EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 1, 2006 (this "Agreement"), by and
among 1-800-FLOWERS.COM, INC., a Delaware corporation ("Flowers"), Fannie
May Confections Brands, Inc., a Utah corporation and a wholly owned
subsidiary of Flowers (the "Company"), and David Taiclet ("Executive").
RECITALS
WHEREAS, pursuant to the Stock Purchase Agreement, dated as of April 5, 2006
(the "Stock Purchase Agreement"), by and among the Company, the Guarantors named
therein, the Sellers named therein and Flowers, Flowers acquired the Company,
through the sale by Sellers to Flowers of all the outstanding shares of capital
stock and warrants of the Company (the "Transaction"); and
WHEREAS, Executive was a significant shareholder of the Company and received
substantial consideration in connection with the Transaction; and
WHEREAS, Flowers would not have completed the Transaction without the
protections and benefits afforded to it under the terms of this Agreement,
including, without limitation, the provisions concerning the protection of
confidential information, non-competition, intellectual property and business
opportunities; and
WHEREAS, the Company desires to employ Executive as Chief Executive Officer of
the Company and Executive desires to accept such employment, subject to the
terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties agree as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company agrees to
employ Executive during the Term (as herein defined). Executive shall be
employed as the Chief Executive Officer ("CEO") of the Company and as such shall
report to the President of Flowers for the Initial Term of this Agreement (as
defined herein). As CEO of the Company, Executive shall perform faithfully and
diligently such duties and responsibilities as are customarily performed by the
CEO of a company the size and nature of the Company, and such other comparable
duties and responsibilities as, from time to time, may be assigned to him by the
President of Flowers or the Board of Directors (the "Board") of the Company.
Executive acknowledges and agrees that Executive may be required, without
additional compensation, to perform comparable services for any business entity
controlling, controlled by, or under common control with, the Company by virtue
of direct or indirect beneficial ownership of voting securities of or voting
interest in the controlled entity (an "Affiliate") and to accept any office or
position with any such Affiliate as the Board may require, including, but not
limited to, service as an officer or director of the Company or any such
Affiliate. Executive shall comply with all applicable policies of the Company,
all policies of Flowers applicable to Executive and all laws, rules and
regulations applicable to the Company and its business.
1.2 Subject to the terms and conditions of this Agreement, Executive hereby
accepts employment hereunder as CEO of the Company and agrees that his
employment shall be full-time and exclusive. During the Term, Executive shall,
except during periods of sick leave or duly authorized vacation or leave of
absence, devote the whole of his time, attention, skill and ability during usual
business hours (and outside those hours when reasonably necessary to Executive's
duties and responsibilities hereunder) to the faithful and diligent performance
of the duties and responsibilities described herein. Nothing in this Agreement
shall preclude Executive, so long as such activities are not prohibited under
Section 9.2 hereof and, in the reasonable determination of the Board, such
activities (individually or collectively) do not create a conflict of interest
for Executive or Flowers and its subsidiaries, including the Company
(collectively the "Group"), or materially interfere with the performance of his
duties and responsibilities hereunder, from engaging in charitable and community
affairs, from managing any passive investment made by him in real estate or
other property (provided that no such investment may exceed two (2%) percent of
the equity securities of any entity, without the prior written approval of the
Board), or from serving, subject to the prior written approval of the Board, as
a member of trade-related boards of directors or as a trustee of any other
trade-related association or entity. Notwithstanding the foregoing, so long as,
in the reasonable determination of the Board, such activities (individually or
collectively) do not create a conflict of interest for Executive or the Group,
or materially interfere with the performance of his duties and responsibilities
hereunder, Executive shall be permitted to continue his current level of
involvement in, and activity related to, the National Confectioner's
Association; St. Joseph's Home for Boys; Conley Insurance Group; Marquette
Insurance; Young Presidents' Organization; Harvard Business School Fund Raising;
and University of Notre Dame Business School.
2. Term of Employment. The term of this Agreement shall commence on the date
hereof and continue through and including April 30, 2008, subject to earlier
termination in accordance with the terms and conditions contained in Section 7
hereof (the " Initial Term" or "Term").
3. Place of Employment. During the Term, Executive shall perform his services
primarily in St. Louis, Missouri, subject to such travel requirements as are
reasonably necessary to the performance of his duties and responsibilities
hereunder.
4. Compensation.
4.1 Salary. During the Term, as consideration for the proper and satisfactory
performance of all duties and responsibilities to be performed by Executive
hereunder, the Company shall pay Executive a base salary (together with any
increases thereto under this Section 4.1, the "Base Salary") at the rate of two
hundred and seventy-five thousand dollars ($275,000) per annum, calculated as of
the commencement date on May 1, 2006 (the "Commencement Date"). Commencing with
Flowers' 2007 fiscal year, Executive shall receive an annual review (with the
first such annual review occurring on or about July 2, 2007) and the Base Salary
shall be subject to such increases, if any, as the Board, in its discretion,
from time to time, may determine. The Base Salary shall be payable in bi-weekly
installments, in arrears, in accordance with the ordinary payroll practices of
the Company for its executive officers, subject to applicable tax and payroll
deductions.
4.2 Performance Bonus. As additional consideration for the proper and
satisfactory performance of all duties and responsibilities to be performed by
Executive hereunder, during the Term, Executive shall be eligible to receive a
performance bonus (the "Performance Bonus"), payable not later than two and
one-half (2 1/2) months after the end of Flowers' fiscal year, subject to the
achievement of such performance goals as established by Flowers (for the
avoidance of doubt, Executive shall not be eligible to receive any Performance
Bonus for the period from the date of this Agreement through July 3, 2006). Any
such Performance Bonus shall be subject to the terms of Flowers' Sharing Success
Program, as in effect from time to time. The initial target Performance Bonus
shall be forty percent (40%) of Executive's current Base Salary and the
attainment of the initial Performance Bonus shall be tied seventy-five percent
(75%) to the Company's financial performance goals and twenty-five percent (25%)
to Flowers' financial performance. Any such Performance Bonus shall be paid in
cash. The first review for the Performance Bonus shall occur on or about July 2,
2007 with respect to Flowers' fiscal year ended July 2, 2007. For Fiscal Year
2007 the Company's financial performance goal shall be met provided the Company
achieves the EBITDA target of $15,000,000 and any other goals mutually agreed
between the Executive and the President of Flowers.
4.3 Stock Option Award. Subject to the approval of the Compensation Committee of
Flowers' Board of Directors, Executive is entitled to an option to purchase
50,000 (Fifty Thousand) shares of Flowers' Class A Common Stock, subject to the
terms of Flowers' 2003 Long term Incentive and Share Award Plan (the "Plan") and
Flowers' Stock Option Agreement. Concurrently with the execution of this
Agreement, Flowers and Executive are entering into a Stock Option Agreement in
the form attached hereto as Exhibit A (the "Stock Option Agreement"). Forty
percent (40%) of these options will vest on the second anniversary of the grant
date, then 20% for each subsequent year Executive remains employed by the
Company up to the fifth anniversary of the grant, when they would be 100%
vested. The grant date shall be the Commencement Date and the exercise price on
this option grant shall be the closing price of Flowers' aforementioned stock on
the Commencement Date.
5. Employee Benefits.
5.1 Health Insurance. During the Term, Executive shall have the option to be
covered under the Company's existing health insurance plan (the "Health
Insurance Plan") under the terms, conditions and rates as offered to other
employees of Company. The parties acknowledge that Executive may commence
coverage under the Health Insurance Plan on or about May 1, 2006 provided he
elects to be so covered.
5.2 Vacation and Fringe Benefits.
(a) Executive shall be entitled to twenty (20) days paid vacation (which shall
include five (5) discretionary days) in each Flowers' fiscal year during the
Term (pro rated as necessary for partial Flowers' fiscal years during the Term).
The timing and duration of any vacation shall be subject to the prior written
approval of Flowers. Executive's allotted vacation days accrue equally over each
Flowers' fiscal year (or partial fiscal year) during the Term and consistent
with the policy of Flowers. In addition, Executive represents he has 3 weeks of
accrued of vacation from his former employment and he is allowed to carry over
those 3 weeks to his employment hereunder. However, those 3 weeks must be used
by December 31, 2006 or they will deemed expired.
(b) The Company shall offer Executive such other fringe benefits which, in the
Company's sole discretion, it determines are consistent with those offered to
the employees of the Group of similar rank or status as Executive.
(c) Executive shall not be entitled to accumulate unused vacation, sick leave or
other fringe benefits from year to year, without the prior written consent of
the Company. Further, Executive shall not be entitled to receive payments in
lieu of any compensation or payment for, or in lieu of, said benefits prorated
to the date of termination of this Agreement.
5.3 Expenses. Executive is authorized to incur reasonable, ordinary and
necessary out-of-pocket business expenses in carrying out his duties and
responsibilities under this Agreement (in accordance with the policies and
procedures established from time to time by Flowers for similarly situated
executive officers of the Group). The Company will promptly reimburse Executive
in full for all such out-of-pocket expenses upon presentation by Executive from
time to time of proper documentation evidencing such expenditures, including
information and materials as the Company may from time to time reasonably
require. In addition, the Company will promptly reimburse Executive in full for
membership dues and similar out-of-pocket expenditures paid by Executive solely
in connection with his involvement in the Young Presidents' Organization upon
presentation by Executive from time to time of proper documentation evidencing
such expenditures, including information and materials as the Company may from
time to time reasonably require; provided, however, that such expenditures shall
in no event exceed $12,500 for any full calendar year occurring during the Term
(pro rated for partial calendar years occurring during the Term).
6. Key-Person Insurance. Executive agrees that the Company may, at any time and
from time to time, and for the Company's own benefit, apply for and take out
term life, health, accident and/or other insurance covering Executive
("Key-Person Insurance") in an amount to be determined in the sole discretion of
the Board. The Company shall own all rights in any such Key-Person Insurance
policies and proceeds thereof and Executive shall not have any right, title or
interest therein; except that if Executive is no longer employed by the Company
(other than as a result of his death or Permanent Disability (as defined
below)), then the Company shall terminate such Key-Person Insurance policies or
arrange for such Key-Person Insurance policies to be assigned to Executive;
provided that said policies permit such assignment and Executive is solely
responsible for the payment of any premiums on such policies after such
assignment. Executive agrees to assist the Company at the Company's expense in
obtaining any such Key-Person Insurance by, among other things, submitting to
customary medical examinations and correctly preparing, signing and delivering
such applications and other documents as may be required by insurers.
7. Termination of Employment.
7.1 Good Reason. Executive shall be entitled to terminate his employment
hereunder during the term for "Good Reason". For purposes of this Agreement,
"Good Reason" shall mean (without Executive's express prior written consent) (i)
any breach by the Company of any material provision of this Agreement or (ii) a
material reduction by the Company in Executive's Base Salary or, during the
Initial Term, a change in his reporting relationship to the President of
Flowers. If Executive desires to terminate his employment with the Company
pursuant to this Section 7.1, he shall, within thirty (30) days after the
occurrence of any event described in clauses (i) or (ii) as the case may be, of
this Section 7.1, first deliver to the Company written notice stating the
specific termination provision in this Section 7.1 relied upon and setting forth
in reasonable detail the facts and circumstances claimed to provide the basis
for such termination. Such written notice of termination shall provide for a
date of termination not less than thirty (30) days and not more than sixty (60)
days after the date of delivery of such notice and such termination shall become
effective on such date unless the Company shall have rectified, cured or
remedied the facts and circumstances claimed to provide the basis for such
termination on or prior to such date. If written notice of termination is not
provided to the Company within thirty (30) days after the occurrence of any
event described in clauses (i) or (ii), as the case may be, of this Section 7.1,
Executive shall have irrevocably waived his right to terminate his employment
hereunder for Good Reason as a result of such event.
7.2 Permanent Disability. In light of the unique nature of Executive's services,
and the unique burden on the Company that would result from Executive's long
term absence, in the event of the Permanent Disability (as defined below) of
Executive, the Company shall have the right, upon written notice delivered to
Executive, to terminate the employment of Executive hereunder, effective upon
the fifteenth (15th) calendar day following the delivery of such notice (or such
later day as shall be specified in such notice). Such notice shall set forth in
reasonable detail the facts and circumstances claimed to provide the basis for
such termination. For purposes of this Agreement, "Permanent Disability" shall
mean any illness or physical or mental disability or incapacity (from any cause
or causes whatsoever) which renders Executive unable in any material respect to
perform his duties and responsibilities under this Agreement in the manner and
to the extent required hereunder, whether with or without reasonable
accommodation, for a period exceeding twelve (12) weeks in any three hundred and
sixty five (365) day period.
7.3 Death. In the event of Executive's death, this Agreement will terminate
automatically.
7.4 Termination for Misconduct. The Company shall have the right to terminate
the employment of Executive hereunder for Misconduct (as defined below). For
purposes of this Agreement, "Misconduct" shall mean (i) Executive's refusal or
failure (other than during periods of illness or disability) to diligently
perform his duties and responsibilities hereunder, (ii) any breach by Executive
of any material provision of this Agreement (Executive agrees that the
provisions of Section 9 are material), (iii) the conviction or plea of guilty or
nolo contendere of Executive in respect of any felony, other than a motor
vehicle offense, or for any crime of moral turpitude, (iv) the commission of any
act by Executive which injures, or in the reasonable judgment of the Board or
Flowers could reasonably be expected to injure, materially the reputation,
business or business relationships of the Group, including, without limitation,
any breach of written policies of Flowers with respect to trading in securities,
(v) acts of fraud or dishonesty by Executive in connection with his duties and
responsibilities under this Agreement, including, without limitation,
misappropriation, theft or embezzlement in the performance of his duties and
responsibilities as an employee of the Company or (vi) Executive fails to
implement or follow any reasonable and lawful policy or directive of the Board
or Flowers. Termination of Executive's employment hereunder by the Company for
Misconduct will be effective upon written notice of the Company delivered to
Executive at any time; provided that if the Company determines to terminate
Executive's employment pursuant to clause (i), (ii) or (vi) hereof, the Company
shall give Executive written notice of the facts and circumstances claimed to
provide the basis for such termination and shall allow Executive no less than
twenty (20) days to cure the situation giving rise to Misconduct; provided,
further, that any breach by Executive of the provisions of Section 9 hereof or
any such policy or directive relating thereto shall be deemed to be a material
breach of this Agreement and shall not be subject to a right of cure.
7.5 Termination Without Misconduct. Anything in this Agreement notwithstanding,
the Company shall have the right to terminate the employment of Executive
hereunder at any time without Misconduct effective upon not less than twenty
(20) days' prior written notice of the Company delivered to Executive. None of
(i) a termination for Permanent Disability under Section 7.2 hereof, (ii) the
automatic termination of this Agreement upon Executive's death under Section 7.3
hereof, (iii) a termination for Misconduct under Section 7.4 hereof or (iv) a
written notice by the Company that the Term shall not be extended under Section
2 hereof shall be deemed to be a termination without Misconduct under this
Section 7.5.
7.6 Voluntary Termination. Anything in this Agreement notwithstanding, Executive
may terminate his employment hereunder not for Good Reason effective upon not
less than one hundred and eighty (180) days' prior written notice of Executive
delivered to the Company. A termination for Good Reason under Section 7.1 hereof
shall not be deemed to be a voluntary termination under this Section 7.6.
8. Compensation Upon Termination.
8.1 Termination for Good Reason; Termination Without Misconduct. If Executive
terminates his employment hereunder for Good Reason pursuant to Section 7.1
hereof or if Executive's employment hereunder is terminated by the Company
without Misconduct pursuant to Section 7.5 hereof, Executive shall be entitled
only to (i) any payments of Base Salary under Section 4.1 hereof accrued and
unpaid through the date of such termination (such amount to be paid within
thirty (30) days after the date of such termination, (ii) provided Executive has
entered into an irrevocable (except to the extent required by law, and to the
extent required by law to be revocable, has not revoked) general release of
claims reasonably satisfactory to Flowers relating to this Agreement and the
termination of his employment, Base Salary under Section 4.1 hereof, at the rate
in effect immediately prior to the date of such termination, payable in equal
monthly installments, for a period equal to the remaining Initial Term of this
Agreement, (iii) rights and benefits, if any, accrued and vested through the
date of such termination under any employee benefit plan or fringe benefit
program (determined in accordance with the applicable terms and provisions of
such plan or program) and (iv) the reimbursement of any expenses incurred by
Executive through the date of such termination pursuant to Section 5.3 hereof
(such amount to be paid within thirty (30) days after the date of such
termination). Notwithstanding the foregoing, to the extent required by Section
409A of the Internal Revenue Code of 1986, as amended (the "Code"), amounts
otherwise payable under clause (ii) within six months after Executive's
termination of employment shall be deferred to and paid on the day following the
six month anniversary of such termination of employment. Notwithstanding Section
4.2 hereof, except as set forth in this Section 8.1, Executive shall not be
entitled to any other compensation, including any Performance Bonus or unused
vacation time, or any other benefits from the Company under this Agreement in
the event of any such termination.
8.2 Voluntary Termination; Termination for Misconduct. If Executive's employment
hereunder is terminated by the Company for Misconduct pursuant to Section 7.4
hereof or if Executive terminates his employment hereunder not for Good Reason
pursuant to Section 7.6 hereof, Executive shall be entitled only to (i) any
payments of Base Salary under Section 4.1 hereof accrued and unpaid through the
date of such termination (such amount to be paid within thirty (30) days after
the date of such termination), (ii) rights and benefits, if any, vested and
accrued through the date of such termination under any employee benefit plan or
fringe benefit program (determined in accordance with the applicable terms and
provisions of such plan or program) and (iii) the reimbursement of any expenses
incurred by Executive through the date of such termination pursuant to Section
5.3 hereof (such amount to be paid within thirty (30) days after the date of
such termination). Notwithstanding Section 4.2 hereof, except as set forth in
this Section 8.2, Executive shall not be entitled to any other compensation,
including any Performance Bonus, or any other benefits from the Company under
this Agreement in the event of any such termination.
8.3 Termination upon Permanent Disability or Death. If Executive's employment
hereunder is terminated by the Company due to Permanent Disability pursuant to
Section 7.2 hereof or if this Agreement is terminated due to Executive's death
pursuant to Section 7.3 hereof, Executive (or, in the case of the death of
Executive, his estate or other legal representative) shall be entitled only to
(i) any payments of Base Salary under Section 4.1 hereof accrued and unpaid
through the date of such termination (such amount to be paid within thirty (30)
days after the date of such termination), (ii) rights and benefits, if any,
vested and accrued through the date of such termination under any employee
benefit plan or fringe benefit program (to the extent provided in such plan and
determined in accordance with the applicable terms and provisions thereof);
provided that, in the event of the termination by the Company due to Permanent
Disability, Executive shall be entitled to continued coverage under any
long-term disability or similar plan in which Executive participated immediately
prior to the date of such termination (determined in accordance with the
applicable terms and provisions of such plan) and (iii) the reimbursement of any
expenses incurred by Executive through the date of such termination pursuant to
Section 5.3 hereof (such amount to be paid within thirty (30) days after the
date of such termination). Notwithstanding Section 4.2 hereof, except as set
forth in this Section 8.3, Executive (or, in the case of the death of Executive,
his estate or other legal representative) shall not be entitled to any other
compensation, including any Performance Bonus, or any other benefits from the
Company under this Agreement in the event of any such termination.
8.4 Effect of Termination. Upon any termination pursuant to Section 7 hereof,
the Company shall have no further obligation to Executive except as provided in
this Section 8; provided that Sections 9 through 22 hereof shall survive and
remain in full force and effect.
9. Confidential Information; Non-Competition; Intellectual Property; Business
Opportunities.
9.1 Executive shall not during the Term and thereafter, without the prior
written consent of the Company, (i) divulge, disclose or make accessible any
Confidential Information (as defined below) to any other person, firm,
partnership, corporation or other entity or (ii) use any Confidential
Information for his own purposes or for the benefit of any other person, firm,
partnership, corporation or other entity (other than the Company), except (x)
during the Term, in the business of and for the benefit of the Company and the
Group or (y) when required to do so by a court of competent jurisdiction, by any
governmental agency having supervisory authority over the business of the Group,
or by any administrative body or legislative body (including a committee
thereof) with jurisdiction to order Executive to divulge, disclose or make
accessible such Confidential Information; provided that, in the event that
Executive is so required to disclose Confidential Information, Executive shall,
prior to making any such disclosure, provide the Company with prompt written
notice of such requirement so that the Company may seek an appropriate
protective order. For purposes of this Agreement, "Confidential Information"
shall mean all data, analyses, reports, interpretations, forecasts, documents
and information concerning the Group's affairs, including, without limitation,
financial data, strategic business plans, computer programs and documentation,
product development data (or other proprietary product data), customer lists and
customer information, discoveries, practices, policies, processes, methods,
marketing plans, prospects, opportunities and other proprietary information in
whatever form, tangible or intangible; provided that Confidential Information
shall not include information that has become generally available to the public
other than as a result of disclosure by Executive in a manner violative of this
Section 9.1. Upon expiration or termination of the Term, Executive shall
immediately return to the Company all Company property, including without
limitation computers, phones, keys and other devices, all Confidential
Information, including copies, reproductions and summaries thereof, in his
possession and shall erase all such Confidential Information from all media in
his possession, and, if the Company so requests, shall certify in writing that
he has done so. All Confidential Information is and shall remain the property of
the Group.
9.2 During the Term (other than on behalf of the Company) and for a period of
five (5) years after Executive's cessation of employment with the Comapny,
Executive agrees that, without the prior written consent of Flowers: (i) he
shall not, directly or indirectly, either as principal, manager, agent,
consultant, officer, stockholder, partner, investor, lender or employee, or in
any other capacity (and whether or not for compensation), carry on, be engaged
in or employed by, be a consultant or provide assistance to or have any
financial interest in, any person, firm, entity or business which is, in whole
or in part, in competition with the business of the Group (as defined above),
(ii) he shall not, on his own behalf or on behalf of any person, firm, entity or
business, directly or indirectly, solicit for employment, offer employment to
any employee, or hire any employee who has been employed by the Group at any
time during the twelve (12) months immediately preceding such solicitation or
offer, and (iii) influence or attempt to influence a supplier or customer of the
Group 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 the Group. Notwithstanding the foregoing, Executive
shall be permitted to (i) own less than two (2%) percent of the outstanding
shares of capital stock of any corporation, which shares are publicly traded on
a U.S. national securities exchange, the Nasdaq Stock Market or any U.S.
over-the-counter public securities market and (ii) maintain (but not increase),
through KDM Holdings, Inc., a Utah corporation, Executive's ownership interest,
as of the date of this Agreement, in Alpine Confections Holdings, Inc., a Utah
corporation, Alpine Confections Canada, ULC, a Nova Scotia unlimited liability
company, Maxfield Candy Company, a Utah corporation, and Kencraft, Inc., a Utah
corporation. The Executive acknowledges that the consideration for this
Non-compete provision is not only his employment with the Company, but also the
monies received as a Seller under the Stock Purchase Agreement. Nothing herein
is intended to prevent Executive from receiving reports customarily given to a
shareholder of a Company.
For purposes of this Section 9.2, a person, firm, entity or business is "in
competition with the business of the Group" if such person, firm, entity or
business is engaged, in any state of the United States or any equivalent section
or area of any country in which the Group has, directly or indirectly,
revenue-producing customers or activities, in the businesses that the Group is
engaged in or actively developing as of the date of this Agreement or from time
to time, while the Executive is employed by the Company, including, without
limitation, the floral industry, the candy industry, the gourmet food industry,
the baked goods and specialty gift items industry and the home and garden
industry.
9.3 All Intellectual Property (as defined below) and Technology (as defined
below) created, developed, obtained or conceived of by Executive during the
Term, and all business opportunities presented to Executive during the Term,
shall be owned by and belong exclusively to the Group, provided that they relate
to the business of the Group as of the date of such creation, development,
obtaining or conception, and Executive shall (i) promptly disclose any such
Intellectual Property, Technology or business opportunity to Flowers and (ii)
execute and deliver to Flowers, without additional compensation, such
instruments as Flowers may require from time to time to evidence its ownership
of any such Intellectual Property, Technology or business opportunity. For
purposes of this Agreement, (x) the term "Intellectual Property" shall mean and
include any and all trademarks, trade names, service marks, service names,
patents, copyrights, logos, domain names and applications for any of the
foregoing and (y) the term "Technology" shall mean and include any and all trade
secrets, proprietary information, inventions, discoveries, know-how, formulae,
processes, recipes and procedures.
9.4 Executive and the Company agree that the restrictions contained in Sections
9.1, 9.2 and 9.3 hereof are a reasonable and necessary protection of the
immediate interests on the Group, that any violation of these restrictions would
cause substantial and irreparable injury to the Group and that Flowers would not
have entered into the Transaction or entered into this Agreement without
receiving the additional consideration offered by Executive in binding himself
to these restrictions. In the event of the breach or threatened breach by
Executive of any of such restrictions, Flowers and the Company shall be entitled
to an injunction, without the necessity of posting a bond, restraining Executive
from such breach or threatened breach and the parties hereby irrevocably consent
to the jurisdiction of the Supreme Court of the State of New York, County of
Nassau, and the United States District Court in and for the Eastern District of
New York, for any action or proceeding relating to injunctive relief pursuant to
this Section 9.4; provided that the right of Flowers and the Company to an
injunction shall not be construed as prohibiting Flowers and the Company from
pursuing any other available remedies for such breach or threatened breach. In
the event that, notwithstanding the foregoing, a restriction, or any portion
thereof, contained in Section 9.1, 9.2 or 9.3 is deemed to be unreasonable by a
court of competent jurisdiction, whether due to the passage of time, change of
circumstances or otherwise, Executive, Flowers and the Company agree that such
restriction, or portion thereof, shall be modified in order to make it
reasonable and shall be enforced accordingly.
10. Notices. Any notice, request, demand or other communication required or
permitted hereunder shall be in writing and shall be delivered by hand,
electronic transmission (with a copy following by hand or by overnight courier),
by registered or certified mail, postage prepaid, return receipt requested, or
by overnight courier addressed to the other party. All notices shall be
addressed as follows, or to such other address or addresses as may be
substituted by notice in writing:
To the Company or Flowers:
1-800-Flowers.COM, Inc.
1600 Stewart Avenue, 7th Floor
Westbury, New York 11590
Attention: PersonNameMaureen Paradine
Vice President of Human Resources
Facsimile: (516)-237-6101
with a copy to:
Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10005
Attention: Christopher T. Cox, Esq.
Facsimile: (212) 269-5420
To Executive:
David Taiclet
16625 Kehrsgrove Drive
Clarkson, MO 63005
Facsimile: (636) 536-7837
with a copy to:
Leonard, Street and Deinard, P.A.
150 South Fifth Street
Suite 2300
Minneapolis, Minnesota 55402
Attention: Thomas J. Conley, Esq.
Facsimile: (612) 335-1657
Communications delivered by hand or by overnight courier shall be deemed
received on the date of delivery; communications sent by electronic means shall
be deemed received one (1) business day after the sending thereof, and
communications sent by registered or certified mail shall be deemed received
three (3) business days after the sending thereof.
11. Severability. If any provision of this Agreement shall be declared to be
invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.
12. Assignment. This Agreement shall be binding upon and inure to the benefit of
the assigns and successors of Flowers and the Company. Neither this Agreement
nor any rights hereunder shall be assignable or otherwise subject to
hypothecation by Executive (except for Executive's right to compensation and
benefits hereunder, which may be assigned by will or by operation of the laws of
intestate succession) or by Flowers or the Company, except that Flowers and the
Company may assign this Agreement to any successor (whether by merger,
acquisition of stock, purchase or otherwise) to all or substantially all of the
assets or business of Flowers or the Company, as the case may be, including,
without limitation, other Affiliates.
13. Amendment; Waiver. This Agreement may only be amended by written agreement
signed by Executive and a duly authorized officer of Flowers and the Company. A
waiver by Flowers and the Company, on the one hand, or Executive, on the other,
of a breach of any provision of this Agreement by the other party shall not
operate or be construed as a waiver of any similar or dissimilar provision at
the same or any prior or subsequent time. Except as set forth in the last
sentence of Section 7.1 hereof, any waiver must be in writing and signed by
Executive or by a duly authorized officer of Flowers and the Company, as the
case may be.
14. Beneficiaries; References. Executive shall be entitled to select (and
change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death, and may change such election, in either case by giving the
Company written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative. Any reference to the feminine gender in this Agreement
shall include, where appropriate, the masculine.
15. Survivorship. The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations. The provisions of this
Section 15 are in addition to the survivorship provisions of any other section
of this Agreement.
16. Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of StateplaceNew York,
without reference to principles relating to conflict of laws.
17. Entire Agreement. This Agreement and its attachments contain the entire
understanding among Executive, Flowers and the Company concerning the subject
matter hereof and supersede in all respects any prior or other agreement,
understanding, discussion, negotiation or undertaking among Flowers, the Company
and Executive, whether oral or written, as to the matters set forth herein and
therein. Except for the obligations specifically set forth herein and in the
attachments, neither Flowers nor the Company owes any obligations to Executive
and Executive does not owe any obligations to Flowers or the Company with
respect to the matters set forth herein and therein.
18. Withholding. The Company shall withhold from any payments due to Executive
hereunder, all amounts relating to taxes as the Company may reasonably determine
should be withheld pursuant to applicable law or regulation.
19. Conflicts of Interest. Executive expressly covenants, warrants and
represents to Flowers and the Company that he has the full, complete and entire
right and authority to enter into this Agreement, that he has no agreement,
duty, commitment or responsibility of any kind or nature whatsoever with any
person, corporation, partnership, firm, company, joint venture or other entity
that would conflict in any manner whatsoever with any of his duties, obligations
or responsibilities to Flowers and the Company pursuant to this Agreement, that
he is not in possession of any document or other tangible property of any other
person, corporation, partnership, firm, company, joint venture or other entity
of a confidential or proprietary nature which would conflict in any manner
whatsoever with any of his duties, obligations or responsibilities to Flowers
and the Company pursuant to this Agreement, and that he is fully ready, willing
and able to perform each and all of his duties, obligations and responsibilities
to Flowers and the Company pursuant to this Agreement.
20. Settlement of Disputes. Except for the enforcement of the restrictive
covenants set forth in Section 9 through injunctive proceedings, any dispute
between the parties hereto arising from or relating to the terms of this
Agreement or Executive's employment with the Company shall be resolved by
arbitration in accordance with the commercial arbitration rules of the American
Arbitration Association then in effect, and the dispute will be heard by a panel
of three (3) arbitrators (one arbitrator appointed by each of Flowers and
Executive within fifteen (15) days after the commencement of the arbitration,
and a third arbitrator appointed by the two party-appointed arbitrators within
fifteen (15) days after the appointment of the second arbitrator (or, in default
of such timely appointment, by the American Arbitration Association)) (the three
appointed arbitrators being referred to herein as the "Arbitral Tribunal").
Arbitration shall be held at the office of the American Arbitration Association
located in Garden City, StateNew York, or, in the event no such office exists in
Garden City, then the arbitration shall be held in an office of the American
Arbitration Association in CityplaceNassau County, StateNew York. If none, then
at their offices in CityplaceNew York, StateNew York. Any arbitration award
rendered by the Arbitral Tribunal shall be final, conclusive and binding, and
judgment upon any arbitration award rendered may be entered in any court having
jurisdiction thereof. In the event of any conflict between the commercial rules
and the provisions of this Agreement, the provisions of this Agreement shall
prevail and be controlling. The Arbitral Tribunal shall have no power or
authority, under the commercial rules of otherwise, to (x) modify or disregard
any provision of this Agreement, including the provisions of this Section 20 or
(y) address or resolve any issue not submitted by the parties to the
arbitration.
21. Headings. The section headings contained in this Agreement are for the
convenience of reference only and shall not affect the construction of any
provision of this Agreement.
22. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original but all of which together shall
constitute one and the same instrument.
23. Section 409A. It is intended that this Agreement will comply with Section
409A of the Code (and any regulations and guidelines issued thereunder) to the
extent the Agreement is subject thereto, and the Agreement shall be interpreted
on a basis consistent with such intent. If an amendment of the Agreement is
necessary in order for it to comply with Section 409A, the parties hereto will
negotiate in good faith to amend the Agreement in a manner that preserves the
original intent of the parties to the extent reasonable possible.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
on the date and year first above written.
/s/ 1-800-FLOWERS, INC.
/s/ Fannie May Confections Brands, Inc.
/s/ David Taiclet
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David Taiclet