Document:

pfgc-ex44_162.htm

Exhibit 4.4

DESCRIPTION OF CAPITAL STOCK

The following is a description of the material terms of the capital stock of Performance Food Group Company (the “Company”).  This description is not complete and is qualified in its entirety by reference to the Company’s amended and restated certificate of incorporation (the “Certificate of Incorporation”) and amended and restated bylaws (the “Bylaws”), copies of which are filed as exhibits to the Company’s Annual Report on Form 10-K.

The Company’s purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the General Corporation Law of the State of Delaware (the “DGCL”). The Company’s authorized capital stock consists of 1,000,000,000 shares of common stock, par value $0.01 per share, (“Common Stock”) and 100,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”). Unless the Company’s Board of Directors (the “Board of Directors”) determines otherwise, the Company will issue all shares of its capital stock in uncertificated form.

Common Stock

Holders of Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders, including the election or removal of directors. The holders of Common Stock do not have cumulative voting rights in the election of directors. Upon the Company’s liquidation, dissolution, or winding up and after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of Common Stock will be entitled to receive pro rata the Company’s remaining assets available for distribution. Holders of Common Stock do not have preemptive, subscription, redemption, or conversion rights. The Common Stock is not subject to further calls or assessment by the Company. There are no redemption or sinking fund provisions applicable to the Common Stock. All shares of the Company’s outstanding Common Stock are fully paid and non-assessable. The rights, powers, preferences, and privileges of holders of Common Stock are subject to those of the holders of any shares of Preferred Stock that the Company may authorize and issue in the future. 

Preferred Stock

The Certificate of Incorporation authorizes the Board of Directors to establish one or more series of Preferred Stock (including convertible preferred stock). The authorized shares of Preferred Stock are available for issuance generally without further action by the Company’s stockholders. The Board of Directors may determine, with respect to any series of preferred stock, the powers, including preferences and relative participations, optional or other special rights, and the qualifications, limitations, or restrictions thereof, of that series, including:

 

	
 
	
•
	
 
	
the designation of the series;

 

	
 
	
•
	
 
	
the number of shares of the series, which the Board of Directors may, except where otherwise provided in the preferred stock designation, increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares then outstanding);

 

	
 
	
•
	
 
	
whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;

 

	
 
	
•
	
 
	
the dates at which dividends, if any, will be payable;

 

	
 
	
•
	
 
	
the redemption rights and price or prices, if any, for shares of the series;

 

	
 
	
•
	
 
	
the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series;

 

	
 
	
•
	
 
	
the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Company’s affairs;

 

	
 
	
•
	
 
	
whether the shares of the series will be convertible into shares of any other class or series, or any other security, of the Company or any other corporation, and, if so, the specification of the other class or series or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates as of which the shares will be convertible, and all other terms and conditions upon which the conversion may be made;

 

 

 

	
 
	
•
	
 
	
restrictions on the issuance of shares of the same series or of any other class or series; and

 

	
 
	
•
	
 
	
the voting rights, if any, of the holders of the series.

The Company could issue a series of Preferred Stock that could, depending on the terms of the series, impede or discourage an acquisition attempt or other transaction that some, or a majority, of the holders of Common Stock might believe to be in their best interests or in which the holders of Common Stock might receive a premium for shares of Common Stock over the market price of the Common Stock. Additionally, the issuance of Preferred Stock may adversely affect the rights of holders of Common Stock by restricting dividends on the Common Stock, diluting the voting power of the Common Stock, or subordinating the liquidation rights of the Common Stock. As a result of these or other factors, the issuance of Preferred Stock could have an adverse impact on the market price of the Common Stock.

Dividends

Delaware law permits a corporation to declare and pay dividends out of “surplus” or, if there is no “surplus,” out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. “Surplus” is defined as the excess of the net assets of the corporation over the amount determined to be the capital of the corporation by the Board of Directors. The capital of the corporation is typically calculated to be (and cannot be less than) the aggregate par value of all issued shares of capital stock. Net assets equal the fair value of the total assets minus total liabilities. Delaware law also provides that dividends may not be paid out of net profits if, after the payment of the dividend, capital is less than the capital represented by the outstanding stock of all classes having a preference upon the distribution of assets.

Declaration and payment of any dividend will be subject to the discretion of the Board of Directors. The time and amount of dividends will depend upon the Company’s financial condition, operations, cash requirements and availability, debt repayment obligations, capital expenditure needs, restrictions in the Company’s debt instruments, industry trends, the provisions of Delaware law affecting the payment of distributions to stockholders, and any other factors the Board of Directors may consider relevant.

The Company has no current plans to pay dividends on the Common Stock. Any decision to declare and pay dividends in the future will be made at the sole discretion of the Board of Directors and will depend on, among other things, the Company’s results of operations, cash requirements, financial condition, contractual restrictions, and other factors that the Board of Directors may deem relevant. Because the Company is a holding company and has no direct operations, the Company will only be able to pay dividends from funds it receives from its subsidiaries. In addition, the Company’s ability to pay dividends will be limited by covenants in the Company’s existing indebtedness and may be limited by the agreements governing other indebtedness that the Company or its subsidiaries incur in the future.

Annual Stockholder Meetings

The Bylaws provide that annual stockholder meetings will be held at a date, time, and place, if any, as exclusively selected by the Board of Directors. To the extent permitted under applicable law, the Company may conduct meetings by remote communications, including by webcast.

Anti-Takeover Effects of the Certificate of Incorporation and the Bylaws and Certain Provisions of Delaware Law

The Certificate of Incorporation, the Bylaws, and Delaware law contain provisions that are summarized in the following paragraphs and that are intended to enhance the likelihood of continuity and stability in the composition of the Board of Directors. These provisions are intended to avoid costly takeover battles, reduce the Company’s vulnerability to a hostile change of control, and enhance the ability of the Board of Directors to maximize stockholder value in connection with any unsolicited offer to acquire the Company.

 

However, these provisions may have an anti-takeover effect and may delay, deter, or prevent a merger or acquisition of the Company by means of a tender offer, a proxy contest, or other takeover attempt that a stockholder 

 

 

might consider in its best interest, including those attempts that might result in a premium over the prevailing market price for the shares of Common Stock held by stockholders.

Authorized but Unissued Capital Stock

Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of the New York Stock Exchange (“NYSE”), which would apply if and so long as the Common Stock remains listed on the NYSE, require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of Common Stock. Additional shares that may be used in the future may be issued for a variety of corporate purposes, including future public offerings, to raise additional capital, or to facilitate acquisitions.

The Board of Directors may generally issue shares of Preferred Stock on terms calculated to discourage, delay, or prevent a change of control of the Company or the removal of the Company’s management. Moreover, authorized but unissued shares of Preferred Stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, to facilitate acquisitions, and employee benefit plans.

One of the effects of the existence of unissued and unreserved Common Stock or Preferred Stock may be to enable the Board of Directors to issue shares to persons friendly to current management, which issuance could render more difficult, or discourage an attempt to obtain control of the Company by means of a merger, tender offer, proxy contest, or otherwise, and thereby to protect the continuity of the Company’s management and possibly deprive the Company’s stockholders of opportunities to sell their shares of Common Stock at prices higher than prevailing market prices.

Classified Board of Directors

The Certificate of Incorporation provides that the Board of Directors is divided into three classes of directors. At the Company’s 2019 annual meeting of stockholders and thereafter, each director who is up for election will be elected to serve for a term of one year and will hold office until the annual meeting at which his or her term expires and until his or her successor is elected or qualified. Commencing at the Company’s 2021 annual meeting of stockholders and thereafter, the Board of Directors will no longer be classified. The classification of directors until the 2021 annual meeting of stockholders will have the effect of making it more difficult for stockholders to change the composition of the Board of Directors. The Certificate of Incorporation and the Bylaws provide that, subject to any rights of holders of Preferred Stock to elect additional directors under specified circumstances, the number of directors will be fixed from time to time exclusively pursuant to a resolution adopted by the Board of Directors.

Business Combinations

The Company has opted out of Section 203 of the DGCL, which governs business combinations with interested stockholders; however, the Certificate of Incorporation contains similar provisions providing that the Company may not engage in certain “business combinations” with any “interested stockholder” for a three-year period following the time that the stockholder became an interested stockholder, unless:

 

	
 
	
•
	
 
	
prior to such time, the Board of Directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

 

	
 
	
•
	
 
	
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the Company’s voting stock outstanding at the time the transaction commenced, excluding certain shares; or

 

	
 
	
•
	
 
	
at or subsequent to that time, the business combination is approved by the Board of Directors and by the affirmative vote of holders of at least 66 2⁄3% of the Company’s outstanding voting stock that is not owned by the interested stockholder.

 

Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person 

 

 

who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of the Company’s outstanding voting stock. For purposes of this section only, “voting stock” has the meaning given to it in Section 203 of the DGCL.

Under certain circumstances, this provision will make it more difficult for a person who would be an “interested stockholder” to effect various business combinations with the Company for a three-year period. This provision may encourage companies interested in acquiring the Company to negotiate in advance with the Board of Directors because the stockholder approval requirement would be avoided if the Board of Directors approves either the business combination or the transaction that results in the stockholder becoming an interested stockholder. These provisions also may have the effect of preventing changes in the Board of Directors and may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

Removal of Directors; Vacancies

Until the completion of the Company’s 2021 annual meeting of stockholders, after which the directors will not be divided into separate classes and all directors will be elected to serve for a term of one year, directors (other than the directors elected by the holders of any series of Preferred Stock, voting separately as a series or together with one or more other such series, as the case may be) may be removed only for cause and only by a vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of the Company’s stock entitled to vote, voting together as a single class. Following the completion of the Company’s 2021 annual meeting of stockholders, when directors will not be divided into separate classes and all directors will be elected to serve for a term of one year, directors may be removed at any time either with or without cause by the affirmative vote of a majority in voting power of all outstanding shares of the Company’s stock entitled to vote, voting as a single class.

In addition, the Certificate of Incorporation also provides that, subject to the rights granted to one or more series of Preferred Stock then outstanding, any newly created directorship on the Board of Directors that results from an increase in the number of directors and any vacancies on the Board of Directors will be filled only by the affirmative vote of a majority of the remaining directors, even if less than a quorum, by a sole remaining director or by the stockholders.

No Cumulative Voting

Under Delaware law, the right to vote cumulatively does not exist unless a corporation’s certificate of incorporation specifically authorizes cumulative voting. The Certificate of Incorporation does not authorize cumulative voting. Therefore, stockholders holding a majority of the shares of the Company’s stock entitled to vote generally in the election of directors will be able to elect all the Company’s directors.

Special Stockholder Meetings

The Certificate of Incorporation provides that special meetings of the Company’s stockholders may be called at any time only by or at the direction of the Board of Directors or the chair of the Board of Directors. The Bylaws prohibit the conduct of any business at a special meeting other than as specified in the notice for such meeting. These provisions may have the effect of deferring, delaying, or discouraging hostile takeovers, or changes in control or management of the Company.

Director Nominations and Stockholder Proposals

The Bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of the Board of Directors or a committee of the Board of Directors. In order for any matter to be “properly brought” before a meeting, a stockholder will have to comply with advance notice requirements and provide the Company with certain information. Generally, to be timely, a stockholder’s notice must be received at the Company’s principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the immediately preceding annual meeting of stockholders. The Bylaws also specify requirements as to the form and content of a stockholder’s notice. The Bylaws allow the chair of the meeting at a meeting of the stockholders to adopt rules and regulations for the conduct of meetings that may have the effect of precluding the conduct of certain business at a meeting if the 

 

 

rules and regulations are not followed. These provisions may also defer, delay, or discourage a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to influence or obtain control of the Company.

Stockholder Action by Written Consent

The Certificate of Incorporation precludes stockholder action by written consent.

Supermajority Provisions

The Certificate of Incorporation and the Bylaws provide that the Board of Directors is expressly authorized to make, alter, amend, change, add to, rescind, or repeal, in whole or in part, the Bylaws without a stockholder vote in any matter not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation. Pursuant to the Bylaws, any amendment, alteration, rescission, or repeal of the Bylaws by the Company’s stockholders requires the affirmative vote of the holders of at least 66 2⁄3% in voting power of all the then outstanding shares of the Company’s stock entitled to vote thereon, voting together as a single class.

The DGCL provides generally that the affirmative vote of a majority of the outstanding shares entitled to vote thereon, voting together as a single class, is required to amend a corporation’s certificate of incorporation, unless the certificate of incorporation requires a greater percentage.

 

The Certificate of Incorporation provides that the following provisions in the Certificate of Incorporation may be amended, altered, repealed, or rescinded only by the affirmative vote of the holders of at least 66 2/3% in voting power of all the then outstanding shares of the Company’s stock entitled to vote thereon, voting together as a single class:

 

	
 
	
•
	
 
	
the provision requiring a 66 2⁄3% supermajority vote for stockholders to amend the Bylaws;

 

	
 
	
•
	
 
	
the provisions providing for a classified Board of Directors (the election and term of the Company’s directors);

 

	
 
	
•
	
 
	
the provisions regarding resignation and removal of directors;

 

	
 
	
•
	
 
	
the provisions regarding competition and corporate opportunities;

 

	
 
	
•
	
 
	
the provisions regarding entering into business combinations with interested stockholders;

 

	
 
	
•
	
 
	
the provisions regarding stockholder action by written consent;

 

	
 
	
•
	
 
	
the provisions regarding calling special meetings of stockholders;

 

	
 
	
•
	
 
	
the provisions regarding filling vacancies on the Board of Directors and newly created directorships;

 

	
 
	
•
	
 
	
the provisions eliminating monetary damages for breaches of fiduciary duty by a director; and

 

	
 
	
•
	
 
	
the amendment provision requiring that the above provisions be amended only with a 66 2⁄3% supermajority vote.

The combination of the classification of the Board of Directors until the 2021 annual meeting of stockholders, the lack of cumulative voting, and the supermajority voting requirements will make it more difficult for the Company’s existing stockholders to replace the Board of Directors as well as for another party to obtain control of the Company by replacing the Board of Directors. Because the Board of Directors has the power to retain and discharge the Company’s officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management.

These provisions may have the effect of deterring hostile takeovers or delaying or preventing changes in control of the Company’s management or the Company, such as a merger, reorganization, or tender offer. These provisions are intended to enhance the likelihood of continued stability in the composition of the Board of Directors and its policies and to discourage certain types of transactions that may involve an actual or threatened acquisition of the Company. These provisions are designed to reduce the Company’s vulnerability to an unsolicited acquisition 

 

 

proposal. The provisions are also intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for the Company’s shares and, as a consequence, they also may inhibit fluctuations in the market price of the Company’s shares that could result from actual or rumored takeover attempts. Such provisions may also have the effect of preventing changes in management. 

 

Exclusive Forum

The Certificate of Incorporation provides that unless the Company consents to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of the Company, (ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder of the Company to the Company or the Company’s stockholders, (iii) action asserting a claim against the Company or any director, officer or stockholder of the Company arising pursuant to any provision of the DGCL or the Certificate of Incorporation or the Bylaws, or (iv) action asserting a claim against the Company or any director, officer or stockholder of the Company governed by the internal affairs doctrine, in each such case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed to have notice of and consented to the forum provisions in the Certificate of Incorporation. However, the enforceability of similar forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be unenforceable.

Transfer Agent and Registrar

The transfer agent and registrar for the Common Stock is Computershare Trust Company, N.A.

Listing

The Common Stock is listed on the NYSE under the symbol “PFGC.”ex_155687.htm

 

Exhibit 10.1

 

BOARD OF DIRECTORS ADVISORY AGREEMENT

 

This Director Advisory Agreement (this “Agreement”) is entered and effective as of August 10, 2019 (the “Effective Date”), by and between True Nature Holding Inc. 1355 Peachtree Street, Suite 1150 Atlanta, GA 30309 (the “Company”) and Jim Crone (“Board Member” and together with the Company, the “Parties.”).

 

RECITALS

 

A.     The Company has requested that Board Member provide certain director services to the Company and Board Member has agreed to provide such services.

 

B.     The Parties would like to enter into this Agreement to define the Parties’ rights and obligations under which Board Member shall provide director services to the Company.

 

NOW, THEREFORE, in consideration of the mutual promises of the parties hereto and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereto agree as follows:

 

	
			1.     DIRECTOR POSITION AND DUTIES

			

 

Director Position. Board Member agrees to serve as a Board Member for the Company, on the terms and conditions set forth below.

 

Term. This Agreement shall begin on the Effective Date continue for a one-year period or until terminated by either Party pursuant to Article 3 (the "Term").

 

Duties. Board Member agrees to undertake and perform all duties and services set forth on Exhibit A to this Agreement (the “Services”). Board Member shall perform the Services herein faithfully, diligently, to the best of Board Member's ability, and in the best interests of the Company.

 

Policies. The Board Member shall adhere to and comply with the policies and procedures adopted by the Company, as amended from time to time, and the laws, regulations, policies and industry standards of all applicable regulatory agencies, stock exchanges and security commissions.

 

Advisor and not Employee. Board Member’s relationship with Company shall be that of an advisor and not that of an employee. Board Member shall not be entitled to any compensation for the performance of the services other than as set forth in this Agreement.

 

Board Member acknowledges and agrees that except as specifically set forth in this Agreement, Board Member shall not be eligible for any Company employee benefits and, to the extent Board Member otherwise would be eligible for any Company employee benefits but for the express terms of this Agreement, Board Member (on behalf of himself and any of his employees) hereby expressly declines to participate in such Company employee benefits.

 

 

 

 

Board Member shall have full responsibility for applicable withholding taxes for all compensation paid to Board Member under this Agreement, and for compliance with all applicable labor and employment requirements with respect to Board Member’s self-employment. Board Member agrees to indemnify, defend, and hold Company harmless from any liability for, or assessment of, any claims or penalties with respect to such withholding taxes, labor or employment requirements, including any liability for, or assessment of, withholding taxes imposed on Company by the relevant taxing authorities with respect to any compensation paid to Board Member.

 

	
			2.     COMPENSATION 

			

 

Director Payments. The Company shall pay to the Board Member, as remuneration of his services, monthly director payments as set forth on Exhibit A.

 

Bonuses. Any bonuses that the Board Member shall be entitled to, if any, shall be listed on Exhibit A. Unless stated explicated otherwise, all bonuses shall only be as approved by the Board of Directors of the Company in their sole and absolute discretion.

 

Equity Compensation Plan. The Board Member shall be eligible to participate in the Company’s equity compensation plan, if any; only to the extent such eligibility is set forth in Exhibit A. To the extent applicable, any options to acquire shares of the Company granted to the Board Member shall be granted under, and be subject to, the terms and conditions of the equity compensation plan and be evidenced by the terms of an equity compensation agreement entered into between the Company and Board Member.

 

Reimbursement for Business Expenses. During the term of this Agreement, the Company shall reimburse the Board Member for all reasonable traveling and other expenses actually, properly and necessarily incurred by the Board Member in connection with the performance of the Board Member's duties hereunder in accordance with the policies set from time to time by the Company, in its sole discretion. Expenses over $500 in any calendar month must be preapproved by the Company in writing prior to their incurrence. The Board Member shall furnish such receipts, vouchers or other evidence as are required by the Company to substantiate such expenses.

 

	
			3.     TERMINATION

			

 

Termination. Either party shall have the right to terminate this Agreement upon written notice, with or without “Cause” (as defined below), before the expiration of the Term. Whatever the circumstances of the termination may be, Board Member shall continue to be bound after termination by Articles 5, 6, 7, and 8 of this Agreement. Except as set forth in Section 3.2, any compensation accrued and or due to be paid under this one-year agreement shall survive termination of this agreement. Board Member acknowledges that the Company has made no promise to Board Member that he will be retained for any particular amount of time and that the Company may terminate Board Member’s services for any reason whatsoever. The date of any termination pursuant to this Section 3.1 shall be referred to as the “Termination Date”.

 

Termination for Cause. If this Agreement is terminated for Cause, Board Member shall forfeit

 

 

 

 

any cash, equity compensation or bonus compensation not already received by Board Member or not already vested as of the Termination Date. Termination for Cause may include a simple vote of the majority of the Board of Directors, not including this Board Member, to remove the individual, or by any other applicable provision of the Company’s Bylaws or Articles of Incorporation, or under any applicable provision of Delaware General Corporate Law (DGCL). The Board Member agrees to complete a Director and Officer Questionnaire upon request in a timely manner for review and acceptance by the Company. The Board Member understands completion and acceptance of the Director and Officer Questionnaire in a timely manner with truthful data is a condition of this agreement. The Board Member is also responsible for maintaining current all personal SEC filings and disclosures including but not limited to SEC Forms 3, 4, and 5. Failure to complete such records in a timely fashion shall be grounds for disqualification from the Board and termination.

 

Cause. For purposes of this Agreement, “Cause” shall mean the following (i) the Board Member’s commission of an act of fraud, theft or dishonesty against the Company; (ii) the arrest of the Board Member for any act involving dishonest conduct or other act of moral turpitude; (iii) willful or wanton misconduct, recklessness, or gross negligence by the Board Member in the performance of the Services; (iv) if Board Member is determined to have a “bad actor” disqualification as set forth in Rule 506(d) of Regulation D under the Securities Act of 1933, (v) a breach by Board Member of any obligation of Board Member under this Agreement, and (vi) unwillingness of the Board Member to perform the Services continuing for a period of five (5) business days after notice to the Board Member.

 

	
			4.     NON-SOLICITATION AND NON-COMPETE

			

 

Non-Solicitation of Employees. So long as Board Member is receiving director payments from the Company and one year following such time, Board Member shall not directly or indirectly solicit for employment or for independent contractor work any employee of the Company or its affiliates, and shall not encourage any such employee to leave the employment of the Company or its affiliates.

 

Non-Compete. Board Member agrees that so long that Board Member is receiving director payments from the Company, Board Member will not be an employee, agent, director, owner, partner, Board Member, financial backer, creditor or otherwise directly or indirectly be connected with or provide services to or participate in the management, operation or control of any Company which is in direct competition to the Company.

 

	
			5.     CONFIDENTIALITY

			

 

Nondisclosure. Board Member acknowledges that in the course of providing services to the Company, Board Member will have access to confidential information. Confidential information includes, but is not limited to, information about either the Company’s clients, the terms and conditions under which the Company or its affiliates deals with clients, pricing information for the purchase or sale of assets, customer lists, research materials, manuals, computer programs, formulas for analyzing asset portfolios, techniques, data,

 

 

 

 

marketing plans and tactics, technical information, lists of asset sources, the processes and practices of the Company, all information contained in electronic or computer files, all financial information, salary and wage information, and any other information that is designated by the Company or its affiliates as confidential or that Board Member knows is confidential, information provided by third parties that the Company or its affiliates are obligated to keep confidential, and all other proprietary information of the Company or its affiliates. Board Member acknowledges that all confidential information is and shall continue to be the exclusive property of the Company or its affiliates, whether or not prepared in whole or in part by Board Member and whether or not disclosed to or entrusted to Board Member in connection with service for the Company. Board Member agrees not to disclose confidential information, directly or indirectly, under any circumstances or by any means, to any third persons without the prior written consent of the Company. Board Member agrees that he will not copy, transmit, reproduce, summarize, quote, or make any commercial or other use whatsoever of confidential information, except as may be necessary to perform work done by Board Member for the Company. Board Member agrees to exercise the highest degree of care in safeguarding confidential information against loss, theft or other inadvertent disclosure and agrees generally to take all steps necessary or requested by the Company to ensure maintenance of the confidentiality of the confidential information.

 

Exclusions. Section 5.1 shall not apply to the following information: (a) information now and hereafter voluntarily disseminated by the Company to the public or which otherwise becomes part of the public domain through lawful means; (b) information already known to Board Member as documented by written records which predate the Effective Date; (c) information subsequently and rightfully received from third parties and not subject to any obligation of confidentiality; and (d) information independently developed by Board Member after termination of his services.

 

Subpoenas; Cooperation in Defense of the Company. If Board Member, during the Term or thereafter, is served with any subpoena or other compulsory judicial or administrative process calling for production of confidential information or if Board Member is otherwise required by law or regulation to disclose confidential information, Board Member will immediately, before making any such production or disclosure, notify the Company and provide it with such information as may be necessary for the Company to take such action as the Company deems necessary to protect its interests. Board Member agrees to cooperate reasonably with the Company, whether during the Term or thereafter, in the prosecution or defense of all threatened claims or actual litigation in which the Company is or may become a party, whether now pending or hereafter brought, in which Board Member has knowledge of relevant facts or issues. Board Member shall be reimbursed for his reasonable expenses for travel time due to cooperating with the prosecution or defense of any litigation for the Company.

 

Disclosure of and/or Trading on Material Nonpublic Information. Board Member acknowledges that Company is a public company and that in performing the Services he may have access to material nonpublic information. Information is material if there is a substantial likelihood that a reasonable investor would consider it important in deciding whether to buy, hold or sell a security. Nonpublic information is information that is not

 

 

 

 

generally known or available to the public. Board Member agrees not to discuss any material nonpublic information with any third parties and to refrain from buying or selling any securities based on any material nonpublic information learned in performing the Services unless such disclosure or trading is permitted under applicable state and federal securities laws.

 

Confidential Proprietary and Trade Secret Information of Others. Board Member represents that he has disclosed to the Company any agreement to which Board Member is or has been a party regarding the confidential information of others and Board Member understands that Board Member's execution of this Agreement with the Company will not require Board Member to breach any-such agreement. Board Member will not disclose such confidential information to the Company nor induce the Company to use any trade secret or proprietary information received from another under an agreement or understanding prohibiting such use or disclosure.

 

No Unfair Competition. Board Member hereby acknowledges that the sale or unauthorized use or disclosure of any of the Company’s confidential material obtained by Board Member by any means whatsoever, at any time before, during, or after the Term shall constitute unfair competition. Board Member shall not engage in any unfair competition with the Company or its affiliates either during the Term, or at any time thereafter.

 

Remedies. The Company shall have all remedies in law and equity against Board Member (including special and consequential damages) for damages to the Company caused by the violations of Articles 4 or 5.

 

	
			6.     COMPANY'S OWNERSHIP IN BOARD MEMBER'S WORK

			

 

Company’s Ownership. Board Member agrees that all inventions, discoveries, improvements, trade secrets, formulae, techniques, processes, and know-how, whether or not patentable, and whether or not reduced to practice, that are conceived or developed during the Term, either alone or jointly with others, if on the Company’s time, using the Company’s equipment, supplies, facilities, or trade secret information or relating to the Company shall be owned exclusively by the Company, and Board Member hereby assigns to the Company all Board Member's right, title, and interest in all such intellectual property. The Board Member agrees that the Company shall be the sole owner of all domestic and foreign patents or other rights pertaining thereto, and further agrees to execute all documents that the Company reasonably determines to be necessary or convenient for use in applying for, prosecuting, perfecting, or enforcing patents or other intellectual property rights, including the execution of any assignments, patent applications, or other documents that the Company may reasonably request. This provision is intended to apply only to the extent permitted by applicable law.

 

Ownership of Copyrights. Board Member agrees that all original works of authorship not otherwise within the scope of Section 6.1 that are conceived or developed during Board Member's engagement with the Company, either alone or jointly with others, if on the Company’s time, using Company’s facilities, or relating to the Company shall be owned exclusively by the Company, and Board Member hereby assigns to the Company all of

 

 

 

 

Board Member's right, title, and interest in all such original works of authorship. Board Member agrees that the Company shall be the sole owner of all rights pertaining thereto, and further agrees to execute all documents that the Company reasonably determines to be necessary or convenient for establishing in Company’s name the copyright to any such original works of authorship. Board Member shall claim no interest in any inventions, copyrighted material, patents, or patent applications unless Board Member demonstrates that any such invention, copyrighted material, patent, or patent application was developed before he began providing any services for Company. This provision is intended to apply only to the extent permitted by applicable law.

 

Ownership of Records. Any written record that Board Member may maintain of inventions, discoveries, improvements, trade secrets, formulae, processes, or know-how, whether or not patentable and whether or not reduced to practice, and any such records relating to original works of authorship made by Board Member, alone or jointly with others, in the course of Board Member's engagement with the Company shall remain the property of the Company. Board Member shall furnish the Company any and all such records immediately upon request.

 

Ventures. If Board Member, during engagement with the Company, is engaged in or associated with the planning or implementation of any project, program, or venture involving the Company and any third parties, all rights in the project, program, or venture shall belong to the Company, and Board Member shall not be entitled to any interest therein or to any commission, finder's fee, or other compensation in connection therewith other than the compensation to be paid to Board Member as provided in this Agreement.

 

Return of Company’s Property and Materials. Upon termination of Board Member’s services with the Company, Board Member shall deliver to the Company all Company property and materials that are in Board Member's possession or control, including all of the information described as confidential information in Section 5.1 of this Agreement and including all other information relating to any inventions, discoveries, improvements, trade secrets, formulae, processes, know-how, or original works of authorship of the Company.

 

	
			7.     INDEMNIFICATION

			

 

By the Company. The Company agrees to indemnify and hold harmless the Board Member with respect to any liability (and actions in respect thereof) incurred by the Board Member by virtue of the performance of the Services hereunder and shall reimburse the Board Member for any legal or other expenses reasonably incurred in connection with investigating or defending any such liability or action, provided that the Company shall have the right to control the defense of any claim giving rise to such liability and no such claim shall be settled without the consent of the Company. The foregoing provisions shall survive termination of this Agreement and any investigation with respect thereto by any party hereto and shall not apply to any such losses, claims, related expenses, damages or liabilities arising out of or in connection with the Board Member’s willful misconduct, fraud, negligence or material breach of this Agreement.

 

By the Board Member. The Board Member agrees to indemnify and hold harmless the

 

 

 

 

Company (including each of its directors, officers, employees, partners and agents) with respect to any liability (and actions in respect thereof) incurred by Company by virtue of reckless, negligent or intentional misconduct of the Board Member and shall reimburse the Company for any legal or other expenses reasonably incurred in connection with investigating or defending any such liability or action. The foregoing provisions shall survive termination of this Agreement and any investigation with respect thereto by any party hereto.

 

	
			8.     ARBITRATION

			

 

Except for disputes, controversies, or claims or other actions seeking injunctive or equitable relief, which may be brought before any court having jurisdiction, any controversy, dispute, or claim ("Claim") whatsoever between Board Member on the one hand, and the Company, or any of its affiliated entities or any of its employees, officers, directors, agents, and representatives of the Company or its affiliated entities on the other hand, shall be settled by binding arbitration, at the request of either party, under the rules of the American Arbitration Association. The arbitrator shall be a retired federal or state judge with at least ten-year experience as a judge. The arbitrator shall apply Delaware law. The demand for arbitration must be in writing and made within the applicable statute of limitations period. The arbitration shall take place in Atlanta, Georgia. The parties shall be entitled to conduct reasonable discovery, including conducting depositions and requesting documents. The arbitrator shall have the authority to resolve discovery disputes, including but not limited to determining what constitutes reasonable discovery. The arbitrator shall prepare in writing and timely provide to the parties a decision and award which includes factual findings and the reasons upon which the decision is based.

 

The decision of the arbitrator shall be binding and conclusive on the parties, except as may otherwise be required by law. Judgment upon the award rendered by the arbitrator may be entered in any court having proper jurisdiction. Each party shall bear its or his own fees and costs incurred in connection with the arbitration, except that the arbitrator may award attorneys' fees and costs in accordance with applicable law.

 

Both the Company and Board Member understand and agree that by using arbitration to resolve any Claims between Board Member and the Company (or its affiliates) they are giving up any right that they may have to a judge or jury trial with regard to those Claims. 

 

	
			9.     MISCELLANEOUS 

			

 

Entire Agreement. This agreement between Board Member and the Company constitutes the entire agreement between the parties with respect to the matters referenced herein.

 

Amendments. The agreement can be modified only by a written instrument executed by Board Member and Company or its successor on behalf of the Company.

 

Disqualification. Board Member represents and warrants to the company that Board Member does not have any “bad actor” disqualification set forth in Rule 506 (d) of Regulation D under the Securities Act of 1933. Board Member acknowledges that Board Member’s

 

 

 

 

representation set forth in this Section 9.3 was a condition precedent to the Company entering into this Agreement. The Board Member further agrees to complete a Director and Officer Insurance Questionnaire upon request in a timely manner for review and acceptance by the Company. The Board Member further understands completion and acceptance of the Director and Officer Insurance Questionnaire in a timely manner with truthful data is a condition of this this agreement.

 

Severable Provisions. The provisions of this Agreement are separate and distinct, and if any provisions are determined to be unenforceable in whole or in part, the remaining provisions, and the enforceable parts of any partially unenforceable provisions, shall nevertheless be enforceable.

 

Surviving Terms. The provisions of Articles 5, 6, 7, 8, and Section 9.8 shall survive the Term of this Agreement and the termination of Board Member's services.

 

Successors and Assigns. The Company may assign its rights and delegate its duties under this Agreement. Board Member may assign his rights under this Agreement only with the Company’s prior written consent. Board Member may not delegate his duties.

 

Resignation from Positions with the Company. The termination of the Board Member’s services for the Company for any reason shall, without any further action on the part of the Board Member, constitute the Board Member’s resignation from any board, or officer position the Board Member has with the Company and any of its affiliates, which resignation shall be effective as of the Board Member’s last day of providing services.

 

Cooperation. From and after the termination of Board Member’s services for the Company, the Board Member agrees, upon the Company’s request, to reasonably cooperate in any investigation, litigation, arbitration or regulatory proceeding regarding events that occurred during the time that Board Member is retained by the Company or its affiliates. The Board Member will make himself reasonably available to consult with Company’s counsel, to provide information and to appear to give testimony. The Company will, to the extent permitted by law, reimburse the Board Member for any reasonable out-of-pocket expenses that the Board Member incurs in extending such cooperation, so long as the Board Member provides the Company with advance written notice of the Board Member’s request for reimbursement and provides satisfactory documentation of the expenses.

 

Governing Law. Regardless of the choice of law provisions of Delaware or of any other jurisdiction, Delaware law shall in all respects govern the validity, construction, and interpretation of this Agreement.

 

Headings. Section and subsection headings do not constitute part of this Agreement. They are included solely for convenience and reference, and they in no way define, limit, or describe the scope of this Agreement or the intent of any of its provisions.

 

Integration. This Agreement together with any exhibits or schedules attached hereto, including any documents expressly incorporated into it by the terms of this Agreement, constitutes the entire agreement between the parties and supersedes all prior oral and written agreements, understandings, negotiations, and discussions relating to the subject matter of

 

 

 

 

this Agreement. With this Agreement the parties rescind any previous agreements or arrangements between themselves. Any supplement, modification, waiver, or termination of this Agreement is valid only if it is set forth in writing and signed by both parties. The waiver of any provision of this Agreement shall not constitute a waiver of any other provisions and, unless otherwise stated, shall not constitute a continuing waiver.

 

Notice. Any notice or other communication required or permitted under this Agreement shall be in writing to the address set forth on Exhibit A and shall be deemed to have been given (i) if personally delivered, when so delivered, (ii) if mailed, one week after having been placed in the United States mail, registered or certified, postage prepaid, addressed to the party to whom it is directed at the address listed below or (iii) by national overnight delivery service upon receipt In order for a party to change its address or other information for the purpose of this section, the party must first provide notice of that change in the manner required by this section.

 

Advice of Counsel. The Parties each agree and represent that they (i) have had advice of counsel of their choosing or had the opportunity of obtaining advice of counsel, in the negotiation and the preparation of this Agreement, (ii) have read this Agreement, and (iii) are fully aware of the contents and legal effect of the this Agreement.

 

Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(Signature page immediately follows)

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Board Member Agreement to be duly executed by their respective authorized representatives as of the Effective Date.

 

 

	
			“COMPANY”:

			 

				
			“BOARD MEMBER”:

			 

			
	
			True Nature Holding Inc.

			1355 Peachtree Street, Suite 1150

			Atlanta, GA 30309

			 

			By: ________________________

			Name: Ron Riewold

			Title: Director

				
			Jim Crone

			 

			 

			 

			By: ________________________

			MR. Jim Crone

			Title: Director

			

 

 

 

 

 

 

EXHIBIT A

 

Additional Terms

 

A.                Services.  Board Member shall perform such duties and exercise such powers as are usually performed by a Board Member of the Company.

 

B.                 Director Payments. The Board of the Company has determined that it is in the best interest of its shareholders to will provide certain compensation to its Board members, including Mr. RIEWOLD for his continued services to the Company.

 

C.                The Company will pay for professional fees of $5,000 per month, of which all shall accrue until such time the that Board decides the Company has sufficient funds to allocate payment of any accrued amounts, except that $1,000 of the $5,000 shall be paid at a high priority along with any other payroll items due to others in the Company. Mr. Crone’s professional fee start date will be retroactive to July 1, 2019. These payments are for his service as a member of the Board of Directors, and do not replace the provisions of his Employment Agreement with the Company which was effective as of October 15, 2018, except that all parties agree that his cash compensation under his employment agreement shall be reduced to $40,000 per year from its current $100,000 per year effective June 1, 2019.

 

D.                Additionally, a restricted stock allocation of 200,000 shares shall be immediately issued to Mr. Crone or his assignee(s) with certain reverse vesting provisions subject to Mr. Crone's continued standing as a Board member, such that all 200,000 of the shares shall be fully vested as of September 30, 2019.  As a further consideration all reverse vesting conditions for 800,000 previously issued shares shall be deemed to be satisfied as of July 1, 2019.  If Mr. Crone has remained a member of the Board continuously through September 30, 2019 he shall own 1 million shares of restricted stock with no further reverse vesting provisions to apply, including the 800,000 shares that were previously issued. The restricted common stock issuances are considered appropriate additional annual compensation for active board duties. All share grants will be subject to rule 144 and will have a six-month holding period. If the director leaves the Board during this 6-month holding period then any shares not previously relieved of the reverse vesting provisions will be rescinded. The Board Member may also elect to receive cash fee payments of any past due and up to six-months of future compensation in the form of registered common stock shares (via S-8) if available. The dollar value of this cash compensation for share

 

 

 

 

exchange shall be the closing market price of the date the Board member elects to take the stock in lieu of cash.

 

E.       Mr. Crone also has a bonus provision he will earn and be paid up to 3% of the value (cash or stock) received by the Company for the following events:

 

●         Capital raised by the Company without the use of any brokers or investment banks;

 

●         Mergers, acquisitions and or acquisitions made by the Company;

 

●         Outright sale of the Company

 

F.                  Addresses.  For purposes of notice under this Agreement the addresses of the Company and Board Member are as follows:

 

Company: True Nature Holding Inc.

1355 Peachtree Street, Suite 1150

Atlanta, GA 30309

 

 

 

Board Member:                        Jim Crone

 

                  ____________________

 

                   ____________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00299-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00299-of-00352.parquet"}]]