EXHIBIT 10.1
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (the "Agreement") is made and entered into as of
January 9, 2006, by and between Grant Guenther ("Employee") and Orange 21 Inc.,
a Delaware corporation (the "Company"), with reference to the following facts:
1.
Employee is employed as Vice President
of Marketing; and
2.
Employee's employment with the Company
will end as of February 15, 2006 (the "Separation Date").
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, it is hereby agreed by and between the parties hereto as follows:
1.
CONSIDERATION.
IN CONSIDERATION OF THE
COVENANTS AND PROMISES CONTAINED IN THIS AGREEMENT, AND AS FULL AND FINAL
COMPENSATION TO EMPLOYEE FOR ALL SERVICES AS AN EMPLOYEE, EMPLOYEE SHALL BE
ENTITLED TO CONTINUED EMPLOYMENT WITH THE COMPANY UNTIL THE SEPARATION DATE,
UNLESS THE COMPANY DETERMINES THAT EMPLOYEE'S EMPLOYMENT MUST BE TERMINATED FOR
CAUSE AT AN EARLIER TIME.
AS A RESULT, EMPLOYEE SHALL CONTINUE TO RECEIVE
SALARY PAYMENTS AND BENEFITS ON THE REGULAR PAYDAYS OF THE COMPANY UNTIL THE
SEPARATION DATE.
CAUSE IS DEFINED AS FOLLOWS: MATERIALLY BREACHING THIS
AGREEMENT, REFUSING TO PERFORM DUTIES AS ASSIGNED, COMMITTING ANY ACT OF
DISHONESTY, KNOWINGLY VIOLATING ANY APPLICABLE LAW OR REGULATION IN THE COURSE
OF HIS DUTIES, VIOLATING A COMPANY POLICY WHICH VIOLATION HAS OR MAY HAVE A
MATERIAL ADVERSE IMPACT ON THE COMPANY, FAILING TO PERFORM HIS DUTIES IN A
TIMELY MANNER (RESULTING IN A SIGNIFICANT LOSS TO OR IMPAIRMENT OF THE COMPANY'S
INTERESTS), BECOMING DISABLED SUCH THAT HE CANNOT PERFORM HIS ESSENTIAL DUTIES
WITH OR WITHOUT REASONABLE ACCOMMODATION, OR DYING.
ADDITIONALLY, CAUSE, AS
DEFINED ABOVE, IS DEEMED TO EXIST IF THE COMPANY MAKES A DETERMINATION THAT
CAUSE EXISTS IN GOOD FAITH AFTER A REASONABLE INVESTIGATION.
ON OR ABOUT THE
SEPARATION DATE, EMPLOYEE WILL RECEIVE A SECOND SEVERANCE AGREEMENT WHICH WILL
ENTITLE HIM, SHOULD HE PROPERLY EXECUTE THE SECOND SEVERANCE AGREEMENT, TO
FURTHER CONSIDERATION.
THE DETAILS OF THE SECOND SEVERANCE AGREEMENT ARE SET
FORTH IN A LETTER ATTACHED HERETO AND INCORPORATED BY REFERENCE HEREIN.
2.
ACCRUED SALARY AND VACATION.
EMPLOYEE
ACKNOWLEDGES AND UNDERSTANDS THAT AS OF THE SEPARATION DATE, THE COMPANY WILL
HAVE PAID EMPLOYEE THE FOLLOWING AMOUNTS, SUBJECT TO STANDARD WITHHOLDINGS FOR
TAX AND SOCIAL SECURITY PURPOSES:
(I) ALL ACCRUED SALARY AND BONUS THROUGH THE
SEPARATION DATE; AND (II) ALL UNUSED AND ACCRUED VACATION PAY EMPLOYEE EARNED
PRIOR TO THE SEPARATION DATE.
EMPLOYEE ACKNOWLEDGES AND AGREES THAT SUCH
AMOUNTS WILL BE ALL THAT HE IS ENTITLED TO RECEIVE AS SALARY, BONUS, AND
VACATION PAY.
ALL APPLICABLE TAXES AND REQUIRED WITHHOLDINGS SHALL BE DEDUCTED
FROM THE SEPARATION PAYMENT.
3.
STOCK OPTIONS.
Employee acknowledges that the vested 24,062 stock options he currently holds to
purchase shares of the Company's common stock will lapse ninety (90) days after
the Separation Date.
4.
NON-SOLICITATION OF EMPLOYEES.
Employee agrees that for the term of his employment with the Company and for one
year and six months after the Separation Date, Employee, will not encourage or
solicit any employee or consultant of the Company to leave the