EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of this 9th day of October, 1997,
is by and between U.S.A. Floral Products, Inc., a Delaware corporation (the
"Company") and Xxxxxxx X. Xxxxxxxx ("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 Chief
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Financial Officer. As such, Employee shall have responsibilities, duties and
authority reasonably accorded to and expected of the chief financial 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 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 $150,000 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) Stock Options. Upon execution of this Agreement, the Company shall
grant Employee options to purchase 50,000 shares of the Company's 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 greater of $8.00
or 60% of the initial public offering price per share.
(d) 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. Provided, however, the Company shall not
request Employee to relocate for a period of one year from the date hereof.
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
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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) three 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.
(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 the lesser of (i) three 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. 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
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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 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.
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 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
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
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(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 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 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
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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.
(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.
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
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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.
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
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
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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: USA Floral Products, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
To Employee: Xxxxxxx X. Xxxxxxxx
0000 Xxxxxxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 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 15.
16. 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.
17. 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 to specific performance and any injunctive or other equitable
relief as a remedy for any breach or threatened breach of the aforementioned
restrictive covenants.
18. 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
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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 17 above, from any court of
competent jurisdiction, without the need to resort to arbitration.
19. Governing Law. This Agreement shall in all respects be construed
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according to the laws of the State of Illinois, 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
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Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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