Exhibit
10.32


 


EMPLOYMENT
AGREEMENT


 


This Employment
Agreement (this “Agreement”) is entered into as of May 20, 2003, between
Ann Hofferberth (the “Executive”) and Florists’ Transworld Delivery, Inc.
(“FTD”).


 


WHEREAS, the parties hereto previously entered into a
letter agreement dated as of January 8, 2001 (as amended or modified prior
to the date hereof, the “Letter Agreement”), setting forth the terms of the
Executive’s employment with FTD, and, in connection therewith, a
Confidentiality and Non-Competition Agreement dated as of January 8, 2001
(the “Confidentiality and Non-Competition Agreement”); and


 


WHEREAS, the parties desire to modify certain terms of
the Executive’s employment with FTD and replace and supercede the Letter
Agreement with this Agreement;


 


NOW, THEREFORE, in consideration of the mutual
promises and covenants set forth below and in the Confidentiality and
Non-Competition Agreement, FTD and the Executive hereby agree as follows:


 


1.                                       Duties.  The Executive shall serve as an officer of
FTD or in a substantially similar position with any entity that acquires FTD or
all or substantially all of FTD’s assets through May 31, 2004 (which term
shall automatically renew for successive one year terms unless FTD provides
written notice of termination to the Executive prior to the end of the initial
term or any renewal term).  The
Executive shall perform the duties assigned by FTD from time to time.  The Executive shall devote the Executive’s
entire business time to the affairs of FTD to the performance of the
Executive’s duties under this Agreement and to the promotion of FTD’s
interests.


 


2.                                       Compensation.  As full compensation for the performance by
the Executive of the Executive’s duties under this Agreement, FTD shall
compensate the Executive as follows:


 


(a)                                  Base
Salary.  During the term of this
Agreement, FTD shall pay to the Executive a base salary set annually by the
Board of Directors of FTD or FTD, Inc. or the Compensation Committee thereof
(collectively, the “Board”), such base salary to initially be $240,000 per
year, payable in the periodic installments ordinarily paid by FTD to employees
of FTD at comparable levels to the Executive. 
The Executive shall be entitled to such merit increases in base salary
as the Board may determine, in its discretion.


 


(b)                                 Performance
Bonus.  The Executive shall be
entitled to participate in a performance bonus as set by the Board based upon
performance criteria to be set by the Board.


 


(c)                                  Equity
Incentive Awards.  In the event a
Change of Control (as hereinafter defined) occurs during the Executive’s
employment, notwithstanding any provision of this Agreement or any other
agreement governing any equity incentive awards granted to the Executive, any
outstanding stock options or restricted stock awards granted to the Executive
by FTD, Inc., FTD or any subsidiary of either company shall vest in full and
become immediately


 

















 


exercisable, and any
restrictions relating thereto shall lapse, upon the occurrence of such Change
of Control.


 


(d)                                 Paid
Vacation.  The Executive shall be
entitled to four weeks of paid vacation per year in accordance with FTD’s
policies with respect to vacations then in effect.


 


(e)                                  Benefits.  During the term of Executive’s employment
hereunder, the Executive shall be entitled to the additional employment-related
benefits (the “Benefits”) that are made available from time to time to
employees of FTD at comparable levels to the Executive.


 


(f)                                    Expense
Reimbursement.  FTD shall reimburse
the Executive, in accordance with the practice from time to time in effect for
other similarly-situated employees of FTD, for all reasonable and necessary
travel expenses and other disbursements incurred by the Executive, for or on
behalf of FTD, in the performance of the Executive’s duties under this Agreement.


 


3.                                       Termination
Following a Change of Control.


 


(a)                                  Involuntary
Termination.  If the Executive’s
employment hereunder is terminated (other than by the Executive (except as
provided under clause (b) below)) or is not renewed pursuant to Section 1
during a Change of Control Severance Period (as hereinafter defined), the
Executive shall be entitled to the benefits provided under Section 4(a)
hereof; provided, however, that the Executive shall not be
entitled to such benefits upon the occurrence of one or more of the following
events:


 


(i)                                     the
Executive’s death;


 


(ii)                                  if
the Executive becomes permanently disabled within the meaning of, and begins
actually to receive disability benefits pursuant to, the long-term disability
plan in effect for, or applicable to, the Executive immediately prior to the
Change of Control; or


 


(iii)                               any
event described in Section 4(c) hereof under the definition of “Cause”.


 


(b)                                 Constructive
Termination.  The Executive may
terminate the Executive’s employment hereunder during the Change of Control
Severance Period upon the occurrence of one or more of the following events
(regardless of whether any other reason, other than Cause, for such termination
exists or has occurred, including without limitation other employment), in
which case the Executive shall be entitled to the benefits provided under
Section 4(a) hereof:


 


(i)                                     failure
to elect or reelect or otherwise to maintain the Executive in the office or the
position, or a substantially equivalent office or position, which the Executive
held immediately prior to the Change of Control;


 


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(ii)                                  (A)
a material adverse change in the nature or scope of the authorities, powers,
functions, responsibilities or duties attached to the position that the
Executive held immediately prior to the Change of Control; (B) a reduction in
the Executive’s base salary from the rates in effect immediately prior to the
Change of Control or a material modification in the scope of the Executive’s
right to participate in any bonus program offered to similarly-situated
employees; or (C) the termination or denial of the Executive’s rights to
Benefits at least as great in the aggregate as are payable thereunder
immediately prior to the Change of Control or a reduction in the scope or value
thereof other than a general reduction applicable to all similarly-situated
employees;


 


(iii)                               a
change in circumstances following the Change of Control, including, without
limitation, a change in the scope of the business or other activities for which
the Executive was responsible immediately prior to the Change of Control, which
has rendered the Executive unable to carry out any material portion of the
authorities, powers, functions, responsibilities or duties attached to the position
held by the Executive immediately prior to the Change of Control, which
situation is not remedied within 30 calendar days after written notice of such
change given by the Executive;


 


(iv)                              the
liquidation, dissolution, merger, consolidation or reorganization of FTD or
transfer of all or substantially all of its business and/or assets, unless the
successor or successors (by liquidation, merger, consolidation, reorganization,
transfer or otherwise) to which all or substantially all of its business and/or
assets have been transferred (directly or by operation of law) shall have
assumed all duties and obligations of FTD under this Agreement; or


 


(v)                                 the
Executive is required to have his principal location of work changed to any
location that is in excess of 50 miles from the Executive’s principal location
of work immediately prior to the Change of Control.


 


For purposes of this Agreement:


 


(i)                                     “Change
of Control” shall mean:


 


(A)                              the
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than 50% of the combined voting power of the
then-


 


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outstanding voting
securities entitled to vote generally in the election of directors (“Voting
Stock”) of FTD, Inc. or FTD, respectively; provided, however, that for purposes
of this subsection (A), the following acquisitions shall not constitute a
Change of Control:  (1) any acquisition
directly from FTD, Inc. or FTD, (2) any acquisition by FTD, Inc., FTD, any
subsidiary of FTD, Inc. or FTD or any employee benefit plan (or related trust)
sponsored or maintained by FTD, Inc. or FTD or any such subsidiary or (3) any
acquisition by any of Perry Acquisition Partners, L.P., Bain Capital, Inc.,
Fleet Private Equity Co. Inc. or any of their respective affiliates;


 


(B)                                a
change in a majority of the members of the Board occurs (1) within one year
following the public announcement of an actual or threatened election contest
(within the meaning of Rule 14a-11 under the Exchange Act) or the filing of a
Schedule 13D or other public announcement indicating a Person intends to effect
a change in control of FTD, Inc. or FTD or (2) as a result of a majority of the
members of the Board having been proposed, designated or nominated by a Person
(other than FTD, Inc. or FTD through the Board or duly authorized committees
thereof or through the exercise of contractual rights);


 


(C)                                consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of FTD, Inc. or FTD (a “Business
Combination”), in each case, unless, following such Business Combination, (1)
more than 50% of the Voting Stock of the entity resulting from such Business
Combination is held in the aggregate by (x) the holders of securities entitled
to vote generally in the election of directors of FTD, Inc. or FTD immediately
prior to such transaction, (y) any employee benefit plan (or related trust)
sponsored or maintained by FTD, Inc. or FTD or such entity or any subsidiary of
any of them or (z) any of Perry Acquisition Partners, L.P., Bain Capital, Inc.,
Fleet Private Equity Co. Inc. or any of their respective affiliates and (2) at
least half of the members of the board of directors of the entity resulting
from such Business Combination were members of the Board at the time of the
execution of the initial agreement, or the action of the Board providing for
such Business Combination; or


 


(D)                               approval
by the stockholders of FTD, Inc. or FTD of a complete liquidation or
dissolution of FTD, Inc. or FTD; and


 


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(ii)                                  “Change
of Control Severance Period” shall mean the period of time commencing on the
date of a Change of Control and continuing until the earliest of (A) the
second anniversary of such Change of Control, (B) the Executive’s death, or (C)
the Executive’s retirement.


 


4.                                       Severance
Compensation.


 


(a)                                  Severance
Following a Change of Control.  If
the Executive is entitled to receive benefits pursuant to the terms of
Section 3(a) or Section 3(b):


 


(i)                                     The Executive, within five business days after
the Executive’s demand therefor, shall be entitled to a lump sum payment in an
amount equal to (A) base salary for two years (at the highest rate in effect
for any period during the three-year period prior to the date of termination),
plus (B) two times the Executive’s target performance bonus as set by the Board
for the fiscal year in which the Change of Control or the date of termination
occurs, whichever is higher, plus (C) any pro rata performance bonus to which
the Executive may be entitled pursuant to this Agreement for the fiscal year in
which the Change of Control or the date of termination occurs, whichever is
higher; and


 


(ii)                                  For
two years following the date of termination (the “Continuation Period”), the
Executive will be provided, at no cost to the Executive, with (A) health
benefits substantially similar to those which the Executive was receiving or
entitled to receive immediately prior to the date of termination; provided,
however, that any such benefits otherwise receivable by the Executive
pursuant to this clause (a)(ii)(A) will be reduced to the extent comparable
benefits are actually received by the Executive from another employer during
the Continuation Period, and any such benefits actually received by the
Executive shall be reported by the Executive to FTD, (B) life insurance and
disability insurance or coverage at least equivalent to that the Executive was
receiving or entitled to receive immediately prior to the date of termination
and (C) reasonable and customary executive outplacement services in an amount
not to exceed $20,000.


 


(b)                                 Other
Severance Payments.  FTD shall have
the right to terminate the Executive’s employment at any time during the term
of this Agreement by giving the Executive written notice of the effective date
of the termination.  If (i) this
Agreement is not renewed pursuant to Section 1 or (ii) the Executive’s
employment is terminated (A) without Cause by FTD (other than during the Change
of Control Severance Period) or (B) by the Executive following the Executive’s
assignment to a position that represents a material diminution in the
Executive’s operating responsibilities (other than during the Change of Control
Severance Period) (it being understood that a change in the Executive’s title
shall not by itself entitle the Executive to terminate the Executive’s
employment and


 


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receive the right to
severance payments under this paragraph), the Executive will be paid (1)
continuing salary for one year from the effective date of any such non-renewal
or termination of employment and (2) any pro rata performance bonus to which
the Executive may be entitled pursuant to this Agreement; provided, however,
that in no event shall the Executive be entitled to any payment under this
Section 4(b) if the Executive is in breach of the Confidentiality and
Non-Competition Agreement.


 


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


 


5.                                       Confidential
Information and Non-Competition. 
The Executive and FTD previously entered into the Confidentiality and
Non-Competition Agreement, which provides for (a) non-disclosure of
confidential information, (b) non-competition and
(c) non-solicitation of customers, suppliers and employees.  The Executive hereby acknowledges that such
agreement shall continue in full force and effect in accordance with the terms
thereof from and after the date hereof and that such continuing force and
effect is a material inducement to FTD’s entering into this Agreement.  Any severance payment made in
accordance with the terms of this Agreement shall be deemed to constitute
consideration for both the Executive’s termination of employment and the Executive’s
agreement regarding non-competition set forth herein and in the Confidentiality
and Non-Competition Agreement.


 


6.                                       Limitation
on Payments and Benefits. 
Notwithstanding any other provision of this Agreement to the contrary,
in the event that it shall be determined (as hereafter provided) that any
payment or distribution by FTD or any of its affiliates to the Executive or for
the Executive’s benefit, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to
or by reason of any other agreement, policy, plan, program or arrangement,
including without limitation any stock option, performance share, performance
unit, stock appreciation right or similar right, or the


 


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lapse or termination of
any restriction on or the vesting or exercisability of any of the foregoing,
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”) (or any successor provision
thereto), by reason of being considered “contingent on a change in ownership or
control” of FTD within the meaning of Section 280G of the Code (or any
successor provision thereto), or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such taxes, then such
payments and benefits to be paid or provided shall be reduced to an amount (but
not below zero) that would result in the maximum possible net after tax
receipts to the Executive from all such payments or distributions (determined
by reference to the present value determined in accordance with
Section 280G(d)(4) of the Code (or any successor provision thereto) of all
such payments net of all such taxes, or any interest or penalties with respect
to such taxes, determined by applying the highest marginal rate under
Section 1 of the Code (or any successor provision thereto) that applied to
the Executive’s taxable income for the immediately preceding taxable year) (the
“Reduced Amount”).  The fact that the
Executive’s payments or benefits may be reduced by reason of the limitations
contained in this paragraph will not of itself limit or otherwise affect any of
the Executive’s other rights other than pursuant to this Agreement.  If it is determined that the Executive
should receive a Reduced Amount, FTD will provide the Executive notice to that
effect and a copy of the detailed calculation thereof.  The Executive will then be entitled to
designate the payments or benefits to be so reduced in order to give effect to
this paragraph.  In the event that the
Executive fails to make such designation within ten business days of
notification of the reduction in payments or benefits is required pursuant to
this paragraph, FTD may effect such reduction in any manner it deems
appropriate.


 


7.                                       Miscellaneous.  This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Illinois, without giving effect to the conflicts of laws principles thereof.  The Executive and FTD consent to
jurisdiction and venue in any federal or state court in the City of
Chicago.  This Agreement and the
Confidentiality and Non-Competition Agreement state the entire agreement and
understanding regarding the Executive’s employment with FTD.  This Agreement supercedes and replaces in
its entirety the Letter Agreement.  This
Agreement may be amended only by a written document signed by both the
Executive and FTD.  No delay or failure
to exercise any right under this Agreement waives such rights under the
Agreement.  If any provision of this
Agreement is partially or completely invalid or unenforceable, then that
provision shall only be ineffective to such extent of its invalidity or
unenforceability, and the validity or enforceability of any other provision of
this Agreement shall not be affected. 
Any controversy relating to this Agreement shall be settled by
arbitration in Chicago, Illinois in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, except as otherwise provided in
the Confidentiality and Non-Competition Agreement.  In the event of any inconsistency between this Agreement and any
personnel policy or manual of FTD with respect to any matter, this Agreement shall
govern the matter.


 


(Signature page follows)


 


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IN WITNESS WHEREOF, the undersigned have hereunto set
their hands as of the date first set forth above.


 


 


	
   

  	
  FLORISTS’ TRANSWORLD DELIVERY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /S/ ROBERT L. NORTON

  	
   

  
	
   

  	
   

  
	
   

  	
  Its: CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /S/ ANN HOFFERBERTH

  	
   

  
	
   

  	
  Ann Hofferberth

  
				



 


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