EXHIBIT 10.15
AGREEMENT
Agreement, dated as of December 6, 1999, by and between Verdant Brands,
Inc., a Minnesota corporation (the "Company"), and Xxxxxxx Xxxxxxxx, an
individual resident of Eden Prairie, Minnesota ("Xxxxxxxx").
WHEREAS, Xxxxxxxx has heretofore rendered executive employment services for
the Company as its President and CEO and, more recently as Chairman of its Board
of Directors; and
WHEREAS, Xxxxxxxx and the Company are parties to an Employment Agreement
dated September 23, 1992 and amended December 5, 1997 (the "Employment
Agreement"), which sets forth the terms and conditions of Xxxxxxxx'x employment
by the Company; and
WHEREAS, pursuant to an Agreement, dated April 29, 1997 (the "Stock
Purchase Agreement"), the Company sold 30,000 (on a post reverse stock split
basis) shares of its common stock to Xxxxxxxx, and Xxxxxxxx made payment of the
purchase price of such shares by delivering to the Company his installment
promissory note which currently has an outstanding principal balance of $65,625
(the "Note"); and
WHEREAS, the Company and Xxxxxxxx have mutually agreed to terminate the
employment relationship between Xxxxxxxx and the Company, to enter into a
consulting agreement, pursuant to which Executive will render ongoing personal
services for the Company as its Chairman, and to modify Xxxxxxxx'x equity and
other interests in the Company, on the terms and subject to the conditions set
forth in this agreement.
NOW THEREFORE, in consideration of the premises, the respective
undertakings of the Company and Xxxxxxxx set forth below and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Xxxxxxxx and the Company agree as follows:
1. Termination of Employment.
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1.01. Resignation. Effective as of December 1, 1999 (the "Effective
-----------
Date"), Xxxxxxxx shall resign as the Chairman, Chief Executive Officer and an
employee of the Company.
1.02 Termination of Employment Agreement. Effective as of the
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Effective Date, the Employment Agreement shall be terminated, shall be null and
void and shall have no continuing legal force or effect on either Xxxxxxxx or
the Company, except that the Company shall be obligated to make payment to
Xxxxxxxx of any salary, automobile allowance or expense reimbursement owing to
Xxxxxxxx for periods prior to the Effective Date.
1.03 Severance Payment. On the Effective Date, the Company shall
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make a cash severance payment to Xxxxxxxx in the amount of $235,000. Such
payment shall be in lieu of, and in complete satisfaction of, any obligations to
make severance or termination payments under the Employment Agreement or
otherwise. Such amount shall be inclusive of all amounts owing to Xxxxxxxx for
salary, accrued bonus, or vacation pay owing to Xxxxxxxx as of the Effective
Date. In addition, through the first anniversary of the Effective Date, the
Company shall, at its cost, provide medical, dental and disability income
insurance for Xxxxxxxx and his dependents under the Company's employee insurance
programs. After the first anniversary of the Effective Date and so long as
Xxxxxxxx is continuing to render services to the Company under the Consulting
Agreement described in section 3, the Company shall continue to provide such
insurance coverage for Xxxxxxxx so long as he can be covered
under the Company's insurance programs, but Xxxxxxxx shall reimburse the Company
for the cost of such insurance coverage.
1.04 Release. As essential inducement to the Company to enter into
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this agreement, and as consideration for the commitments of the Company set
forth in this agreement, Xxxxxxxx agrees as follows:
(a) By this agreement Xxxxxxxx and the Company intend to settle any
and all claims Xxxxxxxx has or may have against the Company as a
result of its hiring Xxxxxxxx, Goldberg's employment with the Company,
and the cessation of Xxxxxxxx'x employment with the Company, and
Xxxxxxxx acknowledges and agrees that the severance payment described
in section 1.03, the consulting arrangement contemplated by section 3
and the equity restructurings described in section 2 constitute
adequate consideration for the release set forth in this section 1.04.
(b) Xxxxxxxx, on behalf of himself and his heirs, personal
representatives, successors and assigns, and each of them, hereby
releases, acquits and forever discharges the Company and its officers,
directors, insurers, agents and employees and each of them (the
"Released Parties"), from any and all liabilities, claims, demands and
causes of action, either in law or in equity, known or unknown,
liquidated or unliquidated, which Xxxxxxxx ever had, has, or may claim
to have, for, upon, or by reason of any matter, act or thing prior to
the date of this agreement, including but not limited to, any cause of
action Xxxxxxxx could have asserted in any litigation against any of
the Released Parties, any cause of action or claim relating to
Xxxxxxxx'x association with or employment by the Company, and/or any
cause of action or claim relating to the cessation of Xxxxxxxx'x
employment with the Company. This release specifically encompasses,
but is not limited to, claims that could be brought under the
Minnesota Human Rights Act, Minn. Stat section 363.01 et seq., Title
VII, 42 U.D. C. section 2000(e) et seq., the Age Discrimination in
Employment Act, 29 U.S.C. section 621 et seq., the Americans with
Disabilities Act, 42 U.S.C. sections 12101-122213, and any other state
or federal statute, including any attorneys' fees that could be
awarded in connection with these or any other claims. This release
also specifically encompasses any and all claims grounded in contract
or tort theories, including, but not limited to breach of contract,
interference with contractual relations, promissory estoppel, breach
of the implied covenant of good faith and fair dealing, breach of
employee handbooks, manuals or other policies, wrongful discharge,
wrongful discharge in violation of public policy, defamation,
intentional or negligent infliction of emotional distress, breach of
fiduciary duty, negligent hiring, retention or supervision or any
other tort theory based on intentional or negligent conduct; provided,
however, that this release does not cover any claims arising from (i)
the commitments of the Company described in this agreement or the
exhibits to this agreement, or (ii) the officer and director
indemnification provisions of the Company's bylaws.
(c) Xxxxxxxx understands that he has twenty-one (21) days to consider
whether he should execute this agreement. Xxxxxxxx further
understands, however, that he is not required to take the entire
twenty-one (21) day period to decide whether he wishes to execute this
agreement and that he may do so on an accelerated basis without
prejudice to his own or the Company's rights under this agreement.
(d) Xxxxxxxx understands that he has the right to rescind or revoke
this agreement for any reason within fifteen (15) days after he signs
it. Xxxxxxxx understands that if he wishes to rescind, the rescission
must be in writing an must be hand-delivered or mailed
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to Xxxx Xxxxxxxxx, the Company's President at the Company's offices at
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx. Xxxxxxxx
also understands that if he elects to rescind this agreement, all
payments made to him concurrently with the execution of this agreement
or prior to such rescission will be immediately returned to the
Company.
(e) Xxxxxxxx acknowledges that the benefits contained in this
agreement which flow to Xxxxxxxx from the Company are subject to
termination, reduction, or cancellation in the event that Xxxxxxxx
takes any action or engages in any conduct deemed by the Company to be
in violation of this agreement.
(f) The parties agree that the terms and conditions of this agreement
are to be held in strict confidence. Xxxxxxxx agrees not to disclose
the terms and conditions of this agreement to any past, present, or
future employee of the Company, or any other individual or entity,
except his attorney, accountant, tax consultant, state and federal tax
authorities, or as may be required by law; and the Company also agrees
not to disclose the terms and conditions of this agreement, except as
it deems necessary to its managers, officers, directors, shareholders,
insurers, attorneys, accountants, auditors, state and federal tax
authorities, as may be required by disclosure requirements of
applicable securities laws or as may otherwise be required by law.
(g) This agreement shall not in any way be construed as an admission
by the Company that it has acted wrongfully with respect to Xxxxxxxx
or any other person, or that Xxxxxxxx has any rights whatsoever
against the Company, and the Company specifically disclaims any
liability to, or wrongful acts against, Xxxxxxxx or any other person,
on the part of itself, its employees or its agents.
2. Restructuring of Xxxxxxxx'x Equity Interests.
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2.01 Cancellation of Stock Purchase Indebtedness. Effective as of the
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Effective Date, the Company shall cancel the Note and Xxxxxxxx shall thereafter
be released from any continuing obligation to make payment to the Company of his
obligations under the Note. As soon as practicable after the Effective Date,
the Company shall deliver to Xxxxxxxx (a) the original copy of the Note marked
"PAID IN FULL", and (b) the certificates evidencing the shares of the Company's
common stock which have been pledged to the Company to secure the payment of the
Note. As of the Effective Date, the Stock Purchase Agreement, the Note and the
stock pledge agreement entered into by Xxxxxxxx pursuant to the Stock Purchase
Agreement shall terminate, shall be null and void and shall be of no continuing
legal force or effect, except that the Company shall continue to be obligated to
make the cash bonus payment specified in section 6(a)(ii) of the Stock Purchase
Agreement to Xxxxxxxx on or before December 31, 1999.
2.02 Issuance of Stock Options. Concurrently with the execution of
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this agreement, Company shall issue to Xxxxxxxx nonqualified stock options for
the purchase of 52,000 shares of the Company's common stock at an exercise price
equal to the fair market value of such shares on the Effective Date. Such stock
options shall be fully vested, shall have a term of five (5) years from the
Effective Date and shall be evidenced by a stock option agreement in the form
attached to this agreement as exhibit A.
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3. Future Services by Xxxxxxxx/Consulting Agreement.
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3.01 Chairman of the Board. Commencing as of the Effective Date,
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Xxxxxxxx shall be retained by the Company to render consulting and advisory
services to the Company, on the terms and conditions set forth in this section
3, as Chairman of the Company's Board of Directors. In such capacity, Xxxxxxxx
shall provide the Company and its senior executives with consultation and advice
on such strategic undertakings as shall be approved by the Company's Board of
Directors and, at the request of the Board or the Company's Chief Executive
Officer, shall provide oversight and/or become involved in operational matters
or business development initiatives that the Company undertakes. Xxxxxxxx shall
render such services for up to one-third of his business time and during the
balance of his business time shall be entitled to render such other services to
other entities as are not inconsistent with his responsibilities under this
section 3, his fiduciary responsibilities to the Company or his ongoing
noncompetition or nondisclosure commitments to the Company under sections 4 and
5 of this agreement, although the rendering of services by Xxxxxxxx pursuant to
this section 3 shall constitute one of Xxxxxxxx'x primary business activities
during the Term (as defined in section 3.02). The consulting arrangement
contemplated by this section 3 shall be referred to as the "Consulting
Agreement".
3.02 Term. Unless terminated at an earlier date pursuant to section
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3.07, the term of the Consulting Agreement shall extend for a period of three
(3) years after the Effective Date (the "Term").
3.03 Compensation. For services rendered by Xxxxxxxx pursuant to the
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Consulting Agreement, the Company shall pay Xxxxxxxx an annual fee of $125,000,
which amount shall be paid to him on a semi-monthly basis.
3.04 Status. In rendering services for the Company pursuant to the
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Consulting Agreement, Xxxxxxxx shall be acting as an independent contractor and
not as an employee, partner or agent of the Company. As an independent
contractor, Xxxxxxxx shall have no authority, express or implied, to commit or
obligate the Company in any manner whatsoever, except as specifically authorized
from time to time in writing by the Company's Board of Directors or its Chief
Executive Officer, which authorization may be general or specific. Xxxxxxxx
shall be responsible for the payment to applicable tax authorities of all
federal, state or local income and FICA taxes payable with respect to
compensation payable to Xxxxxxxx for services rendered pursuant to the
Consulting Agreement; provided, however, that if the Company is determined to be
liable for collection and/or remittance of any such taxes, Xxxxxxxx shall
immediately reimburse the Company for all such payment made by the Company.
3.05 Expense Reimbursement. Xxxxxxxx shall be reimbursed by the
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Company in accordance with the policies and procedures that are established from
time to time by the Company for all reasonable and necessary out-of-pocket
expenses that are incurred by Xxxxxxxx in performing his duties under the
Consulting Agreement; provided, that (a) reimbursement for travel expenses
incurred by Xxxxxxxx shall be prorated if Xxxxxxxx also renders services for any
other entity during any trip on which he renders services for the Company, and
(b) Xxxxxxxx shall not be entitled to any reimbursement by the Company for
commuting between his personal residence and the Company's principal place of
business.
3.06 Grant of Options. As an incentive to Xxxxxxxx to render
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consulting services pursuant to the Consulting Agreement which will increase the
value of the Company's stock, the Company shall grant to Xxxxxxxx an option for
the purchase of up to 50,000 shares of the Company's common stock at a purchase
price equal to the fair market value of the Company's stock on the Effective
Date. Such option shall have a term of five (5) years and shall vest and be
exercisable on a monthly basis in equal installments over the Term, with
acceleration of vesting on a sale or "change of control" of the Company and,
subject to section 3.07(c), termination of all unvested options at such time as
Xxxxxxxx ceases rendering consulting services for the Company pursuant to the
Consulting Agreement. Such option shall be evidenced by a nonqualified stock
option agreement in the form attached to this agreement as exhibit B which shall
be executed by Xxxxxxxx and the Company
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concurrently with the execution of this agreement. During the Term, Xxxxxxxx
shall not be entitled to participate in the Company's Non-employee Director
Stock Option Plan.
3.07 Termination.
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(a) The provisions of the Consulting Agreement shall be terminated
prior to the expiration of the Term upon any of the following events:
(i) Goldberg's death, or
(ii) The Board of Directors of the Company determines (with
Xxxxxxxx abstaining from such determination if he is then
a member of the Board of Directors) that Xxxxxxxx has
become disabled, or
(iii) The Board of Directors notifies Xxxxxxxx that the
Consulting Agreement is being terminated for "cause", or
(iv) Either the Company or Xxxxxxxx elects to terminate the
Consulting Agreement (which election may be made with or
without cause) and gives the other party at least sixty
(60) days prior written notice of such election,
(v) Xxxxxxxx is not reelected to the Company's Board of
Directors by the shareholders of the Company.
(b) For purposes of this section 3.07, the term "cause" shall mean:
(i) Xxxxxxxx has breached the provisions of section 4 or 5 of
the Consulting Agreement in any material respect, or
(ii) Xxxxxxxx has engaged in willful and material misconduct,
including willful and material failure to perform his
duties under the Consulting Agreement, or
(iii) Xxxxxxxx has committed fraud, misappropriation or
embezzlement in connection with the Company's or its
affiliates' business, or
(iv) Xxxxxxxx has been convicted or has pleaded guilty or nolo
contendere to criminal misconduct constituting a gross
misdemeanor or a felony, or
(v) Xxxxxxxx'x use of narcotics, liquor or illicit drug has
had a detrimental effect on the performance of his
responsibilities under the Consulting Agreement.
(c) In the event that (i) the Consulting Agreement is terminated
pursuant to section 3.07(a)(v), or (ii) the Company (through a vote of
a majority of the Company's Board of Directors) elects to terminate
Xxxxxxxx'x engagement pursuant to section 3.07(a)(iv) without "cause",
then (x) the Company shall pay to Xxxxxxxx, as xxxxxxxxx pay, his
monthly fee for the balance of the Term, and (y) all options which
would otherwise have vested under section 3.06 during the contract
year of termination (i.e. the fiscal period ending on the next
November 30th) shall be accelerated and shall become fully vested as
of the date of termination; provided, however that the Company's
obligation to make such severance payments pursuant to this section
3.07(c)(i) subsequent to the second
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anniversary of the Effective Date shall be offset by any consideration
in excess of $200,000, which Xxxxxxxx receives from the rendering of
personal services for any other entity.
3.08 Office Space. For a period of twelve (12) consecutive months,
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commencing at the election of Xxxxxxxx (but no later than April 1, 2000), the
Company shall reimburse Xxxxxxxx up to $1,000 per month for the costs of
maintaining off-site office space and support services, although the Company
shall have no obligation to make such expense reimbursement to Xxxxxxxx after
March 31, 2001. To the extent that office space is available (on a workable
basis) at the Company's principal offices in Bloomington, Minnesota, the Company
will also make an office space and support services available to Xxxxxxxx at
that site for use by Xxxxxxxx in rendering services under the Consulting
Agreement.
3.09 Business Development Incentive Bonus. If during the Term, (a)
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(i) the Board of Directors of the Company requests Xxxxxxxx'x assistance in
completing a sale of the Company, or (ii) the Board of Directors or the Chief
Executive Officer of the Company requests Xxxxxxxx'x assistance in completing a
sale of any business unit of the Company or the acquisition of any other
business, and (b) Xxxxxxxx actively participates in the negotiations leading to
the completion of such sale or acquisition as one of the Company's principal
representatives, the Company shall pay to Executive, concurrently with the
closing of any such sale or acquisition, a fee equal to the lesser of (aa)
$250,000, or (bb) 1% of the consideration paid or received by the Company or its
shareholders in such sale or acquisition transaction; provided, however, that
the fee shall be reduced to .5% of the sale or acquisition consideration if the
Company is obligated to pay a success fee to any investment banker or business
broker in connection with such transaction.
4. Confidentiality Agreement. Except as permitted or directed by the
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Company's Board of Directors, during the term of the Consulting Agreement or at
any time thereafter, Xxxxxxxx shall not divulge, furnish or make accessible to
anyone or use in any way (other than in the ordinary course of the business of
the Company) any confidential or secret knowledge or information of the Company
that Xxxxxxxx has acquired or become acquainted with or will acquire or become
acquainted with prior to the termination of (a) his employment by the Company or
(b) the Consulting Agreement, whether developed by himself or by others,
concerning any trade secrets, confidential or secret designs, processes,
formulae, plans, devices or material (whether or not patented or patentable)
directly or indirectly useful in any aspect of the business of the Company, any
customer or supplier lists of the Company, any confidential or secret
development or research work of the Company, or any other confidential
information or secret aspects of the business of the Company. Xxxxxxxx
acknowledges that the above-described knowledge or information constitutes a
unique and valuable asset of the Company and represents a substantial investment
of time and expense by the Company, and that any disclosure or other use of such
knowledge or information other than for the sole benefit of the Company would be
wrongful and would cause irreparable harm to the Company. Both during and after
the term of the Consulting Agreement, Xxxxxxxx will refrain from any acts or
omissions that would reduce the value of such knowledge or information to the
Company. The foregoing obligations of confidentiality shall not apply to any
knowledge or information that is now published or which subsequently becomes
generally publicly known in the form in which it was obtained from the Company,
other than as a direct or indirect result of the breach of this agreement by
Xxxxxxxx.
5. Noncompetition Covenant.
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5.01 Agreement Not to Compete. During the Term, Xxxxxxxx shall not,
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directly or indirectly, engage in any activities (e.g., as an advisor,
consultant, principal, agent, partner, officer, director, employee or otherwise)
on behalf of any entity which involves (a) the rendering of services or the
providing of counsel or advice on matters in which such entity is in competition
with any business
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then being conducted by the Company or with respect to which the Company is
actively seeking to becoming engaged, or (b) rendering counsel, advice or
assistance to any entity in connection with the acquisition of any business
which is competition with any business then being conducted by the Company or
respect to which the Company is actively seeking to become engaged. During the
Term and for a period of one (1) year after the termination of the Consulting
Agreement, Xxxxxxxx shall not hire any person who was an employee of the Company
at any time during the Term, or induce or cause any such employee to leave the
employment of the Company.
5.02 Geographic Extent of Covenant. The obligations of Xxxxxxxx under
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this section 5 shall apply to any geographic area in which the Company (a) has
engaged in business during the Term through production, promotional, sales or
marketing activity, or otherwise, or (b) has otherwise established its goodwill,
business reputation or any customer or supplier relations.
5.03 Limitation of Covenant. This covenant shall not preclude
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Xxxxxxxx from rendering services for any entity (the "Other Entity") that is
engaged in a business that is competitive with any business that is being
conducted by the Company so long as (a) the services rendered by Xxxxxxxx only
relate to a non-competitive component of the Other Entity's business operations,
(b) Xxxxxxxx notifies the Company's Board of Directors and Chief Executive
Officer in writing of the identity of the Other Entity and the nature of the
services to be provided for the Other Entity prior to commencement of services
for the Other Entity, and (c) Xxxxxxxx does not otherwise violate the provisions
of section 4 of this agreement or any fiduciary responsibilities to the Company
that arise from his membership on the Company's Board of Directors.
6. Miscellaneous.
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6.01 Governing Law. This agreement is made under and shall be
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governed by and construed in accordance with the laws of the state of Minnesota.
6.02 Entire Agreement. This agreement evidences the entire agreement
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of Xxxxxxxx and the Company relating to the Consulting Agreement and the other
matters discussed herein and supersedes all prior agreements and understandings,
whether written or oral, relative to such matter, and the parties hereto have
made no agreements, representations or warranties relating to the subject matter
of this agreement which are not set forth herein. No amendment or modification
of this agreement shall be deemed effective unless made in writing and signed by
both the Company and Xxxxxxxx.
6.03 Assignment. This agreement and the rights and obligations of the
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Company and Xxxxxxxx hereunder shall not be assignable, in whole or in part, by
either party without the prior written consent of the other party.
6.04 No Waiver. No term or condition of this agreement shall be
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deemed to have been waived, nor shall there be any estoppel to enforce any
provisions of this agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
6.05 Severability. To the extent any provision of this agreement
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shall be invalid or unenforceable, it shall be considered deleted from this
agreement and the remainder of such provision and of this agreement shall be
unaffected and shall continue in full force and effect. In furtherance and not
in limitation of the foregoing, should the duration or geographical extend of,
or business activities covered by, any provision of this agreement be in excess
of that which is valid and enforceable under applicable law, then such provision
shall be construed to cover only that duration, extent or activities
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which may validly and enforceably be covered. Xxxxxxxx acknowledges the
uncertainty of the law in this respect and expressly stipulates that this
agreement be given the construction which renders its provisions valid and
enforceable to the maximum extent (not exceeding its express terms) possible
under applicable law.
6.06 Injunctive Relief. Xxxxxxxx agrees that it would be difficult to
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compensate the Company fully for damages for any violation of the provisions of
this agreement, including without limitation the provisions of sections 4 and/or
5 of this agreement. Accordingly, Xxxxxxxx specifically agrees that the company
shall be entitled to temporary and permanent injunctive relief to enforce the
provisions of this agreement and that such relief may be granted without the
necessity of proving actual damages. This provision with respect to injunctive
relief shall not, however, diminish the right of the Company to claim and
recover damages in addition to injunctive relief.
6.07 Legal Review. Xxxxxxxx acknowledges that he has been advised
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by the Company to consult with legal counsel prior to executing this agreement
and that he has entered into this agreement after securing such legal advice as
he as determined to be necessary to understand the legal significance to him of
the release set forth in section 1.04 and the other provisions of this
agreement.
IN WITNESS WHEREOF, Xxxxxxxx and the Company have executed this agreement
as of the date set forth on the first paragraph.
VERDANT BRANDS, INC.
By /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx, President
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
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Exhibit A
VERDANT BRANDS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
(FULLY-VESTED)
Stock Option Agreement, made and entered into as of the 1/st/ day of
December, 1999, between Verdant Brands, Inc., a Minnesota corporation (the
"Company"), and Xxxxxxx Xxxxxxxx, an individual resident of the state of
Minnesota ("Xxxxxxxx").
WHEREAS, Xxxxxxxx and the Company have entered into a separate
agreement, dated December 6, 1999, pursuant to which the Company has agreement
to issue certain stock options to Xxxxxxxx in connection with the termination of
his employment with the Company; and
WHEREAS, the Company has adopted the Verdant Brands, Inc.1996
Incentive and Stock Option Plan (the "Plan") which permits issuance of stock
options for the purchase of shares of common stock of the Company, and the
Company has taken all necessary actions to grant the following option pursuant
and subject to the terms of the Plan.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and Xxxxxxxx hereby agree
as follows:
1. Grant of Option. The Company hereby grants Xxxxxxxx the right
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and option (hereinafter called the "Option") to purchase all or any part of an
aggregate of fifty-two thousand (52,000) shares of the Company's common stock
(the "Shares") at the option price of $2.81 per share on the terms and
conditions set forth in this agreement and in the Plan. The Option shall not be
an Incentive Stock Option governed by the provisions of Section 422 of the
Internal Revenue Code of 1986, as amended. A copy of the Plan will be furnished
upon request of Xxxxxxxx.
2. Exercise of Option Rights. The Option may be exercised by
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Xxxxxxxx, in whole or in part, at any time prior to the close of business on
December 1, 2004, but the Option shall expire and Xxxxxxxx shall have no rights
under the Option or this agreement subsequent to such date. Xxxxxxxx shall not
have any of the rights of a shareholder with respect to any of the Shares until
such Shares shall be issued to Xxxxxxxx upon the proper exercise of the Option.
3. Method of Exercise of Option. Subject to the foregoing, the
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Option may be exercised in whole or in part from time to time by serving written
notice of exercise on the Company at its principal office in Bloomington,
Minnesota. The notice shall set forth the number of Shares for which the Option
is being exercised and shall be accompanied by payment of the purchase price of
the Shares being purchased.
4. Miscellaneous.
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(a) Neither Xxxxxxxx nor Xxxxxxxx'x legal representative, legatees or
distributees, as the case may be, will be or will be deemed to be the holder of
any Shares subject to the Option unless and until the Option has been exercised
and the purchase price of the Shares purchased has been paid.
(b) The Option may not be transferred, except by will or the laws of
descent and distribution or except to persons who are related to Xxxxxxxx by
blood or marriage (or trusts for the benefit of Xxxxxxxx or any such persons).
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(c) If there shall be any change in the stock subject to the Option
through merger, consolidation, reorganization, recapitalization, stock dividend,
stock split or other change in the corporate structure of the Company,
appropriate adjustments shall be made by the Company in the number of Shares and
the purchase price of the Shares in order to prevent dilution or enlargement of
the option rights granted hereunder.
(d) The Company shall at all times during the term of the Option
reserve and keep available such number of shares of the Company's common stock
as will be sufficient to satisfy the requirements of this agreement.
IN WITNESS WHEREOF, the Company and Xxxxxxxx have executed this
agreement on the date set forth in the first paragraph.
VERDANT BRANDS, INC.
By /s/ Xxxx Xxxxxxxxx
-----------------------------------
Xxxx Xxxxxxxxx, President
[the "Company"]
/s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxx
["Xxxxxxxx"]
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Exhibit B
VERDANT BRANDS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
(CONSULTANT)
Stock Option Agreement, made and entered into as of the 1/st/ day
of December, 1999 (the "Effective Date"), between Verdant Brands, Inc., a
Minnesota corporation (the "Company"), and Xxxxxxx Xxxxxxxx, an individual
resident of the state of Minnesota ("Xxxxxxxx").
WHEREAS, Xxxxxxxx and the Company have entered into a separate
agreement, dated December 6, 1999, pursuant to which the Company has agreed to
issue certain stock options to Xxxxxxxx in connection with the performance by
Xxxxxxxx of consulting services to the Company (the "Consulting Agreement"); and
WHEREAS, the Company has adopted the Verdant Brands, Inc. 1996
Incentive and Stock Option Plan (the "Plan") which permits issuance of stock
options for the purchase of shares of common stock of the Company, and the
Company has taken all necessary actions to grant the following option pursuant
and subject to the terms of the Plan.
NOW THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and Xxxxxxxx hereby
agree as follows:
1. Grant of Option. The Company hereby grants Xxxxxxxx the
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right and option (hereinafter called the "Option") to purchase all or any part
of an aggregate of fifty thousand (50,000) shares of the Company's common stock
(the "Shares") at the option price of $2.81 per share on the terms and
conditions set forth in this agreement and in the Plan. The Option shall not be
an Incentive Stock Option governed by the provisions of Section 422 of the
Internal Revenue Code of 1986, as amended. A copy of the Plan will be furnished
upon request of Xxxxxxxx.
2. Exercise of Option Rights. (a) Subject to earlier
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termination as set forth in section 2(c) of this Agreement, the Option shall in
all events terminate five (5) years after the Effective Date and shall
thereafter be null and void.
(b) Except as otherwise provided in section 2(a) or section 2(c) of
this Agreement, the Option shall vest and shall be exercisable with respect to
1388 Shares for each full calendar month between the Effective Date and the
earlier of (i) the date of termination of the Consulting Agreement, or (ii) the
date of exercise.
(c) Notwithstanding the foregoing, (i) if (x) the Consulting
Agreement is terminated by the Company without "cause" pursuant to section
3.07(a)(iv) of the Consulting Agreement, or (y) the Consulting Agreement is
terminated pursuant to section 3.07(a)(v) thereof, the Option shall be deemed to
vest with respect to the number of Shares that would have vested in the year of
termination if the Consulting Agreement had not been terminated, and (ii) if, at
a time when the Consulting Agreement is in effect, (x) the Company or
substantially all of its assets are sold or otherwise acquired, by merger or
otherwise, or (y) a "change of control", as defined in section 2(d) occurs with
respect to the Company, the Option shall be immediately exercisable with respect
to all of the Shares.
(d) For purposes of section 2(c), the term "change of control" shall
mean the occurrence of any of the following events: (i) a public announcement
that any person has acquired or has the right to acquire
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beneficial ownership of 51% or more of the then outstanding shares of common
stock of the Company and, for this purpose, the terms "person" and "beneficial
ownership" shall have the meanings provided in Section 13(d) of the Securities
Exchange Act of 1934 or related rules promulgated by the Securities and Exchange
Commission; (ii) the commencement of or public announcement of an intention to
make a tender or exchange offer for 51% or more of the then outstanding shares
of the common stock of the Company; or (iii) the Board of Directors of the
Company, in its sole and absolute discretion, determines that there has been a
sufficient change in the stock ownership of the Company to constitute a change
in control of the Company.
3. Method of Exercise of Option. Subject to the foregoing, the
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Option may be exercised in whole or in part from time to time by serving written
notice of exercise on the Company at its principal office in Bloomington,
Minnesota. The notice shall set forth the number of Shares for which the Option
is being exercised and shall be accompanied by payment of the purchase price of
the Shares being purchased.
4. Miscellaneous.
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(a) Neither Xxxxxxxx nor Xxxxxxxx'x legal representative, legatees or
distributees, as the case may be, will be or will be deemed to be the holder of
any Shares subject to the Option unless and until the Option has been exercised
and the purchase price of the Shares purchased has been paid.
(b) The Option may not be transferred, except by will or the laws of
descent and distribution or except to persons who are related to Xxxxxxxx by
blood or marriage (or trusts for the benefit of Xxxxxxxx or any such persons).
(c) If there shall be any change in the stock subject to the Option
through merger, consolidation, reorganization, recapitalization, stock dividend,
stock split or other change in the corporate structure of the Company,
appropriate adjustments shall be made by the Company in the number of Shares and
the purchase price of the Shares subject to the Option in order to prevent
dilution or enlargement of the option rights granted hereunder.
(d) The Company shall at all times during the term of the Option
reserve and keep available such number of shares of the Company's common stock
as will be sufficient to satisfy the requirements of this agreement.
IN WITNESS WHEREOF, the Company and Xxxxxxxx have executed this
agreement on the date set forth in the first paragraph.
VERDANT BRANDS, INC.
By /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx, President
[the "Company"]
/s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxx Xxxxxxxx
["Xxxxxxxx"]
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