EXHIBIT 10.47
SEVERANCE AND NONCOMPETE AGREEMENT
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THIS SEVERANCE AND NONCOMPETE AGREEMENT (this "Agreement"), dated
effective as of December 31, 1996, is between Colorado Greenhouse, Inc., a
Delaware corporation (the "Company"), and Xxxxxxx Xxxxx Xxxx ("Employee").
In consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
1. Employment. The Company hereby employs Employee and Employee
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hereby agrees to be employed by the Company for the period and upon the terms
and conditions hereinafter set forth.
2. Capacity and Duties. Employee shall be employed by the Company as
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its Chief Operating Officer or in such other executive capacity as the board of
directors shall determine. During his employment, Employee shall perform the
duties and bear the responsibilities commensurate with his position and shall
serve the Company faithfully and to the best of his ability, under the direction
of the board of directors and the duly elected officers of the Company. Employee
shall devote his entire working time, attention and energies to the business of
the Company. His actions shall at all times be such that they do not discredit
the Company or its products and services. Except for his involvement in personal
investments, Employee shall not engage in any other business activity or
activities that require significant personal services by Employee that, in the
judgment of the board of directors, may conflict with the proper performance of
Employee's duties hereunder.
3. Compensation.
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(a) For all services rendered by Employee, the Company shall pay
Employee during the term of this Agreement an annual salary as set forth herein,
payable semimonthly in arrears. Employee's initial annual salary shall be
$120,000. During the term of this Agreement, the amount of Employee's annual
salary shall be reviewed at periodic intervals and, upon agreement of the
parties hereto, appropriate adjustments in such salary may be made.
(b) In addition to salary payments as provided in Section 3(a),
the Company shall provide Employee, during the term of this Agreement, with the
benefits of such insurance plans, hospitalization plans and other employee
fringe benefit plans as shall be generally provided to executive employees of
the Company and for which Employee may be eligible under the terms and
conditions thereof. Nothing herein contained shall require the Company to adopt
or maintain any such employee benefit plans.
(c) During the term of this Agreement, except as otherwise
provided in Section 5(b), Employee shall be entitled to sick leave and annual
vacation consistent with the Company's customary sick leave and vacation
policies.
(d) During the term of this Agreement the Company shall
reimburse Employee for all reasonable out-of-pocket expenses incurred by
Employee in connection with the business of the Company and in the performance
of his duties under this Agreement upon presentation to the Company of an
itemized accounting of such expenses with reasonable supporting data.
4. Term. Unless sooner terminated in accordance with Section 5, the
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term of this Agreement shall be 1 year commencing on the date hereof, and
thereafter shall continue from year to year unless and until either party shall
give notice to the other at least 90 days prior to the
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end of the original or then current renewal term of his or its intention to
terminate at the end of such term. The provisions of Sections 6, 7, 8 and 10
shall remain in full force and effect for the time periods specified in such
Sections notwithstanding the earlier termination of this Agreement.
5. Termination.
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(a) If Employee dies during the term of this Agreement, the
Company shall pay his estate the compensation that would otherwise be payable to
him for the month in which his death occurs, and this Agreement shall be
considered terminated on the last day of such month.
(b) If, during the term of this Agreement, Employee is prevented
from performing his duties by reason of illness or incapacity for a continuous
period of 120 days, the Company may terminate this Agreement upon 30 days' prior
notice thereof to Employee or his duly appointed legal representative. For the
purposes of this Section 5(b), a period of illness or incapacity shall be deemed
"continuous" notwithstanding Employee's performance of his duties during such
period for continuous periods of less than 15 days in duration.
(c) The Company may terminate this Agreement upon at least 30
days' prior notice to him upon the happening of any of the following events:
(i) the sale by the Company of substantially all of its
assets to a single purchaser or associated group of purchasers who are
not then affiliates of the Company;
(ii) the sale, exchange or other disposition in one
transaction of 80% or more of the outstanding voting stock of the
Company to or with a person, firm or corporation not then an affiliate
of the Company;
(iii) a bona fide decision by the Company to terminate its
business and liquidate its assets (but only if such liquidation is not
part of a plan to carry on the Company's business through its
shareholders);
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(iv) the merger or consolidation of the Company in a
transaction in which the shareholders of the Company receive less than
50% of the outstanding voting stock of the new or continuing
corporation; or
(v) damage, destruction or other loss (including that
caused by condemnation or similar proceedings) to the Company's
facilities to such an extent that the Company is unable to conduct the
ordinary course of its business for a continuous period of 90 days or
more.
For purposes of this Agreement, the term "affiliate" or "affiliates" means a
person, firm or corporation that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with the
Company.
(d) The Company may terminate this Agreement at any time, upon
10 days' prior notice, for Employee's misconduct or gross negligence or for a
material breach of any obligation created by this Agreement.
(e) The Company may terminate this Agreement at any time for any
or no reason upon payment to Employee of an amount equal to Employee's annual
salary.
6. Confidential Information.
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(a) Employee recognizes and acknowledges that the trade secrets,
know-how and proprietary processes of the Company as may exist from time to
time, as well as confidential business plans, strategies, concepts, prospects
and financial data (collectively, the "Confidential Information") of the Company
are valuable, special and unique assets of the business of the Company. Employee
shall, at all times during his employment by the Company and thereafter, hold in
strictest confidence any and all Confidential Information that may have come or
may come into Employee's possession or within Employee's knowledge. Employee
agrees that neither he nor any person or entity, directly or indirectly,
controlled or under common control with the Employee will for any reason, except
in the course of performing his duties
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hereunder or with the Company's prior express written consent, for himself or
any other person, use or disclose to anyone, exclusive of Company employees,
agents or independent consultants to the Company or any of its subsidiaries or
affiliates, any Confidential Information; provided, however, that Employee may
disclose Confidential Information which has become generally available to the
public other than as a result of any act or failure to act by the Employee.
(b) Employee covenants and agrees that he will, upon termination of
this Agreement or, if later, upon termination of his employment with the
Company, deliver to the Company any and all records, forms, contracts, studies,
reports, appraisals, financial data, lists of names or other customer data, and
any other articles or papers, computer tapes and materials that have come into
his possession by reason of his employment with the Company, whether or not any
of said items were prepared by him, and he shall not retain memoranda or copies
of any of said items.
7. Covenants Not to Compete or Interfere.
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(a) During the term of this Agreement (or, if longer, during the term
of Employee's employment with the Company or any of its affiliates) and for a
period of 18 months after termination of this Agreement (or, if later,
termination of Employee's employment with the Company or any of its affiliates),
Employee shall not, within the United States, directly or indirectly, own,
manage, operate, control, be employed by, participate in or be connected in any
manner with the ownership, management, operation or control of any person, firm
or entity that has services or products competitive with or similar to the
services or products of the Company; provided, however, that nothing in this
Agreement shall prohibit Employee from owning equity interests or securities in
another firm or entity engaged in any activity that, if engaged in by Employee,
would be prohibited hereunder, so long as the equity interests or securities so
owned
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by Employee do not represent in the aggregate more than 10% of the aggregate
voting power of all outstanding equity interests or securities in such firm or
entity.
(b) During the term of this Agreement (or, if longer, during the term
of Employee's employment with the Company or any of its affiliates) and for a
period of 18 months after termination of this Agreement (or, if later,
termination of Employee's employment with the Company or any of its affiliates),
Employee shall not (i) directly or indirectly cause or attempt to cause any
employee of the Company to leave the employ of the Company, (ii) in any way
interfere with the relationship between the Company and any employee or customer
of the Company, (iii) directly or indirectly hire any employee of the Company to
work for any person, firm or entity of or for which Employee is an officer,
director, employee, consultant, independent contractor or owner of an equity or
other financial interest, or (iv) interfere or attempt to interfere with any
transaction in which the Company was involved during the term of this Agreement
or his employment.
(c) In consideration for Employee's agreement to be bound by the
terms of this Section 7(a) and (b), the Company shall upon any expiration or
termination of this Agreement (other than a termination under Section 5(d)), pay
to Employee severance pay in an amount equal to Employee's annual salary as of
the date of such termination or expiration.
8. Injunctive Relief. Upon a breach or threatened breach by Employee
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of any of the provisions of Sections 6 or 7 of this Agreement, the Company shall
be entitled to an injunction restraining Employee from such breach. Nothing
herein shall be construed as prohibiting the Company from pursuing any other
remedies for such breach or threatened breach, including recovery of damages
from Employee.
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9. Waiver of Breach. A waiver by the Company of a breach of any
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provision of this Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by Employee.
10. Severability. It is the desire and intent of the parties that the
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provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision or portion of
this Agreement shall be adjudicated to be invalid or unenforceable, this
Agreement shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of this Section in the particular jurisdiction in which
such adjudication is made.
11. Notices. All communications, requests, consents and other notices
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provided for in this Agreement shall be in writing and shall be deemed given if
mailed by first class mail, postage prepaid, addressed as follows:
(i) If to the Company: to its principal office at X.X. Xxx
000, Xx. Xxxxxx, Xxxxxxxx 00000;
(ii) If to Employee: to Xxxxxxx Xxxxx Xxxx, 0000 Xxxxx Xxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000-0000;
or such other address as either party may hereafter designate by notice as
herein provided. Notwithstanding the foregoing provisions of this Section 11, so
long as Employee is employed by the Company any such communication, request,
consent or other notice shall be deemed given if delivered as follows: if to
the Company, by hand delivery to any executive officer of the Company, and if to
Employee, by hand delivery to him.
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12. Governing Law. This Agreement shall be governed by and construed
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and enforced in accordance with the laws of the State of Colorado.
13. Assignment. The Company may assign its rights and obligations
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under this Agreement to any affiliate of the Company or to any acquirer of
substantially all of the business of the Company, and all covenants and
agreements hereunder shall inure to the benefit of and be enforceable by or
against any such assignee. Neither this Agreement nor any rights or duties
hereunder may be assigned, transferred or delegated by Employee.
14. Entire Agreement. This Agreement sets forth the entire agreement
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and understanding of the parties and supersedes all prior understandings,
agreements or representations by or between the parties, whether written or
oral, which relate in any way to the subject matter hereof.
15. Amendments. No provision of this Agreement shall be altered,
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amended, revoked or waived except by an instrument in writing signed by the
party sought to be charged with such amendment, revocation or waiver.
16. Binding Effect. Except as otherwise provided herein, this
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Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective legal representatives, heirs, successors and
assigns.
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IN WITNESS WHEREOF the parties have executed this Agreement to be
effective as of the date first above written.
THE COMPANY:
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Colorado Greenhouse, Inc., a Delaware
corporation
By:_____________________________________
Name:___________________________________
Title:__________________________________
EMPLOYEE:
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Xxxxxxx Xxxxx Xxxx
By:_____________________________________
Xxxxxxx Xxxxx Xxxx
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