EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of April 3, 1998,
between THE PLOW & HEARTH, INC., a Virginia corporation (the "Company"), and
PETER G. RICE (the "Executive").
W I T N E S E T H:
WHEREAS, the Executive is the President and Chief Executive Officer of the
Company;
WHEREAS, the Executive possesses an intimate knowledge of the business and
affairs of the Company;
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the Executive's contribution as President and Chief Executive Officer to
the growth and success of the Company has been substantial and desires to assure
the Company the continued employment of the Executive as President and Chief
Executive Officer of the Company and to compensate him therefor, on the terms
and conditions set forth below; and
WHEREAS, the Executive desires to continue to serve as President and Chief
Executive Officer of the Company, 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. Certain Definitions. As used herein, the following terms shall have the
following meanings:
"Affiliate" shall mean, with respect to any Person, (i) any other
Person, who directly or indirectly, is in control of, is controlled by or is
under common control with, such Person, and (ii) any natural person who is a
director or officer of such Person or of any Person described in clause (i)
above. 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.
"Base Salary" shall have the meaning provided in Section 5(a).
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean (i) the conviction of the Executive of any
felony, or the conviction of the Executive of a misdemeanor which involves moral
turpitude, or the entering by him of a plea of guilty or nolo contendere with
respect to any of the foregoing; (ii) any conduct by the Executive which in the
reasonable determination of the Board is likely to adversely affect in any
material respect the reputation or public image of the Company or any Affiliate
thereof, provided, the Executive is given the opportunity upon five (5) days'
prior notice to be heard by the Board prior to such termination; (iii) the
commission by the Executive of any act involving fraud, misappropriation of
funds, dishonesty, disloyalty, breach of fiduciary duty or other gross
misconduct injurious to the Company or any Affiliate; (iv) the determination by
the Board that the Executive is dependent upon the use of alcohol or drugs; (v)
a breach by the Executive of Sections 10 and 11 of this Agreement or a breach by
the Executive of any other Confidentiality Agreement between the Executive and
the Company or any other Non-Competition Agreement between the Executive and the
Company; or (vi) a violation or breach by the Executive of any material term of
this Agreement and the failure of the Executive to cure such violation or breach
within ten (10) days after receipt of written notice thereof from the Company.
"Confidentiality Agreement" shall mean any agreement or arrangement
between any member of the Flowers Group and the Executive, which restricts or
otherwise limits the disclosure or use of any confidential, proprietary or other
information or material of one or more members of the Flowers Group by the
Executive, including, but not limited to, this Agreement or, any other agreement
or arrangement which is included as part of any other employment or other
agreement.
"Constructive Termination Without Cause" shall mean a termination of
the Executive's employment at his initiative as provided in Section 9(b) hereof
following the occurrence during the Term, without the Executive's prior written
consent, of one or more of the following events: (i) a reduction in the
Executive's then current Base Salary payable to him under Section 5(a); (ii)
failure to provide the Executive with any material employee benefit required to
be provided pursuant to Section 6 below; (iii) the failure to elect or reelect
the Executive as President and Chief Executive Officer of the Company; (iv) the
failure to permit the Executive to serve on the Senior Planning Team of Flowers
and the Executive Committee of the Senior Planning Team of Flowers, provided
that such groups continue to exist; (v) an action by the Company which results
in a material diminution in the Executive's authority or duties as the President
and Chief Executive Officer of the Company, excluding any isolated or
inadvertent action; (vi) if the Executive is relocated to a Company office that
is located more than 65 miles from the Company's current headquarters located at
State Route 230 West, Madison, Virginia; or (vii) if Flowers has violated or
breached the commitments and principles set forth on Exhibit A annexed hereto
and has failed to cure such violation or breach within ten (10) days after
receipt of written notice thereof from the Executive.
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"Disability" shall mean the determination by a physician selected by
the Company that the Executive is unable, by reason of physical or mental
illness, to perform his duties and responsibilities under this Agreement for a
period of 90 consecutive days or a period of in excess of 180 days (whether or
not consecutive) during any calendar year during the Term or the determination
of a court of competent jurisdiction that the Executive is of unsound mind or
otherwise is incapable of carrying out his duties and responsibilities as
President and Chief Executive Officer of the Company.
"Flowers" shall mean 1-800-Flowers, Inc., a Delaware corporation.
"Flowers Group" shall mean Flowers, any of its Affiliates and its
Subsidiaries.
"Non-Competition Agreement" shall mean any agreement or arrangement
between any member of the Flowers Group and the Executive, which restricts or
otherwise limits the ability of the Executive from directly or indirectly
engaging in a business competitive with, or otherwise similar to, the business
of any member of the Flowers Group, including, but not limited to, this
Agreement or, any other agreement or arrangement which is included as part of
any other employment or other agreement.
"Person" or "person" shall mean an individual, corporation,
partnership, joint venture, limited liability company, association, trust,
unincorporated organization or other entity, or other organization (whether or
not a legal entity), including a government or political subdivision or an
agency or instrumentality thereof.
"Stockholders' Agreement" shall mean that certain Stockholders'
Agreement dated the date hereof, among the Company, Flowers and the management
stockholders and optionholders listed on Schedule A thereto, as the same may be
amended, modified or supplemented from time to time.
"Subsidiary" of any Person shall mean any entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the Board or other Persons performing similar functions are owned directly or
indirectly through one or more intermediaries, or both, by such Person.
2. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby accepts such employment, upon the terms and conditions set
forth herein.
3. Term. The term of the Executive's employment under this Agreement shall
commence on the date hereof and shall end on the earlier of (i) the later of the
third anniversary of the date hereof or the Scheduled Expiration Date (as
defined below), or (ii) the date the Executive's employment under this Agreement
terminates (together with any extensions as provided in the following sentence,
the "Term"). The third anniversary of the date hereof, or in the event of any
extension, the next succeeding anniversary thereof, is
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sometimes referred to herein as the "Scheduled Expiration Date." The Term shall
be automatically extended for additional, successive one-year terms unless
either the Company or the Executive gives the other written notice of its
intention to terminate this Agreement no less than ninety (90) days prior to the
Scheduled Expiration Date.
4. Position and Duties. (a) During the Term, the Executive shall serve as
the President and Chief Executive Officer of the Company and, subject to the
supervision of the Chairman of the Board of the Company, and the Board, and
subject to the terms and provisions of the Stockholders' Agreement, the
Executive shall have general and active charge, control and supervision of the
business, property and affairs of the Company. The Executive shall faithfully
and diligently perform such duties, as well as such other services and duties as
from time to time may be prescribed by the Board. The Executive agrees, subject
in each case to his election as such and without additional compensation, to
serve during the Term in such additional offices to which he may be elected from
time to time in the Company's Affiliates and to serve as a director and as a
member of any committee of the Board and as a director and as a member of any
committee of the board of directors of any of the Company's Affiliates.
(b) During the Term and subject to the provisions of Section 10(a),
(i) the Executive's services shall be rendered on a full-time, exclusive basis,
(ii) the Executive will apply on a full-time basis all of his skill and
experience to the performance of his duties in such employment, and (iii) the
Executive shall have no other employment or outside business activities. The
foregoing provisions shall not, however, prohibit the Executive from (i)
acquiring, solely as an investment, securities of any person which are
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and which are publicly traded, so long as he is
not part of any group required to make any filing under Section 13(d) of the
Exchange Act (or any successor rule) in respect of such person and such
securities do not constitute 2% or more of any class of outstanding securities
of such person or (ii)(A) serving on the boards of a reasonable number of trade
associations and/or charitable organizations, (B) engaging in charitable
activities and community affairs and (C) managing his personal investments and
affairs; provided that the foregoing activities do not in the aggregate
interfere in any material respect with the proper performance of his duties and
responsibilities hereunder.
5. Compensation. (a) Base Salary. The Company shall pay or cause to be
paid to the Executive during the Term a base salary (the "Base Salary") at the
rate of $200,000 per annum, which Base Salary may be increased from time to time
at the discretion of the Board. In determining the amount of any increase in the
Base Salary, the Board shall consider, among other factors, the Company's
profitability, the Executive's contribution to that profitability, and the base
salaries paid to executives at the same level as the Executive in comparable
companies in the same industry as the Company is then engaged, as indicated in
reliable industry publications. The Base Salary shall be payable in monthly or
more frequent installments in accordance with the Company's regular payroll
practices for senior executives.
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(b) Bonus. In addition to the Base Salary, through the earlier of
December 31, 1998 or the expiration of the Term, the Company shall maintain for
the benefit of the Executive, the annual profit sharing bonus program (the
"Profit Sharing Plan") currently in effect on the date hereof. The amount of the
Profit Sharing Plan shall be determined at the discretion of the Board, using
substantially similar criteria as in effect for the determination of the amount
of the Profit Sharing Plan for the year ended December 31, 1997. The Executive's
percentage participation in the Profit Sharing Plan shall be determined by the
Board in its discretion, after considering, among other factors, the
recommendations of the Executive. For the period beginning January 1, 1999
through the expiration of the Term, the Executive shall be eligible to
participate in an annual bonus pool established by the Company based upon the
Company's annual performance. The amount of and the Executive's percentage
participation in such bonus pool, if any, shall be determined at the discretion
of the Board. In making any such determination, the Board shall consider, among
other factors, the Company's profitability, the Executive's contribution to that
profitability, and the bonus compensation paid to executives at the same level
as the Executive in comparable companies in the same industry as the Company is
then engaged, as indicated in reliable industry publications.
(c) Automobile. During the Term, the Company shall provide the
Executive with the use of a Company-owned or leased automobile of a type to be
agreed upon by the Executive and the Company. The Company will bear all
insurance, gasoline, registration, maintenance and repair costs incident to the
Executive's use of such automobile in the performance of his duties hereunder.
6. Employee Benefit Programs. Subject to applicable law, through the
expiration of the Term, the Company agrees to provide the Executive the
following:
(a) the Company shall pay on the Executive's behalf all premiums,
not in excess of $27,081 per year, that become due on or after the date hereof
that are required to maintain in effect in its current form and "face amount"
that certain split dollar insurance policy designated policy number #N02720072
(the "Split Dollar Policy") issued to the Rice Family Trust (the"Trust") by the
Life Insurance Company of Virginia (the "Insurance Company"); provided, however,
that the Trust executes an irrevocable split dollar agreement in a form
prescribed by the Company and filed with the Insurance Company assigning to the
Company the right to recover, 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;
(b) the Company shall pay on the Executive's behalf all premiums,
not in excess of $5,500 per year, that become due on or after the date hereof
that are required to maintain in effect in its current form that certain long
term disability policy designated policy number #P448961 issued for the benefit
of the Executive by the Principal Mutual Life Insurance Company (the "Long Term
Disability Policy") (and the Company shall treat and report all such payments as
additional taxable compensation paid to the Executive); and
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(c) the Company shall maintain for the benefit of the Executive all
other employee benefits plans and programs not otherwise described herein
maintained by the Company generally on behalf of its employees on the date
hereof; provided that in the event that the Company's maintenance of such plans
and programs would adversely affect the tax treatment of any benefit provided to
any other employee of the Company or any other person included in the Flowers
Group or the tax qualified status of any employee benefit plan or program
maintained by the Company or any other person included in the Flowers Group,
during such period, the Company may instead provide the Executive with benefits
that are comparable to those generally provided to employees of Flowers from
time to time.
7. Reimbursement of Expenses. During the Term, the Company shall pay or
reimburse the Executive for all reasonable travel, entertainment and other
business expenses actually incurred or paid by the Executive in the performance
of his duties hereunder upon presentation of expense statements or vouchers or
such other supporting documentation as the Company may reasonably require.
8. Vacations. The Executive shall be entitled to all such paid holidays as
are made available to the Company's senior level executives. In addition, the
Executive shall be entitled to four (4) weeks of paid vacation during each year
of the Term (and a pro rata portion thereof for any portion of the Term that is
less than a full year). Any unused vacation days during any year shall not be
carried forward to subsequent years, nor shall the Executive receive any
additional compensation for such unused vacation days.
9. Termination of Employment.
(a) Termination Due to Death; Disability or Cause.
(i) Death. The Executive's employment shall immediately
terminate upon his death.
(ii) Disability. The Company may terminate the Executive's
employment, by written notice delivered to him, due to his Disability.
(iii) Cause. The Company may terminate the Executive's
employment for Cause upon written notice to the Executive specifying the
particulars of the conduct of the Executive forming the basis for such
termination.
(iv) Payment Upon Termination. Upon termination of Executive's
employment due to death, Disability or for Cause, the Company shall pay to the
Executive or his estate:
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(A) any amounts earned, accrued or owing but not yet
paid as of the date of the Executive's death or termination of the Executive's
employment under Sections 5, 6 or 7 above. Without in any way obligating the
Company to provide a long-term disability income plan or policy to its employees
(a "Disability Plan") (except as may be required pursuant to Section 6 (b)), in
the case of Disability, if the Company shall then maintain a Disability Plan,
the Company shall pay the Executive's Base Salary until the earlier of (i) the
commencement of payments, if any, under a Disability Plan or (ii) six months
after the termination of the Executive's employment with the Company as a result
of such Disability; and
(B) such other benefits, if any, as are payable to or
for the benefit of the Executive or his estate as of the date of the Executive's
death or termination in accordance with applicable plans and programs of the
Company.
(b) Termination Without Cause or Constructive Termination Without
Cause.
(i) Resignation. The Executive may terminate his employment
due to a Constructive Termination Without Cause upon ten (10) days prior written
notice to the Company specifying the particulars of the conduct, action or
circumstance forming the basis for such resignation.
(ii) Payment Upon Termination. In the event the Executive's
employment is terminated by the Company without Cause, other than due to his
Disability or death, or is terminated by the Executive due to a Constructive
Termination Without Cause, the Executive shall be entitled to:
(A) an amount equal to his Base Salary (at the applicable rate
in effect at the date of such termination of his employment) through the
Scheduled Expiration Date;
(B) any amounts earned, accrued or owing but not yet paid as
of the date of the termination of the Executive's employment under Sections 5, 6
or 7 above;
(C) such other benefits, if any, as are payable to or for the
benefit of the Executive as of the date of the Executive's termination in
accordance with applicable plans and programs of the Company;
(D) substantially the same health and life insurance coverages
provided to the Executive immediately prior to such termination through the
Scheduled Termination Date; and
(E) continued payment of the premiums required to be paid
pursuant to Sections 6(a) and 6(b) with respect to the Split Dollar Policy and
the Long Term Disability Policy through the Scheduled Termination Date.
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10. Covenant Not-to-Compete. During the Term and for a period of two years
immediately following the termination of the Executive's employment with the
Company for any reason other than as a result of a Constructive Termination
Without Cause or a termination without Cause (the "Covenant Period"):
(a) The Executive agrees that he will not, directly or indirectly,
as a partner, officer, employee, director, stockholder, proprietor, other equity
owner, consultant, representative, agent or otherwise own or operate any
business or person, or otherwise become or be interested in, or associate with
or render assistance to any person (other than the Company or the other persons
included in the Flowers Group), engaged in the United States in (i) the business
of selling, whether by means of catalogue, direct solicitation, telemarketing,
retail marketing, mass marketing, marketing through wholesale clubs,
supermarkets or otherwise, any products or services which are the same or
substantially similar to any of the products and services offered for sale by
the Company or the other persons included in the Flowers Group or any products
or services which the Company or any person in the Flowers Group has developed
or is actively developing at the time of the termination of the Executive's
employment or (ii) a business which is otherwise in competition with the
business of the Company or any of the other persons included in the Flowers
Group. The foregoing provisions shall not, however, prohibit the Executive from
(i) acquiring, solely as an investment, securities of any person which are
registered under Section 12(b) or 12(g) of the Exchange Act and which are
publicly traded, so long as he is not part of any group required to make any
filing under Section 13(d) of the Exchange Act (or any successor rule) in
respect of such person and such securities do not constitute 2% or more of any
class of outstanding securities of such person or (ii)(A) serving on the boards
of a reasonable number of trade associations and/or charitable organizations,
(B) engaging in charitable activities and community affairs and (C) managing his
personal investments and affairs; provided that the foregoing activities do not
in the aggregate interfere in any material respect with the proper performance
of his duties and responsibilities hereunder.
(b) The Executive agrees that he will not, directly or indirectly,
during the Covenant Period, for his own benefit or for the benefit of any other
person:
(i) (A) influence or attempt to influence any person to either
terminate or modify his employment or other professional relationship with the
Company or any other person included in the Flowers Group or (B) employ, consult
or otherwise retain, directly or indirectly, any person who is (or during the
twelve months prior thereto was) employed, consulting to, or otherwise retained
by the Company or any other person included in the Flowers Group;
(ii) Influence or attempt to influence a supplier or customer
of the Company or any other person included in the Flowers Group or any other
person with whom the Company or any other person included in the Flowers Group
shall have dealt, to terminate
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or modify any written or oral agreement or course of dealing with the Company or
any other person included in the Flowers Group; or
(iii) Influence or attempt to influence a supplier or customer
of the Company or any other person included in the Flowers Group or any other
person with whom the Company or any other person included in the Flowers Group
shall have dealt, for the purpose of offering or selling any products or
services which are identical, substantially similar or comparable to the
services or products offered by the Company or any other person included in the
Flowers Group.
(c) 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
the other persons included in the Flowers Group, including, but not limited to,
the Flowers Management Reports (as defined on Exhibit A), and 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 the
other persons in the Flowers Group. 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 Flowers Group or any
person included therein and their respective advisors; (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. In the event
that the Executive is requested or required to disclose any of the Confidential
Information pursuant to subsection (iii) above, he shall provide the Company
with prompt written notice of any such request or requirement so that the
Company or any other person included in the Flowers Group will have a reasonable
period of time in which to seek a stay or other protective order or other
appropriate remedy prior to disclosure by the Executive or such other Person
and, if the Executive provides the Company with such prompt written notice, the
Company shall not cause the Executive to delay any required disclosure beyond
any date or time which would reasonably be likely to result in a violation by
the Executive of any court or governmental order or law or subject the Executive
to any sanctions, prosecution or other action of any court or governmental
agency. Notwithstanding anything to the contrary contained herein, the Executive
shall only be permitted to disclose information contained in the Flowers
Management Reports (i) upon receipt of the prior written consent of the
Chairman, the President, the Treasurer or Corporate Comptroller of Flowers; (ii)
if required by any court or governmental agency or body or otherwise required by
law; provided, however, that the Executive complies with the provisions of the
immediately preceding sentence; or (iii) if
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necessary to establish or assert the rights of the Executive hereunder.
(d) The Executive agrees that any and all publications, inventions,
software, formulae, reports or other work product directly or indirectly
produced, created, developed or otherwise prepared by the Executive while
employed by the Company (or any other person in the Flowers Group) and related
to the business of the Company or any other person in the Flowers Group
(collectively, "Materials") and any copyrights, patents, trademarks, trade
names, service marks or similar registrations or any applications therefore
(collectively, "Intellectual Property Rights") obtained or made at any time
during the Term or thereafter with respect to such Materials shall be the sole
and exclusive property of the Company (or applicable persons in the Flowers
Group). Upon request of the Board or an officer of the Company, the Executive
promptly shall execute any and all applications, assignments or other
instruments which the Board or such officer shall deem necessary or advisable in
order to apply for and obtain an Intellectual Property Right for the Materials
in the United States and throughout the world and to assign to the Company (or
any applicable persons in the Flowers Group) all right, title and interest in
and to such Materials and Intellectual Property Rights. The Company (or
applicable other persons in the Flowers Group) shall bear the cost of
preparation and filing of all such applications, assignments and instruments in
the appropriate governmental offices in the United States and any foreign
country.
(e) The Executive acknowledges and agrees that: (i) this Section 10
is necessary for the protection of the legitimate business of the Company and
the other persons included in the Flowers Group; (ii) the restrictive covenants
set forth in this Section 10 (the "Restrictive Covenants") are reasonable and
valid in geographical and temporal scope and in all other respects; and (iii)
the Executive has received adequate consideration for the execution, delivery
and performance of this Agreement.
(f) If a court of competent jurisdiction finally determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable
for any reason, such court shall have the power to modify such Restrictive
Covenant, or any part thereof, and, in its modified form, such Restrictive
Covenant shall then be valid and enforceable and the remainder of the
Restrictive Covenants shall not thereby be affected and shall be given full
force and effect, without regard to the invalid or unenforceable parts.
(g) The provisions of this Section 10 shall survive the termination
of this Agreement.
(h) The parties agree that a violation of this Section 10 will cause
irreparable damage to the Company, and the Company shall be entitled (without
any requirement of posting a bond or other security), in addition to any other
rights and remedies which it may have, at law or in equity, to an injunction
enjoining and restraining the Executive from doing or continuing to do any such
act or any other violations or threatened violations of this Section 10.
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11. Return of Property. In the event of the termination of the Executive's
employment with the Company, regardless of the reason for such termination, the
Executive shall immediately: (i) return to the Company all documents, Materials,
information and other property of the Company and the other persons included in
the Flowers Group (including, but not limited to, keys, records, notes, data,
memoranda, models and equipment) whether or not such property constitutes
Confidential Information and (ii) purge or destroy any computerized, duplicated,
copied or other records, extracts or summaries of any such information. The
provisions of this Section 11 shall survive the termination of this Agreement.
12. 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 the Company's policies
applicable to senior executives of the Company and the provisions of any
applicable employee benefit plan or program of the Company.
13. Insurance. The Company may, at its election and for its benefit,
insure the Executive against disability or death and the Company shall be
entitled to any and all insurance proceeds in the event of any such disability
or death. The Executive agrees to submit to such physical examination, supply
such information and take such other action as may be reasonably required in
connection therewith.
14. Severability. If any provision of this Agreement for any reason shall
be held to be illegal, invalid or unenforceable, such illegality shall not
affect any other provision of this Agreement, but this Agreement shall be
amended so as to enforce the illegal, invalid or unenforceable provision to the
maximum extent permitted by applicable law, and the parties shall cooperate in
good faith to further modify this Agreement so as to preserve to the maximum
extent possible the intended benefits to be received by the parties.
15. 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.
16. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of laws rules thereof.
17. Dispute Resolution. Any and all disputes, controversies or claims
arising out of or relating to this Agreement, or the enforcement or the breach
thereof, shall be settled by arbitration in Garden City, New York administered
by the American Arbitration Association
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under its Commercial Arbitration Rules and the Supplementary Procedures for
Large, Complex Disputes, and judgment on the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof; provided, however that
any dispute, controversy or claim with respect to Sections 10 or 11, may not be
submitted to arbitration and shall only be submitted to a court in accordance
with Section 18.
18. Consent to Jurisdiction. Subject to Section 17, 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.
19. Notices. (a) Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally by hand or by
recognized overnight courier, telecopied or mailed (by registered or certified
mail, postage prepaid return receipt requested) as follows:
(i) If to the Company, one copy to:
1-800-Flowers, Inc.
1600 Stewart Avenue
Westbury, New York 11590
Telecopier: (516) 237-6060
Attn: William E. Shea
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with a copy to:
Gallagher Walker & Bianco
98 Willis Avenue
Mineola, New York 11501
Telecopier: (516) 248-2394
Attn: Gerard M. Gallagher, Esq.
(ii) If to the Executive, one copy to:
Mr. Peter G. Rice
Route 1, Box 90-B
Madison, Virginia 22727
Telephone: (540) 948-6415
with a copy to:
LeClair Ryan, a Professional Corporation
707 East Main Street, 11th Floor
Richmond, Virginia 23219
Telecopier: (804) 783-2294
Attn: Steven J. Keeler, Esq.
(b) Each such notice or other communication shall be effective (i) if
given by telecopier, when such telecopy is transmitted to the telecopier number
specified in Section 19(a) (with confirmation of transmission); or (ii) if given
by any other means, when delivered at the address specified in Section 19(a).
Any party by notice given in accordance with this Section 19 to the other party
may designate another address (or telecopier number) or person for receipt of
notices hereunder. Notices by a party may be given by counsel to such party.
20. Complete Understanding. 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.
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21. Modification; Waiver; Non-Contractual Remedies; Preservation of
Remedies. 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. 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. Except as otherwise provided herein, the rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies that any
party may otherwise have at law or in equity.
22. Mutual Representations. (a) The Executive represents and warrants to
the Company that the execution and delivery of this Agreement and the
fulfillment of the terms hereof (i) will not constitute a default under or
conflict with any agreement or other instrument to which he is a party or by
which he is bound and (ii) do not require the consent of any person.
(b) The Company represents and warrants to the Executive that this
Agreement has been duly authorized, executed and delivered by the Company and
that such execution and delivery and the fulfillment of the terms hereof (i)
will not constitute a default under or conflict with any agreement or other
instrument to which it is a party or by which it is bound and (ii) do not
require the consent of any person.
(c) Each party hereto represents and warrants to the other that this
Agreement constitutes the valid and binding obligation of such party enforceable
against such party in accordance with its terms.
23. 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.
24. 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.
25. No Third Party Beneficiaries. This Agreement is not intended to, and
shall not be construed to, confer upon any third Person any right, remedy or
benefit nor is it intended to be enforceable by any third Person, and shall only
be enforceable by the parties, and their respective successors, permitted
assigns, heirs, designees, personal representatives or other legal
representatives.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed in its corporate name, and the Executive has manually signed his name
hereto, all as of the day and year first above written.
THE PLOW & HEARTH, INC.
By:_____________________________________
Name:
Title:
________________________________________
Peter G. Rice
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EXHIBIT A
1. The Executive generally will be invited to attend meetings of the Board
of Directors of Flowers (the "Flowers' Board") and will be provided with the
appropriate advance notice. Notwithstanding the foregoing, the Executive will
not be present during (a) "executive sessions" of the Flowers' Board or (b) at
such times when other items deemed appropriate by the Flowers' Board for review
only by board members are being discussed. In addition there may be other
limited occasions when the Flowers' Board or its Chairman may determine that it
is inappropriate for the Executive to be present at board meetings, in which
event the Executive will not attend. The Company will reimburse the Executive
for all reasonable expenses incurred in connection with the Executive's
participation at such meetings in a manner consistent with reimbursement
policies for other senior executives.
2. The Executive will receive copies of regularly prepared management
reports presented to the Flowers' Board, which include financial statements and
operating reports of Flowers ("Flowers Management Reports").
3. The Company will constitute and be operated as the catalogue subsidiary
of Flowers. Accordingly, the Company (or its Subsidiaries) will be the entity
through which Flowers will acquire and operate (i) other catalogue, direct mail
and telemarketing businesses in the home and light garden category, (ii)
interactive businesses in the home and light garden category, and (iii) retail
businesses in which substantially all of the products are in the home and light
garden category.
A-1