Exhibit 10.2


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement (“Agreement”)
is made by and between GrowGeneration Corp., a Colorado corporation (“Company”), and Gregory Sanders (“Employee”),
effective as of August 12, 2022 (the “Effective Date”).


 


WHEREAS, Company desires to employ Employee on
the terms and conditions set forth herein, and Employee desires to accept employment with Company on such terms and conditions.


 


NOW, THEREFORE, in consideration of the mutual
promises contained herein, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties
agree as follows:


 


		1.	EMPLOYMENT AND DUTIES.



 


1.1 Position.
Employee will be employed by Company as its Chief Financial Officer, reporting to the Chief Executive Officer or such other Company official
as Company may direct from time to time. Employee’s duties and responsibilities will be such as are consistent with Employee’s
position, as more fully defined by Company from time to time, as well as such other duties and responsibilities as Company may reasonably
assign to Employee from time to time. In addition, Employee shall, if requested by Company, serve as an officer or director of any subsidiary
of Company (such subsidiaries together with Company, the “Group Companies”) for no additional compensation.


 


1.2 Full
Attention. Employee shall devote substantially all Employee’s business time and attention exclusively to affairs of the Group
Companies and discharge Employee’s duties and responsibilities hereunder faithfully and to the best of Employee’s ability.
Employee shall not, without the prior written consent of Company, engage in any other business, profession, or occupation for compensation
or otherwise which would conflict or interfere with the performance of Employee’s duties and responsibilities hereunder. Notwithstanding
the foregoing, Employee may participate in reasonable levels of charitable, civic, trade organization, and similar activities and passive
personal investment activities, provided that such activities do not, as determined by Company in its reasonable discretion, create an
actual or apparent conflict of interest, injure Company or its reputation, violate any provision of this Agreement, any other contract
between Employee and any Group Company, or any Group Company’s policy in effect from time to time, or otherwise materially interfere
with the performance of Employee’s duties under this Agreement.


 


		2.	TERM AND TERMINATION OF EMPLOYMENT.



 


2.1 Term.
The initial term of this Agreement will begin on the Effective Date and continue for three years, unless terminated earlier pursuant to
Section 2.2. Thereafter, this agreement will automatically renew for successive one-year periods unless either party provides written
notice to the other party of nonrenewal at least 30 days prior to the renewal date, or unless terminated earlier pursuant to Section 2.2.
Termination or expiration of this Agreement does not relieve either party of obligations which by their nature or terms are to be performed
after termination or expiration. The period of Employee’s employment pursuant to this Agreement will be the “Term.”
For the avoidance of doubt, nonrenewal of this Agreement will not be deemed to constitute termination.


 


2.2 Termination.
This Agreement may be terminated at any time, with or without reason or Cause (defined below), (a) by Company upon written notice to Employee
(subject to Section 3.7, if terminated without Cause), or (b) by Employee upon at least 90 days written notice to Company; provided that,
if Employee provides notice to terminate, Company may elect to terminate this Agreement at any time before expiration of the notice period
and pay the base salary and benefits to which Employee would have been entitled but for such election to terminate sooner. Promptly following
termination or expiration of this Agreement, Company shall pay to Employee such employee benefits (excluding base salary, annual bonus,
and equity compensation), if any, to which Employee may be entitled under the Company’s employee benefit plans and/or applicable
law as of the termination or expiration date; provided that, in no event shall Employee be entitled to any payments in the nature of severance
or termination payments except as specifically provided in Section 3.7. On termination or expiration of this Agreement, Employee shall
be deemed to have resigned from all positions that Employee holds as an officer, manager or director of any Group Company.


 






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3. COMPENSATION.
During the Term, Company shall provide the following compensation to Employee:


 


3.1 Base
Salary.  Employee will receive an annualized base salary of $325,000. Effective as of August 16 each year, base salary will increase
by 10% from the prior year base salary rate. Employee’s base salary may be increased or decreased from time to time at the sole
discretion of Company, provided that such base salary may not be decreased below the amount stated in this Section 3.1 (after giving effect
to the annual increase provided herein). Base salary will be paid in accordance with Company’s standard payroll practices as they
may exist from time to time.


 


3.2 Bonus.
Employee will be eligible for an annual performance bonus in the target amount of 50% of base salary (with a maximum amount of 100% of
base salary), based upon Employee’s achievement of performance goals established by Company in its sole discretion. Any bonus to
be paid for a year will be paid in accordance with Company’s standard payroll practices as they may exist from time to time not
later than 30 days after the filing of Company’s Annual Report on Form 10-K. No pro-rated bonus will be paid for any partial year
of employment except as expressly provided in Section 3.7. Notwithstanding the foregoing, Employee shall earn a minimum $50,000 cash bonus
in respect of calendar year 2022 subject to continued employment through December 31, 2022.


 


3.3 Equity.
Company will grant the following equity awards to Employee pursuant to its Amended and Restated 2018 Equity Incentive Plan or any successor
plan thereto (the “Plan”), subject to Employee’s execution and delivery of Company’s then-current form
of award agreement and covenant agreement:


 


3.3.1 As
of August 9, 2022 (the date of board approval), 90,000 restricted stock units, which shall vest in equal installments on June 15 and December
15 each year over three years; and


 


3.3.2 As
of June 15 each year during the Term, subject to board and shareholder approval of sufficient additional incentive equity under the Plan,
an additional award of approximately the same value as the award set forth in Section 3.3.1, determined based on the closing price of
Company stock on June 15 of the applicable year (or if such date is not a trading day, the trading day immediately preceding such date),
vesting in equal installments on June 15 and December 15 each year over three years.


 


All other terms and conditions of such
awards shall be governed by the terms and conditions of the Plan and the applicable award agreement(s) and covenant agreement(s).


 


3.4 Time
Off. Employee will be eligible for three weeks’ paid vacation per year and may accrue up to four weeks of paid vacation total.
Employee will also be entitled to time off for illness, bereavement, parental leave and other personal matters as provided in Company’s
policies in effect from time to time, which will not accrue.


 


3.5 Other
Employment Benefits. Employee will be allowed to participate in Company’s other benefit plans and programs on the same basis
as other Company Employees, subject to the eligibility requirements of such plans or programs. Such benefit plans and programs may be
adopted, modified or terminated by Company from time to time in its sole discretion, subject to the terms of such benefit plans and applicable
law, and may include, without limitation, medical, health and dental care, life insurance, disability protection, 401(k) and retirement
plans.


 






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3.6 Expense
Reimbursement. Company shall reimburse Employee for out-of-pocket expenses reasonably incurred by Employee in the performance of Employee’s
duties under this Agreement, subject to Company’s policies regarding expense reimbursement in effect from time to time.


 


3.7 Severance.


 


3.6.1 If
Company terminates Employee’s employment without Cause (defined below), and provided that Employee executes and returns to Company
a release of claims in a form reasonably acceptable to Company that becomes fully effective within 60 days after the effective date of
such termination (“Termination Date”), Company shall provide severance pay to Employee in an amount equal to the sum
of: (a) three months of base salary; (b) three months of annual bonus at Employee’s target amount; and (c) three months of
Company’s contribution to Employee’s health and welfare benefits, in each case determined at the rates in effect as of the
Termination Date. Severance pay will be paid over a period of three months in equal installments on Company’s regular paydays, commencing
on the first payday that is at least 60 days after the Termination Date; provided that the first such payment will include all sums that
would have been paid had payment commenced on the first payday after the Termination Date.


 


3.6.2 As
used in this Agreement, “Cause” means Employee’s: (a) indictment for or conviction of (including plea of guilty
or no-contest to) any felony or any crime involving dishonesty; (b) engagement in embezzlement, misappropriation, or fraud, (c) engagement
in illegal conduct or gross misconduct in connection with Employee’s employment that is materially injurious to the Group Companies,
which includes sexual assault, sexual harassment, or similar misconduct; (d) refusal or intentional failure to comply with any lawful
written directive of the CEO, President or Board of Directors reasonably within the scope of Employee’s duties and responsibilities;
(e) material breach of Employee’s fiduciary duty or duty of loyalty to any Group Company; or (f) material breach of this Agreement,
any other contract with any Group Company or any policy of any Group Company that is not cured (if capable of cure) within 10 business
days after written notice to Employee identifying the breach; provided no such opportunity to cure shall be required if a substantially
similar breach occurred within the preceding 12-month period.


 


3.8 Clawback.
Notwithstanding anything in this Agreement to the contrary, any incentive-based or other compensation paid to Employee under this Agreement
or any other agreement or arrangement with Company 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 Company pursuant to any such law, government regulation or stock exchange
listing requirement). Company will make any determination for clawback or recovery in its sole discretion and in accordance with any applicable
law or regulation.


 


4. RESTRICTIVE
COVENANTS. Employee acknowledges Employee’s non-competition, non-solicitation, non-disparagement, confidentiality, and other
obligations contained in the covenant agreement(s) executed by Employee in connection with Employee’s equity awards. In the event
of a conflict between any such covenant agreements, the legally enforceable provision affording the greatest protection to Company shall
prevail. Such obligations are incorporated herein by this reference, as if set forth fully herein.


 


5. INDEMNIFICATION
AND INSURANCE. In the event that Employee 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
Employee or any Group Company related to any dispute between Employee and such Group Company with respect to this Agreement or Employee’s
employment hereunder, by reason of the fact that Employee is or was a director or officer of a Group 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, Employee shall be indemnified and held harmless by Company to the maximum extent permitted under applicable
law and Company’s bylaws 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 Employee in defense of such Proceeding
(including attorneys’ fees) shall be paid by Company in advance of the final disposition of such litigation upon receipt by 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 Employee to repay such
amounts if it is ultimately determined that Employee is not entitled to be indemnified by Company under this Agreement. In addition, during
the Term and for a period of six years thereafter, Company or any successor to Company shall purchase and maintain, at its own expense,
directors’ and officers’ liability insurance providing commercially reasonable coverage to Employee.


 






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		6.	ADDITIONAL PROVISIONS



 


5.1 Severability
of Provisions. If any of the provisions of this Agreement will be or become invalid or illegal under any provision of applicable law,
the remainder of the Agreement will not be affected thereby.


 


5.2 Modification;
Waiver. Except for judicial modification of restrictive covenants as provided in the covenant agreement(s) executed by Employee in
connection with Employee’s equity awards, this Agreement cannot be amended or modified except by a writing signed by each of the
parties. No waiver of any provision will be deemed to have occurred unless memorialized in a writing signed by the waiving party. If either
party should waive any breach of any provision of this Agreement, such party will not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this Agreement.


 


5.3 Compliance
with Section 409A. The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Internal
Revenue Code of 1986 (“Section 409A”), to the extent subject thereto, and accordingly, to the maximum extent permitted,
this Agreement will be interpreted to be in compliance with Section 409A. The payment of any annual bonus is intended to be a “short
term deferral” under Section 409A and any amount payable will be paid in a lump sum on a date determined by Company before the end
of the “short term deferral” period” with respect to such bonus. To the extent required to avoid an accelerated or additional
tax under Section 409A, amounts reimbursable to Employee under this Agreement for expenses will be paid to Employee on or before the last
day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement during one
year may not affect the amounts reimbursable in any subsequent year. Notwithstanding any other provision in this Agreement or in any other
document, Company will not be responsible for the payment of any applicable taxes incurred by Employee pursuant to this Agreement, including
with respect to compliance pursuant to Section 409A. Company makes no representation that any or all of the payments and benefits described
in this Agreement will be exempt from or comply with Section 409A.


 


5.4 Governing
Law; Dispute Resolution. This Agreement will be governed by the laws of the State of Colorado and applicable federal law, without
regard to any state’s principles regarding conflict of laws. Any action arising out of or relating to this Agreement will be subject
to the arbitration or other dispute resolution provisions contained in the most recent (as of the date such action is initiated) covenant
agreement executed by Employee in connection with Employee’s equity awards.


 


5.5 Attorney
Fees. In the event of a breach or threatened breach of this Agreement, the non-breaching party will be entitled to recover such party’s
attorney fees incurred as a result of such breach or threatened breach.


 






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5.6 Binding
Effect. This Agreement will be binding on and inure to the benefit of the parties hereto and their successors, assigns, and personal
representatives and heirs; provided, however, that this Agreement may not be assignable by Employee.


 


5.7 Withholding
and Deductions. All payments of base salary, bonus and severance pursuant to this Agreement will be subject to normal withholding
for taxes and other applicable payroll deductions.


 


5.8 Construction.
This Agreement will be deemed to have been drafted jointly by the parties, and no ambiguity in the Agreement will be construed against
either Company or Employee.


 


5.9 Titles
and Headings. Titles and headings in this Agreement are for purpose of reference only and will not limit, define or otherwise affect
the provisions of this Agreement.


 


5.10 Complete
Agreement. This Agreement (along with the other agreements referenced herein) is the entire agreement between the parties regarding
the matters addressed herein, and it and supersedes and replaces all prior agreements, representations, negotiations or discussions between
the parties regarding such matters, whether written or oral. This Agreement may be signed in counterparts, including fax counterparts,
and all counterparts together constitute one fully-executed agreement.


 


	EMPLOYEE: 	 	COMPANY:  
	 	 	 
	 	 	GROWGENERATION CORP.
	 	 	 
	/s/ Gregory Sanders 	 	By:	/s/ Darren Lampert
	Gregory Sanders	 	 	Darren Lampert, CEO
	 	 	 
	Date:	8/11/2022	 	Date:	8/11/2022



 


 


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