EXHIBIT 10.49
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated effective October 15,
1997, is between Colorado Greenhouse Holdings, Inc., a Delaware corporation (the
"Company"), and Xxxxx X. Xxxxxxx ("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 hereby
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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 its
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Chief Executive Officer. 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 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,
provided such involvement does not require any significant services on his part,
Employee shall not engage in any other business activity or activities that
require significant personal services by Employee or 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
$200,000. During the term of this Agreement, the amount of Employee's 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 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 consistent with the
Company's customary sick leave and vacation policies. Employee shall be
entitled to three weeks annual vacation.
(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. Without limiting the
foregoing, the Company shall reimburse Employee for the cost of one home
telephone line plus facsimile equipment.
(e) The Company shall reimburse Employee for reasonable moving
expenses (including the cost of one trip by Employee and his spouse to survey
the Front Range housing market) not to exceed $25,000 within 30 days after
presentation of reasonable documentation thereof.
(f) The Company's compensation committee (the "Compensation
Committee") shall establish a performance based bonus plan that will provide for
annual bonuses of up to 50% of Employee's annual salary based upon achieving
certain milestones. Currently, as to Employee, the Compensation Committee
expects to authorize a bonus of $100,000 if annual EBT projections are achieved,
plus $10,000 for each additional $500,000 in EBT above projections.
(g) The Company shall grant to Employee the option to acquire shares
of the Company's common stock as provided in the Incentive and Nonincentive
Stock Option Certificates (the "Certificate") attached as Exhibits A-1 and A-2.
In addition, the Company may grant to Employee such other stock options as may
be approved by the Compensation Committee.
(h) The Company shall negotiate a vehicle and mileage allowance with
and for Employee.
4. Term/Severance.
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(a) Unless sooner terminated in accordance with Section 5, the term of
this Agreement shall be from the date of this Agreement until December 31, 2002.
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 termination
of this Agreement.
(b) If this Agreement is terminated by the Company prior to the end of
its term pursuant to any provision other than Section 5(d), then the Company
shall pay to Employee one year's annual salary in 12 monthly installments as
severance. The Company shall deduct from such severance payment all applicable
deductions and withholdings.
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. In addition, as provided in the
Company's stock option plan and the Certificate vested stock option may be
exercised by Employee's heirs.
(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;
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(ii) the sale, exchange or other disposition in one
transaction of 51% 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);
(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) the 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.
(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 under this Agreement at the time of such termination.
(f) Either party may elect to terminate this Agreement by giving
notice to the other party at least 60 days prior to any anniversary of the
execution of this Agreement.
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.
6. Confidential Information.
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(a) As used in this Agreement, the term "Confidential Information"
shall include all nonpublic information concerning or arising from the
Company's business, including, without limitation, trade secrets used or
developed by the Company in connection with its business; information concerning
the manner and details of the Company's operation, organization and management;
financial information and/or documents and nonpublic policies, procedures and
other printed or written material generated or used in connection with the
Company's business; the Company's business plans and strategies; the identities
of the Company's customers and the specific individual customer representatives
with whom the Company works and details of the Company's relationship with such
customers and customer representatives; the identities of distributors,
suppliers, contractors and vendors utilized in the Company's business and
details of the Company's relationship with such distributors, suppliers,
contractors and vendors; the nature of fees and charges made to the Company's
customers; nonpublic forms, contracts and other documents used in the Company's
business; the nature and content of computer software used in the
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Company's business, whether proprietary to the Company or used by the Company
under license from a third party; and/or other information concerning know-how,
research, inventions, copyrights, trademarks, patents, processes, designs,
methods, concepts, prospects, customers, employees, contractors, earnings,
products, services, formulas, recipes, compositions, machines, equipment,
systems, and/or prospective and executed contracts and other business
arrangements.
(b) Except in connection with and in furtherance of Employee's
official duties with and on behalf of the Company, Employee shall not at any
time or in any manner use, copy, disclose, divulge, transmit, convey, transfer
or otherwise communicate any Confidential Information to any person or entity,
either directly or indirectly, without the Company's prior written consent.
(c) Employee acknowledges that during the term of this Agreement,
Employee will have access to Confidential Information, all of which shall be
made accessible to Employee only in strict confidence; that unauthorized
disclosure of Confidential Information will damage the Company's business; that
Confidential Information would be susceptible to immediate competitive
application by a competitor of the Company; that the Company's business is
substantially dependent on access to and the continuing secrecy of Confidential
Information; that Confidential Information is unique and proprietary to the
Company and known only to Employee, the Company and certain key employees and
contractors of the Company; and that title, ownership, possession and control of
Confidential Information shall at all times remain vested in the Company.
Consequently, Employee acknowledges that the restrictions contained in this
Section 6 are reasonable and necessary for the protection of the Company's
business.
(d) All documents or other records containing or referring to
Confidential Information that are prepared by or provided to Employee during the
term of this Agreement or that come into Employee's possession in connection
with Employee's performance of services under this Agreement are and shall
remain the Company's property. Employee shall not copy or use any such
documents or Confidential Information for any purpose not relating directly to
Employee's duties under this Agreement, nor shall Employee market or in any way
provide or make available to any party other than the Company any of the
Confidential Information, except pursuant to prior written authorization from
the Company. Upon the termination of this Agreement for any reason and
regardless of the circumstances of such termination or the existence of any
dispute between Employee and the Company following or concerning the termination
of Employee's employment, or upon the request of the Company, its successors or
assigns, Employee shall immediately deliver to the Company or its designee (and
will not keep in Employee's possession or deliver to anyone else) any and all
devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, materials, equipment, other
documents or property, or reproductions of any aforementioned items belonging to
the Company, its successors or assigns. Notwithstanding any other provision of
this Agreement, this Agreement shall not bar Employee from complying with any
subpoena or court order, provided that prior to doing so Employee shall give the
Company's Manager prior written notice, at the Company's principal place of
business, of Employee's receipt of any such subpoena or court order as far as
possible in advance of the appearance time set forth in the subpoena or court
order.
(e) Employee acknowledges that the Company has received and in the
future will receive from third parties confidential or proprietary information,
and that the Company must maintain the confidentiality of such information and
use it only for proper purposes. Employee shall not use or disclose any such
information except as permitted by the Company or the third party to whom the
information
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belongs.
(f) Employee shall not, during Employee's employment with the
Company, improperly use or disclose any proprietary information or trade secrets
belonging to any former employer or any third party to whom Employee owes a duty
of nondisclosure.
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 eighteen 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 or within a 50 mile radius of any
area where the Company is or contemplates doing business at the time of such
termination, 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 business that has services or products competitive
or similar to the services or products of the Company or its affiliates.
(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 eighteen 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 or of any of its affiliates to leave the employ of the
Company or any affiliate, (ii) in any way interfere with the relationship
between the Company and any employee or between an affiliate and any employee of
the affiliate, (iii) directly or indirectly hire any employee of the Company or
of any affiliate to work for any organization of 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 or any of its affiliates was involved during
the term of this Agreement or his employment.
(c) Employee acknowledges that through his employment with the
Company he will acquire access to information suited to immediate application by
a business in competition with the Company. Accordingly, Employee considers the
foregoing restrictions on his future employment or business activities in all
respects reasonable. Employee specifically acknowledges that the Company and its
licensees, as well as the Company's competitors, distribute their products
throughout the United States. Employee therefore specifically consents to the
foregoing geographic restriction on competition and believes that such a
restriction is reasonable, given the scope of the Company's business and the
nature of Employee's position with the Company.
(d) Employee acknowledges the following provisions of Colorado law,
set forth in Colorado Revised Statutes (S) 8-2-113(2):
"Any covenant not to compete which restricts the right of any person
to receive compensation for performance of skilled or unskilled labor
for any employer shall be void, but this subsection (2) shall not
apply to:
(a) Any contract for the purchase and sale of a business or
the assets
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of a business;
(b) Any contract for the protection of trade secrets;
(c) Any contract provision providing for the recovery of
the expense of educating and training an employee who
has served an employer for a period of less than two
years;
(d) Executive and management personnel and officers and
employees who constitute professional staff to
executive and management personnel."
Employee acknowledges that this Agreement is a contract for the protection of
trade secrets under (S) 8-2-113(2)(b), and is intended to protect the
confidential information and trade secrets of the Company; and that Employee is
an executive and management employee or professional staff to executive or
management personnel, within the meaning of (S) 8-2-113(2)(d).
(e) Employee acknowledges and is prepared for the possibility that
his standard of living may be reduced during the noncompetition period provided
in this Section following the termination of this Agreement, and fully accepts
any risk associated with that possibility.
8. Injunctive Relief. Upon a breach or threatened breach by Employee of
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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.
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. Inventions and Discoveries.
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(a) Employee agrees to disclose promptly to the Company the full
details of any and all ideas, processes, recipes, trademarks and service marks,
works, inventions, discoveries, marketing and business ideas, and improvements
or enhancements to any of the foregoing, that Employee conceives, develops or
creates alone or with the aid of others during the term of Employee's employment
with the Company (whether or not conceived, developed or created during regular
working hours) that: (i) relate to the Company's business; (ii) result from any
work performed by Employee for the Company; (iii) involve
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the use of the Company's equipment, supplies, facilities, or trade secret
information; (iv) result from or are suggested by any work done at the Company's
request or by any Company employee other than Employee, or relate to any
problems specifically assigned to Employee; or (v) result from Employee's access
to any of the Company's memoranda, notes, records, drawings, sketches, models,
maps, customer lists, research results, data, formula, specifications,
inventions, processes, recipes, equipment, or the like.
(b) Employee shall assign to the Company, without further
consideration, Employee's entire right to any concept, idea or invention
described in the preceding subsection, which shall be the sole and exclusive
property of the Company whether or not patentable. Employee also acknowledges
that all original works of authorship which are made by Employee (solely or
jointly with others), within the scope of Employee's employment, and which are
protectable by copyright, are "works made for hire," as that term is defined in
the United States Copyright Act (17 U.S.C. (S) 101). To the extent that any such
works, by operation of law, cannot be "works made for hire," Employee hereby
assigns to the Company all right, title, and interest in and to such works and
to any related copyrights.
12. 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 0000 Xxxx
Xxxxxx Xxxx #00, Xxxx Xxxxxx, Xxxxxxxx
00000;
(ii) If to Employee: to his home at 000 Xxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000;
or such other address as either party may hereafter designate by notice as
herein provided. Notwithstanding the foregoing provisions of this Section 12, 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 other than
Employee, and if to Employee, by hand delivery to him.
13. Governing Law. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of Colorado.
14. Assignment. The Company may assign its rights and obligations under
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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 signed or delegated by Employee.
15. Entire Agreement. This Agreement sets forth the entire agreement 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.
16. Amendments. No provision of this Agreement shall be altered, amended,
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revoked or waived except by an instrument in writing signed by the party sought
to be charged with such amendment, revocation or waiver.
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17. Binding Effect. Except as otherwise provided herein, this Agreement
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shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs, successors and assigns.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first above written.
THE COMPANY:
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COLORADO GREENHOUSE HOLDINGS, INC.
By: /s/ X. X. Xxxxxxx Xx
-----------------------------------
Name: X. X. Xxxxxxx Xx
---------------------------------
Title: Chairman Compensation Comm.
--------------------------------
EMPLOYEE:
--------
/s/ Xxxxx X. Xxxxxxx
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XXXXX X. XXXXXXX
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VESTING SCHEDULE FOR XXXXX X. XXXXXXX AND XXXX FINE
STOCK OPTIONS
EXERCISE PRICE: $4.25
XXXXXXX FINE
------- ----
250,000 options 100,000 options
(94,116 incentive and (all incentive)
155,884 non-incentive)
Incentive Non-incentive Calendar Year Number
--------- ------------- ------------- ------
23,529 --- 1997 23,529
23,529 51,961 1998 23,529
23,529 51,962 1999 23,529
23,529 51,962 2000 23,529
2001 5,884
EXHIBIT A-1
Certificate No. 1997-[ ]
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COLORADO GREENHOUSE HOLDINGS, INC.
----------------------------------
INCENTIVE STOCK OPTION CERTIFICATE
----------------------------------
Option Holder: Xxxxx X. Xxxxxxx
Option Price: $4.25 per share
Date of Grant: October 15, 1997
Number of Shares: 94,116
1. This certifies that the above named Option Holder (the "Holder") is the
holder of an incentive stock option (the "Option") to acquire, at the exercise
price per share specified above, the number of shares of the $0.001 par value
common stock ("Stock"), of Colorado Greenhouse Holdings, Inc., a Delaware
corporation (the "Company"), specified above. The Option evidenced by this
Certificate is intended to qualify as an incentive stock option within the
meaning of section 422 of the Internal Revenue Code of 1986, as amended from
time to time (the "Code"), and is granted as of the date specified above and
expires, unless sooner terminated, at 5:00 p.m., Boulder, Colorado time, October
31, 2004.
2. This Certificate is issued as evidence of the Option granted the Holder
pursuant to the Company's 1996 Stock Option Plan effective November 19, 1996
(the "Plan"). Subject to the express terms of this Option, the Option is
subject to all terms and conditions of the Plan, which provisions are
incorporated herein by reference. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to them in the Plan. A copy
of the Plan is available on request from the Company.
3. The Option shall become exercisable as follows; 23,529 shares on the date
hereof and an additional 23,529 on each of October 15, 1998, 1999 and 2000.
4. In the event that any of the following occurs prior to October 15, 2000, all
shares of the Option shall vest on the date of such event, provided the
continuous employment requirement set forth in the Plan is satisfied: (i) there
occurs a greater than 40% change in ownership of the outstanding capital stock
of the Company, other than a transfer of such capital stock to a successor
entity that is a related party or affiliate of the Company or to the beneficial
owners of the current stockholders, or (ii) the Company consummates an
underwritten initial public offering.
5. Notwithstanding the terms of Section 6.3(d)(ii) and (iii) of the Plan, if
Holder's employment by the Company is terminated because the Holder becomes
Disabled within the Option Period, or because Holder dies within the Option
Period, while employed by the Company or within the three-month period referred
to in Section 6.3(d)(iv), the Option may be exercised by Holder or those
entitled to do so under his will or by the laws of descent and distribution
within three years following his death or disability (if otherwise within the
Option Period) but not thereafter.
6. Except as explicitly set forth in this Certificate, under the provisions of
the Plan or as the Board of Directors may determine in its sole and absolute
discretion, the Option shall not be exercisable as to any shares as to which the
continuous employment requirement is not satisfied, regardless of the
circumstances under which the Holder's employment by the Company is terminated.
The number of shares as to which the Option may be exercised is cumulative, so
that once the Option is exercisable as to any shares it shall continue to be
exercisable as to such shares until expiration or termination of the Option as
provided in the Plan. A form of written notice for the purpose of exercising
the Option is attached. Pursuant to the Plan,
A-1
exercising the Option is attached. Pursuant to the Plan, the Company may require
the Holder to execute a Shareholders' Agreement in connection with exercise of
the Option.
Date: October 15, 1997 Colorado Greenhouse Holdings, Inc., a
Delaware corporation
By: /s/ X.X Xxxxxxx Xx.
--------------------------------
Name: X.X. XXXXXXX XX.
------------------------------
Title: CHAIRMAN, COMPENSATION, COMM.
----------------------------
A-2
FORM OF OPTION EXERCISE NOTICE
------------------------------
The undersigned Holder hereby exercises the Option described in this
Certificate as to the number of shares specified below and includes herewith the
purchase price for such shares.
Number of Shares: ___________________________________________
Signature of Holder: ___________________________________________
Printed Name: ___________________________________________
Fiduciary Capacity, if any: ___________________________________________
Address: ___________________________________________
___________________________________________
Telephone: ___________________________________________
Signature Guarantee: ___________________________________________
Date: ___________________________________________
X-0
XXXXXXX X-0
Xxxxxxxxxxx Xx. 0000-[ ]
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COLORADO GREENHOUSE HOLDINGS, INC.
----------------------------------
NONINCENTIVE STOCK OPTION CERTIFICATE
-------------------------------------
Option Holder: Xxxxx X. Xxxxxxx
Option Price: $4.25 per share
Date of Grant: October 15, 1997
Number of Shares: 155,884
1. This certifies that the above named Option Holder (the "Holder") is the
holder of an incentive stock option (the "Option") to acquire, at the exercise
price per share specified above, the number of shares of the $0.001 par value
common stock ("Stock"), of Colorado Greenhouse Holdings, Inc., a Delaware
corporation (the "Company"), specified above. The Option evidenced by this
Certificate is granted as of the date specified above and expires, unless sooner
terminated, at 5:00 p.m., Boulder, Colorado time, October 31, 2004.
2. This Certificate is issued as evidence of the Option granted the Holder
pursuant to the Company's 1996 Stock Option Plan effective November 19, 1996
(the "Plan"). Subject to the express terms of this Option, the Option is
subject to all terms and conditions of the Plan, which provisions are
incorporated herein by reference. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to them in the Plan. A copy
of the Plan is available on request from the Company.
3. The Option shall become exercisable as follows; 51,961 shares on each of
October 15, 1998 and 1999, and 51,962 shares on October 15, 2000.
4. In the event that any of the following occurs prior to October 15, 2000, all
shares of the Option shall vest on the date of such event, provided the
continuous employment requirement set forth in the Plan is satisfied: (i) there
occurs a greater than 40% change in ownership of the outstanding capital stock
of the Company, other than a transfer of such capital stock to a successor
entity that is a related party or affiliate of the Company or to the beneficial
owners of the current stockholders, or (ii) the Company consummates an
underwritten initial public offering.
5. Notwithstanding the terms of Section 6.3(d)(ii) and (iii) of the Plan, if
Holder's employment by the Company is terminated because the Holder becomes
Disabled within the Option Period, or because Holder dies within the Option
Period, while employed by the Company or within the three-month period referred
to in Section 6.3(d)(iv), the Option may be exercised by Holder or those
entitled to do so under his will or by the laws of descent and distribution
within three years following his death or disability (if otherwise within the
Option Period) but not thereafter.
6. Except as explicitly set forth in this Certificate, under the provisions of
the Plan or as the Board of Directors may determine in its sole and absolute
discretion, the Option shall not be exercisable as to any shares as to which the
continuous employment requirement is not satisfied, regardless of the
circumstances under which the Holder's employment by the Company is terminated.
The number of shares as to which the Option may be exercised is cumulative, so
that once the Option is exercisable as to any shares it shall continue to be
exercisable as to such shares until expiration or termination of the Option as
provided in the Plan. A form of written notice for the purpose of
A-1
the Company may require the Holder to execute a Shareholders' Agreement in
connection with exercise of the Option.
Date: October 15, 1997 Colorado Greenhouse Holdings, Inc., a
Delaware corporation
By: /s/ X.X Xxxxxxx Xx.
--------------------------------
Name: X.X. Xxxxxxx Xx.
------------------------------
Title: Chairman, Compensation, Comm.
----------------------------
A-2
FORM OF OPTION EXERCISE NOTICE
------------------------------
The undersigned Holder hereby exercises the Option described in this
Certificate as to the number of shares specified below and includes herewith the
purchase price for such shares.
Number of Shares: ___________________________________________
Signature of Holder: ___________________________________________
Printed Name: ___________________________________________
Fiduciary Capacity, if any: ___________________________________________
Address: ___________________________________________
___________________________________________
Telephone: ___________________________________________
Signature Guarantee: ___________________________________________
Date: ___________________________________________
A-3
