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EXECUTIVE EMPLOYMENT AGREEMENT

Employee Retention Agreement

EXECUTIVE EMPLOYMENT AGREEMENT | Document Parties: ORANGE 21 INC. You are currently viewing:
This Employee Retention Agreement involves

ORANGE 21 INC.

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Title: EXECUTIVE EMPLOYMENT AGREEMENT
Governing Law: California     Date: 1/26/2009
Industry: Recreational Products     Sector: Consumer Cyclical

EXECUTIVE EMPLOYMENT AGREEMENT, Parties: orange 21 inc.
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Exhibit 10.46

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (“Agreement”), dated January 19, 2009 (“Effective Date”), is between Orange 21 Inc. (the “Company”) and A. Stone Douglass (“Executive”).

 

1.

POSITION, RESPONSIBILITIES, AND TERM

a. Position . Executive is employed by the Company to render services to the Company in the position of Chief Executive Officer. Executive shall perform such duties and responsibilities as are normally related to such position in accordance with the standards of the industry and any additional duties now or hereafter assigned to Executive (“Services”) by Executive’s supervisor and/or the Company’s Board of Directors (“Board”). Executive shall abide by the rules, regulations, and practices as adopted or modified from time to time in the Company’s sole discretion. Executive will devote Executive’s best efforts to the provision of Services under this Agreement.

b. Other Activities . Except upon the prior written consent of the Company, Executive will not, during the term of this Agreement: (i) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that might interfere with Executive’s duties and responsibilities hereunder or create a conflict of interest with the Company; or (ii) acquire any interest of any type in any other business which is in competition with the Company, provided , however , that the foregoing shall not be deemed to prohibit the Executive from acquiring solely as an investment up to five percent (5%) of the outstanding equity interests of any publicly-held company.

c. No Conflict . Executive represents and warrants that Executive’s execution of this Agreement and performance of Services under this Agreement will not violate any obligations Executive may have to any other employer, person or entity, including any obligations to keep in confidence proprietary information, knowledge, or data acquired by Executive in confidence or in trust prior to becoming an employee of the Company.

d. Term of Employment . The term of this Agreement shall be for a period of (i) four (4) years after the Effective Date of this Agreement; or (ii) the date upon which Executive’s employment is terminated in accordance with Section 3 (the “Term”). Where the Agreement is terminated upon notice and the expiration of the Term, the Company shall pay to Executive all compensation to which Executive is entitled up through the effective date of termination according to its normal payroll practices, and the Company shall not have any further obligations under this Agreement.

 

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2.

COMPENSATION AND BENEFITS

a. Base Salary . In consideration of the Services to be rendered under this Agreement, the Company shall pay Executive a gross salary at the rate of Three Hundred Thousand Dollars ($300,000.00) per year, less applicable withholdings (“Base Salary”). The Base Salary shall be paid in accordance with the Company’s normal payroll practices. Executive’s Base Salary will be reviewed from time to time in accordance with the established procedures of the Company for adjusting salaries for similarly situated employees and may be increased in the sole discretion of the Company.

b. Annual Bonus . In further consideration of the Services to be rendered under this Agreement, Executive shall be eligible to receive an annual bonus of up to fifty percent (50%) of Executive’s annual Base Salary based on the sole discretion of the Board (“Annual Bonus”). Any Annual Bonus earned by Executive will be paid within two-and-one-half months of the end of the year in which it was earned. Executive must remain employed with the Company through the end of the calendar year at issue in order to be eligible to receive the Annual Bonus.

c. Stock Option . In further consideration of the Services to be rendered under this Agreement, the Company granted Executive an option to purchase 250,000 shares of the Company’s Common Stock vesting over a period of four (4) years (“Stock Option”) in October 2008. Executive’s entitlement to the Stock Option is conditioned upon Executive’s signing of the Company’s Stock Option Agreement and is subject to its terms and the terms of the applicable Employee Stock Option Plan and related documents adopted by the Board, except as expressly provided herein. The Stock Option shall become immediately vested upon a Change in Control. For purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following events: (a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), directly or indirectly, of securities of the Company representing fifty-one percent (51%) or more of the total voting power represented by the Company’s then outstanding voting securities and at any time thereafter prior to the termination of this Agreement, Executive’s employment is terminated without Cause or for Good Reason; or (b) the consummation of the sale, liquidation or disposition by the Company of all or substantially all of the Company’s assets; or (c) the consummation of a merger, consolidation, reorganization or other corporate transaction involving the Company (“Transaction”) in each case, in which the voting securities of the Company outstanding immediately prior thereto do not continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty-one percent (51%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such Transaction.

d. Employment Benefits Plans . In further consideration of the Services to be rendered under this Agreement, Executive will be entitled to participate in pension, profit sharing and other retirement plans, incentive compensation plans, group health, hospitalization and disability or other insurance plans, and other employee welfare benefit plans generally made available to other similarly-situated employees of the Company, in accordance with the benefit plans established by the Company, and as may be amended from time to time in the Company’s sole discretion.

 

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e. Vacation . Executive shall be eligible to receive paid vacation of four (4) weeks per year (or such greater amount as is approved by the Board from time to time) to be accrued on a pro rata basis during each calendar year, subject to the policies and procedures in the Company’s Employee Handbook as may be amended from time to time in the Company’s sole discretion.

f. Expenses . The Company will pay or reimburse Executive for all normal and reasonable travel and entertainment expenses incurred by Executive in connection with Executive’s responsibilities to the Company upon submission of proper vouchers and documentation in accordance with the Company’s expense reimbursement policy. The Company shall also provide Executive with a monthly car allowance of $500.00.

 

3.

AT-WILL EMPLOYMENT

The employment of Executive shall be “at-will” at all times. The Company or Executive may terminate Executive’s employment with the Company at any time, without any advance notice, for any reason or no reason at all, notwithstanding anything to the contrary contained in or arising from any statements, policies or practices of the Company relating to the employment, discipline or termination of its employees. Following the termination of Executive’s employment, the Company shall pay to Executive all compensation to which Executive is entitled up through the date of termination. Thereafter, all obligations of the Company under this Agreement shall cease other than those set forth in Section 4.

 

4.

COMPANY TERMINATION OBLIGATIONS

a. Termination by Company for Cause . Where the Company terminates Executive’s employment for Cause, all obligations of the Company under this Agreement shall cease, other than those set forth in Section 3. For purposes of this Agreement, “Cause” shall mean: (i) Executive engages in a material act of misconduct, including but not limited to misappropriation of trade secrets, fraud, or embezzlement; (ii) Executive commits a crime involving dishonesty, breach of trust, physical harm to any person, or moral turpitude; (iii) Executive breaches this Agreement; (iv) Executive refuses to implement or follow a lawful policy or directive of the Company or engages in other willful misconduct in the performance of Executive’s duties; (v) Executive engages in misfeasance or malfeasance demonstrated by Executive’s failure to perform Executive’s job duties diligently and/or in a professional manner; or (vi) Executive violates a Company policy or procedure which is materially injurious to the Company, including but not limited to violation of the Company’s policy concerning sexual harassment, discrimination, retaliation, conflicts of interest, or drugs or alcohol.

 

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b. Termination by Company without Cause . Where the Company terminates Executive’s employment without Cause, and Executive’s employment is not terminated due to death or Disability (as defined below), Executive will be eligible to receive continued payment of Base Salary for twelve (12) months according to the Company’s normal payroll practices, less applicable withholdings (“Severance”). Executive’s eligibility to receive the Severance set forth in this Section 4(b) is conditioned on Executive having first signed a release agreement in the form attached as Exhibit A. All other obligations of the Company under this Agreement shall cease.

c. Termination Due to Disability . Executive’s employment shall terminate automatically if Executive becomes Disabled. Executive shall be deemed Disabled if Executive is unable for medical reasons to perform Executive’s essential job duties for either ninety (90) consecutive calendar days or one hundred twenty (120) business days in a twelve (12) month period and, within thirty (30) days after a notice of termination is given to Executive, Executive has not returned to work. If Executive’s employment is terminated by the Company due to Executive’s Disability, all obligations of the Company under this Agreement shall cease, other than those set forth in Section 3.

d. Termination Due to Death . Executive’s employment shall terminate automatically upon Executive’s death. If Executive’s employment is terminated due to Executive’s death, all obligations of the Company under this Agreement shall cease, other than those set forth in Section 3.

e. Executive’s Resignation . Executive may resign Executive’s employment at any time during the Term of this Agreement pursuant to Section 3, and thereafter, all obligations of the Company under this Agreement shall cease, other than those set forth in Section 3.

f. Termination By Executive for Good Reason following Change In Control . Executive’s termination of Executive’s employment shall be for “Good Reason” if Executive provides written notice to the Company of the Good Reason within thirty (30) days of the event constituting the Good Reason and provides the Company with a period of thirty (30) days to cure the event constituting the Good Reason and the Company fails to cure the Good Reason within that period. For purposes of this Agreement, “Good Reason” shall mean: (i) material breach of this Agreement by the Company; or (ii) a change in Executive’s position under this Agreement from Chief Executive Officer (other than a result of termination for Cause). Where Executive terminates Executive’s employment for Good Reason within twelve (12) months after a Change In Control, Executive will be eligible to receive Severance as set forth in Section 4(b) above. Executive’s eligibility to receive the Severance is conditioned on Executive having first signed a release agreement in the form attached as Exhibit A. All other obligations of the Company under this Agreement shall cease.

 

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