Exhibit 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of this 4th day of August, 1998, is by
and between U.S.A. Floral Products, Inc., a Delaware corporation (the "Company"
or "USA Floral") and Xxxxxxxxxxx X. Xxxxxx ("Employee").
RECITALS
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 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 Chief
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Operating Officer. As such, Employee shall have responsibilities, duties and
authority reasonably accorded to and expected of the chief operating officer of
the Company. Employee will report directly to the Chief Executive Officer or 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
all 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
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shall compensate Employee as follows:
(a) Base Salary. Effective on the date hereof, the base salary payable to
Employee shall be $160,000 per year, payable on a regular basis in accordance
with the Company's standard payroll procedures for executive officers, 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) Stock Options. Upon execution of this Agreement, USA Floral shall
grant Employee non-qualified stock options, pursuant to the USA Floral 1997
Long-Term Incentive Plan, to purchase 50,000 shares of USA Floral common stock,
which shall vest at the rate of 25% per year, commencing one year from the date
of grant. The options will have an exercise price equal to the closing sale
price of USA Floral common stock on the date hereof.
(d) Initial Relocation Assistance. The Company shall pay or reimburse
Employee for all relocation expenses reasonably incurred by Employee and his
immediate family upon their relocation to the Washington D.C. area, including
payment of Employee's "seller's" and "buyer's" closing costs and related fees.
The Company shall also provide Employee with an initial relocation allowance up
to an amount equal to Ten Thousand Dollars ($10,000) for other related
relocation and household reestablishment expenses as shall be mutually agreed
upon by the Company and Employee.
(e) 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
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by the Company to relocate from his initial relocation 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.
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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 (as defined below) or other 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 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, and that in the judgment
of the Company materially and adversely affects the operations or reputation of
the Company; (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 or
other 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 compensation ("Severance
Compensation") equal to the base salary at the rate then in effect for the
greater 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. In addition, all stock options held by
Employee, whether granted pursuant to this Agreement or otherwise, shall
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automatically vest upon such termination by the Company without cause. If
Employee resigns or otherwise terminates his employment for any reason or for no
reason, other than for disability pursuant to Section 6(b), Employee shall
receive no Severance Compensation or other compensation and no acceleration of
vesting of any stock options held by Employee.
(e) Payment Through Termination. Upon termination of Employee's employment
pursuant to Section 6(a), 6(b), 6(c) or 6(d) 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 to receive any incentive bonus compensation after
the effective date of termination of his employment. 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
Section(s) 6(b) and/or 6(d), as applicable, and 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, other than
compensation, benefits, bonus and reimbursements earned and accrued through the
effective date of termination and prior to commencement of any such other
employment, by the amount of Employee's earnings from such other employment.
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
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 Compensation 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
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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 (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;
(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 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 that, during Employee's employment by the Company was either
called upon by the Company as a prospective acquisition candidate or was the
subject of an acquisition analysis conducted by the Company.
(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.
(c) It is further agreed that, in the event that Employee shall cease to
be employed by the Company and enters into a business or pursues other
activities that, at such time, are not in competition with the Company, Employee
shall not be chargeable with a violation of this Section 7 if the Company
subsequently enters the same (or a similar) competitive business or activity. 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 of
such breach, Employee ceases the prohibited actions.
(d) For purposes of this Section 7, references to "the Company" shall mean
U.S.A. 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
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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; provided, that upon the failure of the Company to make any payments
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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.
(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.
(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 its 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 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
(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 because such Confidential
Information encompasses technical know-how, trade secrets, or technical,
financial, organizational, sales, or other valuable aspects of the Company'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; or (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; provided, that in the case of clauses (b) or (c), Employee shall give
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the Company reasonable advance written notice of the Confidential Information
intended to be disclosed and the 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.
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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, that are conceived or made by Employee,
solely or jointly with another, during the period of employment or within one
year thereafter, and that are directly related to the business or activities of
the Company and that Employee conceives as a result of his employment by the
Company, regardless of whether or not such ideas, inventions, or improvements
qualify as "works for hire." Employee hereby assigns and agrees to assign all
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 country or to
otherwise protect the Company's interest therein.
10. 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 or its respective representatives,
vendors, or customers that pertain to the business of the Company, whether in
paper, electronic, or other form; and (c) all keys, credit cards, vehicles, and
other property of the Company. 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, as the case may be,
and be subject at all times to its discretion and control.
11. 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, provided,
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however, that any such termination shall in no way prejudice Employee's right to
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receive any accrued salary, benefits or other remuneration under any prior
agreement or arrangement with the Company.
12. 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
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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.
13. 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 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 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.
14. NOTICE. Whenever any notice is required hereunder, it shall be given
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in writing addressed as follows:
To the Company: U.S.A. Floral Products, Inc.
0000 Xxxxxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000 Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
To Employee: Xxxxxxxxxxx X. Xxxxxx
00000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Notice shall be deemed given and effective three 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, if sent by express delivery, hand delivery, or
facsimile, 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 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 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 at law or in equity, the Company
shall be entitled
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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 principal office of
the Company is located. Notwithstanding the foregoing, the Company shall be
entitled to seek injunctive or other equitable relief, as contemplated by
Section 16 above, from any court of competent jurisdiction, without the need to
resort to arbitration.
18. GOVERNING LAW. This Agreement shall in all respects be construed
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according to the laws of the State of Delaware, without regard to its conflict
of laws principles.
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IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed as of the date first written above.
U.S.A. FLORAL PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
_______________________________________
Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
EMPLOYEE:
/s/ Xxxxxxxxxxx X. Xxxxxx
_______________________________________
Xxxxxxxxxxx X. Xxxxxx
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EXHIBIT A
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Under USA Floral'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 Compensation Committee of the Board of Directors of
USA Floral, based upon exceptional performance in excess of specified targets
and goals 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
Compensation Committee. Bonuses under the Incentive Bonus Plan will be
determined by measuring Employee's performance and USA Floral's performance
based on criteria established by the Compensation Committee, weighted as
determined by the Compensation Committee, and measured against target
performance levels established by the Compensation Committee.
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