EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of this 1st day of February 1999, is
by and between U.S.A. Floral Products, Inc. ("USA Floral"), a Delaware
corporation, and Xxxx X. Xxxxxxxxx ("Employee").
RECITALS
USA Floral desires to continue to employ Employee and to have the benefit
of his skills and services, and Employee desires to continue employment with USA
Floral, 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. USA Floral hereby employs Employee to perform the
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duties described herein, and Employee hereby accepts employment with USA Floral,
for a term beginning on the date indicated herein and continuing for a period
of two years (the "Term").
2. Position and Duties. USA Floral hereby employs Employee as President
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of the Wholesale Division. As such, Employee shall have responsibilities,
duties and authority reasonably accorded to and expected of the President of a
Division. Employee will report directly to the Chief Executive Officer and the
Board of Directors of USA Floral (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 USA Floral. Employee shall faithfully adhere to, execute, and
fulfill all policies established by USA Floral.
3. Compensation. For all services rendered by Employee, USA Floral 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 $225,000 per year, payable on a regular basis in accordance
with USA Floral's standard payroll procedures, but not less than monthly. On at
least an annual basis, the Board will review Employee's performance and may make
increases to such base salary if, in its sole discretion, any such increase is
warranted.
(b) Incentive Bonus. During the Term, Employee shall be eligible to
receive an incentive bonus up to the amount, based upon the criteria, and
payable at such times as are, specified in Exhibit A attached hereto. The
amount, manner of payment, and form of consideration, if any, shall be
determined by the Board, in its sole and absolute discretion, and such
determination shall be binding and final. To the extent that such bonus is to
be determined in light of financial performance during a specified fiscal period
and this Agreement commences
on a date after the start of such fiscal period, any bonus payable in respect of
such fiscal period's results may be prorated. In addition, if the period of
Employee's employment hereunder expires before the end of a fiscal period, and
if Employee is eligible to receive a bonus at such time (such eligibility being
subject to the restrictions set forth in Section 6 below), any bonus payable in
respect of such fiscal period's results may be prorated.
(c) Perquisites, Benefits, and Other Compensation. During the Term,
Employee shall be entitled to receive all perquisites and benefits as are
customarily provided by USA Floral to its employees, subject to such changes,
additions, or deletions as USA Floral 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. USA Floral shall reimburse Employee for (or,
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at USA Floral'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 USA Floral'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 USA Floral 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, USA Floral
will provide Employee with a relocation allowance, in an amount determined by
USA Floral, 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 USA Floral, in light of
prevailing USA Floral policy at the time.
6. Termination; Rights on Termination. Employee's employment may be
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terminated in any one of the followings ways, prior to the expiration of the
Term:
(a) Death. The death of Employee shall immediately terminate the Term, and
no Severance Compensation (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 essential
functions of his position, with or without reasonable accommodation, 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 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), USA Floral 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, USA Floral 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 USA Floral's regular payroll cycle.
(c) Termination by USA Floral "For Cause." USA Floral 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 USA Floral'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 USA Floral, and that in the judgment
of USA Floral materially and adversely affects the operations or reputation of
USA Floral; (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 USA Floral'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, USA
Floral may, without cause, terminate the Term and Employee's employment,
effective 30 days after written notice is provided to Employee. Should
Employee be terminated by USA Floral without cause or in the event of a change
of control in ownership (which shall be defined as a situation in which a
controlling shareholder, other than a person or entity who is a shareholder as
of the date of this Agreement, obtains more than 50% of the then outstanding
shares of stock), Employee shall receive from USA Floral accelerated vesting of
options to purchase shares of Common Stock then held by him, as well as his base
salary plus benefits for 12 months. Payment of Employee's base salary shall be
in accordance with USA Floral's current payroll practices.
(e) Payment Through Termination. Upon termination of Employee's
employment 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 USA Floral) 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 USA Floral under Section 6(b) or 6(d), Employee shall be entitled
to receive incentive bonus compensation through the end of USA Floral's fiscal
year in which termination occurs, calculated as if Employee had remained
employed by USA Floral 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 USA Floral, 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, Employee shall have no obligation to seek other
employment; provided, that in the event that Employee secures employment or any
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consulting or other similar arrangement during the period that any payment is
continuing pursuant to the provisions of this Section 6, USA Floral 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 USA Floral and/or any other entity owned by or affiliated with USA Floral on
an "at will" basis, for the duration of such period, and thereafter for a period
of two years, Employee shall not, directly or indirectly, for himself or on
behalf of or in conjunction with any other person, USA Floral, 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 USA Floral 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 USA Floral for the purpose or with the intent of enticing such
employee away from or out of the employ of USA Floral;
(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 USA Floral within the
Territory for the purpose of soliciting or selling products or services in
direct competition with USA Floral 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 USA Floral was either
called upon by USA Floral as a prospective acquisition candidate or was the
subject of an acquisition analysis conducted by USA Floral.
(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;
(II) engaging in any activity to which USA Floral shall have provided its prior
written consent; or (iii) maintaining his position with the Meadow Flower, S.A.,
rose farm, located in Ecuador.
(c) It is further agreed that, in the event that Employee shall cease to
be employed by USA Floral and enters into a business or pursues other activities
that, at such time, are not in competition with USA Floral, Employee shall not
be chargeable with a violation of this Section 7 if USA Floral 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 USA Floral of
such breach, Employee ceases the prohibited actions.
(d) For purposes of this Section 7, references to "USA Floral" 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 USA Floral,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by USA Floral of such covenants; provided, that upon
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the failure of USA Floral to make any payments required under this Agreement,
Employee may, upon 30 days' prior written notice to USA Floral, 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 USA Floral 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 USA Floral, and their respective officers,
directors, employees, and stockholders. It is further agreed
that USA Floral and Employee intend that such covenants be construed and
enforced in accordance with the changing activities, business, and locations of
USA Floral 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 USA Floral
(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 USA Floral. It is agreed that the Confidential Information is
confidential and proprietary to USA Floral because such Confidential Information
encompasses technical know-how, trade secrets, or technical, financial,
organizational, sales, or other valuable aspects of USA Floral'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 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 USA Floral
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reasonable advance written notice of the Confidential Information intended to be
disclosed and the reasons and circumstances surrounding such disclosure, in
order to permit USA Floral to seek a protective order or other appropriate
request for confidential treatment of the applicable Confidential Information.
9. Inventions. Employee shall disclose promptly to USA Floral 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
USA Floral and that Employee conceives as a result of his employment by USA
Floral, 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 USA Floral or its nominee. Whenever requested to do so
by USA Floral, Employee shall execute any and all applications, assignments, or
other instruments that USA Floral shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect USA Floral's interest therein.
10. Return of USA Floral Property. Promptly upon termination of
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Employee's employment by USA Floral for any reason or no reason, Employee or
Employee's personal representative shall return to USA Floral (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 USA Floral, or their respective
representatives, vendors, or customers that pertain to the business of USA
Floral, whether in paper, electronic, or other form; and (c) all keys, credit
cards, vehicles, and other property of USA Floral. 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 USA Floral, as the case may be, and be subject at all times to their
discretion and control.
11. No Prior Agreements. Employee hereby represents and warrants to USA
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Floral that the execution of this Agreement by Employee, his employment by USA
Floral, 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 USA Floral 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 USA Floral 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 USA Floral, this Agreement shall automatically
supersede such agreement or understanding, and upon execution of this Agreement
by Employee and USA Floral, 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 USA Floral 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 USA Floral without the prior
written consent of Employee. Subject to the preceding two sentences, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Notwithstanding the foregoing, if Employee accepts
employment with a subsidiary or affiliate of USA Floral other than USA Floral,
unless Employee and his new employer agree otherwise in writing, this Agreement
shall automatically be deemed to have been assigned to such new employer (which
shall thereafter be an additional or substitute beneficiary of the covenants
contained herein, as appropriate), with the consent of Employee, such assignment
shall be considered a condition of employment by such new employer, and
references to the "USA Floral" in this Agreement shall be deemed to refer to
such new employer. If USA Floral is merged with or into another subsidiary or
affiliate of USA Floral, such action shall not be considered to cause an
assignment of this Agreement, and the surviving or successor entity shall become
the beneficiary of this Agreement and all references to the "USA Floral" shall
be deemed to refer to such surviving or successor entity.
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 USA Floral 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 USA Floral 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 USA Floral 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 USA Floral:
U.S.A. Floral Products, Inc.
0000 Xxxxxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000 Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
To Employee: Xxxx X. Xxxxxxxxx
00 Xxxxxxx Xxxx
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 USA Floral 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 USA Floral 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 USA Floral at law or in equity, USA Floral
shall be entitled to specific performance and any injunctive or other equitable
relief as a remedy for any breach or threatened breach of the aforementioned
restrictive covenants.
17. Arbitration. Any unresolved dispute or controversy arising under or
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in connection with this Agreement shall be settled exclusively by arbitration
conducted in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to, detract
from, or modify any provision hereof nor to award punitive damages to any
injured party. A decision by a majority of the arbitration panel shall be
final and binding. Judgement may be entered on the arbitrators' award in any
court having jurisdiction. The direct expense of any arbitration proceeding
shall be borne by USA Floral. Each party shall bear its own counsel fees. The
arbitration proceeding shall be held in the city where the principal office of
USA Floral is located. Notwithstanding the foregoing, USA Floral shall be
entitled to seek injunctive or other eguitable 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 principals.
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed as of the date written above.
USA FLORAL PRODUCTS,INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name:
Title:
EMPLOYEE:
/S/ Xxxx X. Xxxxxxxxx
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EXHIBIT A
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Effective February 1, 1999, under USAFP's Incentive Bonus Plan, Employee will be
eligible to earn up to 75% of Employee's base salary in bonus compensation,
payable out of a bonus pool determined by the Board of Directors of USAFP or a
compensation committee thereof, in their sole discretion, and payable in the
form of cash, stock options, or other non-cash awards, in such proportions, and
in such forms, as are determined in the sole discretion by the Board of
Directors of USAFP or a compensation committee thereof. Employee's prior
employment contract shall govern for year 1999.
