CV SCIENCES, INC. (OTCMKTS:CVSI) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02
On June 8, 2018, CV Sciences, Inc., a Delaware corporation (the “Company”), entered into an Employment Agreement (the “Employment Agreement”) with Michael Mona, Jr., the Company’s Founder and former President, Chief Executive Officer and member of the Board of Directors. to the Employment Agreement and effective as of May 31, 2018, Mr. Mona, as “Founder Emeritus”, will report to the Chief Executive Officer of the Company and have responsibility to manage the Company’s relationships with suppliers and vendors (subject to the decision-making authority of the Company’s executive officers), and perform such other duties assigned to him by the Board of Directors or Chief Executive Officer of the Company.
Salary, Bonus Compensation and Severance. The Employment Agreement has a three (3)-year term. During the term of the Agreement Mr. Mona’s base salary shall be determined by the Board of Directors, based upon the recommendation submitted to the Compensation Committee by the Company’s Chief Executive Officer. Mr. Mona’s initial base salary will continue at the current rate of $400,000. In addition to his base salary, Mr. Mona will continue to receive the benefits and other perquisites in place to his prior Employment Agreement with the Company, including a monthly car allowance in the amount of $1,500. Mr. Mona’s prior Employment Agreement, entered into by and between the Company and Mr. Mona on July 6, 2016 (the “2016 Employment Agreement”), is more fully described in that certain Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on July 11, 2016. Mr. Mona is eligible to receive an annual cash performance bonus upon achievement by the Company of certain goals set forth by the Compensation Committee, and in any event in the discretion of the Board after taking into consideration the recommendation of the Chief Executive Officer, performance of the Company, and the financial condition of the Company. The targeted amount of the annual bonus shall be 50% percent of Mr. Mona’s then effective base salary; provided, however, that the payment and amount of any annual bonus shall be in the sole discretion of the Board.
In addition to the performance bonus described above, to the Employment Agreement Mr. Mona continues to be eligible to receive all monetary bonus and severance arrangements set forth in the 2016 Employment Agreement and the Amendment to the 2016 Employment Agreement, dated March 16, 2017 (the “Amendment”). The terms of the Amendment are more fully described in the Company’s Current Report on Form 8-K filed with the SEC on March 22, 2017 and the Amendment is filed as an exhibit to the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2018.
The severance arrangements for Mr. Mona are as follows: in the event of termination without “Cause” or voluntary termination for “Good Reason”, Mr. Mona shall be entitled to severance equal to his then-current base salary until the end of the employment term (June 8, 2021), or for a period of twelve (12) months, whichever is greater. In the event of the death or disability of Mr. Mona, he (or his estate) shall receive his then-current base salary for a period of one (1) year.
Restricted Stock Units. In connection with Mr. Mona’s retention by the Company, the Compensation Committee granted Mr. Mona 2,950,000 stock-settled restricted stock units (RSU’s) under the Company’s Amended and Restated 2013 Equity Incentive Plan. The RSU’s have a term of ten (10) years, are durational based, with 983,323 RSU’s vesting on June 8, 2019 and the remaining RSU’s vesting in twenty-four (24) equal monthly increments.
Vesting of the RSUs shall accelerate upon termination of Mr. Mona without “Cause” or voluntary termination for “Good Reason”, upon Mr. Mona’s, death or “Disability” or upon a sale of the company or change in control, including a “Disposition Event” as defined under the Agreement and Plan of Reorganization dated December 30, 2015 by and among the Company (formerly CannaVest Corp.), CANNAVEST Merger Sub, Inc., CannaVest Acquisition LLC, CanX, Inc. and The Starwood Trust (the “Purchase Agreement”). The Purchase Agreement is filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 4, 2016.
About CV SCIENCES, INC. (OTCMKTS:CVSI)
CV Sciences, Inc. is a life science company. The Company operates in two segments: specialty pharmaceuticals and consumer products. The Company’s specialty pharma business segment is focused on developing and commercializing therapeutics utilizing synthetic Cannabidiol (CBD) across several therapeutic areas. The consumer product business segment is focused on manufacturing, marketing and selling plant-based CBD products to a range of market sectors.