Exhibit 10.11

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made and entered into as of the
date the last party hereto signs the Agreement but is made effective as of the
Effective Date (as defined below in Section 1(a)) by and between FTD
Companies, Inc., a Delaware corporation (the “Company”), with principal
corporate offices at 3113 Woodcreek Drive, Downers Grove, Illinois 60515, and
Robert S. Apatoff, whose address is 3113 Woodcreek Drive, Downers
Grove, Illinois 60515 (“Employee”).

 

WHEREAS, effective as of the date hereof, Employee and the Company desire to
enter into an employment agreement.

 

NOW THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Term; Position.

 

(a)           The term of this Agreement will commence on the date on which the
spin-off of the Company from United Online, Inc. (the “Spin-Off”) is consummated
(the “Effective Date”) and extend through the third anniversary of the Effective
Date, unless this Agreement is earlier terminated as provided herein (the
“Term”). For the avoidance of doubt, if the Spin-Off is not consummated by
June 30, 2014, this Agreement shall terminate and be of no force or effect.

 

(b)           Employee will serve as President and Chief Executive Officer of
the Company and report to the Board of Directors of the Company. Employee agrees
to devote Employee’s full-time attention, skill and efforts to the performance
of Employee’s duties for the Company.

 

2.                                      Salary and Benefits.

 

(a)           Employee will be paid a salary at an annualized rate of $730,000
payable in successive bi-weekly or other installments in accordance with the
Company’s standard payroll practices for salaried employees. Employee’s rate of
salary will be subject to such increases as may be determined from time to time
by the Board of Directors. As used in this Agreement, the term “Board of
Directors” shall refer to the Board of Directors of the Company or other
governing body or committee to which the authority of the Board of Directors of
the Company with respect to executive compensation matters has been delegated,
including (without limitation) the Compensation Committee of the Board of
Directors of the Company.

 

(b)           Employee will be eligible to participate in each of the Company’s
employee benefit plans that is made generally available either to the Company’s
employees or to the Company’s senior executives and for which Employee satisfies
the applicable eligibility requirements. Employee will be entitled to a minimum
of four (4) weeks of paid vacation each year or such greater amount as
determined in accordance with the Company’s standard vacation policy.

 

(c)           The Company will promptly reimburse Employee for all reasonable
and necessary business expenses Employee incurs in connection with the business
of the Company and the performance of Employee’s duties hereunder upon
Employee’s submission of reasonable and timely documentation of those expenses.
In no event shall any expense be reimbursed later than the end of the calendar
year following the calendar year in which that expense is incurred, and the
amounts reimbursed in any one calendar year shall not affect the amounts
reimbursable in any other calendar year. Employee’s right to receive such
reimbursements may not be exchanged or liquidated for any other benefit.

 

(d)           As soon as practicable following the effective date of the
Spin-Off and the filing of an effective Form S-8, the Board of Directors shall
grant to Employee (i) a number of restricted stock units relating to Company
stock with an aggregate value of $2,500,000, determined based on the average
per-share closing price of the Company’s stock for the five (5) trading days
prior to the date of grant; and (ii) a number of options to purchase Company
stock equal to the number of restricted stock

 

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units granted pursuant to Section 2(d)(i), with an exercise price equal to the
per-share closing price on the date of grant. The restricted stock units and
options shall vest at the rate of one-third on each of the first three
anniversaries of the date of grant, and shall be subject to such other terms and
conditions as may be determined by the Board of Directors (or an appropriate
committee thereof).

 

3.                                      Bonus.

 

For each fiscal year of the Company during the Term of this Agreement, Employee
will be eligible to participate in a bonus program with a target bonus set by
the Board of Directors in an amount of up to 100% of Employee’s annual rate of
base salary. The performance criteria for purposes of determining Employee’s
actual bonus for each fiscal year will be established by the Board of Directors,
and Employee’s annual bonus for one or more of those fiscal years may be
increased to include any additional amounts approved by the Board of Directors.
Except as otherwise determined by the Board of Directors or set forth herein,
Employee will not be entitled to a bonus payment for any fiscal year unless
Employee is employed by, and in good standing with, the Company at the time such
bonus payment is paid. Employee’s bonus payment for each fiscal year shall in no
event be paid later than the 15th day of the third month following the end of
the Company’s fiscal year for which such bonus is earned.

 

4.                                      Restricted Stock Units and Other Equity
Awards.

 

(a)           If Employee’s employment is terminated by the Company “without
cause” or by Employee for “good reason” (as each term is defined below) during
the Term, then upon Employee’s satisfaction of the Release Condition set forth
in Section 7(b) below, any and all equity awards Employee holds on the date of
such termination (other than any equity award granted after the Effective Date
that expressly provides to the contrary) will vest on an accelerated basis as to
that number of additional shares in which Employee would have otherwise been
vested at the time of such termination had Employee completed an additional
twelve (12) months of employment with the Company and had each applicable equity
award been structured so as to vest in successive equal monthly installments
over the vesting schedule for that award. In no event will the number of
additional shares which vest on such an accelerated basis with respect to any
particular equity award exceed the number of shares unvested under that award
immediately prior to the date of such termination. Except as otherwise expressly
provided in the agreement evidencing a particular restricted stock unit or other
equity award or to the extent another issuance date may be required to comply
with any applicable requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), the shares of the common stock of the Company
(“Common Stock”) underlying the equity awards that vest on an accelerated basis
in accordance with this Section 4(a) will be issued to Employee within the sixty
(60)-day period following the date of Employee’s “separation from service” (as
defined below) as a result of Employee’s termination “without cause” (as defined
below) or Employee’s resignation for “good reason” (as defined below), provided
the Release required of Employee pursuant to Section 7(b) has become effective
and enforceable in accordance with its terms following the expiration of the
applicable revocation period in effect for that Release. However, should such
sixty (60)-day period span two taxable years, the issuance shall be effected
during the portion of that period that occurs in the second taxable year.

 

(b)           If Employee’s employment is terminated by the Company “without
cause” or by Employee for “good reason” (as each term is defined below) at any
time during the Term and within the period commencing with the execution by the
Company of a definitive agreement for a Change in Control (as defined below) and
ending with the earlier of (i) the termination of that agreement without the
consummation of such Change in Control or (ii) the expiration of the twenty-four
(24)-month period measured from the date such Change in Control occurs, then
upon Employee’s satisfaction of the Release Condition set forth in
Section 7(b) below, any and all equity awards Employee holds on the

 

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date of such termination will fully vest on an accelerated basis with respect to
all non-vested shares of Common Stock at the time subject to those awards,
except to the extent otherwise provided in the equity award agreement for any
equity award granted after the Effective Date of this Agreement. Except as
otherwise expressly provided in the agreement evidencing a particular restricted
stock unit or other equity award or to the extent another issuance date may be
required in order to comply with any applicable requirements of Section 409A of
the Code, the shares of Common Stock (or any replacement securities) underlying
the equity awards that fully vest on an accelerated basis in accordance with
this Section 4(b), or the proceeds of any cash retention program established in
replacement of those shares pursuant to the terms of the applicable award
agreement, will be issued or distributed to Employee within the sixty (60)-day
period following the date of Employee’s “separation from service” (as defined
below) as a result of Employee’s termination “without cause” (as defined below)
or Employee’s resignation for “good reason” (as defined below), provided the
Release required of Employee pursuant to Section 7(b) has become effective and
enforceable in accordance with its terms following the expiration of the
applicable revocation period in effect for that Release. However, should such
sixty (60)-day period span two taxable years, the issuance shall be effected
during the portion of that period that occurs in the second taxable year.

 

(c)           Upon Employee’s “separation from service” (as defined below) as a
result of Employee’s death or Disability (as defined below), any and all equity
awards Employee holds on the date of such separation from service will vest on
an accelerated basis as to that number of additional shares in which Employee
would have otherwise been vested on the date of such separation from service had
Employee completed an additional twelve (12) months of employment with the
Company and had each applicable equity award been structured so as to vest in
successive equal monthly installments over the vesting schedule for that award.
Except as otherwise expressly provided in the agreement evidencing a particular
restricted stock unit or other equity award or to the extent another issuance
date may be required in order to comply with any applicable requirements of
Section 409A of the Code, the shares of Common Stock underlying the equity
awards that vest on an accelerated basis in accordance with this
Section 4(c) will be issued on the date of such separation from service or as
soon as administratively practicable thereafter, but in no event later than the
later of (i) the end of the calendar year in which such separation from service
occurs or (ii) the 15th day of the third calendar month following the date of
such separation from service. For purposes of this Agreement, “Disability” means
Employee’s inability to engage in any substantial activity necessary to perform
Employee’s duties and responsibilities hereunder by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than twelve (12) months.

 

(d)           The vesting acceleration provisions of this Section 4 and
Section 7 will apply to all outstanding equity awards held by Employee on the
Effective Date, whether or not the agreements evidencing those awards provide
for such acceleration, and those agreements, to the extent they provide for a
lesser amount of acceleration, are hereby amended to incorporate the
acceleration provisions of Section 4 and Section 7 of this Agreement for the
period this Agreement remains in effect, and such vesting acceleration
provisions will also apply to equity awards made after the Effective Date of
this Agreement except to the extent specifically stated in the applicable award
agreement or in a resolution of the Board of Directors covering those future
awards. The shares subject to each equity award that vests pursuant to the
vesting acceleration provisions of this Section 4 shall be issued in accordance
with the applicable issuance date provisions of this Section 4, except to the
extent the agreement evidencing such award provides otherwise or to the extent
another issuance date may be required in order to comply with any applicable
requirements of Section 409A of the Code.

 

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5.                                      Policies; Procedures.

 

As an employee of the Company, Employee will be expected to abide by all of the
Company’s policies and procedures, including (without limitation) the terms of
any Company handbook, insider trading policy and code of ethics in effect from
time to time.

 

6.                                      At Will Employment.

 

Notwithstanding anything to the contrary contained herein, Employee’s employment
with the Company is “at will” and will not be for any specified term, meaning
that either Employee or the Company will be entitled to terminate Employee’s
employment at any time and for any reason, with or without cause or advance
notice. Any contrary representations that may have been made to Employee are
hereby superseded by the terms set forth in this Agreement. This is the full and
complete agreement between Employee and the Company on this subject. Although
Employee’s job duties, title, compensation and benefits, as well as the
Company’s personnel policies and procedures, may change from time to time, the
“at will” nature of Employee’s employment may only be changed in an express
written agreement signed by Employee and the Chairman of the Board of the
Company and approved by the Board of Directors.

 

7.                                      Separation from Service.

 

(a)  Termination by Employee.  If Employee terminates his or her employment with
the Company for any reason other than as a result of his or her death or
Disability or his or her resignation for “good reason” (as defined below), then
all the obligations of the Company set forth in this Agreement will cease, other
than the obligation to pay Employee, on his or her employment termination date,
any earned but unpaid compensation for services rendered through that
termination date and any accrued but unused vacation days as of that termination
date (collectively, the “Accrued Obligations”). If Employee terminates his or
her employment with the Company for “good reason” (as defined below) during the
Term, then in addition to Employee’s right to receive the Accrued Obligations,
Employee will, upon Employee’s satisfaction of the Release Condition set forth
in Section 7(b) below, become entitled to the Separation Payment (as defined
below) and the Additional Payments (as defined below), to the same extent as if
Employee’s employment had been terminated by the Company “without cause” (as
defined below) during the Term, and Employee will also be entitled, in
accordance with the applicable provisions of Section 4 above, to the accelerated
vesting of any equity awards Employee holds at the time of such termination.
Following Employee’s termination of his or her employment with the Company under
this Section 7(a), Employee will continue to be obligated to comply with the
terms of Section 9 below.

 

(b)  Termination by the Company.  If Employee’s employment is terminated by the
Company “without cause” (as defined below) during the Term, then in addition to
Employee’s right to receive the Accrued Obligations, Employee will, upon
Employee’s satisfaction of the Release Condition set forth below in this
Section 7(b), become entitled to a cash separation payment (the “Separation
Payment”) in an aggregate amount equal to two (2) times the base salary at the
annual rate in effect for Employee at the time. In addition, contingent upon
Employee’s satisfaction of the Release Condition, Employee will be eligible for
the following additional separation payments (the “Additional Payments”):

 

(I)            Employee will be eligible for an additional separation payment in
an amount equal to a pro-rated bonus for the fiscal year in which such
involuntary termination occurs. Such pro-rated bonus will be determined by
multiplying (A) the actual bonus (if any) Employee would have earned for that
fiscal year, based on the level at which the applicable performance goals for
such fiscal year are in fact attained, had Employee continued in the Company’s
employ through the date that bonus award becomes due and payable by (B) a
fraction the numerator of which is the

 

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number of whole months (rounded to the next highest whole month) Employee
remained in the Company’s employ during that fiscal year and the denominator of
which is twelve (12), with such pro-rated bonus (if any) to be paid at the same
time and in same form that the bonus payment for such fiscal year would have
been made following the completion of that fiscal year had Employee remained in
the Company’s employ through the payment date. However, if such involuntary
termination occurs in the same fiscal year of the Company in which a Change in
Control occurs, then such pro-rated bonus will instead be determined by
(1) multiplying (A) Employee’s target bonus for that fiscal year by (B) a
fraction the numerator of which is the number of whole months (rounded to the
next highest whole month) Employee remained in the Company’s employ during that
fiscal year and the denominator of which is twelve (12) and (2) reducing such
amount by any bonus earned by Employee for the same fiscal year under Section 3
of this Agreement, with such pro-rated bonus to be paid (in the same form in
which the bonus payment for such fiscal year would have been paid had Employee
remained in the Company’s employ through the payment date) as follows:

 

(i)            if such Change in Control occurs on or before the date of such
involuntary termination, then such payment shall be made on the date on which
the first monthly installment of the Separation Payment (or, in the case of a
termination following a Qualifying Change in Control (as defined below), the
lump sum Separation Payment) is paid; or

 

(ii)           if such Change in Control occurs after the date of such
involuntary termination, then such payment shall be made on the later of (x) the
third (3rd) business day following the effective date of such Change in Control
or (y) the sixtieth (60th) day following the date of Employee’s separation from
service (as defined below) or, if such sixtieth (60th) day is not otherwise a
business day, then the immediately preceding business day.

 

(II)          In addition, if the date of such involuntary termination occurs
after the end of a fiscal year of the Company but prior to the date in the
subsequent fiscal year on which Employee’s bonus for that fiscal year would have
otherwise become due and payable on the basis of the applicable performance
goals attained for that year had Employee continued in employment with the
Company, then the Company will pay Employee an additional separation payment
equal to the bonus that Employee would have received on the basis of the
attained performance goals had Employee remained employed by, and in good
standing with, the Company through the payment date for such bonus, with that
amount to be paid in a lump sum (in the same form in which such bonus payment
would have been paid had Employee remained in the Company’s employ through the
payment date) on the later of (i) the date on which the first monthly
installment of the Separation Payment (or, in the case of a termination
following a Qualifying Change in Control, the lump sum Separation Payment) is
paid to Employee as set forth below in this Section 7(b) or (ii) the date such
bonus would have been paid to Employee pursuant to Section 3 of this Agreement
had Employee continued in the Company’s employ through such payment date.

 

(III)        In no event shall any such Additional Payment be made later than
the last day of the applicable period necessary to qualify such Additional
Payment for the short-term deferral exception under Code Section 409A.

 

Payment of the Separation Payment and the Additional Payments (if any) and the
accelerated vesting of Employee’s equity awards under Section 4 will each be
contingent upon the satisfaction of the following requirements (collectively the
“Release Condition”): (i) Employee must execute and deliver to the Company,
within twenty-one (21) days (or forty-five (45) days to the extent such longer
period is required under applicable law) after the effective date of Employee’s
termination of employment, a comprehensive agreement releasing the Company and
its officers, directors, employees, stockholders, subsidiaries, affiliates,
representatives and other related parties from all claims that Employee may have
with respect to such parties relating to Employee’s employment with the Company
and the termination

 

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of that employment relationship and containing such other and additional terms
as the Company deems satisfactory (the “Release”) and (ii) such Release must
become effective and enforceable after the expiration of any applicable
revocation period under federal or state law.

 

Except as provided in the following paragraph, the Separation Payment to which
Employee becomes entitled under this Section 7(b) or under Section 7(a) above
will be payable in a series of twelve (12) successive equal monthly
installments, beginning on the first regular payday for the Company’s salaried
employees, within the sixty (60)-day period following the date of Employee’s
“separation from service” (as defined below) as a result of Employee’s
termination “without cause” (as defined below) or Employee’s resignation for
“good reason” (as defined below), on which Employee’s executed Release is
effective and enforceable in accordance with its terms following the expiration
of the applicable revocation period in effect for that Release. However, should
such sixty (60)-day period span two taxable years, the first such monthly
installment shall be paid during the portion of that period that occurs in the
second taxable year. The remaining monthly installments shall be paid on
successive monthly anniversaries of the initial monthly installment hereunder.
For purposes of Section 409A of the Code, Employee’s right to receive such
Separation Payment shall be deemed a right to receive a series of separate
individual payments and not a right to single payment.

 

If Employee’s employment is terminated by the Company “without cause” (as
defined below) or if Employee terminates his or her employment with the Company
for “good reason” (as defined below) during the Term and within the twenty-four
(24) month period beginning on the effective date of a Qualifying Change in
Control (as defined below), the Separation Payment to which Employee becomes
entitled under this Section 7(b) or under Section 7(a) above upon Employee’s
satisfaction of the Release Condition will be payable in a single lump-sum
payment on the first regular payday for the Company’s salaried employees, within
the sixty (60)-day period following the date of Employee’s “separation from
service” (as defined below) as a result of Employee’s termination “without
cause” (as defined below) or Employee’s resignation for “good reason” (as
defined below), on which Employee’s executed Release is effective and
enforceable in accordance with its terms following the expiration of the
applicable revocation period in effect for that Release. However, should such
sixty (60)-day period span two taxable years, then such payment shall be made
during the portion of that period that occurs in the second taxable year. Any
Separation Payment to which Employee becomes entitled hereunder in connection
with a termination following a Change in Control other than a Qualifying Change
in Control will be paid in installments as set forth in the immediately
preceding paragraph of this Section 7(b). For purposes of this Agreement, a
“Change in Control” shall have the meaning assigned to such term in the
Company’s most recently-adopted equity compensation plan, and a “Qualifying
Change in Control” shall mean the date on which there occurs a “Change in
Control” (as defined above) that also qualifies as: (i) a change in the
ownership of the Company, as determined in accordance with
Section 1.409A-3(i)(5)(v) of the Treasury Regulations, (ii) a change in the
effective control of the Company, as determined in accordance with
Section 1.409A-3(i)(5)(vi) of the Treasury Regulations, or (iii) a change in the
ownership of a substantial portion of the assets of the Company, as determined
in accordance with Section 1.409A-3(i)(5)(vii) of the Treasury Regulations. For
the avoidance of doubt, the Spin-Off shall not constitute a Change in Control or
a Qualifying Change in Control for purposes of the Agreement.

 

If Employee’s employment is terminated by the Company “without cause” (as
defined below), the Company will have no further obligation to Employee pursuant
to this Agreement other than the Accrued Obligations, the vesting of Employee’s
outstanding equity awards in accordance with the applicable vesting acceleration
provisions of Section 4 above and the obligations of the Company pursuant to
this Section 7(b).

 

If Employee’s employment is terminated by the Company “with cause” (as defined
below), the Company will have no further obligation to Employee under the terms
of this Agreement, other than the Accrued Obligations.

 

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Notwithstanding the termination of Employee’s employment by the Company “with
cause” or “without cause,” or by Employee for “good reason” or without “good
reason”, Employee will continue to be subject to the restrictive covenants set
forth in Section 9, whether or not Employee becomes entitled to any severance or
separation payments or benefits pursuant to Section 4 or Section 7 of this
Agreement.

 

If any payment or benefit received or to be received by Employee (including any
payment or benefit received pursuant to this Agreement or otherwise) would be
(in whole or part) subject to the excise tax imposed by Section 4999 of the
Code, or any successor provision thereto, or any similar tax imposed by state or
local law, or any interest or penalties with respect to such excise tax (such
tax or taxes, together with any such interest and penalties, are hereafter
collectively referred to as the “Excise Tax”), then the cash payments provided
to Employee under this Agreement shall first be reduced, with each such payment
to be reduced pro-rata but without any change in the payment date and with the
monthly installments of the Separation Payment (or the lump sum Separation
Payment in the event of a Qualifying Change in Control) to be the first such
cash payments so reduced, and then, if necessary, the accelerated vesting of
Employee’s equity awards pursuant to the provisions of this Agreement shall be
reduced in the same chronological order in which those awards were made, but
only to the extent necessary to assure that Employee receives only the greater
of (i) the amount of those payments and benefits which would not constitute a
parachute payment under Code Section 280G or (ii) the amount which yields
Employee the greatest after-tax amount of benefits after taking into account any
Excise Tax imposed on the payments and benefits provided Employee hereunder (or
on any other payments or benefits to which Employee may become entitled in
connection with any change in control or ownership of the Company or the
subsequent termination of Employee’s employment with the Company).

 

(c)  Termination by Death or Disability.

 

If Employee incurs a “separation from service” (as defined below) as a result of
his or her death or Disability, the Company will be obligated to pay the Accrued
Obligations to Employee, Employee’s estate or beneficiaries (as the case may be)
on the date of such separation from service or as soon as administratively
practicable thereafter, but in no event later than sixty (60) days after the
date of such separation from service. In the event of such separation from
service due to Employee’s death or Disability, Employee or Employee’s estate or
beneficiaries, as the case may be, will also be entitled to the accelerated
vesting of Employee’s equity awards as set forth in Section 4(c) above. The
provisions of this Section 7(c) will not affect or change the rights or benefits
to which Employee is otherwise entitled under the Company’s employee benefit
plans or otherwise.

 

(d)  Definitions.

 

For purposes of this Agreement, the following definitions will be in effect:

 

“good reason” means:

 

(i)                                     a material reduction in Employee’s base
salary without Employee’s prior written consent;

 

(ii)                                  a material reduction in Employee’s
authority, duties or responsibilities, without Employee’s prior written consent;

 

(iii)                               a material change in the geographic location
at which Employee must perform services (the parties acknowledge that Employee
is currently required to perform services at 3113 Woodcreek Drive, Downers
Grove, Illinois 60515) without Employee’s prior written consent; or

 

(iv)                              any material un-waived breach by the Company
of the terms of this Agreement; provided however, that with respect to any of
the clause (i) - (iv) events above, Employee will not be deemed to have resigned
for good reason unless (A) Employee provides written notice to the

 

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Company of the existence of the good reason event within ninety (90) days after
its initial occurrence, (B) the Company is provided with thirty (30) days after
receipt of such notice in which to cure such good reason event and (C) Employee
effectively terminates Employee’s employment within one hundred eighty
(180) days following the occurrence of the non-cured clause (i) - (iv) event.

 

“with cause” means Employee’s termination of employment by the Company for any
of the following reasons:

 

(i)                                     if Employee is convicted of, or enters a
plea of nolo contendere to, a felony or a misdemeanor involving any act of moral
turpitude;

 

(ii)                                  if Employee commits an act of actual
fraud, embezzlement, theft or similar dishonesty against the Company or any of
its subsidiaries or affiliates;

 

(iii)                               if Employee commits any willful misconduct
or gross negligence resulting in material harm to the Company or any of its
subsidiaries or affiliates; or

 

(iv)                              if Employee fails, after receipt of detailed
written notice and after receiving a period of at least thirty (30) days
following such notice to cure such failure, to use his or her reasonable good
faith efforts to follow the reasonable and lawful direction of the Board of
Directors and to perform his or her obligations hereunder.

 

“without cause” means any reason not within the scope of the definition of the
term “with cause.”

 

“separation from service” means Employee’s cessation of employee status with the
Company by reason of Employee’s death, resignation, dismissal or other
termination event and shall be deemed to occur at such time as the level of bona
fide services Employee is to render as such an employee (or as a non-employee
consultant) permanently decreases to a level that is not more than twenty
percent (20%) of the average level of services Employee rendered as an employee
during the immediately preceding thirty-six (36) months (or such shorter period
of time in which Employee has actually been in employee status with the
Company). Any such determination of Employee’s separation from service shall,
however, be made in accordance with the applicable standards of the Treasury
Regulations issued under Section 409A of the Code.

 

(e)  Code Section 409A Deferral Period.  Notwithstanding any provision in this
Agreement to the contrary (other than Section 7(f) below), no payment or
distribution under this Agreement which constitutes an item of deferred
compensation under Section 409A of the Code and becomes payable by reason of
Employee’s termination of employment with the Company will be made to Employee
until Employee incurs a separation from service (as such term is defined above
and determined in accordance with Treasury Regulations issued under Section 409A
of the Code) in connection with such termination of employment. For purposes of
this Agreement, each amount to be paid or benefit to be provided Employee shall
be treated as a separate identified payment or benefit for purposes of
Section 409A of the Code. In addition, no payment or benefit which constitutes
an item of deferred compensation under Section 409A of the Code and becomes
payable by reason of Employee’s separation from service will be made to Employee
prior to the earlier of (i) the first day of the seventh (7th) month measured
from the date of such separation from service or (ii) the date of Employee’s
death, if Employee is deemed at the time of such separation from service to be a
“specified employee” (as determined pursuant to Code Section 409A and the
Treasury Regulations thereunder) and such delayed commencement is otherwise
required in order to avoid a prohibited distribution under Code
Section 409A(a)(2). Upon the expiration of the applicable deferral period, all
payments and benefits deferred pursuant to this Section 7(e) (whether they would
have otherwise been payable in a single sum or in installments in the absence of
such deferral) shall be paid or provided to Employee in a lump sum on the first
day of the seventh (7th) month after the date of Employee’s separation from
service or, if earlier, the first day of the month immediately following the
date the Company receives

 

8

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proof of Employee’s death. Any remaining payments or benefits due under this
Agreement will be paid in accordance with the normal payment dates specified
herein.

 

(f)  Provisions Applicable to “Specified Employee”.  Notwithstanding
Section 7(e) above, the following provisions shall also be applicable to
Employee if Employee is a “specified employee” at the time of Employee’s
separation of service:

 

(i)            Any payments or benefits which become due and payable to Employee
during the period beginning with the date of Employee’s separation from service
and ending on March 15 of the following calendar year and otherwise qualify for
the short-term deferral exception to Code Section 409A shall not be subject to
the holdback provisions of Section 7(e) and shall accordingly be paid as and
when they become due and payable under this Agreement in accordance with such
short-term deferral exception to Code Section 409A.

 

(ii)           The remaining portion of the payments and benefits to which
Employee becomes entitled under this Agreement, to the extent they do not in the
aggregate exceed the dollar limit described below and are otherwise scheduled to
be paid no later than the last day of the second calendar year following the
calendar year in which Employee’s separation from service occurs, shall not be
subject to the holdback provisions of Section 7(e) and shall be paid to Employee
as they become due and payable under this Agreement. For purposes of this
subparagraph (ii), the applicable dollar limitation will be equal to two times
the lesser of (i) Employee’s annualized compensation (based on Employee’s annual
rate of pay for the calendar year preceding the calendar year of Employee’s
separation from service, adjusted to reflect any increase during that calendar
year which was expected to continue indefinitely had such separation from
service not occurred) or (ii) the compensation limit under Section 401(a)(17) of
the Code as in effect in the year of such separation from service. To the extent
the portion of the severance payments and benefits to which Employee would
otherwise be entitled under this Agreement during the deferral period under
Section 7(e) exceeds the foregoing dollar limitation, such excess shall be paid
in a lump sum upon the expiration of that deferral period, in accordance with
the deferred payment provisions of Section 7(e), and the remaining severance
payments and benefits (if any) shall be paid in accordance with the normal
payment dates specified for them herein.

 

8.                                      Withholding Taxes.

 

All forms of compensation payable pursuant to the terms this Agreement, whether
payable in cash, shares of Common Stock or other property, are subject to
reduction to reflect the applicable withholding and payroll taxes.

 

9.                                      Restrictive Covenants.

 

Until one (1) year after the termination of Employee’s employment with the
Company, Employee will not, directly or indirectly, solicit or recruit for
employment, any person or persons who are employed by Company or any of its
subsidiaries or affiliates, or who were so employed at any time within a period
of twelve (12) months immediately prior to the date Employee’s employment
terminated, or otherwise interfere with the relationship between any such person
and the Company; nor will Employee assist anyone else in recruiting any such
employee to work for another company or business or discuss with any such person
his or her leaving the employ of the Company or engaging in a business activity
in competition with the Company. Notwithstanding the foregoing, if Employee and
the Company enter into any restrictive covenant agreement, the terms of which
conflict with this Section 9, the terms of such agreement shall govern. Employee
hereby agrees to enter into a Confidentiality and Non-Competition Agreement and
an Employee Proprietary Information and Inventions Agreement with the Company on
or prior to the Effective Date, which agreements shall be in substantially the
forms attached hereto as Appendix A and B.

 

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10.                               Deferred Compensation Programs

 

Any compensation deferred by Employee pursuant to one or more non-qualified
deferred compensation plans or arrangements of the Company subject to
Section 409A of the Code and not otherwise expressly addressed by the terms of
this Agreement, shall be paid at such time and in such form of payment as set
forth in each applicable plan or arrangement governing the payment of any such
deferred amounts.

 

11.                               Clawback.

 

Any amounts paid or payable to Employee pursuant to this Agreement or the
Company’s equity or compensation plans shall be subject to recovery or clawback
to the extent required by any applicable law or any applicable securities
exchange listing standards.

 

12.                               Entire Agreement/Construction of Terms.

 

(a)           This Agreement, together with any Company handbooks and policies
in effect from time to time and the applicable stock plans and agreements
evidencing the equity awards made to Employee from time to time during
Employee’s period of employment, contains all of the terms of Employee’s
employment with the Company and supersedes any prior understandings or
agreements, whether oral or written, between Employee and the Company, including
but not limited to the Employment Agreement between Employee and FTD
Group, Inc., effective as of February 7, 2011, as amended, which Employment
Agreement shall terminate as of the Effective Date and be of no further force or
effect.

 

(b)           If any provision of this Agreement is held by an arbitrator or a
court of competent jurisdiction to conflict with any federal, state or local
law, or to be otherwise invalid or unenforceable, such provision shall be
construed or modified in a manner so as to maximize its enforceability while
giving the greatest effect as possible to the intent of the parties. To the
extent any provision cannot be construed or modified to be enforceable, such
provision will be deemed to be eliminated from this Agreement and of no force or
effect, and the remainder of this Agreement will otherwise remain in full force
and effect and be construed as if such portion had not been included in this
Agreement.

 

(c)           This Agreement is not assignable by Employee. This Agreement may
be assigned by the Company to its subsidiaries or affiliates or to successors in
interest to the Company or its lines of business.

 

(d)           The severance payments and benefits under this Agreement are
intended, where possible, to comply with the “short term deferral exception” and
the “involuntary separation pay exception” to Code Section 409A. Accordingly,
the provisions of this Agreement applicable to the Separation Payment and the
accelerated vesting of Employee’s equity awards and the issuance of shares of
Common Stock thereunder and the determination of Employee’s separation from
service due to termination of Employee’s employment without cause or Employee’s
resignation for good reason shall be applied, construed and administered so that
those payments and benefits qualify for one or both of those exceptions, to the
maximum extent allowable. However, to the extent any payment or benefit to which
Employee becomes entitled under this Agreement is deemed to constitute an item
of deferred compensation subject to the requirements of Code Section 409A, the
provisions of this Agreement applicable to that payment or benefit shall be
applied, construed and administered so that such payment or benefit is made or
provided in compliance with the applicable requirements of Code Section 409A. In
addition, should there arise any ambiguity as to whether any other provisions of
this Agreement would contravene one or more applicable requirements or
limitations of Code Section 409A and the Treasury Regulations thereunder, such
provisions shall be interpreted, administered and applied in a manner that
complies with the applicable requirements of Code Section 409A and the Treasury
Regulations thereunder.

 

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13.                               Amendment and Governing Law.

 

This Agreement may not be amended or modified except by an express written
agreement sign by Employee and the Chairman of the Board of Directors of the
Company and approved by the Board of Directors. Employee agrees that any dispute
in the meaning, effect or validity of this Agreement shall be resolved in
accordance with the laws of the State of Illinois without regard to the conflict
of laws provisions thereof. Employee hereby irrevocably submits to the
jurisdiction (including without limitation in personam jurisdiction), process
and venue of the courts of the State of Illinois and the Federal courts of the
United States located in Chicago, Illinois, and hereby agrees that any action,
suit or proceeding initiated by Illinois for the interpretation or enforcement
of the provisions of this Agreement shall, and that any action, suit or
proceeding initiated by Company for the interpretation or enforcement of the
provisions of this Agreement may, be heard and determined exclusively in a
Federal court, or, if not permitted by applicable law, then in a State court,
situated in Chicago, Illinois.

 

14.                               Surviving Provisions.

 

Following any termination or expiration of this Agreement, Sections 5, 6, 7(e),
7(f), 8, 9, 10, 11, 12, 13 and 14 will survive, and, if Employee’s employment
with the Company continues thereafter, Employee’s employment with the Company
will continue to be “at will”.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date stated in the opening paragraph.

 

/s/ Robert S. Apatoff

 

 Robert S. Apatoff

 

 

 

Date signed:

September 8, 2013

 

 

 

 

FTD COMPANIES, INC.

 

 

 

By:

/s/ Mark R. Goldston

 

 

 

 

Name:

Mark R. Goldston

 

 

 

 

Title:

Chairman and Chief Executive Officer

 

 

 

Date signed:

October 30, 2013

 

 

11

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Appendix A

 

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

 

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (the “Agreement”) is made and
entered into as of the date the last party hereto signs the Agreement but is
made effective as of the Effective Date (as defined below) between FTD
Companies, Inc. (the “Company”) and Robert S. Apatoff (the “Executive”).

 

RECITALS:

 

A.            The Company and the Executive have entered into that certain
employment agreement of even date with this Agreement pursuant to which the
Executive will serve as President and Chief Executive Officer of the Company,
commencing on the date on which the spin-off of the Company from United
Online, Inc. (“Spin-Off”) is consummated (the “Effective Date”); and

 

B.            In connection therewith, the Company and the Executive desire to
provide for certain additional obligations.

 

NOW, THEREFORE, in consideration of the offer to and acceptance by the Executive
of employment as President and Chief Executive Officer of the Company and of
other good and valuable consideration, the receipt, sufficiency and adequacy of
which are hereby acknowledged, the parties hereto additionally agree as follows:

 

Section 1.  Secrecy, Non-Competition, No Interference and Non-Solicitation.

 

(a)  No Competing Employment.  The Executive acknowledges that (i) the
agreements and covenants contained in this Section 1 are essential to protect
the value of the Company’s business and assets and (ii) by virtue of his
employment with the Company, the Executive will obtain such knowledge, know-how,
training and experience of such a character that there is a substantial
probability that such knowledge, know-how, training and experience could be used
to the substantial advantage of a competitor of the Company and to the Company’s
substantial detriment. Therefore, the Executive agrees that, for the period (the
“Restricted Period”) commencing on the date of this Agreement and ending on the
date that is twelve (12) months after the date on which the Executive is no
longer employed by the Company for any reason, the Executive shall not
participate, operate, manage, consult, join, control or engage, directly or
indirectly, for the benefit of the Executive or on behalf of or in conjunction
with any person, partnership, corporation or other entity, whether as an
employee, consultant, agent, officer, stockholder, member, investor, agent or
otherwise, in any business activity if such activity constitutes the sale or
provision of floral products or services that are similar to, or competitive
with, floral products or services then being sold or provided by the Company or
any of its subsidiaries or affiliated companies, including, without limitation,
retail florists’ business services, floral order transmission and related
network services, development and distribution of branded floral products on the
Internet or other consumer direct segment of the floral industry (including,
without limitation, Interflora, Inc., Teleflora LLC, 1-800-FLOWERS.COM, Inc.,
Proflowers.com, and Floral Source) (a “Competitive Activity”), in any of: the
City of Downers Grove, Illinois, the County of DuPage, Illinois or any other
city or county in the State of Illinois; the District of Columbia or any other
state, territory, district or commonwealth of the United States or any county,
parish, city or similar political subdivision in any other state, territory,
district or commonwealth of the United States; any other country or territory
anywhere in the world or in any city, canton, county, district, parish, province
or any other political subdivision in any such country or territory; or anywhere
in the world (each city, canton, commonwealth, county, district, parish,
province, state, country, territory or other political subdivision or other
location in the world shall be referred to as a “Non-competition Area”). The
parties to this Agreement intend that the covenant contained in the preceding
sentence of this Section 1(a) shall be construed as a series of separate
covenants, one for each city, canton, commonwealth, county, district, parish,
state, province, country, territory, or other political subdivision or other
area of the world specified. Except for geographic coverage, each separate
covenant shall be considered identical in terms to the covenant contained in the
preceding sentence. The parties further

 

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acknowledge the breadth of the covenants, but agree that such broad covenants
are necessary and appropriate in the light of the global nature of the
Competitive Activity. If, in any judicial or other proceeding, a court or other
body declines to enforce any of the separate covenants included in this
Section 1(a), the unenforceable covenant shall be considered eliminated from
these provisions for the purpose of those proceedings to the extent necessary to
permit the remaining separate covenants to be enforced. Notwithstanding the
foregoing, the Executive may maintain or undertake purely passive investments on
behalf of the Executive, the Executive’s immediate family or any trust on behalf
of the Executive or the Executive’s immediate family in companies engaged in a
Competitive Activity so long as the aggregate interest represented by such
investments does not exceed 1% of any class of the outstanding publicly traded
debt or equity securities of any company engaged in a Competitive Activity.

 

(b)  Nondisclosure of Confidential Information.  The Executive, except in
connection with his employment hereunder, shall not disclose to any person or
entity or use, either during the Executive’s employment with the Company or at
any time thereafter, any information not in the public domain, in any form,
acquired by the Executive while employed by the Company or, if acquired
following the Executive’s employment with the Company, such information that, to
the Executive’s knowledge, has been acquired, directly or indirectly, from any
person or entity owing a duty of confidentiality to the Company or any of its
affiliates, relating to the Company, United Online, Inc., a Delaware corporation
and the former parent corporation of the Company (“UOL”), or any of its
successors or their subsidiaries or affiliated companies (collectively, the
“Company Group”), including but not limited to trade secrets, technical
information, systems, procedures, test data, price lists, financial or other
data (including the revenues, costs or profits associated with any of the
Company’s products or services), business and product plans, code books,
invoices and other financial statements, computer programs, discs and printouts,
customer and supplier lists or names, personnel files, sales and advertising
material, telephone numbers, names, addresses or any other compilation of
information, written or unwritten, that is or was used in the business of the
Company, UOL, any predecessor of the Company, UOL or any of the Company’s, or
UOL’s subsidiaries, affiliates, successors or assigns. The Executive agrees and
acknowledges that all of such information, in any form, and copies and extracts
thereof are and shall remain the sole and exclusive property of the Company or
other Company Group entity, and upon termination of his employment with the
Company, the Executive shall return to the Company the originals and all copies
(and shall delete all such items in electronic format) of any such information
provided to or acquired by the Executive in connection with the performance of
the Executive’s duties for the Company, and shall return to the Company all
files, correspondence, computer equipment and disks or other communications
(including any such materials in electronic format) received, maintained or
originated by the Executive during the course of the Executive’s employment.

 

(c)  No Interference and Non-Solicitation.  During the Restricted Period, the
Executive shall not, whether for the Executive’s own account or for the account
of any other individual, partnership, firm, corporation or other business
organization, solicit, endeavor to entice away from the Company, UOL, or any of
the Company’s or UOL’s subsidiaries or affiliated companies, or otherwise
interfere with the relationship of the Company or UOL or any of its or their
subsidiaries or affiliated companies with, any person who, to the knowledge of
the Executive, is (or has at any time within the preceding three months been)
employed by or otherwise engaged to perform services for the Company, UOL or any
of the Company’s or UOL’s subsidiaries or affiliated companies (including, but
not limited to, any independent sales representatives or organizations) or any
entity who is, or was within the then most recent 12-month period, a customer or
client of the Company, UOL, any predecessor of the Company or UOL or any of the
Company’s or UOL’s subsidiaries or affiliated companies (a “Customer”) or a
supplier or vendor of the Company or UOL or any of the Company’s or UOL’s
subsidiaries or affiliated companies (a “Supplier”); provided, however, that
this Section 1(c) shall not prohibit the Executive from employing, for the
Executive’s own account, following a termination of the employment of the
Executive, any person employed by a Customer or Supplier, if such employment is
not in connection with a Competitive Activity.

 

2

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Section 2.  Calculation of Time Period.  The Executive agrees that if the
Executive violates the provisions of Section 1(a) of this Agreement, the running
of the Restricted Period shall be tolled for the period in which the Executive
is in violation of such non-competition provisions. The Executive understands
that the foregoing restrictions may limit the Executive’s ability to earn a
livelihood in a business engaged in a Competitive Activity, but the Executive
nevertheless believes that the Executive has received and will receive
sufficient consideration and other benefits as an employee of the Company and as
otherwise provided in connection with the Spin-Off to clearly justify
restrictions that, in any event, given his education, skills and ability, the
Executive does not believe would prevent the Executive from earning a living.

 

Section 3.  Inventions.

 

(a)  Defined.  The Executive understands that during term of the Executive’s
employment, there have been and are certain restrictions on the Executive’s
development of technology, ideas, and inventions, referred to in this Agreement
as “Invention Ideas.” The term Invention Ideas means all ideas, processes,
trademarks, service marks, inventions, technology, computer programs, original
works of authorship, designs, formulas, discoveries, patents and copyrights
relating to any existing or planned service or product of the Company, and all
improvements, rights, and claims related to the foregoing, that are conceived,
developed, or reduced to practice by the Executive alone or with others. The
Executive agrees that all original works of authorship which were or are made by
the Executive (solely or jointly with others) as a member of the Company’s (or
any of its affiliate’s) Board of Directors or within the scope of the
Executive’s employment and which are protectable by copyright are “works made
for hire,” as the term is defined in the United States Copyright Act (17 USCA,
Section 101).

 

(b)  Disclosure.  The Executive agrees to maintain adequate and current written
records on the development of all Invention Ideas and to disclose promptly to
the Company all Invention Ideas and relevant records, which records will remain
the sole property of the Company. The Executive further agrees that all
information and records pertaining to any idea, process, trademark, service
mark, invention, technology, computer program, original work of authorship,
design formula, discovery, patent, or copyright that might reasonably be
construed to be an Invention Idea, but was, during the period that the Executive
served as a member of the Company’s (or any of its affiliate’s) Board of
Directors, or is conceived, developed, or reduced to practice by the Executive
(alone or with others) during the Executive’s employment or during the one-year
period following termination of the Executive’s employment, shall be promptly
disclosed to the Company (such disclosure to be received in confidence). Any
disclosure pursuant to this Section 3(b) will be received by the Company in
confidence so that the Company may examine such information to determine if in
fact it constitutes Invention Ideas subject to this Agreement.

 

(c)  Assignment.  The Executive agrees to, and does hereby continuously, assign
to the Company, without further consideration, all right, title, and interest
that the Executive may presently have or acquire (throughout the United States
and in all foreign countries), free and clear of all liens and encumbrances, in
and to each Invention Idea, which shall be the sole property of the Company,
whether or not patentable. In the event any Invention Idea shall be deemed by
the Company to be patentable or otherwise registrable, the Executive shall
assist the Company (at its expense) in obtaining patent or other applicable
registrations, and the Executive shall execute all documents and do all other
things (including testifying at the Company’s expense) necessary or proper to
obtain patent or other applicable registrations and to vest the Company with
full title to them. The Executive’s obligation to assist the Company in
obtaining and enforcing patents, registrations or other rights for such
inventions in any and all countries, shall continue beyond the termination of my
employment, but the Company shall compensate the Executive at a reasonable rate
after such termination for the time actually spent by the Executive at the
Company’s request for such assistance. Should the Company be unable to secure
the Executive’s signature on any document necessary to apply for, prosecute,
obtain, or enforce any patent, copyright, or other right or protection relating
to any Invention Idea, whether due to the

 

3

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Executive’s mental or physical incapacity or any other cause, the Executive
hereby irrevocably designates and appoints the Company and each of its duly
authorized officers and agents as the Executive’s agent and attorney-in-fact, to
act for and on the Executive’s behalf, to execute and file any such document and
to do all other lawfully permitted acts to further the prosecution, issuance,
and enforcement of patents, copyrights, or other rights of protections with the
same force and effect as if executed and delivered by the Executive.
Notwithstanding the foregoing provisions of this Section 3:

 

This provisions of this Section 3(c) do not apply to any invention for which no
equipment, supplies, facility, or trade secret information of the Company was
used and which was developed entirely on the Executive’s own time, unless
(a) the invention relates (i) to the business of the Company or (ii) to the
Executive’s actual or demonstrably anticipated research or development, or
(b) the invention results from any work performed by the Executive for the
Company.

 

(d)  Exclusions.  Except as disclosed in Exhibit A attached hereto, there are no
ideas, processes, trademarks, service marks, inventions, technology, computer
programs, original works of authorship, designs, formulas, discoveries, patents,
copyrights, or improvements to the foregoing that the Executive wishes to
exclude from this Agreement. If nothing is listed on Exhibit A, the Executive
represents that the Executive has no such inventions or improvements at the time
of signing this Agreement, and that the Executive is not aware of any existing
contract in conflict with this Agreement.

 

(e)  Post-Termination Period.  The Executive understands and acknowledges that
because of the difficulty of establishing when any idea, process,
invention, etc., is first conceived or developed by the Executive, or whether it
results from access to confidential, trade secret or proprietary information or
the Company’s equipment, facilities, and data, the Executive agrees that any
idea, process, trademark, service mark, invention, technology, computer program,
original work of authorship, design, formula, discovery, patent, copyright, or
any improvement, rights, or claims related to the foregoing shall be presumed to
be an Invention Idea if it relates to any existing or planned service or product
of the Company, subsidiaries or affiliates, and if it is conceived, developed,
used, sold, exploited, or reduced to practice by the Executive or with the
Executive’s aid within six months after the Executive’s termination of
employment with the Company. The Executive may rebut the above presumption if
the Executive proves that the invention, idea, process, etc., is not an
Invention Idea as defined in Section 3(a).

 

(f)  Illinois Statute.  The Executive understands that nothing in this Agreement
is intended to expand the scope of protection provided the Executive by Illinois
Statute 765 ILCS 1060.

 

Section 4.  Irreparable Injury.  It is further expressly agreed that the Company
will or would suffer irreparable injury if the Executive were to compete with
the Company or any of its or their subsidiaries or affiliated companies in
violation of this Agreement or the Executive were to otherwise breach this
Agreement. Any such violation or breach will cause the Company irreparable harm,
the amount of which may be extremely difficult to estimate, thus, making any
remedy at law or in damages inadequate. Consequently, the Company shall have the
right to apply to a court of appropriate jurisdiction for, and the Executive
consents and stipulates to the entry of, an order of injunctive relief in
prohibiting the Executive from competing with the Company, its successors or any
of its or their subsidiaries or affiliated companies in violation of this
Agreement, an order restraining any other breach or threatened breach of this
Agreement, and any other relief the Company and such court deems appropriate.
This right shall be in addition to any other remedy available to the Company in
law or equity. The parties hereby agree that the attorneys’ fees of the
prevailing party in any such proceeding or action shall be paid by the
non-prevailing party.

 

Section 5.  Representation and Warranties of the Executive.  The Executive
represents and warrants that the execution of this Agreement and subsequent
employment with the Company does not and will not conflict with any obligations
that the Executive has to any former employers or any other entity. The
Executive further represents and warrants that the Executive has not brought to
the Company, and

 

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will not at any time bring to the Company, any materials, documents or other
property of any nature of a former employer.

 

Section 6.  Miscellaneous.

 

(a)  Jurisdiction, Choice of Law and Venue.  The validity and construction of
this Agreement shall be governed by the internal laws of the State of Illinois,
excluding the conflicts-of-laws principles thereof. Each party hereto consents
to the jurisdiction of, and venue in, any federal or state court of competent
jurisdiction located in Chicago, Illinois.

 

(b)  Entire Agreement.  This Agreement and any other agreement or document
delivered in connection with this Agreement, including the letter agreement
dated as of the date hereof, between the Company and the Executive, state the
entire agreement and understanding of the parties on the subject matter of this
Agreement, and supersede all previous agreements, arrangements, communications
and understandings relating to that subject matter.

 

(c)  Counterparts.  This Agreement may be signed in two or more counterparts,
each of which shall be deemed an original, with the same effect as if all
signatures were on the same document.

 

(d)  Amendment; Waiver; etc.  This Agreement, and each other agreement or
document delivered in connection with this Agreement, may be amended, modified,
superseded or canceled, and any of the terms thereof may be waived, only by a
written document signed by each party to this Agreement or, in the case of
waiver, by the party or parties waiving compliance. The delay or failure of any
party at any time or times to exercise any right or require the performance of
any duty under this Agreement or any other agreement or document delivered in
connection with this Agreement shall in no way affect the right of that party at
a later time to exercise that right or enforce that duty or any other right or
duty. No waiver by any party of any condition or of any breach of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed or construed to be a further or continuing waiver of any such
condition or breach or of the breach of any other term of this Agreement. A
single or partial exercise of any right shall not preclude any other or further
exercise of the same right or of any other right. The rights and remedies
provided by this Agreement shall be cumulative and not exclusive of each other
or of any other rights or remedies provided by law.

 

(e)  Severability.  If any provision of this Agreement or any other agreement or
document delivered in connection with this Agreement, if any, is partially or
completely invalid or unenforceable in any jurisdiction, then that provision
shall be ineffective in that jurisdiction to the extent of its invalidity or
unenforceability, but the invalidity or unenforceability of that provision shall
not affect the validity or enforceability of any other provision of this
Agreement, all of which shall be construed and enforced as if that invalid or
unenforceable provision were omitted, nor shall the invalidity or
unenforceability of that provision in one jurisdiction affect its validity or
enforceability in any other jurisdiction. The Company and the Executive agree
that the period of time and the geographical area described in Section 1 are
reasonable in view of the nature of the business in which the Company is engaged
and proposes to be engaged, and the Executive’s understanding of his prospective
future employment opportunities. However, if the time period or the geographical
area, or both, described in Section 1 should be judged unreasonable in any
judicial proceeding, then the period of time shall be reduced by that number of
months and the geographical area shall be reduced by elimination of that
portion, or both, as are deemed unreasonable, so that the restriction covenant
of Section 1 may be enforced during the longest period of time and in the
fullest geographical area as is adjudged to be reasonable.

 

(f)  Employment “At-Will”

 

Both the Executive and the Company acknowledge that nothing in this Agreement
creates a contract for employment for any specific duration. The Executive’s
employment shall be “at-will”,

 

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meaning both the Company and the Executive can terminate the relationship at any
time, with or without reason or notice.

 

(g)  Survival of Obligations.  The obligations of the Executive set forth in
this Agreement shall survive the termination of Employee’s employment with the
Company and the termination of this Agreement.

 

(h)  Assignment.  This Agreement may be freely assigned by the Company, but may
not be assigned by the Executive without the prior written consent of the
Company which may be withheld at the Company’s sole discretion.

 

(i)  Binding Effect.  This Agreement shall inure to the benefit of the Company
and its successors and assigns, and shall be binding upon the Executive and the
Executive’s heirs, personal representatives and any permitted assigns.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

FTD COMPANIES, INC.

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

 

Its:

 

 

 

 

 

 

Robert S. Apatoff

 

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Appendix A

 

EXHIBIT A

EXECUTIVE’S DISCLOSURE

 

Except as set forth below, there are no ideas, processes, trademarks, service
marks, inventions, technology, computer programs, original works of authorship,
designs, formulas, discoveries, patents, copyrights, or any claims, rights, or
improvements to the foregoing that I wish to exclude from the operation of this
Agreement:

 

 

Date:

 

 

 

 

 

 

 

 

Robert S. Apatoff

 

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Appendix B

 

EMPLOYEE PROPRIETARY INFORMATION

AND INVENTIONS AGREEMENT

 

In consideration of my employment or continued employment by Florists Transworld
Delivery, Inc. (my “Employer”), the compensation I receive, and any other
consideration I have been provided that was conditioned on my execution of this
Employee Proprietary Information and Inventions Agreement (“the Agreement”), I
agree as follows:

 

1.                                      PROPRIETARY INFORMATION.

 

(a)  Parties.  I understand and agree that this Agreement is intended to benefit
Employer and all of its affiliates including, but not limited to, FTD
Companies, Inc. and all of its current and future direct and indirect parents
and subsidiaries and their successors (all of the foregoing being referred to,
individually and collectively, ad the “Company”).

 

(b)  Confidential Restrictions.  I understand that, during the course of my work
as an employee of Employer, I have had and will have access to Proprietary
Information (as defined below) concerning the Company and parties with which the
Company has a business relationship. I acknowledge that the Company has
developed, compiled, and otherwise obtained, at great expense, such Proprietary
Information. I agree to hold in strict confidence all Proprietary Information
and will not disclose any Proprietary Information to anyone outside of the
Companyand will not use, copy, publish, summarize, or remove from Company
premises Proprietary Information, except during my employment to the extent
necessary to carry out my responsibilities as an employee of Employer. I further
agree that the publication of any Proprietary Information through literature or
speeches must be approved in advance in accordance with the Company’s applicable
policies and procedures. I understand that my employment creates a relationship
of confidence and trust between me and Employer with respect to Proprietary
Information, and I voluntarily accept this trust and confidence.

 

(c)  Proprietary Information Defined.  I understand that the term “Proprietary
Information” in this Agreement means all information and any idea, in whatever
form, tangible or intangible, whether disclosed to or learned or developed by
me, pertaining in any manner to the current or proposed business of the Company
unless the information (i) is publicly known through lawful means; (ii) was
rightfully in my possession prior to my employment with the Company as
demonstrated by written documents currently in existence; (iii) is disclosed to
me without restriction by a third party who rightfully possesses and discloses
the information and who did not learn of it directly from the Company; or
(iv) is reasonably known to people in the trade or industry. Without limiting
the scope of the definition, I understand that the Company considers the
following to be included in the definition of Proprietary Information: (i) all
client/customer lists and all lists or other compilations containing client,
customer or vendor information; (ii) information about products, proposed
products, research, product development, techniques, processes, costs, profits,
product pricing, markets, marketing plans, strategies, forecasts, sales and
commissions; (iii) plans for the future development and new product concepts;
(iv) all information regarding the Company’s subscribers and all information
regarding the Company’s subscribers compiled by or derived from the Company’s
database; (v) the compensation and terms of employment of other employees;
(vi) all other information that has been or will be given to me in confidence by
the Company; and (vii) software in various stages of development, designs,
drawings, specifications, techniques, models, data, source code, algorithms,
object code, documentation, diagrams, flow charts, computer programs, databases,
and other data of any kind and description, including electronic data recorded
or retrieved by any means. Proprietary Information also includes any information
described above which the Company obtains from another party and which the
Company treats as proprietary or designates as Proprietary Information whether
or not owned or developed by the Company or the other party.

 

(d)  Company Materials.  I understand that I will be entrusted with “Company
Materials” (as defined below) which are important to the Company’s business or
the business of Company customers or clients. I agree that during my
employment, I will not deliver any Company Materials to any person

 

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or entity outside the Company, except as I am required to do in connection with
performing my duties for Company. For purposes of this Agreement, “Company
Materials” are documents, electronic files or any other tangible or electronic
items that contain information concerning the business, operations or plans of
the Company or its customers, whether the documents have been prepared by me or
others. Company Materials include, but are not limited to, computers, computer
disk drives, computer files, computer disks, documents, code, flowcharts,
schematics, designs, graphics, customer lists, drawings, photographs, customer
information, etc.

 

(e)  Information Use Return and Acknowledgement.  I agree that I will not retain
and I will return all Proprietary Information and all copies of it in whatever
form, as well as all Company Materials, apparatus, equipment and other Company
property along with all reproductions, to Employer after my employment
terminates. The only exceptions are (i) my personal copies of records of my
compensation; (ii) any agreements between me and the Company that I have signed;
and (iii) my copy of this Agreement. I agree to execute reasonable documentation
if requested by Employer upon the termination of my employment reflecting such
return and acknowledging my obligations under this Agreement.

 

(f)  Prior Actions and Knowledge.  I represent and warrant that from the time of
my first contact or communication with the Company, I have held in strict
confidence all Proprietary Information and have not disclosed any Proprietary
Information to anyone outside of the Company, or used, copied, published, or
summarized any Proprietary Information except to the extent necessary to carry
out my responsibilities as an employee of Employer.

 

(g)  Former Employer Information; Consents.  I agree that I will not, during my
employment, improperly use or disclose any confidential information, proprietary
information or trade secrets of my former or any concurrent employers. I agree
that I will not bring onto the premises of the Company any document or any
property belonging to my former or any concurrent employers unless consented to
in writing by them. I represent and warrant that I have returned all property
and confidential information belonging to all prior employers. I also represent
and warrant that my performance of services for Employer will not require any
authorization, consent, exemption or other action by any other party and will
not conflict with, violate or breach any agreement, instrument, order, judgment
or decree to which I am subject.

 

(h)  Conflicting Employment.  I agree that, during the term of my employment, I
will not engage in any other employment, occupation, consulting or other
business activity directly related to the business in which the Company is now
involved or may become involved during the term of my employment, nor will I
engage in any other business activities that conflict with my obligations to the
Company.

 

(i)  Non-Solicitation of Customers.  I understand and agree that as a result of
my employment and the position that I hold, the Company has entrusted and will
in the future entrust me with Proprietary Information that is maintained by the
Company in confidence and that, if known, would have economic value to a
competitor. Such Proprietary Information includes, but is not limited to,
customer identities, requirements, purchasing volumes, demographic needs, and
other individualized customer information, coding, future technology plans,
product strategies, business strategies, coding models, and the like. I
understand and agree that my solicitation of Company customers on behalf of an
entity other than the Company would involve the use of such Proprietary
Information. Consequently, I agree that during the term of my employment with
Employer, any other affiliate of the Company or the Company, and for a period of
one (1) year after termination (voluntarily or involuntarily) of my
employment, I shall not, for myself or any third party, solicit, directly or
indirectly, any customer of the Company who was a Company customer during my
employment for the purpose of offering products or services that compete in the
same market with the Company’s products or services. In addition, I agree that I
will not, for myself or any third party, solicit, directly or indirectly, any

 

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potential customer of the Company with whom the Company was engaged in
substantial negotiations during my employment. I hereby acknowledge that pursuit
of the activities forbidden by this paragraph would necessarily involve the use
or disclosure of Proprietary Information in breach of this Agreement, but that
proof of such breach would be extremely difficult. None of my activities will be
prohibited under this Paragraph if I can prove that the action was taken without
the use in any way of Proprietary Information.

 

(j)  Non-Solicitation of Employees.  I agree that for the term of my employment
with Employer, any other affiliate of the Company or the Company, and for a
period of one (1) year following the termination (voluntarily or involuntarily)
of my employment, I will not, on behalf of myself or any other person or entity,
either directly or indirectly, solicit the services of any person who was
employed by the Company on or prior to the date of my termination of employment.

 

2.                                      INVENTIONS.

 

(a)  Defined.  I understand that during the term of my employment, there have
been and are certain restrictions on my development of technology, ideas, and
inventions, referred to in this Agreement as “Invention Ideas.” The term
Invention Ideas means all ideas, processes, trademarks, service marks,
inventions, technology, computer programs, original works of authorship,
designs, formulas, discoveries, patents, copyrights, relating to any existing or
planned service or product of the Company and all improvements, rights, and
claims related to the foregoing that are conceived, developed, or reduced to
practice by me alone or with others, except to the extent that applicable state
law prohibits the assignment of these rights. I agree that all original works of
authorship which are made by me (solely or jointly with others) within the scope
of my employment and which are protectable by copyright are “works made for
hire,” as the term is defined in the United States Copyright Act (17 USCA,
Section 101).

 

(b)  Notice Regarding State Invention Assignment Laws.  The laws of some states
prohibit the assignment of certain invention rights (e.g., Delaware Code Title
19 § 805; Illinois 765 ILCS 1060/1-3; Kansas Stat. Ann. § 44-130; Minnesota
Stat. 13A, § 181.78; North Carolina Gen. Stat. Art. 10A, § 66-57.1; Utah Stat.
§ 34-39-1 through 34-39-3; Washington RCW 49.44.140). This Agreement shall be
construed so that it complies with all such applicable laws. To that end, to the
extent applicable state law requires it, you are notified as follows:

 

NOTICE: This Agreement does not apply to an invention for which no equipment,
supplies, facility, or trade secret information of the employer was used and
which was developed entirely on the employee’s own time, unless (a) the
invention relates at the time of conception or reduction to practice (i) to the
business of the employer, or (ii) to the employer’s actual or demonstrably
anticipated research or development, or (b) the invention results from any work
performed by the employee for the employer.

 

If the state law that applies provides greater invention rights to you than are
described in the above notice, those greater rights will apply to you.

 

(c)  Disclosure.  I agree to maintain adequate and current written records on
the development of all Invention Ideas and to disclose promptly to Employer all
Invention Ideas and relevant records, which records will remain the sole
property of Employer. I further agree that all information and records
pertaining to any idea, process, trademark, service mark, invention, technology,
computer program, original work of authorship, design formula, discovery,
patent, or copyright that might reasonably be construed to be an Invention Idea,
but is conceived, developed, or reduced to practice by me (alone or with others)
during my employment or during the one year period following termination of my
employment, shall be promptly disclosed to Employer. If I inform Employer before
making a specific disclosure pursuant to this paragraph that I contend the
subject matter being disclosed is not subject to this Agreement, then the
disclosure will be received by Employer in confidence so that

 

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Employer may examine such information to determine if in fact it constitutes
Invention Ideas subject to this Agreement.

 

(d)  Assignment.  I agree to assign and hereby do assign to Employer, without
further consideration, all right, title, and interest that I may presently have
or may acquire in the future (throughout the United States and in all foreign
countries), free and clear of all liens and encumbrances, in and to each
Invention Idea, which shall be the sole property of Employer, whether or not
patentable. The rights I have assigned, and will assign, include all copyrights,
patent rights, trade secret rights and any rights of publicity or personality
(including usage of my name, voice, image, likeness and performance in any and
all media), vested and contingent, and include extensions and renewals thereof
and the right to license and assign. I will waive and hereby do waive any moral
rights I have or may have in any Invention Idea. In the event any Invention Idea
shall be deemed by Employer to be patentable or otherwise registrable, I will
assist Employer or the Company, as Employer may direct (at its expense) in
obtaining letters patent or other applicable registrations, and I will execute
all documents and do all other things (including testifying at Employer’s
expense) necessary or proper to obtain letters patent or other applicable
registrations and to vest Employer or the Company, as Employer may direct, with
full title to them. My obligation to assist Employer in obtaining and enforcing
patents, registrations or other rights for such inventions in any and all
countries, shall continue beyond the termination of my employment, but Employer
or the Company shall compensate me at a reasonable rate after such termination
for the time actually spent by me at Employer’s request for such assistance.
Should Employer be unable to secure my signature on any document necessary to
apply for, prosecute, obtain, or enforce any patent, copyright, or other right
or protection relating to any Invention Idea, whether due to my mental or
physical incapacity or any other cause, I irrevocably designate and appoint
Employer and each of its duly authorized officers and agents as my agent and
attorney-in-fact, to act for and on my behalf, to execute and file any such
document and to do all other lawfully permitted acts to further the prosecution,
issuance, and enforcement of patents, copyrights, or other rights of protections
with the same force and effect as if executed and delivered by me.

 

(e)  License.  In the case of any invention or work of authorship that I own or
in which I have an interest that is not owned by Employer pursuant to the other
terms in this Agreement, the following shall apply. If I use the invention or
work of authorship, or allow it to be used, in the course of the Company’s
business, or incorporate the invention or work of authorship, or allow it to be
incorporated, into any product or process owned or developed in whole or in part
by the Company, I will grant, and I hereby do grant to Employer and/or one or
more affiliates of the Company, as Employer may direct, and their assigns a
nonexclusive, perpetual, irrevocable, fully paid-up, royalty-free, worldwide
license of all of my interests in the invention or work of authorship, including
all rights to make, use, sell, reproduce, modify, distribute, perform publicly,
display publicly and transmit the invention or work of authorship, without
restriction. At Employer’s direction and expense I will execute all documents
and take all actions necessary or convenient for Employer and the Company to
document, obtain, maintain or assign their license rights hereunder of my
interest in any such invention or work of authorship.

 

(f)  Exclusions.  Except as disclosed in Exhibit A, there are no ideas,
processes, trademarks, service marks, inventions, technology, computer programs,
original works of authorship, designs, formulas, discoveries, patents,
copyrights, or improvements to the foregoing that I wish to exclude from this
Agreement. If nothing is listed on Exhibit A, I represent that I have no such
inventions or improvements at the time of signing this Agreement. I am not aware
of any existing contract in conflict with this Agreement.

 

(g)  Post-Termination Period.  I acknowledge that because of the difficulty of
establishing when any idea, process, invention, etc., is first conceived or
developed by me, or whether it results from access to Proprietary Information or
the Company’s equipment, facilities, and data, I agree that any idea, process,
trademark, service mark, invention, technology, computer program, original work
of

 

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authorship, design, formula, discovery, patent, copyright, or any improvement,
rights, or claims related to the foregoing shall be presumed to be an Invention
Idea if it relates to any existing or planned service or product of the Company,
and if it is conceived, developed, used, sold, exploited, or reduced to practice
by me or with my aid within six months after my termination of employment
(voluntarily or involuntarily)with Employer, or any other affiliate of the
Company, or the Company. I can rebut the above presumption if I prove that the
invention, idea, process, etc., is not an Invention Idea as defined in
paragraph 2(a).

 

(h)  State Law Regarding Invention Rights.  I understand that nothing in this
Agreement is intended to expand the scope of protection regarding invention
rights that is provided to me by applicable state law.

 

3.                                      CONTRACTS.

 

I understand that the Company has or may enter into contracts with the
government or other companies under which certain intellectual property rights
will be required to be protected, assigned, licensed, or otherwise transferred
and I hereby agree to execute such other documents and agreements as are
necessary to enable the Company to meet its obligations under those contracts.

 

4.                                      REMEDIES.

 

I recognize that nothing in this Agreement is intended to limit any remedy of
the Company under applicable state law protecting confidential information or
trade secrets or any other relevant state or federal law. In addition, I
recognize that my violation of this Agreement could cause the Company
irreparable harm, the amount of which may be extremely difficult to estimate,
thus, making any remedy at law or in damages inadequate. Therefore, I agree that
the Company shall have the right to apply to any court of competent jurisdiction
for an order restraining any breach or threatened breach of this Agreement and
for any other relief the Company deems appropriate. This right shall be in
addition to any other remedy available to the Company in law or equity.

 

5.                                      MISCELLANEOUS PROVISIONS.

 

(a)  Assignment/Successors and Assigns.  I agree that Employer may assign to
another person or entity any of its rights under this Agreement. This Agreement
shall be binding upon me and my heirs, personal representatives, and successors,
and shall inure to the benefit of the Employer’s successors and assigns.

 

(b)  Jurisdiction, Choice of Law and Venue.  The validity, interpretation,
enforceability and performance of this Agreement shall be governed and construed
in accordance with the laws of the State of Illinois, excluding the
conflicts-of-laws principles thereof. Each party hereto consents to the
jurisdiction of, and venue in, any federal or state court of competent
jurisdiction located in the County of DuPage in the State of Illinois.

 

(c)  Severability.  If any provision of this Agreement, or application thereof
to any person, place, or circumstances, shall be held by a court of competent
jurisdiction to be invalid, unenforceable, or void, such provision shall be
deemed to be modified to the maximum extent possible to give effect to the
intent of the language while still remaining enforceable under applicable law.
The remainder of this Agreement and application thereof shall remain in full
force and effect.

 

(d)  No Guarantee of Employment.  I understand this Agreement is not a guarantee
of continued employment. My employment is terminable at any time by Employer or
me, with or without cause or prior notice, except as may be otherwise provided
in an express written employment agreement properly authorized by Employer.

 

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(e)  Entire Agreement.  The terms of this Agreement are the final expression of
my agreement with respect to these subjects and may not be contradicted by
evidence of any prior or contemporaneous agreement. This Agreement shall replace
and supersede any similar agreement that currently is in effect between me and
Employer or the Company, provided that Employer shall retain all rights that
have arisen under that prior agreement up to the time I sign this new Agreement.
This Agreement shall constitute the complete and exclusive statement of its
terms and no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding involving this Agreement. This
Agreement can only be modified in writing signed by FTD Companies, Inc.’s
General Counsel (if Employer is, at the time of the modification, an affiliate
of FTD Companies, Inc.), or signed by Employer’s President or General Counsel
(if Employer is not an affiliate of FTD Companies, Inc. at the time of the
modification).

 

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY
NOTED ON EXHIBIT A TO THIS AGREEMENT ANY PROPRIETARY INFORMATION, IDEAS,
PROCESSES, TRADEMARKS, SERVICE MARKS, INVENTIONS, TECHNOLOGY, COMPUTER PROGRAMS,
ORIGINAL WORKS OF AUTHORSHIP, DESIGNS, FORMULAS, DISCOVERIES, PATENTS,
COPYRIGHTS, OR IMPROVEMENTS, OR RIGHTS THAT I DESIRE TO EXCLUDE FROM THIS
AGREEMENT.

 

Date:

 

 

 

 

 

 

 

 

Robert S. Apatoff

 

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EXHIBIT A

EMPLOYEE’S DISCLOSURE

 

Prior Inventions.  Except as set forth below, there are no ideas, processes,
trademarks, service marks, inventions, technology, computer programs, original
works of authorship, designs, formulas, discoveries, patents, copyrights, or any
claims, rights, or improvements to the foregoing that I wish to exclude from the
operation of this Agreement:

 

 

 

Date:

 

 

 

 

 

 

 

 

Robert S. Apatoff

 

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