Document:

Exhibit

10.4

CONFIDENTIALITY AND

NON-COMPETITION AGREEMENT

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT dated                        

between Florists’ Transworld Delivery Inc. (the “Company”) and                       

(the “Executive”).

In consideration of the obligations of the Company and

the consideration to be received by the Company pursuant to the Employment

Agreement, dated as of the date hereof (the “Employment Agreement”) between the

Company and the Executive, the Company and the Executive 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 one year after the termination of the Executive’s employment under the

Employment Agreement for any reason, the Executive shall not participate,

operate, manage, consult, join, control or engage, directly or indirectly, for

himself 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 Inc., 1-800-FLOWERS.COM, Inc., PC

Flowers & Gifts.com Inc.,(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

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 himself, his immediate family or any

trust on behalf of himself or his 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 his 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 his 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, FTD, Inc., a Delaware corporation and the direct parent corporation of

the Company (“FTDI”), or any of its or their subsidiaries or affiliated

companies, 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),

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, FTDI, any predecessor of

the Company, FTDI or any of the Company’s, or FTDI’s subsidiaries.  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, 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 his duties for the Company, and

shall return to the Company all files, correspondence or other communications

(including any such materials in electronic format) received, maintained or

originated by the Executive during the course of his employment.

(c)   No Interference and

Non-Solicitation.  During the

Restricted Period, the Executive shall not, whether for his own account or for

the account of any other individual, partnership, firm, corporation or other

business organization (other than the Company), solicit, endeavor to entice

away from the Company, FTDI, or any of the Company’s or FTDI’s subsidiaries, or

otherwise interfere with the relationship of the Company or any of its

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, FTDI or

any of the Company’s or FTDI’s subsidiaries

 

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(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, FTDI, any

predecessor of the Company or FTDI or any of the Company’s or FTDI’s

subsidiaries (a “Customer”); provided, however, that this

Section 1(c) shall not prohibit the Executive from employing, for his 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.

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 under the

Employment Agreement 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.       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, FTDI or any of its or their subsidiaries or

affiliated companies in violation of this Agreement and that the Company would

by reason of such competition be entitled to injunctive relief in a court of

appropriate jurisdiction, and the Executive further consents and stipulates to

the entry of such injunctive relief in such a court prohibiting the Executive

from competing with the Company or  FTDI

or any of its or their subsidiaries or affiliated companies in violation of

this Agreement.

Section 4.       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 and the

Executive has to any former employers or any other entity.  The Executive further represents and

warrants that he has not brought to the Company, and will not at any time bring

to the Company, any materials, documents or other property of any nature of a

former employer.

Section 5.       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 the City of

Chicago.

(b)   Entire Agreement.  This Agreement and any other agreement or

document delivered in connection with this Agreement, including the Employment

Agreement and the Restricted Shares 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.

 

3

 

(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; Wavier; 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)    Arbitration.

(i)            Any controversy or claim arising out

of or relating to this Agreement, or the breach thereof, shall be settled by

arbitration in Chicago, Illinois in accordance with the commercial arbitration

rules of the American Arbitration Association. 

Judgment upon the award rendered in the arbitration may be entered in

any court having jurisdiction.

(ii)           Notwithstanding the clause (i)

above, the Executive acknowledges and understands that the provisions of this

Agreement are of a special and unique nature,

 

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the loss of which cannot be accurately compensated for

in damages by an action at law, and that the breach or threatened breach of the

provisions of this Agreement would cause the Company irreparable harm.  In the event of a breach or threatened

breach by the Executive of the provisions of Section 1, the Company shall

be entitled to seek to obtain a court-ordered injunction restraining the

Executive from the breach or threatened breach upon the terms and conditions as

the court ordering the injunction may impose.

 

IN WITNESS WHEREOF, the parties hereto have executed

this Agreement as of the date first above written.

Florists’ Transworld

Delivery Inc.

 

 

 

 

	

  By:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  

 

 

 

 

	

   

  
	

  [Signature of Executive]

  

 

 

5Exhibit

10.5

 

 

FORM OF

NON–QUALIFIED STOCK OPTION GRANT AGREEMENT

 

FTD, INC.

 

[Date]

 

[Participant]

______________

______________

______________

 

Re:          FTD, Inc. Grant of Non–Qualified

Stock Option

 

Dear ______________:

 

FTD, Inc. (the “Company”)

is pleased to advise you (the “Participant”) that, pursuant to the

Company’s 2002 Long–Term Equity Incentive Plan (the “Plan”), the

Special Subcommittee of the Compensation Committee of the Company’s Board of

Directors (the “Subcommittee”) has granted to you an option (the “Option”)

to acquire shares of the Company’s Class A Common Stock, par value $.01 per

share (the “Common Stock”), as set forth below (the “Option Shares”),

subject to the terms and conditions set forth herein and in the Plan:

 

	

  Number of Option

  Shares

  	

   

  
	

  Date of Grant

  	

   

  
	

  Exercise Price

  per Option Share

  	

   

  
	

  Vesting Dates of

  Option Shares

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  Expiration Date

  of All Option Shares

  	

   

  

 

The Option is not

intended to be an “incentive stock option” within the meaning of Section 422 of

the Internal Revenue Code of 1986.

The Option is intended to

conform in all respects with, and is subject to all applicable provisions of,

the Plan (which is incorporated herein by reference).  Certain capitalized terms used herein shall have the meanings

ascribed to them but not otherwise defined in the Plan.  Inconsistencies between this Agreement and

the Plan shall be resolved in accordance with the terms of the Plan.

 

 

 

1.             Option.

(a)           Term.  Subject to the terms and conditions set

forth herein and in the Plan, the Company hereby grants to you (or such other

persons as permitted by paragraph 6 below) an Option to purchase the

Option Shares at the exercise price per Option Share set forth above in the

introductory paragraph of this letter (the “Exercise Price”), payable

upon exercise as set forth in paragraph 1(b) below.  The Option shall expire at the close of business on the date set

forth above in the introductory paragraph of this letter (the “Expiration

Date”), which is the tenth anniversary of the date of grant set forth above

in the introductory paragraph of this letter (the “Grant Date”), subject

to earlier expiration as provided in paragraph 2(c) below should you cease to

be an employee, officer or director of the Company or a Subsidiary.  The Exercise Price and the number and kind

of shares of Common Stock or other property for which the Option may be

exercised shall be subject to adjustment as provided in paragraph 7 below.

(b)           Payment of Option Price.  Subject to paragraph 2 below, the Option may

be exercised in whole or in part upon payment of an amount (the “Option

Price”) equal to the product of (i) the Exercise Price and

(ii) the number of Option Shares to be acquired.  Payment of the Option Price shall be made by one or more of the

following means:

(i)            in cash (including

check, bank draft, money order or wire transfer of immediately available

funds);

(ii)           by delivery of

outstanding shares of Common Stock with a Fair Market Value on the date of

exercise equal to the Option Price;

(iii)          by simultaneous

sale through a broker reasonably acceptable to either the Subcommittee or the

Committee of Option Shares acquired on exercise, as permitted under

Regulation T of the Federal Reserve Board;

(iv)          by authorizing the

Company to withhold from issuance a number of Option Shares issuable upon

exercise of the Option which, when multiplied by the Fair Market Value of a

share of Common Stock on the date of exercise, is equal to the Option Price; or

(v)           by any combination

of the foregoing.

2.             Exercisability/Vesting and Expiration.

(a)           Normal Vesting.  The Option granted hereunder may be

exercised only to the extent it has become vested.  The Option shall vest in increments of [___%] commencing on the

[_____] anniversary of the Grant Date and shall become fully vested on the

[_____] anniversary of the Grant Date, as indicated by the Vesting Dates of

Option Shares set forth in the introductory paragraph of this letter.

(b)           Normal Expiration.  In no event shall any part of the Option be

exercisable after the Expiration Date.

(c)           Effect on Vesting and Expiration

of Employment Termination. 

Notwithstanding paragraphs 2(a) and (b) above, the following special

vesting and expiration rules 

 

2

 

shall apply if your

employment or service with the Company terminates prior to the Option becoming

fully vested and/or prior to the Expiration Date:

(i)            Death or

Disability.  If you die or become

subject to a Disability while an employee, officer or director  of, or otherwise performing services for, the

Company or a Subsidiary, then (A)  the unvested portion of the Option shall

expire and be forfeited immediately upon such death or Disability and (B) the

vested portion of the Option shall expire up to 180 days from the date of your

death or Disability, but in no event after the Expiration Date; provided in the

case of a Disability, that you do not engage in Competition during such 180–day

period unless you receive written consent to do so from the Board or the

Subcommittee or the Committee.

(ii)           Retirement.  If you cease to be an employee, officer or

director of, or to perform other services for, the Company or a Subsidiary upon

the occurrence of your retirement, then, at the discretion of either the

Subcommittee or the Committee (A) any portion of the Option which has not yet

vested shall expire and be forfeited immediately upon such retirement;

provided, however, that, in the discretion of either the Subcommittee or the

Committee, all or any portion of the unvested portion of the Option may become

fully vested and exercisable, and (B) the exercise period for all or any

portion of the Option that is exercisable on the effective date of your

retirement shall remain (provided that you do not engage in Competition during

such 90–day period unless you receive written consent to do so from the

Board or the Subcommittee or the Committee) exercisable for, and shall

otherwise terminate at the end of, a period of 90 days after the effective date

of your retirement, but in no event after the Expiration Date.

(iii)          Discharge for

Cause.  If you cease to be an

employee, officer or director  of, or to

perform other services for, the Company or a Subsidiary due to Cause, or if you

do not become an employee, officer or director of, or do not begin performing

other services for, the Company or a Subsidiary for any reason, then all of the

Option shall expire and be forfeited immediately upon such cessation  or

non–commencement, whether or not then vested and exercisable.  In connection with such a Discharge for

Cause, the Company, at the discretion of either the Subcommittee or the

Committee, may repurchase all or any portion of any Option Shares issued

hereunder; provided that any such repurchase shall be subject to the

limitations set forth in Section 6(e)(iii) of the Plan.  The repurchase price for any Shares

repurchased by the Company pursuant to the preceding sentence shall be the

lower of Fair Market Value or the terminated participant’s cost thereof, as

determined in good faith by the Subcommittee or the Committee

(iv)          Other Termination.  Unless otherwise determined by the

Subcommittee or the Committee, if you cease to be an employee, officer or

director of, or to perform other services for, the Company or a Subsidiary

other than by death, Disability, retirement or Discharge for Cause, then (A)

the Option shall survive such cessation and (B) the Option shall expire and

otherwise terminate up to 30 days from the date of such cessation, but in no

event after the Expiration Date; provided that you do not engage in Competition

during such 30–day period unless you receive written consent to do so

from the Board or the Subcommittee or the Committee.

 

3

 

(d)           Change in Control.  If there is a Change in Control, then the

Option shall become vested and fully exercisable as to all the Option Shares

upon the consummation of such Change in Control.

3.             Procedure for Exercise.  You may exercise all or any portion of the Option, to the extent

it has vested and is outstanding, at any time and from time to time prior to

the Expiration Date, by delivering written notice to the Company in the form

attached hereto as Exhibit A, together with payment of the Option Price

in accordance with the provisions of paragraph 1(b) above. The Option may not

be exercised for a fraction of an Option Share.

4.             Withholding of Taxes.

(a)           Participant Election. Unless

otherwise determined by the Subcommittee or the Committee, you may elect to

deliver shares of Common Stock (or have the Company withhold Option Shares acquired

upon exercise of the Option) to satisfy, in whole or in part, the amount the

Company is required to withhold for taxes in connection with the exercise of

the Option.  Such election must be made

on or before the date the amount of tax to be withheld is determined.  Once made, the election shall be

irrevocable.  The fair market value of

the shares to be withheld or delivered will be the Fair Market Value as of the

date the amount of tax to be withheld is determined.

(b)           Company Requirement.  The Company, to the extent permitted or

required by law, shall have the right to deduct from any payment of any kind

(including salary or bonus) otherwise due to you, an amount equal to any

federal, state or local taxes of any kind required by law to be withheld with respect

to the delivery of Option Shares under this Agreement.

5.             Grant of Reload Option.  In the event you exercise all or any portion of the Option (the “Exercised

Option”) and pay all or part of the Option Price with shares of Common

Stock, the Company hereby grants to you (or such other persons as permitted by

paragraph 6 below) an additional option (a “Reload Option”) for a number

of Option Shares equal to the number of shares of Common Stock tendered or

withheld in payment of the Option Price plus the number of shares of Common

Stock, if any, tendered or withheld by you or withheld by the Company to

satisfy any federal, state or local tax withholding requirements in connection

with the exercise of the Exercised Option. 

The terms of each Reload Option, including the date of its expiration

and the terms and conditions of its exercisability and transferability, shall

be the same as the terms of the Exercised Option to which it relates, except

that (i) the grant date for each Reload Option shall be the date of exercise of

the Exercised Option to which it relates and (ii) the exercise price for each

Reload Option shall be the Fair Market Value of the Common Stock on the grant

date of the Reload Option.

6.             Transferability of Option.  Unless either the Subcommittee or the

Committee determines otherwise, you may transfer the Option granted hereunder

only by will or the laws of descent and distribution.  Unless the context requires otherwise, references herein to you

are deemed to include any permitted transferee under this

paragraph 6.  Unless either the

Subcommittee or the Committee determines otherwise, the Option may be exercised

only by: (i) you; (ii) by your executor or administrator or any person to whom

the Option is transferred by will or the laws of descent and distribution; or

(iii) by your guardian or legal representative.

7.             Adjustments. 

In the event of a reorganization, recapitalization, stock split, stock

dividend, combination of shares, merger, consolidation, distribution of assets,

or any other change in the corporate structure or shares of the Company, either

the Subcommittee or the 

 

4

 

Committee shall make such

adjustments as it deems appropriate in the number and kind of shares reserved

for issuance under the Plan, the number and kind of shares covered by the

Option and the Exercise Price specified herein.

8.             Amendment or Substitution of Option.  The terms of the Option may be amended from

time to time by either the Subcommittee or the Committee in its discretion in

any manner that it deems appropriate (including, but not limited to,

acceleration of the date of exercise of the Option);  provided that, except as otherwise provided in paragraph 7 above,

no such amendment shall adversely affect in a material manner any of your

rights under the award without your written consent, and provided further that

neither the Subcommittee nor the Committee shall reduce the exercise price of

the Option without approval of the stockholders of the Company.

* * * * *

 

5

 

                                IN

WITNESS WHEREOF, the undersigned have executed this Non-Qualified Stock Option

Grant Agreement as of the ___ day of _______, 20___.

 

 

	

   

  	

  FTD, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  

 

	

  ACKNOWLEDGED AND AGREED:

  
	

   

  
	

   

  
	

  (Signature of Participant)

  

 

6

 

EXHIBIT A

Form of Letter to be Used

to Exercise Non-Qualified Stock Option

 

___________

Date

______________________

______________________

______________________

Attention:              ____________________

 

 

I wish to exercise the

stock option granted on ________ and evidenced by a Non-Qualified Stock Option

Agreement dated as of ____________, to acquire __________ shares of Common

Stock of _______________, at an option price of $_______ per share. In

accordance with the provisions of paragraph 1 of the Non-Qualified Stock Option

Agreement, I wish to make payment of the exercise price (please check all that apply):

 

in cash

by delivery of shares of Common Stock held by me

by simultaneous sale through a broker of Option Shares

by authorizing the

Company to withhold Option Shares

 

Please issue a certificate for these shares in the following name:

 

	

   

  
	

  Name

  
	

   

  
	

  Address

  
	

   

  

 

 

	

   

  	

  Very truly yours,

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Signature

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Typed or Printed Name

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Social Security Number

  

 

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