Exhibit 10.3

 

 

 

 

December 30, 2002

 

 

 

M.J. Soenen

Florists’ Transworld Delivery

3113 Woodcreek Drive

Downers Grove, Illinois 60515

 

Dear Mike:

 

This letter agreement (this “Agreement”) sets forth the terms of your employment
with Florists’ Transworld Delivery Inc. (“FTD”).

Duties.  You shall serve as Executive Vice President of Mercury Technology or in
a substantially similar position with any entity that acquires FTD or all or
substantially all of FTD’s assets through October  31, 2004, which term shall
automatically renew for two-year periods thereafter unless this Agreement is
terminated as provided herein upon notice by FTD Inc. and /or FTD prior to the
commencement of any two-year renewal period.  You shall perform the duties
assigned by FTD from time to time.  You shall devote your entire business time
to the affairs of FTD to the performance of your duties under this Agreement and
to the promotion of FTD’s interests.

Compensation.  As full compensation for the performance by you of your duties
under this Agreement, FTD shall compensate you as follows:

(A)           SALARY.  DURING THE TERM OF THIS AGREEMENT, FTD SHALL PAY TO YOU A
SALARY OF $220,000 PER YEAR, PAYABLE IN THE PERIODIC INSTALLMENTS ORDINARILY
PAID BY FTD TO EMPLOYEES OF FTD AT COMPARABLE LEVELS TO YOU.  YOU SHALL BE
ENTITLED TO SUCH MERIT INCREASES IN BASE SALARY AS THE BOARD OF DIRECTORS MAY
DETERMINE, IN ITS DISCRETION.

(B)           PERFORMANCE BONUS.  YOU SHALL BE ENTITLED TO PARTICIPATE IN A
PERFORMANCE BONUS AS SET BY THE BOARD OF DIRECTORS BASED UPON PERFORMANCE
CRITERIA TO BE SET BY THE BOARD.  IF YOUR EMPLOYMENT WITH FTD IS TERMINATED FOR
ANY REASON OTHER THAN “CAUSE” (AS DEFINED BELOW UNDER “SEVERANCE”) FOLLOWING A
CHANGE IN CONTROL (AS DEFINED BELOW), YOU SHALL BE ENTITLED TO RECEIVED A PRO
RATA BONUS FOR THE APPLICABLE FISCAL YEAR IF YOU ARE ENTITLED TO ONE BASED UPON
THE PERFORMANCE CRITERIA SET BY THE BOARD.  FOR PURPOSES OF THIS AGREEMENT,
“CHANGE OF CONTROL” SHALL MEAN:

(1) THE ACQUISITION BY ANY INDIVIDUAL, ENTITY OR GROUP (WITHIN THE MEANING OF
SECTION 13(D)(3) OR 14(D)(2) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE
“EXCHANGE ACT”)) (A “PERSON”) OF BENEFICIAL OWNERSHIP (WITHIN THE MEANING OF
RULE 13D-3 PROMULGATED UNDER THE EXCHANGE ACT) OF MORE THAN 50% OF THE COMBINED
VOTING POWER OF THE THEN-OUTSTANDING VOTING

 

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SECURITIES ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS (“VOTING
STOCK”) OF FTD INC. OR FTD, RESPECTIVELY; PROVIDED, HOWEVER, THAT FOR PURPOSES
OF THIS SUBSECTION (I), THE FOLLOWING ACQUISITIONS SHALL NOT CONSTITUTE A CHANGE
OF CONTROL:  (A) ANY ACQUISITION DIRECTLY FROM FTD INC. OR FTD, (B) ANY
ACQUISITION BY FTD INC., FTD, ANY SUBSIDIARY OF FTD INC. OR FTD OR ANY EMPLOYEE
BENEFIT PLAN (OR RELATED TRUST) SPONSORED OR MAINTAINED BY FTD INC. OR FTD OR
ANY SUCH SUBSIDIARY OR (C) ANY ACQUISITION BY ANY OF PERRY ACQUISITION PARTNERS,
L.P., BAIN CAPITAL, INC., FLEET PRIVATE EQUITY CO. INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES;

(2) A CHANGE IN A MAJORITY OF THE MEMBERS OF THE BOARD OF DIRECTORS OF FTD INC.
OR FTD, RESPECTIVELY, OCCURS (A) WITHIN ONE YEAR FOLLOWING THE PUBLIC
ANNOUNCEMENT OF AN ACTUAL OR THREATENED ELECTION CONTEST (WITHIN THE MEANING OF
RULE 14A-11 UNDER THE EXCHANGE ACT) OR THE FILING OF A SCHEDULE 13D OR OTHER
PUBLIC ANNOUNCEMENT INDICATING A PERSON INTENDS TO EFFECT A CHANGE IN CONTROL OF
FTD INC. OR FTD OR (B) AS A RESULT OF A MAJORITY OF THE MEMBERS OF THE BOARD
HAVING BEEN PROPOSED, DESIGNATED OR NOMINATED BY A PERSON (OTHER THAN FTD INC.
OR FTD THROUGH THEIR RESPECTIVE BOARDS OF DIRECTORS OR DULY AUTHORIZED
COMMITTEES THEREOF OR THROUGH THE EXERCISE OF CONTRACTUAL RIGHTS);

(3) CONSUMMATION OF A REORGANIZATION, MERGER OR CONSOLIDATION OR SALE OR OTHER
DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF FTD INC. OR FTD (A
“BUSINESS COMBINATION”), IN EACH CASE, UNLESS, FOLLOWING SUCH BUSINESS
COMBINATION, (A) MORE THAN 50% OF THE VOTING STOCK OF THE ENTITY RESULTING FROM
SUCH BUSINESS COMBINATION IS HELD IN THE AGGREGATE BY (1) THE HOLDERS OF
SECURITIES ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS OF FTD INC.
OR FTD IMMEDIATELY PRIOR TO SUCH TRANSACTION, (2) ANY EMPLOYEE BENEFIT PLAN (OR
RELATED TRUST) SPONSORED OR MAINTAINED BY FTD INC. OR FTD OR SUCH ENTITY OR ANY
SUBSIDIARY OF ANY OF THEM OR (3) ANY OF PERRY ACQUISITION PARTNERS, L.P., BAIN
CAPITAL, INC., FLEET PRIVATE EQUITY CO. INC. OR ANY OF THEIR RESPECTIVE
AFFILIATES AND (B) AT LEAST HALF OF THE MEMBERS OF THE BOARD OF DIRECTORS OF THE
ENTITY RESULTING FROM SUCH BUSINESS COMBINATION WERE MEMBERS OF THE BOARD OF
DIRECTORS OF  FTD INC. OR FTD AT THE TIME OF THE EXECUTION OF THE INITIAL
AGREEMENT, OR THE ACTION OF THE BOARD OF DIRECTORS OF  FTD INC. OR FTD,
PROVIDING FOR SUCH BUSINESS COMBINATION; OR

(4) APPROVAL BY THE STOCKHOLDERS OF FTD INC. OR FTD OF A COMPLETE LIQUIDATION OR
DISSOLUTION OF FTD INC. OR FTD.

(C)           PAID VACATION.  YOU SHALL BE ENTITLED TO FOUR WEEKS OF PAID
VACATION PER YEAR IN ACCORDANCE WITH FTD’S POLICIES WITH RESPECT TO VACATIONS
THEN IN EFFECT.

(D)           BENEFITS.  YOU SHALL BE ENTITLED TO THE ADDITIONAL
EMPLOYMENT-RELATED BENEFITS THAT ARE MADE AVAILABLE FROM TIME TO TIME TO
EMPLOYEES OF FTD AT COMPARABLE LEVELS TO YOU.

(E)           EXPENSE REIMBURSEMENT.  FTD SHALL REIMBURSE YOU, IN ACCORDANCE
WITH THE PRACTICE FROM TIME TO TIME IN EFFECT FOR OTHER EMPLOYEES OF FTD, FOR
ALL REASONABLE AND NECESSARY TRAVEL EXPENSES AND OTHER DISBURSEMENTS INCURRED BY
YOU, FOR OR ON BEHALF OF FTD, IN THE PERFORMANCE OF YOUR DUTIES UNDER THIS
AGREEMENT.

 

(F)            ACCELERATED VESTING OF RESTRICTED STOCK.  UPON A CHANGE OF
CONTROL (AS DEFINED IN (B) ABOVE, ALL OF THE THEN UNVESTED RESTRICTED SHARES
GRANTED TO EXECUTIVE ON DECEMBER 30, 2002 SHALL VEST IMMEDIATELY,
NOTWITHSTANDING ANY PROVISIONS TO THE CONTRARY IN THE RELATED RESTRICTED STOCK
AGREEMENT OR THE TERMS OF THE FTD 2002 LONG-TERM INCENTIVE PLAN.

 

 

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Severance.  FTD shall have the right to terminate your employment by giving you
written notice of the effective date of the termination.  If your employment is
terminated (i) without “cause” by FTD or (ii) by you following your assignment
to a position that represents a material diminution in your operating
responsibilities (it being understood that a change in your title shall not by
itself entitle you to terminate your employment and receive the right to
severance payments under this paragraph), FTD will pay you continued salary for
one year from the effective date of any such termination of employment and any
pro rata bonus to which you may be entitled pursuant to this Agreement.  FTD’s
severance obligations are subject to your best efforts to mitigate.  FTD shall
have no further obligation hereunder.

For purposes of this Agreement, “cause” means any of the following events that
FTD or the FTD Board of Directors has determined, in good faith, has occurred:
(i) your continual or deliberate neglect of the performance of your material
duties; (ii) your failure to devote substantially all of your working time to
the business of FTD and its subsidiaries or affiliated companies; (iii) your
engaging willfully in misconduct in connection with the performance of any of
your duties, including, without limitation, the misappropriation of funds or
securing or attempting to secure personally any profit in connection with any
transaction entered into on behalf of FTD or its subsidiaries or affiliated
companies; (iv) your willful breach of any confidentiality or nondisclosure
agreements with FTD (including this Agreement) or your violation, in any
material respect, of any code or standard of behavior generally applicable to
employees or executive employees of FTD; (v) your active disloyalty to FTD,
including, without limitation, willfully aiding a competitor or improperly
disclosing confidential information; or (vi) your engaging in conduct that may
reasonably result in material injury to the reputation of FTD, including
conviction or entry of a plea of nolo contendre for a felony or any crime
involving fraud under Federal, state or local laws, embezzlement, bankruptcy,
insolvency or general assignment for the benefit of creditors.

Confidential Information and Non-Competition.  You agree to enter into a
separate agreement with FTD (attached hereto as Exhibit A) that provides for
(i) non-disclosure of confidential information, (ii) non-competition and
(iii) non-solicitation of customers, suppliers and employees.  This Agreement
shall not be effective until you have executed and delivered such agreement to
the Company.

Limitation on Payments and Benefits.  Notwithstanding any other provision of
this Agreement to the contrary, in the event that it shall be determined (as
hereafter provided) that any payment or distribution by FTD or any of its
affiliates to you or for your benefit, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to
or by reason of any other agreement, policy, plan, program or arrangement,
including without limitation any stock option, performance share, performance
unit, stock appreciation right or similar right, or the lapse or termination of
any restriction on or the vesting or exercisability of any of the foregoing,
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”) (or any successor provision
thereto), by reason of being considered “contingent on a change in ownership or

 

 

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control” of FTD within the meaning of Section 280G of the Code (or any successor
provision thereto), or to any similar tax imposed by state or local law, or any
interest or penalties with respect to such taxes, then such payments and
benefits to be paid or provided shall be reduced to an amount (but not below
zero) that would result in the maximum possible net after tax receipts to you
from all such payments or distributions (determined by reference to the present
value determined in accordance with Section 280G(d)(4) of the Code (or any
successor provision thereto) of all such payments net of all such taxes, or any
interest or penalties with respect to such taxes, determined by applying the
highest marginal rate under Section 1 of the Code (or any successor provision
thereto) that applied to your taxable income for the immediately preceding
taxable year) (the “Reduced Amount”).  The fact that your payments or benefits
may be reduced by reason of the limitations contained in this paragraph will not
of itself limit or otherwise affect any of your other rights other than pursuant
to this Agreement.  If it is determined that you should receive a Reduced
Amount, FTD will provide you notice to that effect and a copy of the detailed
calculation thereof.  You will then be entitled to designate the payments or
benefits to be so reduced in order to give effect to this paragraph.  In the
event that you fail to make such designation within ten business days of
notification of the reduction in payments or benefits is required pursuant to
this paragraph, FTD may effect such reduction in any manner it deems
appropriate.

Miscellaneous.  This Agreement shall be governed by the internal laws of the
State of Illinois, excluding the conflicts-of-law principles thereof.  You and
FTD consent to jurisdiction and venue in any federal or state court in the City
of Chicago.  This Agreement and the accompanying Exhibit A state our entire
agreement and understanding regarding your employment with FTD.  This agreement
may be amended only by a written document signed by both you and FTD.  No delay
or failure to exercise any right under this Agreement waives such rights under
the Agreement.  If any provision of this Agreement is partially or completely
invalid or unenforceable, then that provision shall only be ineffective to such
extent of its invalidity or unenforceability, and the validity or enforceability
of any other provision of this Agreement shall not be affected.  Any controversy
relating to this Agreement shall be settled by arbitration in Chicago, Illinois
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, except as otherwise provided in the Confidentiality and
Non-Competition agreement attached hereto as Exhibit A.  In the event of any
inconsistency between this Agreement and any personnel policy or manual of FTD
with respect to any matter, this Agreement shall govern the matter.

 

Signature page follows

 

 

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Sincerely,

 

 

 

/s/ Robert L. Norton

 

Robert L. Norton

 

CEO, and Chairman of the Board

 

 

Accepted as of this 30th day of December, 2002

 

/s/ M.J. Soenen

M.J. Soenen

 

 

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