BODY AND MIND INC. Item 5.02 Departure of Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
Effective
Amended and Restated Consulting Agreement with
On the Effective Date, the Company,
The Company may from time to time consider paying Fairlawn a bonus, the timing and amount of which remains entirely within the Company's discretion. The Company may also grant stock options to Fairlawn (or its designee) pursuant to the Company's 2012 Incentive Stock Option Plan; any such grant is completely within the Company's discretion.
The Fairlawn Agreement provides that Fairlawn is entitled to reimbursement of all reasonable pre-approved travel and other out-of-pocket expenses incurred in connection with the performance of services.
The Fairlawn Agreement is for an indefinite term, subject to termination as follows:
1. By theCompany: (a) Termination without Cause - for any reason, without liability, except as provided in the Change of Control Termination below, upon 90 days' written notice or payment in lieu thereof to Fairlawn; (b) Termination for Cause - with or without any advance notice in the event that the Company determines that the Fairlawn Agreement and Fairlawn's services should be terminated for Cause (as defined below), which shall be effective immediately upon written notice by the Company to Fairlawn and Fairlawn's rights to all compensation shall cease as of the date of such written notice. In such event, Fairlawn shall not be entitled to any future compensation nor shall Fairlawn by entitled to any severance pay. - 2 - (i) "Cause" shall mean: (i) Fairlawn's failure to perform its duties to the standards and requirements of the Company or neglect of duties for which employed or misconduct in the performance of such duties, all of such facts to be determined by the Company in its good faith judgment; (ii) Fairlawn committing fraud, misappropriation or embezzlement; (iii) Fairlawn's commission or conviction of, or entry of a plea of guilty, any felony or misdemeanor involving moral turpitude; (iv) Fairlawn breaching any provision of this Agreement or any of the rules, regulations, or policies of the Company; (v) the discovery that any of Fairlawn's representations are inaccurate; (vi) Fairlawn manufacturing, distributing, dispensing, transporting, possessing or being under the influence of alcohol or illegal drugs during working hours or while on the property or in a vehicle of the Company or any affiliate of the Company; (vii) Fairlawn misusing or abusing prescription drugs during working hours or while on the property of or in a vehicle of the Company or any affiliate of the Company; (viii) Fairlawn having present in his body illegal drugs in any amount during working hours or while on the property on in a vehicle of the Company or any affiliate of the Company; (ix) and Fairlawn failing to immediately comply with a request that he submit to a drug or alcohol test after a work-related injury or accident or whenever the Company reasonably suspects that Fairlawn is in violation of (vi) through (viii) above. Upon termination of this Agreement as provided in this Section 3.1, the Agreement shall terminate and be of no further force and effect, except as provided in Section 5.3 of the Fairlawn Agreement. (c) immediately, without cost, charge or liability, except as provided in the Change of Control Termination below, if the Company becomes bankrupt or insolvent. (d) immediately, without cost, charge or liability, in the event that Mr. Mills dies or is prevented from performing his duties or fulfilling his responsibilities under the Fairlawn Agreement by reason of incapacity or disability. 2. By Fairlawn: (a) At any time and at Fairlawn's sole discretion, without cause and without any cost, charge, or liability to the Company, upon thirty (30) days' written notice of such termination to the Company.
3. Change of Control Termination
(a) Notwithstanding any other provision contained herein, if Fairlawn's
engagement hereunder is terminated by Fairlawn for Good Reason or by
the Company without Cause (other than on account of Mr. Mills' death or
disability), in each case within twelve (12) months following a Change
in Control, Fairlawn shall be entitled to receive any accrued amounts
owed under the Fairlawn Agreement and subject to Fairlawn's compliance
with Part 4 (Confidentiality; Intellectual Property; and Restrictive
Covenants) of the Fairlawn Agreement Fairlawn shall be entitled to
receive the following:
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(i) a lump sum payment equal to twelve (12) months Fee for the year in
which the termination occurs (or if greater, the year immediately
preceding the year in which the Change in Control occurs), which
shall be paid within thirty (30) days following the date of
termination;
(b) For purposes of this Agreement "Change in Control" shall mean the
occurrence of any of the following after the Effective Date:
(i) one person (or more than one person acting as a group) acquires
ownership of stock of the Company that, together with the stock
held by such person or group, constitutes more than 50% of the
total fair market value or total voting power of the stock of the
Company; provided that, a Change in Control shall not occur if any
person (or more than one person acting as a group) owns more than
50% of the total fair market value or total voting power of the
Company's stock and acquires additional stock;
(ii) one person (or more than one person acting as a group) acquires
(or has acquired during the twelve-month period ending on the date
of the most recent acquisition) ownership of the Company's stock
possessing 30% or more of the total voting power of the Company's
stock;
(iii) a majority of the members of the Board are replaced during any
twelve-month period by directors whose appointment or election is
not endorsed by a majority of the Board before the date of
appointment or election; or
(iv) the sale of all or substantially all of the Company's assets.
Notwithstanding the foregoing, a Change in Control shall not occur
unless such transaction constitutes a change in the ownership of the
Company, a change in effective control of the Company, or a change in
the ownership of a substantial portion of the Company's assets under
Section 409A of the Internal Revenue Code.
(c) For purposes of this Agreement, "Good Reason" shall mean the occurrence
of any of the following, in each case during the Term of this Agreement
without Fairlawn's written consent:
(i) a material reduction in Fairlawn's Fee other than a general
reduction in Fee that affects all similarly situated consultant's or
Company executive's in substantially the same proportions;
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(ii) a relocation of Fairlawn's principal place of engagement by more
than 50 miles;
(iii) a material, adverse change in Fairlawn's authority, duties, or
responsibilities, or reporting structure applicable to Fairlawn.
Fairlawn cannot terminate the Agreement for Good Reason unless Fairlawn
has provided written notice to the Company of the existence of the
circumstances providing grounds for termination for Good Reason within
30 days of the initial existence of such grounds and the Company has had
at least 30 days from the date on which such notice is provided to cure
such circumstances. If Fairlawn does not terminate the Agreement for
Good Reason within 180 days after the first occurrence of the applicable
grounds, then Fairlawn will be deemed to have waived the right to
terminate for Good Reason with respect to such grounds.
Fairlawn has agreed to certain non-solicitation and no-hire covenants that will survive termination of the Fairlawn Agreement for a period of 12 months.
Amended and Restated Consulting Agreement with
On the Effective Date, the Company,
The Company may from time to time consider paying Golden Tree a bonus, the timing and amount of which remains entirely within the Company's discretion. The Company may also grant stock options to Golden Tree (or its designee) pursuant to the Company's 2012 Incentive Stock Option Plan; any such grant is completely within the Company's discretion.
The Golden Tree Agreement provides that Golden Tree is entitled to reimbursement of all reasonable pre-approved travel and other out-of-pocket expenses incurred in connection with the performance of services.
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The Golden Tree Agreement is for an indefinite term, subject to termination as follows:
1. By theCompany: (a) Termination without Cause - for any reason, without liability, except as provided in the Change of Control Termination below, upon 90 days' written notice or payment in lieu thereof to Golden Tree; (b) Termination for Cause - with or without any advance notice in the event that the Company determines that the Golden Tree Agreement and Golden Tree's services should be terminated for Cause (as defined below), which shall be effective immediately upon written notice by the Company to Golden Tree and Golden Tree's rights to all compensation shall cease as of the date of such written notice. In such event, Golden Tree shall not be entitled to any future compensation nor shall Golden Tree by entitled to any severance pay. (i) "Cause" shall mean: (i) Golden Tree's failure to perform its duties to the standards and requirements of the Company or neglect of duties for which employed or misconduct in the performance of such duties, all of such facts to be determined by the Company in its good faith judgment; (ii) Golden Tree committing fraud, misappropriation or embezzlement; (iii) Golden Tree's commission or conviction of, or entry of a plea of guilty, any felony or misdemeanor involving moral turpitude; (iv) Golden Tree breaching any provision of this Agreement or any of the rules, regulations, or policies of the Company; (v) the discovery that any of Golden Tree's representations are inaccurate; (vi) Golden Tree manufacturing, distributing, dispensing, transporting, possessing or being under the influence of alcohol or illegal drugs during working hours or while on the property or in a vehicle of the Company or any affiliate of the Company; (vii) Golden Tree misusing or abusing prescription drugs during working hours or while on the property of or in a vehicle of the Company or any affiliate of the Company; (viii) Golden Tree having present in his body illegal drugs in any amount during working hours or while on the property on in a vehicle of the Company or any affiliate of the Company; (ix) and Golden Tree failing to immediately comply with a request that he submit to a drug or alcohol test after a work-related injury or accident or whenever the Company reasonably suspects that Golden Tree is in violation of (vi) through (viii) above. Upon termination of this Agreement as provided in this Section 3.1, the Agreement shall terminate and be of no further force and effect, except as provided in Section 5.3 of the Golden Tree Agreement. (c) immediately, without cost, charge or liability, except as provided in the Change of Control Termination below, if the Company becomes bankrupt or insolvent. (d) immediately, without cost, charge or liability, in the event that Mr. Shim dies or is prevented from performing his duties or fulfilling his responsibilities under the Golden Tree Agreement by reason of incapacity or disability. - 6 - 2. By Golden Tree: (a) At any time and at Golden Tree's sole discretion, without cause and without any cost, charge, or liability to the Company, upon thirty (30) days' written notice of such termination to the Company.
3. Change of Control Termination
(a) Notwithstanding any other provision contained herein, if Golden Tree's
engagement hereunder is terminated by Golden Tree for Good Reason or by
the Company without Cause (other than on account of Mr. Shim's death or
disability), in each case within twelve (12) months following a Change
in Control, Golden Tree shall be entitled to receive any accrued
amounts owed under the Golden Tree Agreement and subject to Golden
Tree's compliance with Part 4 (Confidentiality; Intellectual Property;
and Restrictive Covenants) of the Golden Tree Agreement Golden Tree
shall be entitled to receive the following:
(i) a lump sum payment equal to twelve (12) months Fee for the year in
which the termination occurs (or if greater, the year immediately
preceding the year in which the Change in Control occurs), which
shall be paid within thirty (30) days following the date of
termination;
(b) For purposes of this Agreement "Change in Control" shall mean the
occurrence of any of the following after the Effective Date:
(i) one person (or more than one person acting as a group) acquires
ownership of stock of the Company that, together with the stock
held by such person or group, constitutes more than 50% of the
total fair market value or total voting power of the stock of the
Company; provided that, a Change in Control shall not occur if any
person (or more than one person acting as a group) owns more than
50% of the total fair market value or total voting power of the
Company's stock and acquires additional stock;
(ii) one person (or more than one person acting as a group) acquires
(or has acquired during the twelve-month period ending on the date
of the most recent acquisition) ownership of the Company's stock
possessing 30% or more of the total voting power of the Company's
stock;
(iii) a majority of the members of the Board are replaced during any
twelve-month period by directors whose appointment or election is
not endorsed by a majority of the Board before the date of
appointment or election; or
(iv) the sale of all or substantially all of the Company's assets.
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Notwithstanding the foregoing, a Change in Control shall not occur unless
such transaction constitutes a change in the ownership of the Company, a
change in effective control of the Company, or a change in the ownership of
a substantial portion of the Company's assets under Section 409A of the
Internal Revenue Code.
(c) For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the following, in each case during the Term of
this Agreement without Golden Tree's written consent:
(i) a material reduction in Golden Tree's Fee other than a general
reduction in Fee that affects all similarly situated consultant's
or Company executive's in substantially the same proportions;
(ii) a relocation of Golden Tree's principal place of engagement by
more than 50 miles;
(iii) a material, adverse change in Golden Tree's authority, duties, or
responsibilities, or reporting structure applicable to Golden
Tree.
Golden Tree cannot terminate the Agreement for Good Reason unless Golden
Tree has provided written notice to the Company of the existence of the
circumstances providing grounds for termination for Good Reason within
30 days of the initial existence of such grounds and the Company has had
at least 30 days from the date on which such notice is provided to cure
such circumstances. If Golden Tree does not terminate the Agreement for
Good Reason within 180 days after the first occurrence of the applicable
grounds, then Golden Tree will be deemed to have waived the right to
terminate for Good Reason with respect to such grounds.
Golden Tree has agreed to certain non-solicitation and no-hire covenants that will survive termination of the Golden Tree Agreement for a period of 12 months.
Amended and Restated Employment Agreement with Stephen 'Trip' Hoffman
On the Effective Date, the Company and Stephen 'Trip' Hoffman entered into an
Amended and Restated Employment Agreement (the "Hoffman Agreement"), which
supersedes and replaces
The Hoffman Agreement has an indefinite term commencing retroactively on
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The Company may from time to time consider paying
The Hoffman Agreement shall terminate, or may be terminated as follows:
(a) Termination by the Company for "Cause" - with or without any advance
notice in the event that the Company determines that the Hoffman
Agreement and Mr. Hoffman's services hereunder should be terminated for
Cause (as defined below). Termination for Cause shall be effective
immediately upon delivery of written notice thereof by the Employer to
Employee and Employee's rights to all compensation shall cease as of
the date of such written notice. In such event, Employee shall not be
entitled to any future compensation nor shall Employee be entitled to
any severance pay.
(i) For the purposes of the Hoffman Agreement, "Cause" shall mean: (i)
Mr. Hoffman's failure to perform his duties to the standards and
requirements of the Company or neglect of duties for which employed
or misconduct in the performance of such duties, all of such facts
to be determined by the Company in its good faith judgment; (ii) Mr.
Hoffman committing fraud, misappropriation or embezzlement; (iii)
Mr. Hoffman's commission or conviction of, or entry of a plea of
guilty, any felony or misdemeanor involving moral turpitude; (iv)
Mr. Hoffman breaching any provision of the Hoffman Agreement or any
of the rules, regulations, or policies of the Company; (v) the
discovery that any of Mr. Hoffman's representations are inaccurate;
(vi) Mr. Hoffman manufacturing, distributing, dispensing,
transporting, possessing or being under the influence of alcohol or
illegal drugs during working hours or while on the property or in a
vehicle of the Company or any affiliate of the Company; (vii) Mr.
Hoffman misusing or abusing prescription drugs during working hours
or while on the property of or in a vehicle of the Company or any
affiliate of the Company; (viii) Company having present in his body
illegal drugs in any amount during working hours or while on the
property on in a vehicle of the Company or any affiliate of the
Company; (ix) and Mr. Hoffman failing to immediately comply with a
request that he submit to a drug or alcohol test after a
work-related injury or accident or whenever the Company reasonably
suspects that Mr. Hoffman is in violation of (vi) through (viii)
above. Upon termination of the Hoffman Agreement as provided in this
Section 5(a)(i), the Hoffman Agreement shall terminate and be of no
further force and effect, except as provided in Section 7 of the
Hoffman Agreement.
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(b) Mutual Agreement - At any time by the mutual written agreement of the
parties, the Hoffman Agreement shall terminate and shall be of no
further force and effect, except as provided herein and as provided in
Section 7 of the Hoffman Agreement.
(c) Death or Incapacity - In the event that
prevented from performing his duties or fulfilling his responsibilities
under the Hoffman Agreement by reason of incapacity or disability, the
Hoffman Agreement shall terminate and shall be of no further force and
effect.
(d) Termination by
the Company, Mr. Hoffman has the right to voluntarily terminate the
Hoffman Agreement, for any reason and at any time, by providing the
Company at least thirty (30) days prior written notice of such
termination.
(e) Termination by the Company - The Company has the right to terminate the
Hoffman Agreement, at any time and for any reason, by providing the
Company at least thirty (30) days prior written notice of such
termination. In the event the Company terminates Mr. Hoffman's
employment, for any reason and at any time, his right to all
compensation shall cease at the end of the 30 day notice period,
except, if applicable, as provided in the section on Change of Control
Termination below.
(f) Change of Control Termination
(i) Notwithstanding any other provision contained herein, if Mr.
Hoffman's employment hereunder is terminated by Mr. Hoffman for Good
Reason or by the Company without Cause (other than on account of Mr.
Hoffman's death or disability), in each case within twelve (12)
months following a Change in Control, Mr. Hoffman shall be entitled
to receive the Accrued Amounts (as defined in the Hoffman Agreement)
and subject to Mr. Hoffman's compliance with the Section 6 (Change
of Control Termination) and Section 7 (Covenants and Restrictions)
of the Hoffman Agreement Mr. Hoffman shall be entitled to receive
the following:
(A) a lump sum payment equal to twelve (12) months base salary for
the year in which the Termination Date occurs (or if greater, the
year immediately preceding the year in which the Change in
Control occurs), which shall be paid within thirty (30) days
following the Termination Date;
(ii) For purposes of the Hoffman Agreement "Change in Control" shall
mean the occurrence of any of the following after the Effective
Date:
(A) one person (or more than one person acting as a group) acquires
ownership of stock of the Company that, together with the stock
held by such person or group, constitutes more than 50% of the
total fair market value or total voting power of the stock of the
Company; provided that, a Change in Control shall not occur if
any person (or more than one person acting as a group) owns more
than 50% of the total fair market value or total voting power of
the Company's stock and acquires additional stock;
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(B) one person (or more than one person acting as a group) acquires
(or has acquired during the twelve-month period ending on the
date of the most recent acquisition) ownership of the Company's
stock possessing 30% or more of the total voting power of the
Company's stock;
(C) a majority of the members of the Board are replaced during any
twelve-month period by directors whose appointment or election
is not endorsed by a majority of the Board before the date of
appointment or election; or
(D) the sale of all or substantially all of the Company's assets.
Notwithstanding the foregoing, a Change in Control shall not occur
unless such transaction constitutes a change in the ownership of the
Company, a change in effective control of the Company, or a change in
the ownership of a substantial portion of the Company's assets under
Section 409A of the Internal Revenue Code.
(iii) For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the following, in each case during the
continuance of Mr. Hoffman's employment hereunder without Mr.
Hoffman's written consent:
(A) a material reduction in Mr. Hoffman's base salary other than a
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