Item 1.01Entry into a Material Definitive Agreement.
Employment Agreement
Effective February 11, 2022, the Company appointed Dr. Michael R. Hawthorne as
the Deputy Chief Executive Officer of the Company and concurrently therewith the
Company and Dr. Hawthorne entered into an employment agreement (the "Employment
Agreement"), which sets forth the terms and conditions of Dr. Hawthorne's
employment.
Dr. Hawthorne's employment with the Company will be considered "at-will"
employment, and either the Company or Dr. Hawthorne may terminate the Agreement
with or without cause. Other than a termination during the first 90 days, in
the event of Dr. Hawthorne's termination of employment, for any reason, the
Company shall pay to Dr. Hawthorne: (i) any base salary earned, but unpaid,
through the date of termination of employment; (ii) reimbursement for
unreimbursed business expenses properly incurred by Dr. Hawthorne, which shall
be subject to and paid in accordance with the Company's expense reimbursement
policy; and (iii) such equity compensation, if any, to which Dr. Hawthorne may
be entitled as of the date of termination of employment.
The Company shall pay Dr. Hawthorne an annualized base salary of $1.00.
Effective February 11, 2022, the Company granted Dr. Hawthorne a non-qualified
stock option to purchase two million (2,000,000) shares of the Company's common
stock, with an exercise price equal to $3.00, (i.e., the closing price of the
Common Stock of the Company as reported by the OTC Markets Pink Sheets, as of
the date immediately preceding the Effective Date. Such options shall be
exercisable for seven (7) years. Subject to the Plan, the options shall vest at
the rate of 1/48 per month on the last day of each month following the Grant
Date, with all unvested options vesting on the fourth anniversary date of the
Grant Date.
Notwithstanding any provision of the Plan or the Option Agreement to the
contrary, in the event of a Change in Control as defined in the Employment
Agreement there shall be an acceleration of the vesting of the
--------------------------------------------------------------------------------
Page 2
--------------------------------------------------------------------------------
number Options equal to one million (1,000,000) minus the number of Options
already vested. To the extent practicable, such acceleration of vesting and
exercisability shall occur in a manner and at a time which allows Employee the
ability to participate in the Change in Control with respect to the Option
Shares.
Subject to terms of the Employment Agreement and Option, all other terms and
conditions of the Option including, without limitation, the treatment of vested
and unvested Option shares following a termination of employment, shall be
governed by the terms and conditions of the Plan.
Pursuant to the terms of the Agreement, the Company shall indemnify Dr.
Hawthorne against any and all losses incurred by reason of the fact that he is
an officer, director, agent or advisor of the Company, or is or was serving at
the request of the Company as a director, officer, employee, agent or advisor of
another corporation, partnership, joint venture, trust, limited liability
company or other entity or enterprise, in each case to the fullest extent
permitted by Nevada law.
The foregoing summary description of the terms of the Employment Agreement is a
summary only and does not purport to be complete, may not contain all
information that is of interest to the reader and is qualified in its entirety
by reference to the full text of such Employment Agreement, attached hereto as
Exhibit 10.01.
Consulting Agreement
On February 11, 2022 the Company entered into a Consulting Agreement with Badger
Real Estate Advisors, LLC, an Illinois limited liability company (the
"Consultant"), owned and controlled by Mitch Kahn. Mr. Kahn, a seasoned
executive and entrepreneur, through his entity, will advise the Company on
various projects and undertakings, in furtherance of the Company's long-term
objectives, growth and optimizing the value of the Company.
Mr. Kahn was the Co-Founder and CEO of Grassroots Cannabis, a large private,
vertically integrated cannabis operation in the United States, which was
purchased by Curaleaf Holdings in 2020. Mr. Kahn co-founded Grassroots in 2014
to provide safe and efficacious cannabinoid products to consumers. Under his
leadership, Mr. Kahn led over 1,100 team members across 11 states and obtained
more than 60 regulatory licenses in the emerging cannabis sector. Prior to
Grassroots Cannabis, Mr. Kahn co-founded Frontline Real Estate Partners, a
Chicago-based real estate investment and advisory company with expertise in the
acquisition, development, management, disposition, and leasing of commercial
real estate properties throughout the United States. The company acquired
properties valued at more than $125,000,000 and built a successful brokerage and
property management business currently managing more than two million square
feet of properties. In addition, to founding Grassroots Cannabis and Frontline,
Mr. Kahn co-founded Hilco, a leading real estate restructuring, disposition
valuation, and appraisal firm. Mitch served as President and CEO, and grew the
business to more than 30 employees and annual revenues in excess of $15,000,000.
Mr. Kahn began his career as a transactional attorney focused on real estate and
corporate M&A transactions. Before entering his entrepreneurial endeavors, he
served as Senior Vice President of Sportmart, growing the company's footprint
from 20 to 70 stores. Mr. Kahn is a graduate of the University of Wisconsin
School of Business and received his JD from Northwestern University Law
School. Mr. Kahn serves on multiple Boards and is actively involved in
numerous charitable and community organizations. Mr. Kahn currently serves as
Chairman of Frontline Real Estate Partners and Fyllo, and sits on the Board of
Directors at Wesana Heath and Curaleaf.
Pursuant to the Consulting Agreement, in consideration for certain services
rendered by the Consultant, the Company granted Consultant a non-qualified stock
option o purchase three million five (3,500,000) shares of the Company's common
stock with an exercise price of $3.00 per share, (i.e., equal to the closing
price of the Common Stock of the Company as reported by the OTC Markets Pink
Sheets, as of the date immediately preceding the Effective Date. The Option
shall be comprised of 2,500,000 Base Options and 1,000,000 Bonus Options which
vest as provided in the Consulting Agreement. Concurrently with the Consulting
Agreement, the Company and Consultant entered into a Confidentiality and
Proprietary Rights Agreement and Mutual Agreement to Arbitrate Claims.
--------------------------------------------------------------------------------
Page 3
--------------------------------------------------------------------------------
The foregoing summary description of the terms of the Consulting Agreement is a
summary only and does not purport to be complete, may not contain all
information that is of interest to the reader and is qualified in its entirety
by reference to the full text of such Consulting Agreement, attached hereto as
Exhibit 10.02.
Item 5.02Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers Compensatory Arrangements of Certain Officers.
Appointment of Deputy Chief Executive Officer
As set forth above, on February 11, 2022, the Company appointed Dr. Michael R.
Hawthorne as the Deputy Chief Executive Officer of the Company. Dr. Hawthorne
has not been named to serve on any committee of the Board. Dr. Hawthorne does
not have a material interest in any transaction that is required to be disclosed
under Item 404(a) of Regulation S-K, and there is no family relationship between
Dr. Hawthorne and any of the Company's other directors or executive officers.
Dr. Hawthorne's biography is below.
Dr. Michael R. Hawthorne, age 47, is a successful biopharma leader with proven
strategic and operational skills ranging from launching start-up discovery
biotech to driving growth in global large businesses. Dr. Hawthorne has a track
record of delivering a consistent return to shareholders through motivated
teams. Dr. Hawthorne was awarded Fellowship of The Royal Society of Biology in
2020 in recognition of his contribution to global biosciences. Dr. Hawthorne
has served as an advisor to Closed Loop Medicine Ltd (London, UK) since 2017.
Dr. Hawthorne has served as the Executive Chairman of Domainex Ltd (Cambridge,
UK), a Global drug discovery contract research organization (CRO), Since August
2021. Dr. Hawthorne is an investor and has served as a director of BG Capital
(USA) from 2016 to present, adding executive strategic and commercial direction
to their portfolio of healthcare companies, from biotech services to artificial
intelligence companies.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are either filed as a part hereof or
are incorporated by reference. Exhibit numbers correspond to the numbering
system in Item 601 of Regulation S-K.
Exhibit
Number Description of Exhibit
10.1 Employment Agreement dated February 11, 2022 (1)
10.2 Consulting Agreement dated February 11, 2022 (2)
(1) Filed herewith
© Edgar Online, source Glimpses