Document:

Exhibit

EXHIBIT 10.2

T D   A M E R I T R A D E   H O L D I N G
C O R P O R A T I O N   M A N A G E M E N T
I N C E N T I V E   P L A N
(February 18, 2016 Amendment and Restatement)
SECTION 1
BACKGROUND, PURPOSE AND DURATION
1.1  Effective Date.  The Plan was approved by the shareholders of the Company at the 2007 Annual Meeting of the Stockholders of the Company and reapproved at the 2011 and 2016 Annual Meeting of Stockholders, effective as of November 20, 2015  (the "Amended Effective Date"), 
1.2  Purpose of the Plan.  The Plan is intended to increase shareholder value and the success of the Company by motivating key executives (1) to perform to the best of their abilities, and (2) to achieve the Company's objectives. The Plan's goals are to be achieved by providing such executives with incentive awards based on the achievement of goals relating to the performance of the Company. The Plan is intended to permit the payment of bonuses that are intended to qualify as performance-based compensation under section 162(m) of the Code.
SECTION 2
DEFINITIONS
The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context:
2.1 "Actual Award" means as to any Performance Period, the actual amount (if any) payable to a Participant for the Performance Period. Each Actual Award is determined by the Payout Formula for the Performance Period, subject to the Committee's authority under Section 3.6 to eliminate or reduce the award otherwise determined by the Payout Formula.
2.2 "Affiliate" means any corporation or other entity (including, but not limited to, partnerships and joint ventures) controlled by the Company.

 
2.3 "Base Salary" means as to any Performance Period, the Participant's annualized salary rate on the last day of the Performance Period. Such Base Salary shall be before both (a) deductions for taxes or benefits, and (b) deferrals of compensation pursuant to any Company or Affiliate sponsored deferred compensation plan.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Code" means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation promulgated thereunder, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
2.6 "Committee" means the HR and Compensation Committee of the Board, or any other committee appointed by the Board (pursuant to Section 5.1) to administer the Plan.
2.7 "Company" means TD Ameritrade Holding Corporation, a Delaware corporation, or any successor thereto.
2.8 "Determination Date" means the latest possible date that will not jeopardize a Target Award or Actual Award's qualification as performance-based compensation under section 162(m) of the Code.
2.9 "Disability" means, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receipt by a Participant of income replacement benefits for a period of not less than three (3) months under an applicable disability benefit plan of the Company or an Affiliate.
2.10 "Employee" means any employee of the Company or of an Affiliate, whether such employee is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan.

2.11 "Fiscal Year" means the fiscal year of the Company.
2.12 "Fiscal Quarter" means a fiscal quarter of the Company.
2.13 "Maximum Award" means as to any Participant for all Performance Periods ending during a Fiscal Year, $25 million. The Maximum Award is the maximum amount that may be earned by a Participant for all Performance Periods ending during that Fiscal Year.
2.14 "Participant" means as to any Performance Period, an Employee who has been selected by the Committee for participation in the Plan for that Performance Period.
2.15 "Payout Formula" means as to any Performance Period, the formula or payout matrix established by the Committee pursuant to Section 3.4 in order to determine the Actual Awards (if any) to be paid to Participants. The formula or matrix may differ from Participant to Participant.
2.16 "Performance Goals" means the goal(s) determined by the Committee (in its discretion) to be applicable to a Participant with respect to an Award. As determined by the Committee, the Performance Goals applicable to an Award may provide for a targeted level or levels of achievement using one or more of the following measures: (i) cash flow, (ii) client growth (assets or accounts), (iii) client satisfaction, (iv) earnings (v) economic value added, (vi) expense control, (vii)  income, (viii) revenue, (ix) market share, (x) product quality, (xi) total stockholder return, and (xii) working capital. Any Performance Goal used may be measured (1) in absolute terms, (2) in combination with another Performance Goal or Goals (for example, but not by way of limitation, as a ratio or matrix), (3) in relative terms (including, but not limited to, as compared to results for other periods of time, against financial metrics, and/or against another company, companies or an index or indices), (4) on a per-share or per-capita basis, (5) against the performance of the Company as a whole or a specific business unit(s), business segment(s) or product(s) of the Company, and/or (6) on a pre-tax or after-tax basis. The 

 
Committee, in its discretion, will determine (no later than the Determination Date) whether any significant element(s) or item(s) will be included in or excluded from the calculation of any Performance Goal with respect to any Participants (for example, but not by way of limitation, the effect of mergers and acquisitions). As determined in the discretion of the Committee, achievement of Performance Goals for a particular Award may be calculated in accordance with the Company's financial statements, prepared in accordance with generally accepted accounting principles, or as adjusted for certain costs, expenses, gains and losses to provide non-GAAP measures of operating results.
2.17 "Performance Period" means any period of time not shorter than a fiscal quarter or longer than twenty consecutive fiscal quarters (or five fiscal years), as determined by the Committee in its sole discretion.
2.18 "Plan" means the TD Ameritrade Holding Corporation Management Incentive Plan, as set forth in this instrument and as hereafter amended from time to time.
2.19 "Retirement" means, with respect to any Participant, a Termination of Employment after attaining at least age 55 and after having at least ten (10) years of continuous service with the Company or any Affiliate.
2.20 "Shares" means shares of the Company's common stock.
2.21 "Target Award" means the target award payable under the Plan to a Participant for the Performance Period, expressed as a percentage of his or her Base Salary, a specific dollar amount, or a result of a formula or formulae, as determined by the Committee in accordance with Section 3.3.
2.22 "Termination of Employment" means a cessation of the employee-employer relationship between an Employee and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability, Retirement, or the disaffiliation of an Affiliate, but excluding any such 

termination where there is a simultaneous reemployment by the Company or an Affiliate.
SECTION 3
SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS
3.1  Selection of Participants.  The Committee, in its sole discretion, shall select the Employees who shall be Participants for any Performance Period. Participation in the Plan is in the sole discretion of the Committee, and on a Performance Period by Performance Period basis. Accordingly, an Employee who is a Participant for a given Performance Period in no way is guaranteed or assured of being selected for participation in any subsequent Performance Period.
3.2  Determination of Performance Goals.  The Committee, in its sole discretion, shall establish the Performance Goal(s) for each Participant for the Performance Period. Such Performance Goal(s) shall be set forth in writing.
3.3  Determination of Target Awards.  The Committee, in its sole discretion, shall establish a Target Award for each Participant. Each Participant's Target Award shall be set forth in writing.
3.4  Determination of Payout Formula or Formulae.  On or prior to the Determination Date, the Committee, in its sole discretion, shall establish a Payout Formula or Formulae for purposes of determining the Actual Award (if any) payable to each Participant. Each Payout Formula shall (a) be in writing, (b) be based on a comparison of actual performance to the Performance Goals, (c) provide for the payment of a Participant's Target Award if the Performance Goals for the Performance Period are achieved, and (d) provide for an Actual Award greater than or less than the Participant's Target Award, depending upon the extent to which actual performance exceeds or falls below the Performance Goals. Notwithstanding the preceding, in no event shall a Participant's Actual Award(s) exceed his or her Maximum Award.

 
3.5  Date for Determinations.  The Committee shall make all determinations under Section 3.1 through 3.4 on or before the Determination Date.
3.6  Determination of Actual Awards.  After the end of each Performance Period, the Committee shall certify in writing (for example, in meeting minutes) the extent to which the Performance Goals applicable to each Participant for the Performance Period were achieved or exceeded, as determined by the Committee. The Actual Award for each Participant shall be determined by applying the Payout Formula to the level of actual performance that has been certified by the Committee, subject to the following. Notwithstanding any contrary provision of the Plan, the Committee, in its sole discretion, may (a) eliminate or reduce the Actual Award payable to any Participant below the amount that otherwise would be payable under the Payout Formula, and (b) determine whether or not a Participant will receive an Actual Award in the event the Participant incurs a Termination of Employment prior to the date the Actual Award is to be paid pursuant Section 4.2 below.
SECTION 4
PAYMENT OF AWARDS
4.1  Right to Receive Payment.  Each Actual Award that may become payable under the Plan shall be paid solely from the general assets of the Company or the Affiliate that employs the Participant (as the case may be), as determined by the Committee. Nothing in this Plan shall be construed to create a trust or to establish or evidence any Participant's claim of any right to payment of an Actual Award other than as an unsecured general creditor with respect to any payment to which he or she may be entitled.
4.2  Timing of Payment.  Subject to Section 3.6, payment of each Actual Award shall be made as soon as administratively practicable, but in no event later than (a) the 15th day of the third month following the end of the Company's taxable year in which the Performance Period has ended, or (b) March 15th of the calendar year 

following the calendar year in which the applicable Performance Period has ended.
4.3  Form of Payment.  Each Actual Award normally shall be paid in cash (or its equivalent) in a single lump sum. However, the Committee, in its sole discretion, may declare any Actual Award, in whole or in part, payable in Shares of restricted stock, restricted stock units and/or options granted under one of the Company's stock plans. The number of Shares of restricted stock and/or restricted stock units granted shall not exceed the cash amount foregone divided by the fair market value of a Share on the date that the cash payment otherwise would have been made, rounded down to the nearest whole number of shares. For this purpose, "fair market value" shall have the same meaning as provided by the applicable Company stock plan under which the award shall be granted. The number of options granted shall generally be determined by dividing the cash amount foregone by an option pricing model determined by the Committee (e.g., Black-Scholes), rounded down to the nearest whole number of shares. Any restricted stock, restricted stock units or options so awarded may be subject to such additional vesting over a period of not more than four years, and/or be subject to additional vesting conditions, including specifically additional Performance Goals, all as determined by the Committee in its sole discretion. The number of Shares of restricted stock and/or restricted stock units granted pursuant to this Section 4.3 may be increased if such new award is granted by the Committee subject to Performance Goals and decreased at the discretion of the Committee, provided that any increase otherwise meets all the performance-based compensation requirements of section 162(m) of the Code. For the avoidance of doubt, nothing in this Plan precludes the Committee from granting to any Employee any other awards under any Company stock plan, so long as such grants are consistent with the applicable stock plan and applicable law.
4.4  Payment in the Event of Death or Disability.  If a Participant dies, or is determined to have a Disability, prior to the payment of an Actual Award that was scheduled to 

 
be paid to him or her prior to death, or the determination of a Disability, for a prior Performance Period, the Award shall be paid, in the case of death, to his or her estate, and in the case of Disability, to the Participant or any other person authorized under applicable law.
4.5  Forfeiture or Repayment in Connection with Certain Events.
(a) Forfeiture or Repayment.  Notwithstanding any contrary provision of the Plan or the terms of any written agreement between the Company and the Participant (including specifically any written employment, severance or change in control agreement), if the Committee determines (in its sole discretion, but acting in good faith) that a Clawback Event has occurred at any time while an individual who participated in the Plan was an Employee and, with respect to each Target Award and Actual Award, such determination is made no later than three (3) years following the later of (i) the end of the applicable Performance Period or, (ii) the date of grant of the Shares of restricted stock, restricted stock units and/or options issued to the Affected Participant in payment of the Actual Award for such Performance Period, then: (i) with respect to the Performance Period then in effect, if the Affected Participant is currently participating in the Plan, participation in the Plan may, in the sole discretion of the Committee, immediately cease, in which case the Affected Participant will have no further rights or interest in his or her Target Award; (ii) with respect to any Performance Period that has ended, but for which any Actual Award has not yet been paid in full to the Affected Participant, the Committee may, in its discretion, reduce or eliminate the unpaid portion of the Actual Award; and (iii) each Actual Award to which this Section 4.5 applies that has previously been paid to the Affected Participant must, if required by the Committee, in its sole discretion, be repaid to the Company. The portion of the Actual Award paid to the Affected Participant in cash must be repaid to the Company in cash. The manner in which the portion, if any, of the Actual Award paid to the Affected Participant in Shares of restricted stock, restricted stock units and/or 

options granted under one of the Company's stock plans must be repaid to the Company will be governed by the terms and conditions of the applicable award agreement for such Shares of restricted stock, restricted stock units and/or options. For the portion of the Actual Award that must be repaid in cash, if the Affected Participant refuses to make such payment, the Company will, if directed by the Committee, in its sole discretion, and subject to applicable law (including any Code Section 409A considerations), recover such payment and, if applicable, the amount of its court costs, attorneys' fees and other costs and expenses incurred in connection with enforcing this Section 4.5 by (w) reducing the amount that would otherwise be payable to the Affected Participant under any compensatory plan, program or arrangement maintained by the Company or any Affiliate, (x) withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with the Company's (or its Affiliate's) otherwise applicable compensation practices, (y) reducing any severance benefits that would otherwise be payable or provided to the Affected Participant under any plan, program or arrangement maintained or entered into by the Company or any Affiliate (including specifically under any employment or severance agreement) or (z) by any combination of the foregoing.
(b) Discretion to Reduce Amount Subject to Forfeiture or Repayment.  In the event of a Clawback Event described in subsection (c)(iii)(A) of this Section 4.5, the Committee may, in its sole discretion, limit the amount to be recovered from the Affected Participant to the amount by which the Actual Award exceeded the amount that would have been payable to the Affected Participant had the financial statements been initially filed as restated, as determined by the Committee in accordance with the terms and conditions of the Plan. In the event the Committee exercises such discretion, the Committee will have the discretion to determine how the amount to be recovered will be allocated among the portion, if any, of the Actual Award 

 
paid in cash and the portion, if any, of the Actual Award paid in Shares of restricted stock, restricted stock units and/or options granted under one of the Company's stock plans.
(c) Definitions.
(i) For purposes of this Section 4.5, "Affected Participant" shall mean an individual who is or was a Participant with respect to whom the Committee has determined that a Clawback Event has occurred, regardless of whether the individual is a Participant or Employee at the time of such determination.
(ii) For purposes of this Section 4.5, "Change of Control" shall have the same meaning as the term "Change in Control" under the Company's Long-Term Incentive Plan.
(iii) For purposes of this Section 4.5, "Clawback Event" shall mean the occurrence of any of the following: (A) any of the Company's financial statements are required to be restated resulting from fraud or willful misconduct by the Affected Participant or any other person, provided that the Affected Participant knew or should have known of such fraud or willful misconduct; (B) any act of fraud, negligence or breach of fiduciary duty by the Affected Participant or any other person, provided that the Affected Participant knew or should have known of such fraud, negligence or breach of fiduciary, which act results in material loss, damage or injury to the Company; or (C) any other event or situation that is covered by the Company's clawback policy as it may be established and/or amended from time to time.
(d) Restrictions on Sale of Stock Pending Determination of Clawback Event.  If the Company reasonably believes that a Clawback Event has occurred, the Company may, in its sole discretion, restrict the Affected Participant's ability to directly or indirectly sell, offer, contract or grant any option to sell (including without limitation any short sale), pledge, swap, hedge, transfer, or otherwise dispose of any shares of Company common stock held by the Affected 

Participant in his or her Company brokerage account (whether issued in connection with an Actual Award or otherwise) pending a final determination by the Committee that a Clawback Event has or has not occurred. Such determination shall be made as soon as administratively practicable but in no event will the Affected Participant be restricted in accordance with the preceding sentence for more than that period of time that the Committee determines is reasonably necessary to determine the existence of a Clawback Event. The Company shall have no responsibility or liability for any fluctuations that occur in the price of the Company's common stock or for any potential loss or gain the Affected Participant could have realized from the sale of his or her shares of Company common stock during the period of time in which the Affected Participant is restricted in accordance with this Section 4.5(d).
(e) Applicability and Expiration.  This Section 4.5 shall not apply to Actual Awards paid prior to the Amended Effective Date. Further, this Section 4.5 shall expire and have no further force or effect upon a Change of Control (except to the limited extent required by the Dodd-Frank Wall Street Reform and Consumer Protection Act). Solely with respect to this Section 4.5, a "Change of Control" shall not be deemed to have occurred if the Company's outstanding Shares or substantially all of the Company's assets are purchased by TD Bank Financial Group.
(f) No Waiver.  Any failure by the Company to assert the forfeiture and repayment rights under this Section 4.5 with respect to specific claims against the Affected Participant shall not waive, or operate to waive, the Company's right to later assert its rights hereunder with respect to other or subsequent claims against the Affected Participant.
(g) No Limitation on Remedies.  The Company's forfeiture and repayment rights under this Section 4.5 shall be in addition to, and not in lieu of, actions the Company may take to remedy or discipline any misconduct by the Affected Participant including, but not limited to, 

 
termination of employment or initiation of appropriate legal action.
SECTION 5
ADMINISTRATION
5.1  Committee is the Administrator.  The Plan shall be administered by the Committee. The Committee shall consist of not less than two (2) members of the Board. The members of the Committee shall be appointed from time to time by, and serve at the pleasure of, the Board. Each member of the Committee shall qualify as an "outside director" under section 162(m) of the Code. If it is later determined that one or more members of the Committee do not so qualify, actions taken by the Committee prior to such determination shall be valid despite such failure to qualify.
5.2  Committee Authority.  It shall be the duty of the Committee to administer the Plan in accordance with the Plan's provisions. The Committee shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) determine which Employees shall be granted awards, (b) prescribe the terms and conditions of awards, (c) interpret the Plan and the awards, (d) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Employees who are foreign nationals or employed outside of the United States, (e) bifurcate the Plan and treat Participants differently as provided by Section 8.1, (f) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and (g) interpret, amend or revoke any such rules.
5.3  Decisions Binding.  All interpretations, determinations and decisions made by the Committee, the Board, and any delegate of the Committee pursuant to the provisions of the Plan shall be final, conclusive, and binding on all persons, and shall be given the maximum deference permitted by law.

5.4  Delegation by the Committee.  The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the Company; provided, however, that the Committee may delegate its authority and powers only to the extent that the delegation would not jeopardize the qualification of an award as performance-based compensation under section 162(m) of the Code (with respect to awards that are intended to so qualify).
SECTION 6
GENERAL PROVISIONS
6.1  Tax Withholding.  The Company shall withhold all applicable taxes (and any other required amounts) from any payment, including (but not limited to) any federal, Federal Insurance Contributions Act (FICA), state, and local taxes.
6.2  No Effect on Employment.  Nothing in the Plan shall interfere with or limit in any way the right of the Company or an Affiliate, as applicable, to terminate any Participant's employment or service at any time, with or without cause. For purposes of the Plan, transfer of employment of a Participant between the Company and any one of its Affiliates (or between Affiliates) shall not be deemed a Termination of Employment. Employment with the Company and its Affiliates is on an at-will basis only. The Company expressly reserves the right, which may be exercised at any time and without regard to when during or after a Performance Period such exercise occurs, to terminate any individual's employment with or without cause, and to treat him or her without regard to the effect which such treatment might have upon him or her as a Participant.
6.3  Participation.  No Employee shall have the right to be selected to receive an award under this Plan, or, having been so selected, to be selected to receive a future award. Participation in this Plan shall not give any Employee the 

 
right to participate in any other benefit, stock or deferred compensation plan of the Company or any Affiliate.
6.4  Indemnification.  Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Company against and from (a) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any award, and (b) from any and all amounts paid by him or her in settlement thereof, with the Company's approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.
6.5  Successors.  All obligations of the Company under the Plan, with respect to awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company.
6.6  Beneficiary Designations.  If permitted by the Committee, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid award shall be paid in the event of the Participant's death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Committee. In the 

absence of any such designation, any vested benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate.
6.7  Nontransferability of Awards.  No award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 6.6. All rights with respect to an award granted to a Participant shall be available during his or her lifetime only to the Participant.
6.8  Deferrals.  The Committee, in its sole discretion, may permit a Participant to defer receipt of the payment of cash that would otherwise be delivered to a Participant under the Plan. Any such deferral elections shall be subject to such rules and procedures as shall be determined by the Committee in its sole discretion.
SECTION 7
AMENDMENT, TERMINATION AND DURATION
7.1  Amendment, Suspension or Termination.  The Board, in its sole discretion, may amend or terminate the Plan, or any part thereof, at any time and for any reason. The amendment, suspension or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Target Award theretofore granted to such Participant. No award may be granted during any period of suspension or after termination of the Plan.
7.2  Duration of the Plan.  The Plan shall commence on the date specified herein, and subject to Section 7.1 (regarding the Board's right to amend or terminate the Plan), shall remain in effect thereafter.
SECTION 8
LEGAL CONSTRUCTION
8.1  Section 162(m) Conditions; Bifurcation of Plan.  It is the intent of the Company that the Plan and the awards paid under the Plan to Participants who are or may become persons whose compensation is subject to section 162(m) 

 
of the Code, satisfy any applicable requirements of section 162(m) of the Code. Any provision, application or interpretation of the Plan inconsistent with this intent shall be disregarded. The provisions of the Plan may be bifurcated by the Board or the Committee at any time so that certain provisions of the Plan, or any award, required in order to satisfy the requirements of section 162(m) of the Code are only applicable to Participants whose compensation is subject to section 162(m) of the Code.
8.2  Gender and Number.  Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.
8.3  Severability.  In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
8.4  Requirements of Law.  The granting of awards under the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be required.
8.5  Governing Law.  The Plan and all awards shall be construed in accordance with and governed by the laws of the State of Nebraska, but without regard to its conflict of law provisions.
8.6  Section 409A of the Code.  It is intended that all bonuses payable under this Plan will be exempt from the requirements of Section 409A of the Code pursuant to the "short-term deferral" exemption or, in the alternative, will comply with the requirements of Section 409A so that none of the payments and benefits to be provided under this Plan will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein shall be interpreted to so comply or be exempt. Each payment and benefit payable under this Plan is intended to constitute a separate payment for purposes of 

Section 1.409A-2(b)(2) of the Treasury Regulations. The Company may, in good faith and without the consent of any Participant, make any amendments to this Plan and take such reasonable actions which it deems necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition under Section 409A prior to actual payment to the Participant. However, in no event will the Company pay or reimburse a Participant for any taxes or other costs that may be imposed on the Participant as a result of Section 409A.
8.7  Bonus Plan.  The Plan is intended to be a "bonus program" as defined under U.S. Department of Labor regulation section 2510.3-2(c) and shall be construed and administered by the Company in accordance with such intention.
8.8  Captions.  Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or construction of the Plan.Binding Memorandum of Understanding

EXHIBIT 10.1

Binding Memorandum of Understanding By and Between Flying Eagle Advisors LLC, Aquarius Cannabis Inc., and Grower’s Supply LLC.

Whereas, Flying Eagle Advisors LLC (“FEA”) seeks to finance and provide startup business management consulting services to Native American tribes seeking to begin legal cannabis growing and manufacturing businesses in compliance with State laws; and

Whereas, Aquarius PR LLC. (“Aquarius”), the consulting subsidiary of Aquarius Cannabis Inc., provides centralized, operational structuring, compliance, supply chain development, marketing, cultivation, processing, manufacturing, and branding consulting services to State-legal cannabis cultivators and manufacturers who enter into contracts to produce and sell the cannabis products they cultivate and manufacture under brand names that Aquarius owns; and

Whereas, Growers Supply LLC (“Growers Supply”) utilizes its extensive, profitable operating history as a vertically integrated ornamental flower producer as the backbone of its cannabis cultivation facility design, build, and operations management services to legal cannabis cultivators; and

Whereas, FEA seeks to establish one or more joint consulting ventures (“JCV(s)”) with Aquarius and/or Growers Supply where Aquarius and/or Growers Supply provide consulting services to Native American tribes and tribal members that have consulting agreements with FEA (“FEA Client(s)”); and

Whereas FEA, Aquarius, and Growers Supply agree that for the purposes of this agreement “All Parties” shall mean all 3 parties, “Collective Clients” shall mean clients of All Parties, and “Mutual Clients” shall mean clients of FEA and Aquarius, regardless of whether or not the Mutual Client is also a client of Growers Supply.  A “Mutual Client” may also be or become a “Collective Client”, when under contract with All Parties.

Whereas All Parties seek to clearly define the roles and responsibilities of Aquarius and Growers Supply in the proposed JCV(s) with FEA and to future FEA Clients; and

Whereas All Parties seek to define how Aquarius and Growers Supply will be compensated for performing their roles and responsibilities in the JCV(s) with FEA.

Therefore, the parties hereby agree:

1.

Aquarius’ Operational Structuring and Compliance Roles and Responsibilities

a.

Structure FEA’s initial JCV revenue model of financing and consulting to Native American Tribes in a manner that FEA can use for multiple tribal projects in multiple jurisdictions with little to no alteration of structure between contracts in different jurisdictions; and

b.

Collaborate with Growers Supply to ensure the cultivation and processing facility they design for FEA’s initial JCV sales materials is capable of consistently producing cannabis flowers and trim that meet Aquarius’ strict brand standards of being free from pesticides, plant growth regulators, heavy metal contaminants, or biological contaminants (mold/mildew); and

c.

Ensure that any design, build and operating costs projections developed for FEA on JCV’s in which Aquarius has been contractually engaged are accurate to their assumptions; and

d.

Create, with the aide of legal counsel, the contractual business structure between FEA, Aquarius, Growers Supply and the Collective Clients; and

e.

Provide, with the aide of legal counsel, incorporation and governance templates for Mutual Clients to adopt in order to:

i.

Be compliant with current California (“CA”) law governing cultivation and processing of medical cannabis, and easily transition to the recently adopted State-licensing regulations whenever California implements this system; and

ii.

For Mutual Clients in California (and any other states where Aquarius believes it will be valuable), this responsibility includes templates for the incorporation and operation of the Internal Revenue Code (“IRC”) Section 521 exempt Agricultural Cooperative; and

iii.

For Mutual Clients outside of California, Aquarius will be responsible for vetting and hiring qualified counsel and developing relevant templates with counsel in the State of the relevant JCV; and 

iv.

NOTE: All legal documents developed by Aquarius’ counsel must be vetted and approved by FEA’s counsel prior to providing for use by Mutual Client(s).

f.

Assist the FEA team in the development and editing of FEA’s materials for educating investors and/or tribes on mutual JCV opportunity(ies); and

g.

Ensure all Mutual Client(s) in CA are members of a verifiably lawful collective (by written legal opinion from qualified counsel) to satisfy key requirements of present compliance with CA State laws and Federal compliance memos, including but not limited to the Wilkinson1 and Cole2 Memos. More specifically, provide Mutual Client(s) with total integration into a partner collective of Aquarius in California, which means ensuring the collective partner designates each Client(s)’ growing or processing facility with the

———————

1 Wilkinson Memo of the U.S. Department of Justice, policy statement regarding marijuana issue in Indian Country, 10/28/2014.

2 Cole Memo of the U.S. Department of Justice, guidance regarding marijuana related financial crimes, 02/14/2014.

authority to grow and manufacture whatever amount of plants and/or dried weight and marijuana infused products (“MIPS”) will allow the Client(s) to maximize production.

h.

Ensure all Mutual Clients have a legal, contractual relationship with one or more Aquarius-approved distributor(s) who will take responsibility for wholesaling 100% of the amount of cannabis flowers and/or MIPS that are produced each month in the JCV’s facilities; and

i.

Provide to all Mutual Clients a buyer for 100% their branded trim; and

a.

Provide working knowledge of cannabis accounting processes and best practices to FEA and all Mutual Clients, so that operations can begin in full compliance with Federal and State tax laws (particularly IRC Section

280E); and

b.

Recommend to FEA, accountants qualified to advise on ongoing IRC Section 280E issues for FEA as the core management consulting team overseeing the management of capital flow for JCV operations; and

2.

Aquarius and Growers Supply Cultivation Partnership Overview

a.

Both Aquarius and Growers Supply have knowledge and experience that add value to FEA clients. After the initial introduction by FEA, Aquarius and Growers Supply have decided to combine their respective knowledge and desire for particular operational roles to the benefit of FEA and its Client(s) in any JCV(s).

b.

When jointly engaged, both Aquarius and Growers Supply are jointly responsible for the final results obtained by each Collective Client in their facility. Specifically, Aquarius and Growers Supply are jointly responsible for achieving an average yield of greater than 1.2oz of dried, trimmed flower per square foot (ft2) of flowering canopy harvested each month. If the average yield of dried, trimmed flower from each square foot (ft2) of flowering canopy harvested in a given month is less than 1.2oz per square canopy foot for 6 consecutive months, Client and FEA have the right to seek a new cultivation management company. Additionally, Aquarius and Growers Supply are responsible for ensuring 95% or more of the flower harvested meets Aquarius (and if applicable, governmental) laboratory testing standards to be free from pesticides and other contaminants.

c.

In the event that Aquarius and Growers Supply are jointly engaged on a particular JCV and fail to deliver results meeting the standards of the cultivation management and consulting contracts with a particular Collective Client, both parties must be terminated simultaneously from their cultivation management responsibilities if either party is terminated from their cultivation management responsibilities by FEA or the Collective Client.

d.

Growers Supply takes responsibility for designing and building a cultivation facility that meets the Collective Client(s) needs within a budget and timeframe that Growers Supply will commit to before each project begins.

e.

When the facility begins operations, Growers Supply will be fully responsible for the day-to-day management of growing and processing the cannabis through the point it is ready to be packaged for market. Notwithstanding any joint responsibilities shared with Aquarius, Growers Supply is responsible to each Collective Client for the operational results of each facility on which they are engaged.

f.

Growers Supply has final authority over: exterior facility design and development, indoor facility installation, facility staffing, labor practices and management, operations practices, and any operations costs that do not conflict with Aquarius’ areas of authority. Notwithstanding anything herein to the contrary, All Parties shall comply with tribal and State law with regard to the final choices on operations practices.

g.

Aquarius Cannabis takes responsibility for ensuring Growers Supply and each Mutual Client’s cultivation staff are equipped with the knowledge and skills necessary to ensure each Mutual Client’s JCV facility produces cannabis that meets Aquarius standards at commercially viable yields.

h.

Aquarius has the final authority over interior facility design, grow media selection, nutrient formula selection, nutrient sourcing choices, pest management practices, pest management supply sourcing choices, harvesting practices and harvest supply sourcing choices. Notwithstanding anything herein to the contrary, all parties shall comply with tribal and State law with regard to the final choices on operations practices.

3.

Obligations and Responsibilities of Cultivation and Processing Facility Management Services of Growers Supply

a.

Provide start-to finish cultivation facility design and build services to each Collective Client’s expectations; and

b.

Provide day-to-day cultivation operations management to each Collective Client’s facilities once construction is complete; and

c.

For each Collective Client, take full responsibility for all aspects of day to day personnel management, including all hiring, firing, and compensation programs for staff; and

d.

For each JCV in which Growers Supply is engaged jointly with Aquarius, coordinate what is going to be produced and how it is going to be produced

within the parameters of Aquarius’s roles and responsibilities to each Collective Client (see Sections 4 and 5 of this agreement); and

e.

Implement automated, remote, atmospheric and plant monitoring systems in each Collective Client’s facilities; and

f.

Implement, collect, and securely store daily human reports on critical aspects of operations, site conditions and plant conditions that are not captured in the automatic monitoring and recording systems, sharing with Aquarius on Collective Client’s facilities; and

g.

Provide weekly updates to FEA, Collective Client(s), and Aquarius on the status of key metrics of cultivation, harvesting, and storage operations for Collective Clients; and

h.

Manage each Collective Client’s inventory of flowers and trim through the time of transfer to the distributor entity or manufacturer/packager entity.

4.

Obligations and Responsibilities of Cultivation and Processing Consulting Services of Aquarius

To Mutual Client(s) Cultivating and Wholesaling Aquarius Branded Flowers and Trim: 

Cultivation Consulting:

a.

Analyze commercial viability of strains and decide what strains should be grown by each Mutual Client to maximize each Mutual Client’s revenue and market share; and

b.

Coordinate access to genetics chosen under 4.a for each Mutual Client; and 

c.

Collaborate with Growers Supply to ensure the cultivation and processing facility designed for each Collective Client is capable of consistently producing cannabis flowers and trim that meet Aquarius’ strict brand standards of being free from pesticides, plant growth regulators, heavy metal contaminants, or biological contaminants (mold/mildew); and

i.

Take full responsibility for this design in the event Aquarius is engaged without Growers Supply for a particular JCV; and

d.

Provide Growers Supply and each Collective or Mutual Client’s cultivation staff with written instructions on how to operate the client’s cultivation facility in a way that will produce flowers meeting Aquarius’ standards for quality and safety at commercially viable yield levels. More specifically, ensure Growers Supply and each Collective or Mutual Client are able to produce Aquarius’s quality of cannabis at commercially viable flower yields

of greater than 1.20 oz. of dried, cured cannabis flower, per square foot (ft2) of flowering canopy, per harvest; and

e.

Provide on-site cultivation consulting from qualified commercial cannabis consultants to ensure successful adoption of Aquarius’s cultivation practices by Growers Supply and/or each Collective or Mutual Client’s cultivation staff:

i.

For the first two cycles, provide on-site consulting to each client’s facility a minimum of two full days every two weeks; and

ii.

Every cycle thereafter provide on-site consulting to each client’s facility a minimum of two full days every month; and

iii.

In every cycle, provide on-site support as much as is reasonably required to ensure each client achieves commercial operational success (as defined in 4.d. above), even if that requires more than the minimum guaranteed visits each month.

f.

Specify to Growers Supply and each Collective or Mutual Client what information from the facilities needs to be automatically monitored and recorded remotely for access by Aquarius consultants to review daily; and

g.

Specify to Growers Supply and each Collective or Mutual Client the daily human reporting requirements on critical aspects of operations, site conditions and plant conditions that are not captured in the automatic monitoring and recording systems; and

h.

Provide a weekly consulting session with Growers Supply and each Collective or Mutual Client’s cultivation staff in order to provide regular, constructive feedback and ensure corrective actions are taken whenever required to improve results, and prior to the consulting session, review all weekly recorded data and reports on site and plant conditions.

Harvest and Processing Consulting:

i.

Provide Growers Supply and/or each Collective or Mutual Client’s staff with written instructions and best practices describing how to properly harvest, trim, dry, cure, quality test, and store Aquarius branded flowers and trim for future packaging or processing; and

j.

Provide on-site consulting to train Growers Supply and/or each Collective or Mutual Client’s harvest staff on how to implement the best practices for the harvesting, trimming, drying, curing, quality testing, and storing of Aquarius branded flowers and trim for future packaging or processing; and

k.

Specify to Growers Supply and/or each Collective or Mutual Client’s staff the daily, human reporting required to monitor all important aspects of harvesting, trimming, curing, quality testing, and storing conditions; and

l.

Provide a weekly consulting session with Growers Supply and/or each Collective or Mutual Client’s harvest staff in order to ensure harvesting, trimming, curing, quality testing, and storage practices are being strictly followed and find new areas of improvement in harvesting efficiency and harvest consistency; and prior to the consulting session, review all recorded data and reports on site and plant conditions; and

m.

Perform regular, monthly visits to audit each Collective or Mutual Client’s facility’s harvesting, trimming, drying, quality testing, and storage practices to ensure the highest level of consistency in Aquarius branded cannabis products.

5. 

Marijuana Infused Products (“MIPS”) Manufacturing Consulting Services of Aquarius

For Collective or Mutual Client(s) Manufacturing and Selling Aquarius Branded

MIPS

NOTE: This is an optional expansion of Aquarius’s production, marketing, branding, and distribution services for Collective or Mutual Clients that cultivate Aquarius’ branded flowers and want to produce and distribute various Aquarius branded MIPS with similar assistance from Aquarius as their flower cultivation business.

a.

Decide what MIPS brands should be manufactured by each Collective or Mutual Client to maximize their revenue and market share; and

b.

Prior to the beginning of MIPS manufacturing operations, provide each Collective or Mutual Client with an individualized plan to direct a specific portion of their Aquarius’ branded raw cannabis flowers and trim to their MIPS operation that will allow them to manufacture their MIPS at prices that make their MIPS production competitive with competing MIPS manufacturers; and

c.

Create or license MIPS manufacturing processes and consumer brands then provide them to each Collective or Mutual Client for use our in order fulfill on obligations to each client as stated in 5.a. above; and

d.

Provide each Collective or Mutual Client with repeatable, instant access to the knowledge required to produce, package, and label the MIPS in the form of written, audio, and/or video information; and

e.

Provide on-site training and ongoing consulting to ensure each Collective or Mutual Client’s manufacturing staff is capable of producing the MIPS at the consistency and quality that is required of for whatever brand of MIPS that Aquarius and FEA determine. All MIPS will be made from oils that are derived from cannabis flower and trim grown in cultivation facilities that

Aquarius certifies meet its standards for the production for Aquarius branded flowers;

f.

If requested by Collective or Mutual Client, help client hire qualified MIPS

manufacturing staff at commercially reasonable rates; and

g.

Provide any and all intellectual property or brand licenses necessary for Collective or Mutual Client(s) to legally produce and sell branded MIPS at wholesale.

6. 

Supply Chain, Marketing, and Branding Consulting Services of Aquarius

To Collective or Mutual Client(s) Cultivating and Wholesaling Flowers and Trim: 

Marketing, Branding, and Packaging

a.

Aquarius develops all marketing, branding, packaging, and labeling to create 100% market demand for the Aquarius products grown by each client

Supply Chain Organization/Distribution

a.

Aquarius connects each client to one or more legitimate, professional distributors who are licensed by Aquarius to distribute Aquarius branded products to Aquarius approved retailers; and

b.

Aquarius ensures each Collective or Mutual Client has relationships with enough authorized distributors to ensure that 100% of each client’s monthly supply of cannabis flowers (that meet Aquarius brand standards) get distributed to cannabis retailers that are compliant with applicable State laws to the standards set by the distributor’s marijuana counsel; and

c.

Aquarius will ensure that Aquarius-authorized distributors abide by the following operations and payment terms:

i.

Pay a deposit of $1,000.00 per pound of flowers upon receipt of the flowers from each Collective or Mutual Client; and

ii.

Pay a pre-agreed deposit on any MIPS picked up from a Collective or Mutual client for distribution to retailers upon receipt of the MIPS from client; and

iii.

Transport and sell the packaged, branded flowers and/or MIPS to retail clients for the highest possible price; and

iv.

Pay each Collective or Mutual Client the remainder of the cash compensation due to them for the sales net thirty (30) days of paying the deposit

a.

The remainder amount due to the Collective or Mutual Client will be equal to: (Gross Revenue)-(9.77% Aquarius

Consulting Fee)-(9.77% Distributor Gross Margin)-($100 per/pound or $X per unit transportation cost reimbursement)

b.

An appropriate transportation reimbursement will be agreed upon by distributor and each Collective or Mutual Client for each MIPS product at the same time the deposit amount for each MIPS product is agreed upon by distributor and each Collective or Mutual client.

v.

Upon payment of the remainder due to Collective or Mutual Client for each pound of flower or specified amount of MIPS sold by the distributor, the distributor will calculate and provide an invoice showing the final wholesale price, the Aquarius fees, the distributor fees, the transportation cost reimbursements, and the final amount due to the Collective or Mutual Client; and

vi.

Make all files related to the sales of each client’s product(s) transparent so that client and FEA may audit wholesale prices; and vii. Pay late fees of 1% of the value of the outstanding fees per day after 10 days (up to 10%); and

viii.

If any payment is more than 10 business days past due or any payment over $100,000 is one day late, FEA and Collective or Mutual Clients have the option to terminate agreement with the distributor. 

ix.

Termination of the distributor shall not limit FEA or the Collective or Mutual Client’s ability to seek all legal remedies against the distributor

x.

Aquarius is not a financial guarantor for payments by any of it’s licensed, 3rd party, distributors

d.

Aquarius will verify each Aquarius authorized distributor and retailer meet local and State legal requirements, and Aquarius will provide the legal structures and frameworks for each operating entity of each Collective or Mutual Client to interact with each other operating entity; and

e.

Aquarius provides standard operating procedures and measures key internal economic indicators for each authorized distributor; and

f.

Aquarius is responsible for acquisition and account management of authorized retailers for the authorized distributors; and

g.

Aquarius manages inventory data from authorized retailers, distributors, and growers ensuring the supply chain efficiently delivers products customers want to purchase; and

h.

In between the inception date of growth for a particular batch of cannabis flowers growing in a Collective or Mutual Client(s)’ facility and the time that batch is harvested, Aquarius will ensure that  Collective or Mutual Client has one or more Aquarius-approved distributors and/or manufacturers agreeing

to purchase the full expected output of the flowers and trim growing in that particular batch; and

i.

Once the distribution and/or manufacturing outlet is secured, formally estimate within a $1 margin of error what price per gram that each Collective or Mutual Client(s) can expect to be paid at wholesale for that batch; and

j.

If the flowers grown by a particular Collective or Mutual Client are to be sold as packaged, branded flowers directly by the client’s cultivation entity:

i.

Ensure client(s)’ facilities for storing market ready, unpackaged flowers are adequate to maintain consistency and safety in the final packaged, branded flowers; and

ii.

Ensure client(s)’ facilities for packaging the final branded flowers are adequate to maintain consistency and safety; and

iii.

Ensure client(s)’ processing staff are adequately trained in the storing and packaging processes to be capable of delivering consistent, packaged branded flowers that meet all testing and labeling standards required by Aquarius to be ready for distribution by an Aquarius- authorized distributor; and

iv.

Ensure client has 100% demand for their packaged, branded, flowers from an Aquarius-authorized distributor.

k.

If the flowers are to be processed into packaged, branded flowers by a manufacturing entity owned in whole or in part by a particular Collective or Mutual Client:

i.

Ensure each client(s)’ facilities for storing market ready, unpackaged flowers are adequate to maintain consistency and safety in the final packaged, branded flowers; and

ii.

Ensure each client(s)’ facilities for packaging the final product are adequate to maintain consistency and safety in the final packaged, branded flowers; and

iii.

Ensure each client(s)’ processing staff are adequately trained in the storing and packaging processes to be capable of delivering consistent, packaged branded flowers that meet all testing and labeling standards required by Aquarius to be ready for distribution by an Aquarius-authorized distributor; and

iv.

Ensure each client has 100% demand for their packaged, branded, flowers from an Aquarius-authorized distributor.

v.

Develop a sustainable, legal relationship and transfer pricing program that maximizes revenue to each client with the written approval of legal counsel and a Certified Public Accountant.

l.

If the flowers and/or trim are to be processed into MIPS by a manufacturing entity owned in whole or in part by a particular Collective or Mutual Client:

vi.

Ensure the client(s)’ facilities for storing ready-to-process flower and trim are adequate to maintain consistency and safety in the final packaged, branded MIPS; and

vii.

Ensure the client(s)’ facilities for processing and manufacturing the flower and trim into MIPS are adequate to maintain consistency and safety in the final packaged, branded MIPS; and

viii.

Ensure the client(s)’ staff are adequately trained in the storing, processing, manufacturing and packaging processes to deliver consistent, packaged branded MIPS that meet all testing and labeling standards and are ready for distribution by an Aquarius-authorized distributor; and

ix.

Develop a sustainable, legal relationship and transfer pricing program that maximizes revenue to the client(s) with the written approval of legal counsel and a Certified Public Accountant.

m.

If the flowers/trim are to be processed into MIPS by an unaffiliated manufacturing entity:

x.

Perform due diligence to ensure the unaffiliated MIPS manufacturing entity is legally compliant under CA state law; and 

xi.

Ensure the unaffiliated MIPS manufacturer is under contract to comply with any Aquarius co-branding Aquarius may require; and 

xii.

Create any contracts or agreements necessary to make transacting with the unaffiliated MIPS manufacturer legal under CA State law.

7.

Aquarius’ and Growers Supply’s compensation from each JCV Client:

a. 

AQUARIUS will earn from each JCV in which it is engaged:

i.

9.77% of gross revenue from the wholesale sales of the Aquarius- authorized distributor of products cultivated and/or manufactured by any JCV Client; and

1.

NOTE: Distributor earns $100 per pound reimbursement (on packaged, branded flower) plus 9.77% of gross revenue, then passes through all remaining funds to each JCV’s Client’s wholesale cultivation or manufacturing entity or entities; and

2.

NOTE: Aquarius collects this fee through contracts with one or more licensed distributor of Aquarius brands. Each Collective or Mutual Client will have a binding distribution contract with one or more Aquarius-authorized distributors; and

ii.

5% of gross revenue from each Collective or Mutual Client’s wholesale sales of branded flowers, trim, or MIPS to any Aquarius-authorized distributor or Aquarius-authorized manufacturer; and

iii.

25% of the Cultivation Performance Incentive (table below):

1.

25 % of the $50-300 per pound cultivation fee on each pound of finished, branded flowers grown in each Collective or Mutual Client’s facility; and

2.

25% of the $24 per pound cultivation fee on branded trim from cannabis produced in each Collective or Mutual Client’s facility; and

3.

NOTE 1: the fee structure per pound is based on actual yield attained by each JCV Client, as described in the Cultivation Performance Incentive Table below; and

4.

NOTE 2: the form of contract may be two separate contracts with Aquarius and Growers Supply, or just one contract; and

5.

NOTE 3: in the event Aquarius is engaged separately from Growers Supply, Aquarius assumes the roles, responsibilities, and additional 75% of the Cultivation Performance Incentive

b.

GROWERS SUPPLY will earn from each JCV in which it is engaged:

i.

75% of the Cultivation Performance Incentive:

1.

75% of the $50-300 per pound cultivation fee on each pound of finished, branded flowers; and

2.

75% of the $24 per pound cultivation fee on branded trim from cannabis produced in each JCV Client’s facility; and

3.

NOTE 1: the fee structure per pound is based on actual yield attained by each JCV Client, as described in the Cultivation

Performance Incentive table below; and

4.

NOTE 2: the form of contract may be two separate contracts with Aquarius and Growers Supply, or just one contract; and

Cultivation Performance Incentive Table:

			
	Ounces of flower produced per canopy

ft2 harvested each

month

	Per pound FLOWER fee to Growers Supply

(75%) and Aquarius

(25%), on pounds produced each month

	Per pound TRIM fee to

Growers Supply(75%) and Aquarius (25%) on pounds produced that month

	 
	 
	 

	1.19 oz or less

	$50

	$24

	1.2 oz to 1.49 oz

	$100

	$24

	1.5 oz to 1.79 oz

	$150

	$24

	1.8 oz to 1.49 oz

	$200

	$24

			
	2.1 oz to 2.39 oz

	$250

	$24

	2.4 oz or more

	$300

	$24

	 
	 
	 

8.

FEA’s roles and responsibilities in the JCV

a.

FEA will provide management consulting services for both the JCV and each tribal entity; and

b.

Secure Native American cultivation site(s) with the assistance of Aquarius Cannabis and Growers Supply’s experience and resources; and, FEA will assist each JCV and tribal entity with overall business and operational structure, develop internal controls, business and management processes, and work with grant writers to assist the tribe in structuring the Tribal laws and internal controls; so that proposed cannabis operations become legal under each specific tribe’s laws, while complying with all State laws and all Federal memorandums addressing this issue; and

c.

Provide or coordinate financing to each Tribal client, unless the Tribe is providing its own financing; and

d.

Provide comprehensive management services to each JCV Client as the senior business management consultant to each JCV client for the results of day to day operations of their business; FEA will identify and suggest recommendations that create value, provide ongoing support for business strategy, financial and management controls, human resources; as well as advising on additional resources needed to implement viable solutions, maximize growth of the cultivation operations, and improve overall business strategy, structure, and performance; and

e.

Ensure proper payment of all funds due to Aquarius, Growers Supply, FEA, and any other outside vendors from each JCV Client; and

f.

Work on securing additional cultivation sites in other jurisdictions outside of CA; and

g.

Develop a Research and Development Department to create oils, MIPS and possibly additional cannabis products; and

9.

FEA’s compensation from clients in the JCV

a.

FEA will receive an administration and management fee from each JCV Client; and

b.

FEA will negotiate its compensation with each JCV Client’s cannabis cultivation or manufacturing business on an individual basis that reflects the unique resources and characteristics of each party in each specific deal; and

c.

FEA’s compensation contracts with each tribal entity and each JCV will be executed simultaneously with the compensation contracts for Aquarius with the tribal entity in each JCV.

10. 

Aquarius Cannabis Inc. equity bonuses to FEA

a.

100,000 warrants issued upon execution of this binding MOU; and

b.

Up to 2,500,000 warrants issued for achieving milestones with the first 1⁄2 Acre+ cultivation facility (total greenhouse size) on tribal land;

i.

125,000 warrants upon securing cultivation rights with one or more tribes for a 1⁄2 Acre+ cultivation facility producing Aquarius brands; and

ii.

125,000 warrants upon raising the full amount of capital necessary to build and operate a 1⁄2 Acre+ cultivation facility, producing Aquarius

brands, through to first revenue; and

iii.

250,000 warrants upon completion of both:

1.

Construction of a 1⁄2 Acre of cultivation facility that is under contract to produce Aquarius brands; and

2.

The first batch of cannabis plants in vegetative state being moved into the flowering chambers of the 1⁄2 Acre+ cultivation facility; and

iv.

500,000 warrants upon the successful harvest, trimming, curing, and

packaging of a total of 500 pounds of branded, packaged marijuana flowers meeting Aquarius brand standards; and

v.

500,000 warrants upon the successful harvest, trimming, curing, and packaging of a total of 2000 pounds of branded, packaged marijuana

flowers meeting Aquarius brand standards; and

vi.

500,000 warrants upon the successful harvest, trimming, curing, and packaging of a total of 4000 pounds of branded, packaged marijuana flowers meeting Aquarius brand standards; and

vii.

500,000 warrants upon the successful harvest, trimming, curing, and packaging of a total of 6000 pounds of branded, packaged marijuana flowers meeting Aquarius brand standards; and

c.

Up to 2,500,00 warrants for achieving subsequent milestones in developing and funding additional cultivation and manufacturing facilities producing Aquarius brands;

i.

250,000 warrants upon the successful harvest, trimming, curing, and packaging of the first 1000 pounds from any additional JCV cultivation or manufacturing facility in CA,

1.

Includes but is not limited to an additional facility on the same reservation as the first, 1 Acre facility cultivation facility.

2.

May earn this bonus up to four (4) times for a total of up to 1,000,000 warrants earned by FEA

ii.

500,000 warrants upon the successful harvest, trimming, curing, and packaging of the first 1000 pounds from any additional JCV cultivation or manufacturing facility in a State other than California;

1.

May be earned for up to 5 States

iii.

By combining it’s best combination of both bonuses available in Sections 10.c.i. and 10.c.ii. above, FEA may earn a maximum of 2,500,000 warrants

d.

Warrant Expiration:

i.

2 years from the date of issuance

e.

Warrant Exercise Price:

i.

If from the exercise of the binding MOU agreement:

1.

$0.15 exercise price 

ii.

If earned in 2016:

1.

$0.25 exercise price 

iii.

If earned in 2017:

1.

$0.50 exercise price 

iv.

If earned in 2018 or after:

1.

$1.00 exercise price

f.

NOTE 1: Any individual or incorporated entity Acquiring over 10% beneficial ownership of common shares in Aquarius will be deemed an “affiliate” by the SEC and be subject to restrictions on the sale of stock each quarter; and

g.

NOTE 2: The warrants issued to FEA by Aquarius may be issued pro-rata by Aquarius to the principal members of FEA if both FEA and Aquarius agree.

11. 

Additional Terms

a.

Aquarius is in the process of becoming a publicly traded company and as such, must disclose material agreements to the SEC. Accordingly, this agreement will be disclosed publicly through SEC filings.

b.

All Parties acknowledge that the execution of a first JCV is dependent on FEA successfully raising capital for the first JCV. If no JCV has been created under this agreement eighteen (18) months from the execution of this agreement, than all provisions of this agreement are automatically null and void, except the 100,000 warrants issued to FEA will be retained by FEA.

c.

FEA and all of its members, member LLC’s, and members of the member LLC’s agree that they will not circumvent or attempt to otherwise alter the roles, responsibilities, and compensation contractually assigned to Aquarius and/or Growers Supply under this agreement, when Aquarius and/or Growers Supply is “contractually engaged” for a specific JCV or to serve a specific Collective or Mutual Client under this agreement

i.

Execution of this document shall irrevocably, “contractually engage” both Aquarius and Growers Supply at the terms herein for the first JCV cultivation project executed by FEA

ii.

For any future, proposed JCV projects in which FEA desires Aquarius and/or Growers Supply to be involved in creating or operating, FEA will create and execute a separate, binding agreement in which FEA “contractually engages” Aquarius and/or Growers Supply. Such agreement will be binding and may not be circumvented.

iii.

When contractually engaged for a Collective Client with FEA, the term of engagement for Aquarius and Growers Supply with the JCV Client will be equal to the term of engagement between FEA and that Client. Notwithstanding anything herein to the contrary, if Aquarius and Growers Supply are simultaneously terminated, then Aquarius’s and Grower Supply’s terms of engagement shall be terminated at such time. If Either of Aquarius or Growers Supply are terminated individually, then said respective terminated party’s engagement shall be terminated at such time.

d.

All Parties contractually agree to allow each other the freedom to enter into business contracts in the legal cannabis industry on their own and in partnership with each other outside of this JCV agreement:

i.

Aquarius agrees that FEA and/or Growers Supply may develop additional cannabis cultivation and manufacturing projects that do not involve Aquarius; and

ii.

FEA agrees that Aquarius and/or Growers Supply may develop additional cannabis cultivation and manufacturing projects that do not involve FEA; and

iii.

Growers Supply agrees that FEA and/or Aquarius may develop additional cannabis cultivation and manufacturing projects that do not involve Growers Supply.

e.

All Parties contractually agree that they will be required to submit to a criminal background check within thirty (30) days of the execution of this Agreement and if the results of this background check reveal any legal

convictions that would disallow said party to work in the cannabis industry, then such party will not be a party to this Agreement or involved in any way with any specific JCV.

f.

If FEA, Aquarius and/or Growers Supply defaults in their performance of any of their respective obligations under this Agreement, and fails to cure such default within thirty (30) days after receiving written notice of such default, the remaining parties may (but shall not be obligated to) terminate said party from this Agreement.

g.

All claims arising out of or related to this Agreement, or a breach hereof, that are not otherwise resolved by the parties by negotiation or voluntary mediation shall be settled by binding arbitration in accordance with the procedures set forth in this Section. All arbitrations will be conducted in CA, or at another location mutually approved by such parties, pursuant to the commercial arbitration rules of the American Arbitration Association, by one arbitrator. The arbitrator shall be a lawyer who is disinterested in the controversy, shall be independent of the parties, shall have training and experience as an arbitrator and shall have a demonstrated reputation for fairness and integrity as an arbitrator. The arbitrator is directed by this Agreement to conduct the arbitration hearing expeditiously after demand for arbitration has been filed with the American Arbitration Association. Depositions shall be permitted only as deemed appropriate by the arbitrator, upon motion of the party seeking deposition discovery, but shall be limited to no more than two (2) for each party. The parties to the arbitration will be entitled to conduct document discovery as deemed appropriate by the arbitrator. The arbitrator will resolve any discovery disputes. The arbitrator shall have the power to subpoena documents or parties as provided by law. The award of the arbitrator shall provide for an allocation among the parties of all costs and expenses of the arbitration on a basis that is just and equitable under the circumstances and shall award reasonable attorney’s fees to the prevailing party. The arbitrator shall have no power to award punitive damages except to the extent authorized by any applicable statute. Notices of demand for arbitration must be given in writing to the Parties within a reasonable time after the claim has arisen but in no event later than the date when institution of legal or equitable proceedings based on such claim would be barred by the applicable statute of limitations. The award of the arbitrator shall be in writing, shall be based on the evidence admitted and the applicable law as determined by the arbitrator and shall contain a reasoned award for each claim. The award rendered by the arbitrator is final and binding on all parties, and judgment may be entered upon it by any court of competent jurisdiction.

h.

Any Party may assign its rights and obligations under this Agreement to another affiliated party with the prior written consent of the other Parties.

12.

Notices.

Any notices required to be given under this Agreement by either party to the other may be effected in writing by personal delivery, via e-mail, or by mail, registered or certified, postage prepaid with return receipt requested.  Either party may change the address by giving written notice in accordance with this paragraph.  Mailed noticed must be addressed to the parties at the addresses appearing below:

Flying Eagle Advisors LLC: 

Mr. Danny Federhofer

c/o Deborah Smiley

The Verity Law Firm, LLC

2085 Bluestone Drive

St. Charles, MO 63303

Email:  deborahsmiley@veritylawfirm.com

Aquarius PR LLC:

Mr. Michael Davis Lawyer 

c/o Gregg Jaclin

Szaferman, Lakind, Blumstein, and Blader, PC

101 Grovers Mill Rd #200, 

Lawrenceville, NJ 08648

Email: gjaclin@szaferman.com

Grower’s Supply LLC:

Mr. Bernie Heimos

c/o N.G. Heimos Greenhouses

6627 Rte. 158

Milstadt, IL 62260

Email: bheimos@ngheimos.com

This Agreement will be governed by and construed in accordance with the laws of the State of Nevada.

Executed at Las Vegas, Nevada, on this, the 18th day of February 2016.

					
	Aquarius PR LLC.

	 
	Flying Eagle Advisors LLC

	 
	 
	 
	 
	 

	Name:

	Michael Davis Lawyer

	 
	Name:

	Danny Federhofer

	Title:

	El Presidente

	 
	Title:

	Manager, Sr. VP Business Development

	Signature:

	/s/ Michael Davis Lawyer

	 
	Signature:

	/s/ Danny Federhofer

	Date:

	2/18/2016

	 
	Date:

	2/18/2016

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Growers Supply LLC.

	 
	 
	 

	 
	 
	 
	 
	 

	Name:

	Bernie Heimos

	 
	 
	 

	Title:

	President

	 
	 
	 

	Signature:

	/s/ Bernie Heimos

	 
	 
	 

	Date:

	2/18/2016

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