee's principal place of
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employment shall he located in the greater Washington, D.C. metropolitan area.
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7. Term: Termination; Rights on Termination.
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(a) This Agreement shall have a term of three years, commencing as of
January 3,2000 and ending on January 2, 2003. Such three year period is referred
to herein as the "Term," and the period during the Term, prior to termination of
the Employee's employment pursuant to paragraph 7(b), is referred to herein as
the "Employment Period."
(b) The Employee's employment hereunder may be terminated during the
Term in any one of the following ways:
(i) Death. Upon death of Employee, with no severance
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compensation due to Employee's estate. Company shall pay Employee's estate
all accrued but unpaid base salary and accrued but unused vacation through
the date of death.
(ii) Disability. If, as a result of incapacity due to physical
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or mental illness or injury, Employee shall have been absent from his full-
time duties hereunder for four (4) consecutive months, then ten (10) days
after written notice to Employee (which notice may be given only after the
end of such four (4) month period), the Company may terminate Employee's
employment hereunder, provided than Employee is unable to resume his full-
time duties at the conclusion of such notice period. Also, Employee may
terminate his employment hereunder if his health should become impaired to
an extent that makes the continued performance of his duties hereunder
hazardous to his physical or mental health or his life, provided that
Employee shall have furnished the Company with a written statement from a
qualified doctor to such effect, and provided, further, that, at the
Company's request made within thirty (30) days of the date of such written
statement, Employee shall submit to an examination by a doctor selected by
the Company who is reasonably acceptable to Employee or Employee's doctor
and such doctor shall have concurred in the conclusion of Employee's
doctor. In the event the Employee's employment is terminated as a result of
Employee's disability, Employee shall receive from the Company the base
salary, at the rate then in effect, and accrued but unused vacation and the
additional benefits and requirements described in paragraph 4, for whatever
time period is remaining under the Term, payable over the remaining period
of the Term and otherwise in accordance with the provisions of this
Agreement.
(iii) Cause. Employee's employment shall terminate thirty (30)
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days after written notice to Employee specifying "cause" therefor. For
purposes of this Agreement, the term "cause" shall mean and refer to: (A)
Employee's willful breach of this Agreement (continuing for thirty (30)
days after receipt of written notice specifying in reasonable detail the
basis for the notice and of the need to cure), that has a material adverse
effect on the Company; (B) Employee's gross negligence in the performance
or intentional nonperformance (continuing for thirty (30) days after
receipt of written notice specifying in reasonable detail the basis for the
notice and of need to cure) of any of Employee's material duties and
responsibilities hereunder that has a material adverse
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effect on the Company; (C) Employee's willful dishonesty, fraud or
misconduct with respect to the business or affairs of the Company which
materially and adversely affects the operations or reputation of the
Company; (D) Employee's conviction (with respect to which all appeals have
been exhausted) of a crime involving moral turpitude or a felony; or (E)
chronic alcohol use by Employee that impairs the performance of his duties
under this Agreement or illegal drug abuse. In the event of a termination
for "cause," as enumerated above, Employee shall have no right to any
severance compensation; provided; however, that Company shall pay all
accrued but unpaid base salary and accrued but unused vacation through the
date of termination.
(iv) Without Cause. The Company may, without "cause," terminate
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the, Employee's employment, effective thirty (30) days after written notice
is provided to Employee. Should Employee be terminated by the Company
without "cause," Employee shall receive from the Company, within five (5)
days after termination, a lump sum payment equal to accrued hut unused
vacation and fifty percent (50%) of the base salary at the rate then in
effect at the time of such termination for the period remaining in the Term
or one (l) year, whichever is greater, with an additional fifty percent
(50%) of the Employee's base salary at the rate then in effect at the time
of termination to be paid in regular installments according to the payroll
payment schedule then in effect at the time of such termination over the
period remaining in the Term or one (1) year, whichever is greater, and
coverage under Company-provided benefit and insured welfare arrangements on
the same basis as such benefits were provided at the time of such
termination for the period remaining in the Term or one (l) year, whichever
is greater; provided, however, should such termination occur within a two
year period following a Change in Control (as defined below, unless any
change in the definition is more advantageous to Employee), in lieu of the
amount to be provided above, the Employee shall receive, within five (5)
days of such termination, a lump sum payment equal to three (3) times
Employee's annual base salary in effect at the time of such termination or
at the time of the Change in Control, whichever is greater, plus coverage
under Company-provided insured welfare arrangements on the same basis as
such benefits were provided at the time of such termination for three (3)
years.
(v) Resignation. The Employee may resign at any time. If
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Employer resigns or otherwise terminates his employment without "good
reason" pursuant to this paragraph 7(b)(v), Employee shall receive no
severance compensation. If the Employee's resignation or other termination
is for "good reason," the Company shall pay and/or provide Employee with
the amounts of severance compensation and benefits as if his employment
were terminated without "cause" pursuant to paragraph 7(b)(iv) and
according to the schedule set forth in that paragraph, (or, if Employee
terminates his employment for "good reason" within the two (2) year period
following a change in Control, a lump sum payment within five (5) days of
the termination equal to three (3) times Employee's annual base salary in
effect at the time of such termination or at the time of the Change in
Control, whichever is greater, plus coverage under Company-
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provided benefit and insured welfare arrangements on the same basis as such
benefits were provided at the time of such termination for three (3)
years). For purposes of this Agreement, "good reason" shall mean and refer
to the Company's material breach of any provision of this Agreement
(continuing for thirty (30) days after receipt of written notice specifying
in reasonable detail the basis for such notice and of need to cure)
including, but not by way of limitation, a substantial diminution in, or
assignment to Employee of any duties, responsibilities or reporting
relationship that are substantially inconsistent with the nature or status
of Employee's duties, responsibilities or functions from those in effect at
the commencement of the Term.
(vi) Residency. The Employee represents that he is able to work
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legally in the United States under his immigration status as of the date of
this Agreement and as of the Employment Commencement Date. If he ceases for
any reason related to his immigration status to be able to work legally in
the United States and he is absent from his full-time duties hereunder at
the Company's principal headquarters for two (2) consecutive months because
of or in connection with such cessation, then ten (10) days after written
notice to Employee (which notice may be given only after the end of such
two (2) month period), the Company may terminate Employee's employment
hereunder, provided that Employee is unable to resume his full-time duties
legally in the United States at the conclusion of such notice period. If
the Employee's employment is terminated as a result of his inability for
any reason related to his immigration status to work legally in the United
States, Employee shall be treated as though he had resigned voluntarily and
without "good reason."
(c) Upon expiration of the Term, Employee agrees that he is not
eligible to receive any severance.
(d) Upon termination of the Employee's employment for any reason
provided above, the Company shall pay Employee no later than the end of the next
regularly scheduled payroll period beginning after such termination all
compensation earned (including but not limited to accrued but unused vacation)
and all benefits due and reimbursements for expenses incurred 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. All other rights and obligations of the
Company and Employee under this Agreement shall cease as of the effective date
of termination, except that the Company's obligations under paragraphs 3, 7 and
11 herein and Employee's obligations under paragraphs 5, 7, 8, 9 and 10 herein
shall survive such termination in accordance with such terms.
(e) The Company agrees that, if the Employee's employment by the
Company is terminated during the Term, the Employee is not required to seek
other employment, or to attempt in any way to reduce any amounts payable to the
Employee by the Company pursuant to paragraph 7(b). Further, the amount of any
payment or benefit provided for in such paragraph 7(b) shall not be reduced by
any compensation or benefits earned by the Employee as the result
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of employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Employee to the Company, for any breach or
alleged breach of any covenant contained in this or any other agreement, or
otherwise.
(f) The Employee acknowledges that continuing benefit coverage as set
forth in this Agreement may not be legally or contractually possible if he
ceases to provide services to the Company or may violate the Code relating to
nondiscrimination in benefits and agrees, if such legal or contractual
prohibition exists or coverage would be inconsistent with the Code, to accept in
lieu of all such coverage (i) payment by the Company when due of the premiums
for the benefit continuation periods indicated above on individual insurance
policies either the Employee or the Company obtains that provide substantially
equivalent benefits or (ii) if the Employee is unable to obtain such coverage
(because he is uninsurable at commercially reasonable rates or, as with
disability, because coverage may be unavailable if he is not working), one or
more payments totaling 150% of the average monthly premium cost the Company paid
on his behalf in 2000 (or in the immediately preceding calendar year with
respect to employment termination after December 31, 2001) for any of those
coverages under which he cannot participate after employment ends times the
number of months of benefits continuation, with the payments under clause (ii)
due within 30 days after the Employee notifies the Company that he is unable to
obtain such coverage. Nothing in this paragraph 7(f) waives or extends any
rights the Employee may have to continuation health coverage under Section 4980B
of the Code.
8. Return of Company Property. All records, designs, patents, business
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plans, financial statements not filed with the Securities and Exchange
Commission, manuals, memoranda, lists and other property delivered to or
compiled by Employee by or on behalf of the Company (including the respective
Subsidiaries thereof) or their representatives, vendors or customers which
pertain to the business of the Company (including the respective Subsidiaries
thereof) shall be and remain the property of the Company, and be subject at all
times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company which is collected by
Employee or otherwise in Employee's possession or control shall be delivered
promptly to the Company, without request by the Company, upon termination of
Employee's employment hereunder.
9. Inventions. Employee shall disclose promptly to the Company any and
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all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Employee,
solely or jointly with another, during the Employment Period and which are
directly related to the business or activities of the Company and which are
conceived as a result of his employment by the Company. Employee hereby assigns
and agrees to assign all of his interests therein to the Company or its nominee.
Whenever requested to do so by the Company, employee shall execute any and all
applications, assignments or other instruments that the Company shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign company or so otherwise protect the Company's interest therein.
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10. Trade Secrets. Employee is employed hereunder by the Company in a
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confidential relationship wherein Employee, in the course of his employment with
the Company, has and will continue to become familiar with and aware of
information as to the Company and its Subsidiaries, customers, relationships or
agreements with their respective vendors or customers, specific manner of doing
business, including the processes, techniques and trade secrets utilized by the
Company and its Subsidiaries, and future plans with respect thereto, all of
which has been and will be established and maintained at great expense to the
Company and its Subsidiaries; any and all of such information are trade secrets
and constitute the valuable goodwill of the Company and its Subsidiaries.
Employee agrees that he will not, during the Term, disclose any of such
information and/or trade secrets, whether in existence or proposed, to any
person, firm, partnership, corporation or business for any reason or purpose
whatsoever, except as may be required by law.
11. Indemnification. In the event Employee is made a party to any
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threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Employee), by reason or the fact that he is or was performing services
under this Agreement or otherwise resulting from this Agreement or Employee's
position as an employee, officer, shareholder and/or director of the Company
and/or any of its Subsidiaries, then the Company shall indemnify Employee
against all expenses (including reasonable attorneys' fee), judgments, fines
and amounts paid in settlement, as actually and reasonably incurred, by Employee
in connection therewith. In the event that both Employee and the Company are
made a party to the same third-party action, complaint, suit or proceeding, the
Company agrees to engage competent legal representation, and Employee agrees to
use the same representation, provided that if counsel selected by the Company
shall have an actual or potential conflict of interest that prevents such
counsel from representing Employee, Employee may engage separate counsel and the
Company shall pay all attorneys' fees of such separate counsel. Employee shall
not be liable to the Company for errors or omissions made in good faith where
Employee has not exhibited gross, willful or wanton negligence or misconduct or
performed criminal or fraudulent acts which materially damage the business of
the Company.
12. No Prior Agreements. Employee confirms that he has fully disclosed to
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the Company, to the best of his knowledge, all circumstances under which he, his
spouse, and other persons who reside in his household have or may have a
conflict of interest with the Company. Employee further agrees to fully disclose
to the Company any such circumstances that might arise during his employment
upon his becoming aware of such circumstances. Employee agrees to fully comply
with, the Company's policy and practices relating to conflicts of interest,
Employee hereby represents and warrants to the Company that the execution of
this Agreement by Employee and his employment by the Company and the performance
of his duties hereunder or thereunder will, not violate or be a breach of any
written agreement with any employer, client or any other person or entity.
Further, Employee agrees to indemnify the Company for any claim, including, but
not limited to, reasonable attorneys' fees and expenses o investigation, by any
such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any written noncompetition
agreement, invention or
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secrecy agreement between Employee and such third party which was in existence
as of the day before the Employment Commencement Date.
13. 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.
Subject to the preceding two (2) 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.
14. Complete Agreement. This Agreement is not a promise of future
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employment. Employee is and shall be an employee at-will and the Company or the
Employee may terminate this Agreement at any time, with or without "cause,"
subject to the parties' obligations described herein. Employee has no oral
representations, understandings or agreements with the Company or any of its
officers or representatives covering the same subject matter as this Agreement.
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 writing signed by the xxxxx waiving the
benefit of such term.
15. No Improper Payments. Employee will neither pay nor permit payment of
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any remuneration to or on behalf of any governmental official other than
payments required or permitted by applicable law. Employee will comply fully
with the Foreign Corrupt Practices Act of 1 977, as amended. Employee will not,
directly or indirectly, make or permit any contribution, gift, bribe, rebate,
payoff, influence payment, kickback, or other payment to any person or entity,
private or public, regardless of what form, whether in money, property or
services to obtain favorable treatment for business secured, to pay for
favorable treatment for business secured, to obtain special concessions or for
special concessions already obtained, or in violation of any legal requirement,
or establish or maintain any fund or asset related to the Company that is not
recorded in the Company's books and records, or take any action that would
violate (or would be part of a series of actions that would violate) any U.S.
law relating to international trade or commerce, including those laws relating
to trading with the enemy, export control, and boycotts of Israel or Israeli
products.
16. Notice. Whenever any notice is required hereunder, it shall be given
------
in writing addressed as follows:
To the Company: U.S.A. Floral Products, Inc.
0000 Xxxxxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000 Xxxx
Xxxxxxxxxx, X.X. 00000
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With a copy to: Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
To Employee: Xxxxxxx X. Xxxxxxxxxx
0000 00xx Xxxxxx, X.X
Xxxxxxxxxx, XX 00000
With a copy to: Xxxxxx Xxxx & Xxxxxx LLP
0000 00xx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxxxx
Notice shall he deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first-class mail,
certified, return-receipt requested, or when actually received. Either party may
change the address for notice by notifying the other party of such change in
accordance with this paragraph 16.
17. Severability Headings. If any portion of this Agreement is held
---------------------
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. 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 any part hereof.
18. Arbitration. Except to the extent necessary for the Company to
-----------
avail itself of its remedies pursuant to paragraph S, any unresolved dispute or
controversy arising under or 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. The arbitrators shall have the
authority to order back-pay, severance compensation, vesting of options (or
cash compensation in lieu of vesting of options), in the event the arbitrators
determine that Employee was terminated without disability or "cause," as defined
in paragraphs 7(b)(ii) and 7(b)(ii), respectively, or Employee resigned for
"good reason" as defined in paragraph 7(b)(v), or that the Company has otherwise
materially breached this Agreement. 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. The arbitration proceeding shall be
held in the city where the Company's corporate headquarters is located.
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19. Defined Terms. The following terms are defined as follows:
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"Change of Control" shall have the meaning set forth in the Company's
-----------------
1997 Long Term Incentive Plan as in effect on the date hereof, except that such
term shall not include the financial alternatives under consideration by the
Board of Directors (as described in writing to the Employee) as of the date
hereof to the extent they are consummated within six months from the date
hereof.
"Operating Income" shall mean the Company's earnings for financial
----------------
statement purposes before interest and taxes.
"Person" shall mean an individual, partnership, limited liability
------
company, corporation, joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political subdivision or
agency thereof.
"Subsidiaries" shall mean each partnership, limited liability company,
------------
corporation, joint stock company, trust, unincorporated association, joint
venture or other entity in which the Company owns or controls, directly or
indirectly, capital stock or other equity interests representing at least 20% of
the outstanding voting stock or other equity interests,
20. Governing Law. This Agreement shall in all respects be governed by
-------------
and construed in accordance with the laws of the State of Delaware.
21. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, with the
same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
[signature page follows]
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In WITNESS WHEREOF, the Company and Employee have executed this
Agreement as of the date first above written.
ATTEST COMPANY
U.S.A. FLORAL PRODUCTS, INC.
a Delaware Corporation
By: /s/ Xxxxxx X. Xxxxxxx (SEAL)
------------------------- --------------------------
WITNESS: EMPLOYEE
/s/ X. X. Xxxxxxxxxx (SEAL)
------------------------- -----------------------------
Xxxxxxx X. Xxxxxxxxxx
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