EXHIBIT 10.50
SEPARATION AGREEMENT AND LEGAL RELEASE
This agreement is between Colorado Greenhouse Holdings, Inc. ("CG"), and
Xxxxxx X. Xxxxxxxxx ("Xxxxxxxxx"), and shall be effective as of October 20, 1997
(the "Effective Date").
RECITALS
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1. Xxxxxxxxx is employed by CG as its chief executive officer, but
desires to resign as chief executive officer as of the Effective Date.
2. CG and Xxxxxxxxx are parties to that certain Severance and Noncompete
Agreement (the "Agreement") dated effective as of December 31, 1996. CG and
Xxxxxxxxx desire fully and completely to resolve all matters between them
relating in any way to Xxxxxxxxx'x resignation and the Agreement.
AGREEMENT
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In consideration of the conditions, covenants, and agreements set forth
below, the receipt and sufficiency of which are hereby acknowledged by CG and
Xxxxxxxxx, the parties agree as follows:
1. Duties. Between the Effective Date and December 31, 1997, Xxxxxxxxx
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shall continue to perform the non-operating duties of Chairman of the Board (the
"Board") and shall perform such tasks as he and the Board may mutually agree.
2. Compensation and Benefits.
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a. Between the Effective Date and December 31, 1997, Xxxxxxxxx shall
remain on CG's payroll and shall continue to receive the same base salary that
he received for the pay period immediately preceding the Effective Date, payable
in installments on CG's customary paydays, less legally required withholdings.
Xxxxxxxxx shall be deemed an employee of CG until December 31, 1997, at which
time his employment with CG shall terminate.
b. Between the Effective Date and December 31, 1997, Xxxxxxxxx
shall be eligible to continue to participate in CG's company-sponsored benefit
plans, including its health insurance plan and its 401k plan, on the same terms
as applied to him immediately before the Effective Date. After the effective
date, however, Xxxxxxxxx shall not accrue any paid vacation, sick days or other
paid leave of any kind.
3. Stock Options. The parties acknowledge that Xxxxxxxxx currently holds
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certain unvested stock options, consisting of the option to buy 202,725 shares
of CG stock at a strike price of $.74 per share, two-thirds of which are fully
vested and one-third of which is not scheduled to vest until December 31, 1997.
In order to remove any ambiguity concerning the vesting of the final one-third
of such options, CG agrees that on the Effective Date, the last one-third of the
stock options that are scheduled to vest in Xxxxxxxxx on December 31, 1997 shall
instead vest in Xxxxxxxxx immediately. CG further agrees to amend Xxxxxxxxx'x
existing option agreement to extend the exercise period as set forth on Exhibit
A attached hereto and made a part hereof.
4. Agreement; Payments. CG and Xxxxxxxxx acknowledge and agree that the
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Agreement will terminate according to its terms on December 31, 1997. As final
payment of all amounts owned to Xxxxxxxxx thereunder, CG agrees to pay and
Xxxxxxxxx agrees to accept the payment of $120,000 as follows: $40,000 shall be
paid on January 2, 1998 and $6666.66 shall be paid monthly for 12 months on the
last day of each month beginning January 31, 1998 with the last payment on
December 31, 1998.
5. Release by Xxxxxxxxx. Xxxxxxxxx, for himself and his heirs, personal
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representatives and assigns, and any other firm or entity that could or might
act on behalf of him including, without limitation, his attorneys (all of whom
are collectively referred to as "Releasors"), hereby fully and forever release
and discharge CG, its present and future affiliates and subsidiaries, and each
of their past, present, and future officers, directors, employees, shareholders,
independent contractors, attorneys, insurers and any and all other persons or
entities that are now or may become liable to any Releasor due to any Releasee's
act or omission, all of whom are collectively referred to as "Releasees", of and
from any and all actions, causes of action, claims, demands, costs and expenses,
including attorneys' fees, of every kind and nature whatsoever, in law or in
equity, whether now known or unknown, that Releasors, or any person acting under
any of them, may now have, or claim at any future time to have, based in whole
or in part upon any act or omission occurring prior to the Effective Date,
without regard to present actual knowledge of such acts or omissions, including
specifically, but not by way of limitation, matters which may arise at common
law, such as breach of contract, express or implied, promissory estoppel,
wrongful discharge, tortious interference with contractual rights, infliction of
emotional distress, defamation, or under federal, state or local laws, such as
the Fair Labor Standards Act, the Employee Retirement Income Security Act, the
National Labor Relations Act, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Rehabilitation Act of 1973, the Equal Pay
Act, the Americans with Disabilities Act, and the Colorado Civil Rights Act;
EXCEPT for the rights and obligations created by this agreement. Xxxxxxxxx
understands and agrees that by signing this agreement he is giving up his right
to bring any legal claim against CG of any nature related in any way, directly
or indirectly, to Xxxxxxxxx'x employment relationship with CG, including his
separation from employment. Xxxxxxxxx agrees that this paragraph is intended to
be interpreted in the broadest possible manner in favor of CG, to include all
actual or potential legal claims that Xxxxxxxxx may have against CG, except as
specifically provided otherwise in this agreement.
6. Release by CG. CG, for itself and its affiliates, hereby fully and
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forever releases and discharges Xxxxxxxxx of and from any and all actions,
causes of action, claims, demands, costs and expenses, including attorneys'
fees, of every kind and nature whatsoever, in law or in equity, whether now
known or unknown, that CG, or any person acting under it, may now have, or claim
at any time to have, based in whole or in part upon any act or omission
occurring prior to the Effective Date, without regard to present actual
knowledge of such acts or omissions, including specifically, but not by way of
limitation, matters which arise at common law, such as breach of contract,
express or implied, promissory estoppel, wrongful discharge, tortious
interference with contractual rights, infliction of emotional distress,
defamation or under federal, state or local laws.
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7. Authority and Nonassignment. The parties warrant that each has
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authority to enter into this agreement, and that neither has transferred to any
other person or entity any claim, action, demand, or cause of action released by
this agreement.
8. Survival of Covenants and Warranties. All covenants and warranties
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contained in this agreement are contractual and shall survive the closing of
this agreement.
9. Miscellaneous. (a) Successors and Assigns. This agreement shall be
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binding in all respects upon, and shall inure to the benefit of, the parties'
heirs, successors and assigns. (b) Governing Law. This agreement shall be
governed by the law of the State of Colorado, irrespective of the choice of law
principles of any jurisdiction. (c) Severability. In the event that a court of
competent jurisdiction enters a final judgement holding invalid any material
provision of this agreement, the remainder of this agreement shall be fully
enforceable. (d) Integration. This agreement and the Agreement constitute the
entire agreement of the parties and a complete merger of prior negotiations and
agreements. (e) Modification. This agreement and the Agreement shall not be
modified except in a writing signed by the parties. (f) Waiver. No term or
condition of this agreement shall be deemed to have been waived, nor shall there
be an estoppel against the enforcement of any provision of this agreement except
by written instruments signed by the party charged with the waiver or estoppel.
No waiver shall be deemed a continuing waiver unless specifically stated
therein, and the written waiver shall operate only as to the specific term or
condition waived, and not for the future or as to any act other than that
specifically waived. (g) Headings. Paragraph headings are intended solely as a
convenience and shall not control the meaning or interpretation of any provision
of this agreement. (h) Gender and Number. Pronouns contained in this agreement
shall equally apply to the feminine, neuter, and masculine genders. The singular
shall include the plural and the plural shall include the singular. (i) Burden
of Proof. Any party contesting the validity or enforceability of any term of
this agreement shall have the burden of proof as to fraud, concealment or
failure to disclose material information, unconscionability, misrepresentation,
mistake of fact or law, and any other matters. (j) Ambiguities. The parties
acknowledge that they have reviewed this agreement in its entirety and have had
a full opportunity to negotiate its terms, and therefore waive all applicable
rules of construction that any provision of this agreement should be construed
against its drafter and agree that all provisions of the agreement shall be
construed as a whole, according to the fair meaning of the language used.
In witness whereof, this agreement has been executed on the dates below
written, to be effective on the last such date.
Xxxxxx X. Xxxxxxxxx Colorado Greenhouse Holdings, Inc.
/s/ Xxxxxx X. Xxxxxxxxx By: /s/ X.X. Xxxxxxx, Xx.
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X.X. Xxxxxxx, Xx.
DATE: Oct 31, 1997 Chairman of Compensation Committee
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DATE: 10/31/97
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3
EXHIBIT A
WRITTEN CONSENT IN LIEU OF MEETING
OF
DIRECTORS OF COLORADO GREENHOUSE HOLDINGS, INC.
THE UNDERSIGNED, being all of the Directors of COLORADO GREENHOUSE
HOLDINGS, INC., a Delaware corporation (the "Corporation"), do hereby consent
to, vote in favor of and adopt the following resolutions by unanimous written
consent to action without a meeting pursuant to Section 141(f) of the General
Corporation Law of the State of Delaware:
WHEREAS, Xxxxxx X. Xxxxxxxxx was granted an option (the "Option") on
November 19, 1996 to purchase shares of the Common Stock of the Corporation
pursuant to the Corporation's 1996 Stock Option Plan (the "Plan");
WHEREAS, the Section 6.3(d) of the Plan provides that the Option Committee
(which, at this time, consists of the full Board of Directors of the
Corporation) may specify the period during which an option may be exercised
following termination of the employment of an option holder and that in lieu of
so specifying, if the employment relationship with the Corporation terminates
within the Option Period (as defined in the Plan) for any reason, other than for
cause, and such termination occurs more than six months after the option is
granted, the Option may be exercised by the option holder within three months
following the date of such termination (if otherwise within the Option Period),
but not thereafter.
WHEREAS, the Option Committee did not specify the period during which
Xxxxxx X. Xxxxxxxxx'x Option may be exercised following termination and now
desires to do so.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
determines that the period in which Xxxxxx X. Xxxxxxxxx may exercise his Option
following termination of his employment relationship with the Corporation shall
be three years from October 20, 1997.
[Directors' signatures follow]
EXECUTED as of the dates set forth below.
______________________________ October ___, 1997
Xxxxxx X. Xxxxxxxxx, Chairman
______________________________ October ___, 1997
Xxxxxx X. Xxxx
______________________________ October ___, 0000
Xxxxxxx Xxxxx
______________________________ October ___, 1997
Kit Xxxxxxx
/s/ X. X. Xxxxxxx, Xx. October ___, 1997
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X. X. Xxxxxxx, Xx.
______________________________ October ___, 1997
Xxxxx X. Xxxxx
______________________________ October ___, 1997
Xxxxxx X. Xxxxxxx
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