Employment Agreement
Exhibit 10.13
This
Employment Agreement (the “Agreement”) is made and
entered into as of June 1, 2018, by and between Xxxxxx Xxxxx (the
“Executive”) and Planet 13 Holdings, Inc., a Canadian
corporation (the “Company”).
WHEREAS, the
Company desires to employ the Executive on the terms and conditions
set forth herein;
WHEREAS, the
Executive desires to be employed by the Company on such terms and
conditions; and,
WHEREAS, Executive
shall be providing services for Planet 13 Holdings, Inc. and for
the subsidiaries of Planet 13 Holdings, Inc.
NOW,
THEREFORE, in consideration of the mutual covenants, promises, and
obligations set forth herein, the parties agree as
follows:
1. Term.
The Executive’s Employment hereunder shall be effective as of
June 1, 2018, (the “Effective Date”) and shall continue
until the fifth anniversary thereof, unless terminated earlier
pursuant to Section 5 of this Agreement; provided that, on such
third anniversary of the Effective Date and each annual anniversary
thereafter (such date and each annual anniversary thereof, a
“Renewal Date”), the Agreement shall be deemed to be
automatically extended, upon the same terms and conditions, for
successive periods of one year, unless either party provides
written notice of its intention not to extend the term of the
Agreement at least 90 days’ prior to the applicable Renewal
Date. The period during which the Executive is employed by the
Company hereunder is hereinafter referred to as the
“Employment Term.”
2. Position
and Duties.
a. Position.
During the Employment Term, the Executive shall serve as the Chief
Financial Officer of the Company, reporting to the Chief Executive
Officer and to the Board. In such position, the Executive shall
have such duties, authority, and responsibility as shall be
determined from time to time by the Chief Executive Officer, which
duties, authority, and responsibility are consistent with the
Executive’s position. The Executive shall, if requested, also
serve as a member of the board of directors of the Company (the
“Board”) or as an officer or director of any affiliate
of the Company for no additional compensation.
b. Duties.
During the Employment Term, the Executive shall perform such duties
as are ordinary and reasonable for the position listed in Item 2(a)
and shall provide reasonable time and attention to the performance
of the Executive’s duties hereunder.
3. Place
of Performance. The principal place of Executive’s
employment shall be Xxxxxxx, Xxxxxxx Xxxxxx ; provided that, the
Executive may be required to travel on Company business during the
Employment Term.
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4. Compensation.
a. Base
Salary. The Company shall pay the Executive an annual rate
of base salary of CAD $120,000 in periodic installments in
accordance with the Company’s customary payroll practices and
applicable wage payment laws, but no less frequently than
bi-weekly.
The
Executive’s base salary shall be reviewed at least annually
by the Compensation Committee of the Board (the “Compensation
Committee”). However, the Executive’s base salary may
not be decreased during the Employment Term. The Executive’s
annual base salary, as in effect from time to time, is hereinafter
referred to as “Base Salary”.
b. Annual
Bonus.
i. For each calendar
year of the Employment Term, the Executive shall be eligible to
receive an annual bonus (the “Annual Bonus”). However,
the decision to provide any Annual Bonus and the amount and terms
of any Annual Bonus shall be in the sole and absolute discretion of
the Compensation Committee.
ii. The Annual Bonus,
if any, will be paid within two and a half (2 1/2) months after the
end of the applicable calendar year.
iii. Except
as otherwise provided in Section 5, the Annual Bonus will be
subject to the terms of the Company annual bonus plan under which
it is granted.
c. Performance
Bonus.
i. Executive shall be
eligible to receive a performance bonus in accordance with the
performance bonus as established by the Compensation
Committee.
d. Equity
Awards.
i. In consideration of
the Executive entering into this Agreement and as an inducement to
join the Company, on or within thirty days of the Effective Date,
the Company will grant the following equity awards to the Executive
pursuant to the Company’s Restricted Stock Unit Plan: 371,000
restricted stock units, which shall vest in accordance with the
terms of the Restricted Stock Unit Plan. All other terms and
conditions of such awards shall be governed by the terms and
conditions of the Restricted Stock Unit Plan and the applicable
award agreements; and
ii. With respect to
each calendar year of the Company ending during the Employment
Term, the Executive shall be eligible to receive annual equity
awards under the Stock Option Plan and the Restricted Stock Unit
Plan or other equity plans of the Company.
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e. Fringe
Benefits and Perquisites. During the Employment Term, the
Executive shall be entitled to fringe benefits and perquisites
consistent with the practices of the Company, and to the extent the
Company provides similar benefits or perquisites (or both) to
similarly situated executives of the Company, including without
limitation, reimbursement of executives cellular phone expenses, a
monthly vehicle allowance, reimbursement of professional licensing
and agent cards, and reimbursement of reasonable professional
education expenses.
f. Employee Benefits. During the Employment
Term, the Executive shall be entitled to participate in all
employee benefit plans, practices, and programs maintained by the
Company, as in effect from time to time (collectively,
“Employee Benefit Plans”), on a basis which is no less
favorable than is provided to other similarly situated executives
of the Company, to the extent consistent with applicable law and
the terms of the applicable
Employee Benefit
Plans. The Company reserves the right to amend or cancel any
Employee Benefit Plans at any time in its sole discretion, subject
to the terms of such Employee Benefit Plan and applicable law.
Vacation; Paid Time-Off. The Executive shall receive other paid
time-off in accordance with the Company’s policies for
executive officers as such policies may exist from time to
time.
g. Relocation
Expenses. Although Executive and Company do not anticipate
the need to relocate the Executive, the Company shall pay, or
reimburse the Executive for, all reasonable relocation expenses
incurred by the Executive relating to his relocation that is
requested by the Company, should such be required at a future
date.
h. Business
Expenses. The Executive shall be entitled to reimbursement
for all reasonable and necessary out-of-pocket business,
entertainment, and travel expenses incurred by the Executive in
connection with the performance of the Executive’s duties
hereunder in accordance with the Company’s expense
reimbursement policies and procedures.
i. Indemnification.
i. In the event that
the Executive is made a party or threatened to be made a party to
any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (a “Proceeding”),
other than any Proceeding initiated by the Executive or the Company
related to any contest or dispute between the Executive and the
Company or any of its affiliates with respect to this Agreement or
the Executive’s employment hereunder, by reason of the fact
that the Executive is or was a director or officer of the Company,
or any affiliate of the Company, or is or was serving at the
request of the Company as a director, officer, member, employee, or
agent of another corporation or a partnership, joint venture,
trust, or other enterprise, the Executive shall be indemnified and
held harmless by the Company from and against any liabilities,
costs, claims, and expenses, including all costs and expenses
incurred in defense of any Proceeding (including attorneys’
fees). Costs and expenses incurred by the Executive in defense of
such Proceeding (including attorneys’ fees) shall be paid by
the Company in advance of the final disposition of such litigation
upon receipt by the Company of: (i) a written request for payment;
(ii) appropriate documentation evidencing the incurrence, amount,
and nature of the costs and expenses for which payment is being
sought; and (iii) an undertaking adequate under applicable law made
by or on behalf of the Executive to repay the amounts so paid if it
shall ultimately be determined that the Executive is not entitled
to be indemnified by the Company under this Agreement.
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ii. During the
Employment Term and for a period of six (6) years thereafter, the
Company or any successor to the Company shall purchase and
maintain, at its own expense, directors’ and officers’
liability insurance providing coverage to the Executive on terms
that are no less favorable than the coverage provided to other
directors and similarly situated executives of the
Company.
j. Clawback Provisions. Notwithstanding any
other provisions in this Agreement to the contrary, any
incentive-based compensation paid to the Executive pursuant to this
Agreement which is subject to recovery under any law, government
regulation or stock exchange listing requirement, will be subject
to such deductions and clawback as may be required to be made
pursuant to such law, government regulation, or stock exchange
listing requirement (or any policy adopted by the Company pursuant
to any such law, government regulation or stock exchange listing
requirement).
5. Termination
of Employment. The Employment Term and the Executive’s
employment hereunder may be terminated by either the Company or the
Executive at any time and for any reason; provided that, unless
otherwise provided herein, either party shall be required to give
the other party at least 30 days advance written notice of any
termination of the Executive’s employment. Upon termination
of the Executive’s employment during the Employment Term, or
if the Executive is served with a written notice of the
Company’s intention not to extend the term of the Agreement
in accordance with Section 1, the Executive shall be entitled to
the compensation and benefits described in this Section 5 and shall
have no further rights to any compensation or any other benefits
from the Company or any of its affiliates.
a. For
Cause or Without Good Reason.
i. The
Executive’s employment hereunder may be terminated by the
Company for Cause or by the Executive without Good Reason. If the
Executive’s employment is terminated, by the Company for
Cause or by the Executive without Good Reason, the Executive shall
be entitled to receive:
1. any accrued but
unpaid Base Salary and accrued but unused vacation which shall be
paid [on the Termination Date (as defined below)/within one (1)
week following the Termination Date (as defined below)/on the pay
date immediately following the Termination Date (as defined below)
in accordance with the Company’s customary payroll
procedures;
2. any earned but
unpaid Annual Bonus with respect to any completed calendar year
immediately preceding the Termination Date, which shall be paid on
the otherwise applicable payment date except to the extent payment
is otherwise deferred pursuant to any applicable deferred
compensation arrangement; provided that, if the Executive’s
employment is terminated by the Company for Cause, then any such
accrued but unpaid Annual Bonus shall be forfeited;
3. reimbursement for
unreimbursed business expenses properly incurred by the Executive,
which shall be subject to and paid in accordance with the
Company’s expense reimbursement policy; and
4. such employee
benefits (including equity compensation), if any, to which the
Executive may be entitled under the Company’s employee
benefit plans as of the Termination Date; provided that, in no
event shall the Executive be entitled to any payments in the nature
of severance or termination payments except as specifically
provided herein.
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Items
5(a)(i)(1) through 5(a)(i)(4) are referred to herein collectively
as the “Accrued Amounts”.
ii. For purposes of
this Agreement, “Cause” shall mean:
1. the
Executive’s willful failure to perform his duties (other than
any such failure resulting from incapacity due to physical or
mental illness);
2. the
Executive’s conviction of or plea of guilty or nolo
contendere to a crime (other than related to cannabis) that
constitutes a felony (or state law equivalent) or a crime that
constitutes a misdemeanor involving moral turpitude, if such felony
or other crime is work-related, materially impairs the
Executive’s ability to perform services for the Company or
results in material harm to the Company or its
affiliates;
For
purposes of this provision, no act or failure to act on the part of
the Executive shall be considered “willful” unless it
is done, or omitted to be done, by the Executive with malicious
intent against the furtherance of Company business or operations.
Any act, or failure to act, based upon 1) authority given pursuant
to a resolution duly adopted by the Board, 2) duties generally
considered part of the Executives position of a similarly situated
public company, or 3) upon the advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done,
by the Executive in good faith and in the best interests of the
Company.
Termination of the
Executive’s employment shall not be deemed to be for Cause
unless and until the Company delivers to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a
majority of the Board (after reasonable written notice is provided
to the Executive and the Executive is given an opportunity,
together with counsel, to be heard before the Board), finding that
the Executive has engaged in the conduct described in 5(a)(ii)
above. Except for a failure, breach, or refusal which, by its
nature, cannot reasonably be expected to be cured, the Executive
shall have ten (10) business days from the delivery of written
notice by the Company within which to cure any acts constituting
Cause; provided however, that, if the Company reasonably expects
irreparable injury from a delay of ten (10) business days, the
Company may give the Executive notice of such shorter period within
which to cure as is reasonable under the circumstances, which may
include the termination of the Executive’s employment without
notice and with immediate effect. The Company may place the
Executive on paid leave for up to 60 days while it is determining
whether there is a basis to terminate the Executive’s
employment for Cause. Any such action by the Company will not
constitute Good Reason.
iii. For
purposes of this Agreement, “Good Reason” shall mean
the occurrence of any of the following, in each case during the
Employment Term without the Executive’s written
consent:
1. a reduction in the
Executive’s Base Salary;
2. a relocation of the
Executive’s principal place of employment by more than 50
miles;
3. any material breach
by the Company of any material provision of this Agreement or any
material provision of any other agreement between the Executive and
the Company;
4. the Company’s
failure to obtain an agreement from any successor to the Company to
assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform if
no succession had taken place, except where such assumption occurs
by operation of law;
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5. a material, adverse
change in the Executive’s title, authority, duties, or
responsibilities (other than temporarily while the Executive is
physically or mentally incapacitated or as required by applicable
law) considering the Company’s size, status as a public
company, and capitalization as of the date of this Agreement;
or
6. a material adverse
change in the reporting structure applicable to the
Executive.
The
Executive cannot terminate his employment for Good Reason unless he
has provided written notice to the Company of the existence of the
circumstances providing grounds for termination for Good Reason
within 14 days of the initial existence of such grounds and the
Company has had at least 14 days from the date on which such notice
is provided to cure such circumstances. If the Executive does not
terminate his employment for Good Reason within 14 days after the
first occurrence of the applicable grounds, then the Executive will
be deemed to have waived his right to terminate for Good Reason
with respect to such grounds.
b. Without
Cause or for Good Reason. The Employment Term and the
Executive’s employment hereunder may be terminated by the
Executive for Good Reason or by the Company without Cause. In the
event of such termination, the Executive shall be entitled to
receive the Accrued Amounts and subject to the Executive’s
compliance with Section 6, Section 7, Section 8, and Section 9 of
this Agreement and his execution of a release of claims in favor of
the Company, its affiliates and their respective officers and
directors in a form provided by the Company (the
“Release”) and such Release becoming effective within
30 days following the Termination Date (such 30-day period, the
“Release Execution Period”)], the Executive shall be
entitled to receive the following:
i. continued Base
Salary and health care benefits at a substantially similar level to
the benefits provided while Executive was employed by the Company
for a period of 18 (eighteen) months as if there had been no
Termination, from the Termination Date payable in equal
installments in accordance with the Company’s normal payroll
practices, but no less frequently than monthly, which shall
commence within 14 days following the Termination
Date;
ii. subject to
proration, any earned but unpaid Annual Bonus with respect to any
calendar year immediately preceding the Termination Date, which
shall be paid on the otherwise applicable payment date except to
the extent payment is otherwise deferred pursuant to any applicable
deferred compensation arrangement;
iii. Company
shall reimburse Executive for all reasonable administrative
assistant expenses incurred by Executive for a period of six months
following the Termination Date.
iv. The treatment of
any outstanding equity awards shall be determined in accordance
with the terms of the Restricted Stock Unit plan and stock option
plan and the applicable award agreements.
v. Notwithstanding the
terms of the Restricted Stock Unit plan and stock option plan or
any applicable award agreements:
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1. all outstanding
unvested stock options/stock appreciation rights/restricted stock
units granted to the Executive during the Employment Term shall
become fully vested and exercisable for the remainder of their full
term;
2. all outstanding
equity-based compensation awards other than stock options/stock
appreciation rights that are not intended to qualify as
performance-based compensation under Section 162(m)(4)(C) of the
Internal Revenue Code of 1986, as amended (the “Code”),
shall become fully vested and the restrictions thereon shall lapse;
provided that, any delays in the settlement or payment of such
awards that are set forth in the applicable award agreement and
that are required under Section 409A of the Code (“Section
409A”) shall remain in effect; and
3. all outstanding
equity-based compensation awards other than stock options/stock
appreciation rights that are intended to constitute
performance-based compensation under Section 162(m)(4)(C) of the
Code shall remain outstanding and shall vest or be forfeited in
accordance with the terms of the applicable award agreements, if
the applicable performance goals are satisfied.
c. Death
or Disability.
i. The
Executive’s employment hereunder shall terminate
automatically upon the Executive’s death during the
Employment Term, and the Company may terminate the
Executive’s employment on account of the Executive’s
Disability.
ii. If the
Executive’s employment is terminated during the Employment
Term on account of the Executive’s death or Disability, the
Executive (or the Executive’s estate and/or beneficiaries, as
the case may be) shall be entitled to receive the
following:
1. the Accrued
Amounts;
2. a lump sum payment
equal to 12 months of the Executive’s current Base Salary, as
shown at Item 4(a) or as later increased by the Compensation
Committee; and,
3. a lump sum payment
equal to the Annual Bonus, if any, that the Executive would have
earned for the calendar year in which the Termination Date occurs
based on the achievement of applicable performance goals for such
year, which shall be payable on the date that annual bonuses are
paid to the Company’s similarly situated executives, but in
no event later than two-and-a-half (2 1/2) months following the end
of the calendar year in which the Termination Date
occurs.
iii. For
purposes of this Agreement, “Disability” shall mean the
Executive’s inability, due to physical or mental incapacity,
to perform the essential functions of his job, with or without
reasonable accommodation, for one hundred eighty (180) days out of
any three hundred sixty-five (365) day period or one hundred twenty
(120) consecutive days. Any question as to the existence of the
Executive’s Disability as to which the Executive and the
Company cannot agree shall be determined in writing by a qualified
independent physician mutually acceptable to the Executive and the
Company. If the Executive and the Company cannot agree as to a
qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall
make such determination in writing. The determination of Disability
made in writing to the Company and the Executive shall be final and
conclusive for all purposes of this Agreement.
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d. Notice
of Termination. Any termination of the Executive’s
employment hereunder by the Company or by the Executive during the
Employment Term (other than termination pursuant to Section 5.3(a)
on account of the Executive’s death) shall be communicated by
written notice of termination (“Notice of Termination”)
to the other party hereto in accordance with Section 24. The Notice
of Termination shall specify:
i. The termination
provision of this Agreement relied upon;
ii. To the extent
applicable, the facts and circumstances claimed to provide a basis
for termination of the Executive’s employment under the
provision so indicated; and
iii. The
applicable Termination Date.
e. Termination
Date. The Executive’s “Termination Date”
shall be:
i. If the
Executive’s employment hereunder terminates on account of the
Executive’s death, the date of the Executive’s
death;
ii. If the
Executive’s employment hereunder is terminated on account of
the Executive’s Disability, the date that it is determined
that the Executive has a Disability;
iii. If
the Company terminates the Executive’s employment hereunder
for Cause, the date the Notice of Termination is delivered to the
Executive;
iv. If the Company
terminates the Executive’s employment hereunder without
Cause, the date specified in the Notice of Termination, which shall
be no less than 30 days following the date on which the Notice of
Termination is delivered; provided that, the Company shall have the
option to provide the Executive with a lump sum payment equal to 30
days’ Base Salary in lieu of such notice, which shall be paid
in a lump sum on the Executive’s Termination Date and for all
purposes of this Agreement, the Executive’s Termination Date
shall be the date on which such Notice of Termination is
delivered;
v. If the Executive
terminates his employment hereunder with or without Good Reason,
the date specified in the Executive’s Notice of Termination,
which shall be no less than 14 days following the date on which the
Notice of Termination is delivered; provided that, the Company may
waive all or any part of the 14 day notice period for no
consideration by giving written notice to the Executive and for all
purposes of this Agreement, the Executive’s Termination Date
shall be the date determined by the Company; and
vi. If the
Executive’s employment hereunder terminates because either
party provides notice of non-renewal pursuant to Section 1, the
Renewal Date immediately following the date on which the applicable
party delivers notice of non-renewal.
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f. Mitigation. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and except as
provided in Section 5.2(c), any amounts payable pursuant to this
Section 5 shall not be reduced by compensation the Executive earns
on account of employment with another employer.
g. Resignation
of All Other Positions. Upon termination of the
Executive’s employment hereunder for any reason, the
Executive shall be deemed to have resigned from all positions that
the Executive holds as an officer or member of the Board (or a
committee thereof) of the Company or any of its
affiliates.
6. Cooperation.
The parties agree that certain matters in which the Executive will
be involved during the Employment Term may necessitate the
Executive’s cooperation in the future. Accordingly, following
the termination of the Executive’s employment for any reason,
to the extent reasonably requested by the Board, the Executive
shall cooperate with the Company in connection with matters arising
out of the Executive’s service to the Company; provided that,
the Company shall make reasonable efforts to minimize disruption of
the Executive’s other activities. The Company shall reimburse
the Executive for reasonable expenses incurred in connection with
such cooperation and, to the extent that the Executive is required
to spend substantial time on such matters, the Company shall
compensate the Executive at an hourly rate based on the
Executive’s Base Salary on the Termination Date.
7. Confidential
Information. The Executive understands and acknowledges that
during the Employment Term, he will have access to and learn about
Confidential Information, as defined below.
a. Confidential
Information Defined. For purposes of this Agreement,
“Confidential Information” includes, but is not limited
to, all information not generally known to the public, in spoken,
printed, electronic or any other form or medium, relating directly
or indirectly to: business processes, practices, terms of
agreements, transactions, potential transactions, know-how, trade
secrets,[ financial information, and customer lists of the Company
or its businesses, or of any other person or entity that has
entrusted information to the Company in confidence.
The
Executive understands that the above list is not exhaustive, and
that Confidential Information also includes other information that
is marked or otherwise identified as confidential or proprietary,
or that would otherwise appear to a reasonable person to be
confidential or proprietary in the context and circumstances in
which the information is known or used.
The
Executive understands and agrees that Confidential Information
includes information developed by him in the course of his
employment by the Company as if the Company furnished the same
Confidential Information to the Executive in the first instance.
Confidential Information shall not include information that is
generally available to and known by the public at the time of
disclosure to the Executive; provided that, such disclosure is
through no direct or indirect fault of the Executive or person(s)
acting on the Executive’s behalf.
b. Company Creation and Use of Confidential
Information. The Executive understands and acknowledges that
the Company has invested, and continues to invest, substantial
time, money, and specialized knowledge into developing its
resources, creating a customer base, generating customer and
potential customer lists, training its employees, and improving its
offerings in the field of state-legal wholesale and retail
cannabis. The Executive understands and acknowledges that as a
result of these efforts, the Company has created, and continues to
use and create Confidential Information. This Confidential
Information provides the Company with a competitive advantage over
others in the marketplace.
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c. Disclosure
and Use Restrictions. The Executive agrees and covenants:
(i) to treat all Confidential Information as strictly confidential;
(ii) not to directly or indirectly disclose, publish, communicate,
or make available Confidential Information, or allow it to be
disclosed, published, communicated, or made available, in whole or
part, to any entity or person whatsoever (including other employees
of the Company) not having a need to know and authority to know and
use the Confidential Information in connection with the business of
the Company and, in any event, not to anyone outside of the direct
employ of the Company except as required in the performance of the
Executive’s authorized employment duties to the Company or
with the prior consent of the Board or Chief Executive Officer
acting on behalf of the Company in each instance (and then, such
disclosure shall be made only within the limits and to the extent
of such duties or consent); and (iii) not to access or use any
Confidential Information, and not to copy any documents, records,
files, media, or other resources containing any Confidential
Information, or remove any such documents, records, files, media,
or other resources from the premises or control of the Company ,
except as required in the performance of the Executive’s
authorized employment duties to the Company or with the prior
consent of Board or Chief Executive Officer acting on behalf of the
Company in each instance (and then, such disclosure shall be made
only within the limits and to the extent of such duties or
consent). Nothing herein shall be construed to prevent disclosure
of Confidential Information as may be required by applicable law or
regulation, or pursuant to the valid order of a court of competent
jurisdiction or an authorized government agency, provided that the
disclosure does not exceed the extent of disclosure required by
such law, regulation, or order. The Executive shall promptly
provide written notice of any such order to Board or Chief
Executive Officer.
d. Notice of Immunity
Under the Economic Espionage Act of 1996 of the United States of
America, as amended by the Defend Trade Secrets Act of 2016
(“DTSA”). Notwithstanding any other provision of this
Agreement:
i. The Executive will
not be held criminally or civilly liable under any federal or state
trade secret law for any disclosure of a trade secret
that:
1. is made (1) in
confidence to a federal, state, or local government official,
either directly or indirectly, or to an attorney; and (2) solely
for the purpose of reporting or investigating a suspected violation
of law; or
2. is made in a
complaint or other document filed under seal in a lawsuit or other
proceeding.
ii. If the Executive
files a lawsuit for retaliation by the Company for reporting a
suspected violation of law, the Executive may disclose the
Company’s trade secrets to the Executive’s attorney and
use the trade secret information in the court proceeding if the
Executive:
1. files any document
containing trade secrets under seal; and
2. does not disclose
trade secrets, except pursuant to court order.
The
Executive understands and acknowledges that his obligations under
this Agreement with regard to any particular Confidential
Information shall commence immediately upon the Executive first
having access to such Confidential Information (whether before or
after he begins employment by the Company) and shall continue
during and after his employment by the Company until such time as
such Confidential Information has become public knowledge other
than as a result of the Executive’s breach of this Agreement
or breach by those acting in concert with the Executive or on the
Executive’s behalf.
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8. Restrictive
Covenants.
a. Non-Competition.
Because of the Company’s legitimate business interest as
described herein and the good and valuable consideration offered to
the Executive, during the Employment Term and for the twelve
months, to run consecutively, beginning on the last day of the
Executive’s employment with the Company, the Executive agrees
and covenants not to engage in Prohibited Activity within a 50 mile
radius of Las Vegas.
For
purposes of this Section 8, “Prohibited Activity” is
activity in which the Executive contributes his knowledge, directly
or indirectly, in whole or in part, as an employee, employer,
owner, operator, manager, advisor, consultant, agent, employee,
partner, director, stockholder, officer, volunteer, intern, or any
other similar capacity to an entity engaged in the same or similar
business as the Company, including those engaged in the business of
licensed cannabis cultivation, production, or dispensary
operations. Prohibited Activity also includes activity that may
require or inevitably requires disclosure of trade secrets,
proprietary information or Confidential Information.
This
Section 8 does not, in any way, restrict or impede the Executive
from exercising protected rights to the extent that such rights
cannot be waived by agreement or from complying with any applicable
law or regulation or a valid order of a court of competent
jurisdiction or an authorized government agency, provided that such
compliance does not exceed that required by the law, regulation, or
order. The Executive shall promptly provide written notice of any
such order to Company.
b. Non-Solicitation
of Employees. The Executive agrees and covenants not to
directly or indirectly solicit, hire, recruit, attempt to hire or
recruit, or induce the termination of employment of any employee of
the Company for 12 months, to run consecutively, beginning on the
last day of the Executive’s employment with the
Company.
c. Non-Solicitation
of Customers and Vendors. The Executive understands and
acknowledges that because of the Executive’s experience with
and relationship to the Company, he will have access to and learn
about much or all of the Company’s customer and vendor
information (or, “Competitive Information”).
Competitive includes, but is not limited to, names, phone numbers,
addresses, e-mail addresses, order history, order preferences,
chain of command, pricing information, and other information
identifying facts and circumstances specific to the vendor or the
customer and relevant to sales.
The
Executive understands and acknowledges that loss of this customer
or vendor relationship and/or goodwill will cause significant and
irreparable harm.
The
Executive agrees and covenants, during 12 months, to run
consecutively, beginning on the last day of the Executive’s
employment with the Company, not to directly or indirectly solicit,
contact (including but not limited to e-mail, regular mail, express
mail, telephone, fax, and instant message), attempt to contact, or
meet with the Company’s current, former or prospective
vendors or customers for purposes of offering or accepting goods or
services similar to or competitive with those offered by the
Company.
This
restriction shall only apply to:
i. Vendors, customers
or prospective customers the Executive contacted in any way during
the past 12 months;
ii. Vendors or
customers about whom the Executive has trade secret or confidential
information;
iii. Vendors
or customers who became vendors or customers during the
Executive’s employment with the Company; and
iv. Vendors or
customers about whom the Executive has information that is not
available publicly.
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9. Non-Disparagement.
The Executive agrees and covenants that he will not at any time
make, publish or communicate to any person or entity or in any
public forum any defamatory or disparaging remarks, comments, or
statements concerning the Company or its businesses, or any of its
employees, officers, and existing and prospective customers,
suppliers, investors and other associated third
parties.
This
Section 9 does not, in any way, restrict or impede the Executive
from exercising protected rights to the extent that such rights
cannot be waived by agreement or from complying with any applicable
law or regulation or a valid order of a court of competent
jurisdiction or an authorized government agency, provided that such
compliance does not exceed that required by the law, regulation, or
order. The Executive shall promptly provide written notice of any
such order to the Chief Executive Officer.
The
Company agrees and covenants that it shall cause its officers and
directors to refrain from making any defamatory or disparaging
remarks, comments, or statements concerning the Executive to any
third parties.
10. Acknowledgement.
The Executive acknowledges and agrees that the services to be
rendered by him to the Company are of a special and unique
character; that the Executive will obtain knowledge and skill
relevant to the Company’s industry, methods of doing business
and marketing strategies by virtue of the Executive’s
employment; and that the restrictive covenants and other terms and
conditions of this Agreement are reasonable and reasonably
necessary to protect the legitimate business interest of the
Company.
The
Executive further acknowledges that the amount of his compensation
reflects, in part, his obligations and the Company’s rights
under Section 7, Section 8, and Section 9 of this Agreement; that
he has no expectation of any additional compensation, royalties or
other payment of any kind not otherwise referenced herein in
connection herewith; and that he will not be subject to undue
hardship by reason of his full compliance with the terms and
conditions of Section 7, Section 8, and Section 9 of this Agreement
or the Company’s enforcement thereof.
11. Remedies. In
the event of a breach or threatened breach by the Executive of
Section 7, 8, or Section 9 of this Agreement, the Executive hereby
consents and agrees that the Company shall be entitled to seek, in
addition to other available remedies, a temporary or permanent
injunction or other equitable relief against such breach or
threatened breach from any court of competent jurisdiction, without
the necessity of showing any actual damages or that money damages
would not afford an adequate remedy, and without the necessity of
posting any bond or other security. The aforementioned equitable
relief shall be in addition to, not in lieu of, legal remedies,
monetary damages, or other available forms of relief.
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12. Proprietary
Rights.
a. Work
Product. The Executive acknowledges and agrees that all
right, title, and interest in and to all writings, works of
authorship, technology, inventions, discoveries, processes,
techniques, methods, ideas, concepts, research, proposals,
materials, and all other work product of any nature whatsoever,
that are created, prepared, produced, authored, edited, amended,
conceived, or reduced to practice by the Executive individually or
jointly with others during the period of his employment by the
Company and relate in any way to the business or contemplated
business, products, activities, research, or development of the
Company or result from any work performed by the Executive for the
Company (in each case, regardless of when or where prepared or
whose equipment or other resources is used in preparing the same),
all rights and claims related to the foregoing, and all printed,
physical and electronic copies, and other tangible embodiments
thereof (collectively, “Work Product”), as well as any
and all rights in and to US and foreign (a) patents, patent
disclosures and inventions (whether patentable or not), (b)
trademarks, service marks, trade dress, trade names, logos,
corporate names, and domain names, and other similar designations
of source or origin, together with the goodwill symbolized by any
of the foregoing, (c) copyrights and copyrightable works (including
computer programs), [mask works,] and rights in data and databases,
(d) trade secrets, know-how, and other confidential information,
and (e) all other intellectual property rights, in each case
whether registered or unregistered and including all registrations
and applications for, and renewals and extensions of, such rights,
all improvements thereto and all similar or equivalent rights or
forms of protection in any part of the world (collectively,
“Intellectual Property Rights”), shall be the sole and
exclusive property of the Company.
For
purposes of this Agreement, Work Product includes, but is not
limited to, Company information, including plans, publications,
research, strategies, documents, contracts, customer lists,
manufacturing information, marketing information, advertising
information, and sales information.
b. Work
Made for Hire; Assignment. The Executive acknowledges that,
by reason of being employed by the Company at the relevant times,
to the extent permitted by law, all of the Work Product consisting
of copyrightable subject matter is “work made for hire”
as defined in 17 U.S.C. § 101 and such copyrights are
therefore owned by the Company. To the extent that the foregoing
does not apply, the Executive hereby irrevocably assigns to the
Company, for no additional consideration, the Executive’s
entire right, title, and interest in and to all Work Product and
Intellectual Property Rights therein, including the right to xxx,
counterclaim, and recover for all past, present, and future
infringement, misappropriation, or dilution thereof, and all rights
corresponding thereto throughout the world. Nothing contained in
this Agreement shall be construed to reduce or limit the
Company’s rights, title, or interest in any Work Product or
Intellectual Property Rights so as to be less in any respect than
that the Company would have had in the absence of this
Agreement.
c. Further Assurances; Power of Attorney.
During and after his employment, the Executive agrees to reasonably
cooperate with the Company to (a) apply for, obtain, perfect, and
transfer to the Company the Work Product as well as any and all
Intellectual Property Rights in the Work Product in any
jurisdiction in the world; and (b) maintain, protect and enforce
the same, including, without limitation, giving testimony and
executing and delivering to the Company any and all applications,
oaths, declarations, affidavits, waivers, assignments, and other
documents and instruments as shall be requested by the Company. The
Executive hereby irrevocably grants the Company power of attorney
to execute and deliver any such documents on the Executive’s
behalf in his name and to do all other lawfully permitted acts to
transfer the Work Product to the Company and further the transfer,
prosecution, issuance, and maintenance of all Intellectual Property
Rights therein, to the full extent permitted by law, if the
Executive does not promptly cooperate with the Company’s
request (without limiting the rights the Company shall have in such
circumstances by operation of law). The power of attorney is
coupled with an interest and shall not be affected by the
Executive’s subsequent incapacity.
d. No
License. The Executive understands that this Agreement does
not, and shall not be construed to, grant the Executive any license
or right of any nature with respect to any Work Product or
Intellectual Property Rights or any Confidential Information,
materials, software, or other tools made available to him by the
Company.
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13. Security.
a. Security
and Access. The Executive agrees and covenants (a) to comply
with all Company security policies and procedures as in force from
time to time and any and all other Company IT resources
(“Facilities and Information Technology Resources”);
(b) not to access or use any Facilities and Information Technology
Resources except as authorized by the Company; and (iii) not to
access or use any Facilities and Information Technology Resources
in any manner after the termination of the Executive’s
employment by the Company, whether termination is voluntary or
involuntary. The Executive agrees to notify the Company promptly in
the event he learns of any violation of the foregoing by others, or
of any other misappropriation or unauthorized access, use,
reproduction, or reverse engineering of, or tampering with any
Facilities and Information Technology Resources or other Company
property or materials by others.
b. Exit
Obligations. Upon (a) voluntary or involuntary termination
of the Executive’s employment or (b) the Company’s
request at any time during the Executive’s employment, the
Executive shall (i) provide or return to the Company any and all
Company property and all Company documents and materials belonging
to the Company and stored in any fashion, including but not limited
to those that constitute or contain any Confidential Information or
Work Product, that are in the possession or control of the
Executive, whether they were provided to the Executive by the
Company or any of its business associates or created by the
Executive in connection with his employment by the Company; and
(ii) delete or destroy all copies of any such documents and
materials not returned to the Company that remain in the
Executive’s possession or control, including those stored on
any non-Company devices, networks, storage locations, and media in
the Executive’s possession or control.
14. Publicity.
The Executive hereby irrevocably consents to any and all uses and
displays, by the Company and its agents, representatives and
licensees, of the Executive’s name, voice, likeness, image,
appearance, and biographical information in, on or in connection
with any pictures, photographs, audio and video recordings, digital
images, websites, television programs and advertising, other
advertising and publicity, sales and marketing brochures, books,
magazines, other publications, CDs, DVDs, tapes, and all other
printed and electronic forms and media throughout the world, at any
time during or after the period of his employment by the Company,
for all legitimate commercial and business purposes of the Company
(“Permitted Uses”) without further consent from or
royalty, payment, or other compensation to the Executive. The
Executive hereby forever waives and releases the Company and its
directors, officers, employees, and agents from any and all claims,
actions, damages, losses, costs, expenses, and liability of any
kind, arising under any legal or equitable theory whatsoever at any
time during or after the period of his employment by the Company,
arising directly or indirectly from the Company’s and its
agents’, representatives’, and licensees’
exercise of their rights in connection with any Permitted
Uses.
15. Governing
Law: Jurisdiction and Venue. This Agreement, for all
purposes, shall be construed in accordance with the laws of the
Province of Ontario, Canada without regard to conflicts of law
principles. Any action or proceeding by either of the parties to
enforce this Agreement shall be brought only in a provincial or
federal court located in the Province of Ontario, in the city of
Toronto. The parties hereby irrevocably submit to the exclusive
jurisdiction of such courts and waive the defense of inconvenient
forum to the maintenance of any such action or proceeding in such
venue.
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16. Entire
Agreement. Unless specifically provided herein, this
Agreement contains all of the understandings and representations
between the Executive and the Company pertaining to the subject
matter hereof and supersedes all prior and contemporaneous
understandings, agreements, representations and warranties, both
written and oral, with respect to such subject matter. The parties
mutually agree that the Agreement can be specifically enforced in
court and can be cited as evidence in legal proceedings alleging
breach of the Agreement.
17. Modification
and Waiver. No provision of this Agreement may be amended or
modified unless such amendment or modification is agreed to in
writing and signed by the Executive and by Chief Executive Officer
of the Company. No waiver by either of the parties of any breach by
the other party hereto of any condition or provision of this
Agreement to be performed by the other party hereto shall be deemed
a waiver of any similar or dissimilar provision or condition at the
same or any prior or subsequent time, nor shall the failure of or
delay by either of the parties in exercising any right, power, or
privilege hereunder operate as a waiver thereof to preclude any
other or further exercise thereof or the exercise of any other such
right, power, or privilege.
18. Severability.
Should any provision of this Agreement be held by a court of
competent jurisdiction to be enforceable only if modified, or if
any portion of this Agreement shall be held as unenforceable and
thus stricken, such holding shall not affect the validity of the
remainder of this Agreement, the balance of which shall continue to
be binding upon the parties with any such modification to become a
part hereof and treated as though originally set forth in this
Agreement.
The
parties further agree that any such court is expressly authorized
to modify any such unenforceable provision of this Agreement in
lieu of severing such unenforceable provision from this Agreement
in its entirety, whether by rewriting the offending provision,
deleting any or all of the offending provision, adding additional
language to this Agreement, or by making such other modifications
as it deems warranted to carry out the intent and agreement of the
parties as embodied herein to the maximum extent permitted by
law.
The
parties expressly agree that this Agreement as so modified by the
court shall be binding upon and enforceable against each of them.
In any event, should one or more of the provisions of this
Agreement be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not
affect any other provisions hereof, and if such provision or
provisions are not modified as provided above, this Agreement shall
be construed as if such invalid, illegal, or unenforceable
provisions had not been set forth herein.
19. Captions.
Captions and headings of the sections and paragraphs of this
Agreement are intended solely for convenience and no provision of
this Agreement is to be construed by reference to the caption or
heading of any section or paragraph.
20. Counterparts.
This Agreement may be executed in separate counterparts, each of
which shall be deemed an original, but all of which taken together
shall constitute one and the same instrument.
15
21. Tolling.
Should the Executive violate any of the terms of the restrictive
covenant obligations articulated herein, the obligation at issue
will run from the first date on which the Executive ceases to be in
violation of such obligation.
22. Notification
to Subsequent Employer. When the Executive’s
employment with the Company terminates, the Executive agrees to
notify any subsequent employer of the restrictive covenants
sections contained in this Agreement. The Executive will also
deliver a copy of such notice to the Company before the Executive
commences employment with any subsequent employer. In addition, the
Executive authorizes the Company to provide a copy of the
restrictive covenants sections of this Agreement to third parties,
including but not limited to, the Executive’s subsequent,
anticipated, or possible future employer.
23. Successors
and Assigns. This Agreement is personal to the Executive and
shall not be assigned by the Executive. Any purported assignment by
the Executive shall be null and void from the initial date of the
purported assignment. The Company may assign this Agreement to any
successor or assign (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of
the business or assets of the Company. This Agreement shall inure
to the benefit of the Company and permitted successors and
assigns.
24. Notice.
Notices and all other communications provided for in this Agreement
shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, or by
overnight carrier to the parties at the addresses set forth below
(or such other addresses as specified by the parties by like
notice):
If to
the Company:
Planet
13 Holdings, Inc., or MM Development Company, Inc., currently
registered corporate office or registered agent.
If to
the Executive:
Address
written below.
000
Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Xxxxxx
25. Representations
of the Executive. The Executive represents and warrants to
the Company that:
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The
Executive’s acceptance of employment with the Company and the
performance of his duties hereunder will not conflict with or
result in a violation of, a breach of, or a default under any
contract, agreement, or understanding to which he is a party or is
otherwise bound.
The
Executive’s acceptance of employment with the Company and the
performance of his duties hereunder will not violate any
non-solicitation, non-competition, or other similar covenant or
agreement of a prior employer.
26. Withholding.
The Company shall have the right to withhold from any amount
payable hereunder any Federal, Provincial, and local taxes in order
for the Company to satisfy any withholding tax obligation it may
have under any applicable law or regulation.
27. Survival.
Upon the expiration or other termination of this Agreement, the
respective rights and obligations of the parties hereto shall
survive such expiration or other termination to the extent
necessary to carry out the intentions of the parties under this
Agreement.
28. Gender
and Number. Wherever appropriate herein, the masculine may
mean the feminine and the singular may mean the plural or vice
versa.
29. Acknowledgement
of Full Understanding. THE EXECUTIVE ACKNOWLEDGES AND AGREES
THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO
THIS AGREEMENT. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS
HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF
HIS CHOICE BEFORE SIGNING THIS AGREEMENT.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
|
Employee:
/s/
Xxxxxx
Xxxxx
Name:
Xxxxxx Xxxxx
Address:
[REDACTED]
|
Planet
13 Holdings, Inc.
By:
/s/ Xxxxxx
Xxxxxxxxx
Xxxxxx
Xxxxxxxxx, co-CEO
By:
/s/ Xxxxx
Xxxxxxxxx
Name:
Xxxxx Xxxxxxxxx, co-CEO
|
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