Exhibit 10.20
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of July 1, 1999,
between 0-000-XXXXXXX.XXX, INC., a Delaware corporation (the "Company"), and
XXXXXXXXXXX X. XXXXXX (the "Executive")
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to accept such employment, on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises,
representations and warranties set forth herein, and for other good and valuable
consideration, it is hereby agreed as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the
Executive, and the Executive hereby accepts such employment, upon the terms and
conditions set forth herein.
2. TERM. Subject to the provisions of Section 10
hereof, the period of the Executive's employment under this Agreement shall
be from July 1, 1999 through June 30, 2004, as may be extended as hereinafter
provided (the "Term"). As of June 30, 2000 and each subsequent June 30 (June
30, 2000 and each subsequent June 30 hereinafter called a "Renewal Date"),
the Term shall be automatically extended by one additional year (i.e. to
include a period of 60 months commencing on each Renewal Date) unless, at
least 180 days prior to any such Renewal Date, the Company shall deliver to
the Executive or the Executive shall deliver to the Company written notice
that the Term will not be further extended.
3. POSITION AND DUTIES.
(a) During the Term, the Executive shall serve as a
Senior Vice President of the Company and shall have such duties consistent with
such office as from time to time may be prescribed by the Board of Directors of
the Company (the "Board"). During the Term, the Executive and the Company agree
that the Executive shall serve as a member of the Board and a member of the
Board of Directors of any of the Affiliates (as such term is defined herein) of
the Company and as a member of any committee or committees of the Board and the
Board of Directors of any of the Affiliates of the Company, subject in each case
to the Executive's election as such.
(b) During the Term, the Executive shall perform and
discharge the duties that may be assigned to him by the Board from time to time
in accordance with this Agreement, and the Executive shall devote his best
talents, efforts and abilities to the performance of his duties hereunder.
(c) During the Term, the Executive shall perform such
duties on a full-time basis. Notwithstanding the foregoing, the Executive shall
not be precluded from engaging in other outside business activities, provided
that such activities do not materially interfere with the Executive's
performance of his duties hereunder.
4. COMPENSATION.
(a) For the Executive's services hereunder, the
Company shall pay the Executive a minimum annual salary (as the same shall be
increased from time to time, the "Base Salary") of $250,000, payable in
accordance with the customary payroll practices of the Company.
(b) The Base Salary shall be increased by 10% (or
such greater percentage as the Board may determine) on July 1, 2000 and each
subsequent July 1 during the Term.
5. BONUSES.
(a) BONUSES. During the Term, the Executive shall be
eligible to participate in the Management Incentive Plan of the Company or such
other bonus arrangements as the Company may make available to its executive
employees (individually and collectively, the "Bonus Arrangement"), in
accordance with the terms and conditions of the Bonus Arrangement, as they may
exist from time to time.
6. OTHER BENEFITS. During the Term, the Company shall
provide the Executive with the following benefits:
(a) STOCK OPTION PLANS AND STOCK OPTIONS. The
Executive shall be eligible to participate in any stock option plans maintained
by the Company, including, without limitation, the 0-000-XXXXXXX.XXX INC.1999
Stock Option Plan (the "Option Plan"), in accordance with the terms and
conditions thereof, as applicable to other executive officers of the Company.
Simultaneously with the consummation of the initial public offering of shares of
Class A Common Stock of the Company, the Executive shall be granted
non-qualified stock options under the Option Plan (the "Options") for the
purchase of 200,000 shares of Class A Common Stock of the Company ("Common
Stock") which options shall vest at the rate of twenty-five percent (25%) a
year. The per share exercise price of the Options shall be the initial public
offering price set forth for said shares of Class
A Common Stock in the final prospectus under the Company's Registration
Statement on Form S-1, initially filed with the Securities Exchange Commission
on May 21, 1999.
(b) MEDICAL AND HEALTH INSURANCE BENEFITS. The
Company shall, at its own expense, provide the Executive and his eligible
dependents with the medical, health and dental insurance coverage generally
provided by the Company to its other executive employees.
(c) SPLIT DOLLAR LIFE INSURANCE. The Company shall
pay on the Executive's behalf all premiums that become due during the Term that
are required to maintain in effect a whole life insurance policy on the
Executive's life with a face value of up to $1,000,000 (the "Split Dollar
Policy"); provided, however, that the Executive executes an irrevocable
collateral assignment and split dollar agreement in a form prescribed by the
Company and acceptable to the Executive assigning to the Company the right to
recover, following the earlier of the Executive's death or the Executive's
cancellation of the Split Dollar Policy, from the cash value and any death
proceeds of the Split Dollar Policy, any and all amounts paid by the Company
with respect to the Split Dollar Policy and otherwise setting forth the terms
and conditions of maintaining this split dollar life insurance program.
(d) DISABILITY AND ACCIDENT INSURANCE BENEFITS. The
Company shall provide the Executive with long term disability insurance
(providing 100% Base Salary replacement coverage), business travel accident and
accidental death and dismemberment insurance coverage.
(e) 401(k) PLAN. The Executive shall be entitled to
participate in the Company's 401(k) Plan in accordance with the terms and
conditions of such plan.
(f) OTHER BENEFITS. The Company shall make available
to the Executive any and all other employee or fringe benefits (in accordance
with their terms and conditions) which the Company may generally make available
to its other executive employees.
(g) KEY-MAN LIFE INSURANCE. The Company may purchase
one or more "key man" insurance policies on the Executive's Life ("key man
policies"), each of which will be payable to and owned by the Company. The
Company, in its sole discretion, may select the amount and type of key man
policies purchased, and the Executive will have no interest in any key man
policies. The Executive agrees to reasonably cooperate with the Company in
securing the key man policies, by submitting to all reasonably requested medical
examinations, supplying all reasonably requested information and executing all
documents in order for the Company to secure the key man policies.
7. TRANSPORTATION. During the Term, the Company shall
reimburse the
Executive for expenses he incurs in connection with his acquisition and/or
maintenance of two automobiles, such as automobile lease or loan payments, plus
such amount(s) as may be required to reimburse the Executive for expenses such
as registration, insurance, repairs, maintenance, license fees, parking,
gasoline and oil incurred by the Executive incident to the use of such
automobiles.
8. REIMBURSEMENT OF EXPENSES. During the Term, the
Company shall pay or reimburse the Executive for all reasonable travel (at
first class level), entertainment and other business expenses actually
incurred or paid by the Executive in the performance of his duties hereunder
upon presentation of expense statements and/or such other supporting
information as the Company may reasonably require of the Executive.
9. VACATIONS. The Executive shall be entitled to no
less than four weeks of paid vacation during each full calendar year of the
Term (and a pro rata portion thereof for any portion of the Term that is less
than a full calendar year). Unused vacation may be carried over to successive
years.
10. TERMINATION. The employment hereunder of the
Executive may be terminated prior to the expiration of the Term in the manner
described in this Section 10.
(a) TERMINATION BY THE COMPANY FOR GOOD CAUSE. The
Company shall have the right to terminate the employment of the Executive for
Good Cause (as such term is defined herein) by written notice to the Executive
specifying the particulars of the circumstances forming the basis for such Good
Cause.
(b) TERMINATION UPON DEATH. The employment of the
Executive hereunder shall terminate immediately upon his death.
(c) VOLUNTARY RESIGNATION BY THE EXECUTIVE. The
Executive shall have the right to voluntarily resign his employment hereunder
for other than Good Reason (as such term is defined herein) by written notice to
the Company.
(d) TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE.
The Company shall have the right to terminate the Executive's employment
hereunder without Good Cause by written notice to the Executive.
(e) RESIGNATION BY THE EXECUTIVE FOR GOOD REASON. The
Executive shall have the right to terminate his employment for Good Reason by
written notice to the Company specifying the particulars of the circumstances
forming the basis for such Good Reason.
(f) TERMINATION DATE. The "Termination Date" is the
date as of
which the Executive's employment with the Company terminates. Any notice of
termination given pursuant to the provisions of this Agreement shall specify the
Termination Date.
(g) CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms shall have the following meanings:
(i) "Person" means any individual,
corporation, partnership, association, joint-stock company, trust,
unincorporated organization, joint venture, court, government (or political
subdivision or agency thereof) or other entity.
(iii) "Change of Control" with respect to
the Company, means the occurrence of any of the following, other than in
connection with the initial public offering of the Common Stock, (A) the
acquisition directly or indirectly (in one or more related transactions) by any
Person (other than the Executive), or two or more Persons (other than the
Executive) acting as a group, of beneficial ownership (as that term is defined
in Rule 13d-3 under the Securities Exchange Act of 1934) of outstanding capital
stock of the Company which possess at least 30% of the total voting power of all
such outstanding capital stock ("Voting Shares"); (B) the merger or
consolidation of the Company with one or more other corporations as a result of
which the holders of the outstanding Voting Shares of the Company immediately
before the merger hold less than 50% of the Voting Shares of the surviving or
resulting corporation; (C) the sale of all or substantially all of the assets of
the Company; (D) the Company or any of its shareholders enters into any
agreement providing for any of the foregoing and the transaction contemplated
thereby is ultimately consummated; or (E) individuals who as of the date of this
Agreement constitute the Board of Directors of the Company cease for any reason
to constitute at least a majority thereof, unless the election, or the
nomination for election by the Company's stockholders, of each new director was
approved by a vote of a majority of the directors then still in office who were
directors as of the date of this Agreement.
(iiii) "Good Cause" shall exist if, and only
if, the Executive (A) willfully and repeatedly fails in any material respect to
perform his obligations hereunder as provided herein, provided that such Good
Cause shall not exist unless the Company shall first have provided the Executive
with written notice specifying in reasonable detail the factors constituting
such material failure and such material failure shall not have been cured by the
Executive within 30 days after such notice or, if impracticable of being cured
within such 30 day period, such longer period as may reasonably be necessary to
accomplish the cure; (B) has been convicted of a crime which constitutes a
felony under applicable law or has entered a plea of guilty or nolo contendere
with respect thereto; or (C) is unable, by reason of physical or mental illness,
to perform his material duties and responsibilities under this Agreement for a
period of 180 consecutive days or a period of in excess of 180 days (whether or
not consecutive) during any calendar year during the Term or is determined by a
court of competent jurisdiction either to be of unsound mind or otherwise is
incapable of carrying out his duties and responsibilities as a Senior Vice
President of the Company.
(iv) "Good Reason" means the occurrence of
any of the following events:
(A) the assignment to the Executive
of any duties inconsistent in any material respect with the Executive's then
position (including status, offices, titles and reporting relationships),
authority, duties or responsibilities, or any other action or actions by the
Company which when taken as a whole results in a significant diminution in the
Executive's position, authority, duties or responsibilities, excluding for this
purpose any isolated, immaterial and inadvertent action not taken in bad faith
and which is remedied by the Company immediately after receipt of notice thereof
given by the Executive;
(B) a material breach by the Company
of one or more provisions of this Agreement, provided that such Good Reason
shall not exist unless the Executive shall first have provided the Company with
written notice specifying in reasonable detail the factors constituting such
material breach and such material breach shall not have been cured by the
Company within 30 days after such notice or, if impracticable of being cured
within such 30 day period, such longer period as may reasonably be necessary to
accomplish the cure;
(C) the Company requiring the
Executive to be based at any location other than within 25 miles of the
Company's current executive office location, except for requirements of
temporary travel on the Company's business to an extent substantially consistent
with the Executive's business travel obligations existing immediately prior to
the date of this Agreement;
(D) any purported termination by the
Company of the Executive's employment otherwise than as expressly permitted by
this Agreement; and
(E) a Change of Control of the
Company, provided that the Termination Date occurs no later than one year
following such Change of Control.
(iv) "Affiliate" shall mean with respect to
any Person, any other Person, who directly or indirectly, is in control of, is
controlled by or is under common control with, such Person. For the purposes of
this definition, "CONTROL" (including, with correlative meanings, the terms
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of capital stock, by contract or otherwise.
11. OBLIGATIONS OF COMPANY ON TERMINATION.
Notwithstanding anything in this Agreement to the contrary, the Company's
obligations on termination of the Executive's employment shall be as
described in this Section 11.
(a) OBLIGATIONS OF THE COMPANY IN THE CASE OF
TERMINATION WITHOUT GOOD CAUSE OR RESIGNATION BY THE EXECUTIVE FOR GOOD REASON.
In the event that prior to the expiration of the Term, the Company terminates
the Executive's employment pursuant to Section 10(d), or pursuant to Section
10(e), the Company shall provide the Executive with the following:
(i) AMOUNT OF SEVERANCE PAYMENT. Within 10
days following the Termination Date, the Company shall pay the Executive a
single lump sum cash payment (the "Severance Payment") equal to the sum of the
following:
(A) $500,000, plus the Base Salary
otherwise payable to the Executive for the then remaining duration of the Term;
and
(B) any Base Salary, Bonus
Arrangement bonuses, vacation and unreimbursed expenses accrued but unpaid as of
the Termination Date.
(ii) MEDICAL AND HEALTH INSURANCE. The
Company shall, at its sole expense, provide the Executive (and his dependents)
with the highest level of coverage provided to any executive employee of the
Company under (and in accordance with the terms and conditions of) the Company's
medical and health insurance plans, as in effect from time to time, for the
otherwise remaining duration of the Term; provided that to the extent such
coverage may be unavailable under such medical and health insurance plans due to
restrictions imposed by the insurer(s) under such plans, the Company shall
provide equivalent coverage, if such coverage is available.
(iii) SPLIT DOLLAR LIFE INSURANCE. For the
otherwise remaining duration of the Term, the Company shall continue to pay all
premiums required to maintain the Split Dollar Policy as though the Executive's
employment hereunder had not terminated.
(b) OBLIGATIONS OF THE COMPANY IN CASE OF TERMINATION
FOR DEATH, VOLUNTARY RESIGNATION OR GOOD CAUSE. Upon termination of the
Executive's employment pursuant to Section 10(b), pursuant to Section 10(c) or
pursuant to Section 10(a), the Company shall have no payment or other
obligations hereunder to the Executive, except for the payment of any Base
Salary, Bonus Arrangement bonuses, benefits or unreimbursed expenses accrued but
unpaid as of the date of such termination.
12. RESTRICTIVE COVENANTS.
(a) NONCOMPETITION. In the event of the termination
of the Executive's employment pursuant to Section 10(c) or pursuant to Section
10(a), during the one-year period commencing on the Termination Date, the
Executive shall not own, manage, control or participate in the ownership,
management or control of, or be employed, consult to or engaged by or otherwise
affiliated or associated with, whether as a sole proprietor, shareholder (except
as a holder of not more than five percent of any class of the outstanding shares
of a publicly held corporation), owner, partner, joint venturer, employee,
agent, manager, salesman, consultant, advisor, independent contractor, officer,
director, promoter or otherwise, whether or not for compensation, with respect
to any corporation, partnership, proprietorship, firm, association or other
business entity which is engaged primarily in the business of selling floral
products which are the same or substantially similar to the floral products
offered for sale by the Company and/or any Affiliate of the Company.
(b) CONFIDENTIAL INFORMATION. The Executive
recognizes and acknowledges that, in connection with his employment with the
Company, he has had and will continue to have access to valuable trade secrets
and confidential information of the Company and its Affiliates, including, but
not limited to, management reports, customer, supplier and mailing lists,
business methods and processes, advertising, marketing, promotional, pricing and
financial information and data relating to officers, employees, agents and
consultants (collectively, "CONFIDENTIAL INFORMATION") and that such
Confidential Information is being made available to the Executive only in
connection with the furtherance of his employment with the Company and/or its
Affiliates. The Executive agrees that he will not at any time, directly or
indirectly, use for any purpose, disclose or make available to any person any of
such Confidential Information, except that disclosure of Confidential
Information will be permitted: (i) to the Company an/or its Affiliates and the
advisors of the Company and/or its Affiliates; (ii) if such Confidential
Information has previously become available to the public through no fault of
the Executive; (iii) if required by any court or governmental agency or body or
is otherwise required by law; (iv) if necessary to establish or assert the
rights of the Executive hereunder; (v) if expressly consented to in writing by
the Company; or (vi) if necessary to carry on the Company's business in the
ordinary course or to perform the Executive's duties hereunder.
13. SEVERABILITY. Should any provision of this
Agreement be held, by a court of competent jurisdiction, to be invalid or
unenforceable, such invalidity or unenforceability shall not render the
entire Agreement invalid or unenforceable, and this Agreement and each other
provision hereof shall be enforceable and valid to the fullest extent
permitted by law.
14. ARBITRATION. Any and all disputes, controversies
or claims arising out of or relating to this agreement, or the enforcement or
breach thereof, shall be settled by arbitration conducted in the County of
Nassau, in the State of New York, and in
accordance with the Commercial Arbitration Rules (the "Arbitration Rules") of
the American Arbitration Association ("AAA") and the Supplementary Procedures
for Large, Complex Disputes; provided, however, that any dispute, controversy or
claim with respect to Section 12, may not be submitted to arbitration and shall
only be submitted to a court in accordance with Section 15. The arbitral
tribunal shall consist of three arbitrators. The Company and the Executive shall
each select and appoint one arbitrator within 30 days of initiation of the
arbitration and those arbitrators shall jointly appoint a third arbitrator
within 30 days of their selection and appointment. If the third arbitrator is
not appointed as provided above, such arbitrator shall be appointed by the AAA
as provided in the Arbitration Rules.
Any decision or award of the arbitral tribunal shall be final
and binding upon the parties to the arbitration proceeding. The parties hereto
hereby waive to the extent permitted by law any rights to appeal or to seek
review of such award by any tribunal. The parties hereto agree that the arbitral
award may be enforced against the parties to the arbitration proceeding or their
assets wherever they may be found and that a judgment upon the arbitral award
may be entered in court in accordance with the provisions of Section 15 hereof.
15. CONSENT TO JURISDICTION. Subject to Section 14
hereof, the Company and the Executive irrevocably and voluntarily submit to
personal jurisdiction in the State of New York and in the Federal and state
courts in such state located in the Eastern District of New York in any
action or proceeding arising out of or relating to this Agreement and agree
that all claims in respect of such action or proceeding may be heard and
determined in any such court. The Company and the Executive further consent
and agree that the parties hereto may be served with process in the same
manner as a notice may be given under Section 19. The Company and the
Executive agree that any action or proceeding instituted by one party against
the other party with respect to this Agreement will be instituted exclusively
in the state courts located in, and in the United States District Court for
the Eastern District of New York. The Company and the Executive irrevocably
and unconditionally waive and agree not to plead, to the fullest extent
permitted by law, any objection that they may now or hereafter have to the
laying of venue or the convenience of the forum of any action or proceeding
with respect to this Agreement in any such courts.
16. SUCCESSORS AND ASSIGNS.
(a) This Agreement and all rights under this
Agreement are personal to the Executive and shall not be assignable other than
by will or the laws of descent. All of the Executive's rights under the
Agreement shall inure to the benefit of his heirs, personal representatives,
designees or other legal representatives, as the case may be.
(b) This Agreement shall inure to the benefit of and
be binding
upon the Company and its successors and assigns. Any Person succeeding to the
business of the Company by merger, purchase, consolidation or otherwise shall
assume by contract or operation of law the obligations of the Company under this
Agreement.
17. GOVERNING LAW. This Agreement shall be construed
in accordance with and governed by the laws of the State of New York, without
regard to the conflicts of laws rules thereof.
18. NOTICES. All notices, requests and demands given
to or made upon the respective parties hereto shall be deemed to have been
given or made three business days after the date of mailing when mailed by
registered or certified mail, postage prepaid, or on the date of delivery if
delivered by hand, or one business day after the date of delivery by Federal
Express or other reputable overnight delivery service, addressed to the
parties at their addresses set forth below or to such other addresses
furnished by notice given in accordance with this Section 18: (a) if to the
Company, to 0-000-XXXXXXX.XXX, 0000 Xxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxx
00000, and (b) if to the Executive, to Xxxxxxxxxxx X. XxXxxx, 00 Xxxxxxx
Xxxx, Xxxxxxxx, Xxx Xxxx 00000.
19. WITHHOLDING. All payments required to be made by
the Company to the Executive under this Agreement shall be subject to
withholding taxes, social security and other payroll deductions in accordance
with applicable law and the Company's policies applicable to executive
employees of the Company.
20. COMPLETE UNDERSTANDING. Except as expressly
provided below, this Agreement supersedes any prior contracts,
understandings, discussions and agreements relating to employment between the
Executive and the Company, and constitutes the complete understanding between
the parties with respect to the subject matter hereof. No statement,
representation, warranty or covenant has been made by either party with
respect to the subject matter hereof except as expressly set forth herein.
21. MODIFICATION; WAIVER.
(a) This Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Company and the Executive or in the case of a waiver, by the
party against whom the waiver is to be effective. Any such waiver shall be
effective only to the extent specifically set forth in such writing.
(b) No failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
22. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of this Agreement.
23. COUNTERPARTS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received counterparts hereof signed by the other party hereto.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed in its corporate name by one of its officers duly authorized to
enter into and execute this Agreement, and the Executive has manually signed his
name hereto, all as of the day and year first above written.
1-800 XXXXXXX.XXX, INC.
_________________________ By:______________________________
Witness
/s/ Xxxxxxxxxxx X. XxXxxx
_________________________ _________________________________
Witness Xxxxxxxxxxx X. XxXxxx
