Document:

mmen_ex1012a.htm

EXHIBIT 10.12A
    
 MEDMEN ENTERPRISES INC.
2018 STOCK AND INCENTIVE PLAN
NOTICE OF STOCK OPTION GRANT
     
 You have been granted the following option to purchase Class B Subordinate Voting Shares of MEDMEN ENTERPRISES INC. (the “Company”):
  
 	  
	 Name of Optionee: 
	  
	  

	  
	  
	  
	  

	  
	 Total Number of Shares Subject to Option:
	  
	  

	  
	  
	  
	  

	  
	 Type of Option: 
	 Non‐Qualified Stock Option
	  

	  
	  
	  
	  

	  
	 Exercise Price Per Share: 
	 CDN$ __________________________________________________
	  

	  
	  
	  
	  

	  
	 Date of Grant: 
	  
	  

	  
	  
	  
	  

	  
	 Vesting Commencement Date 
	  
	  

	  
	  
	  
	  

	  
	 Vesting Terms: 
	 [1/4 of theShares subject to this option shall vest and become exercisable on the first anniversary of the Vesting Commencement Date.Thereafter, an additional 1/48 of the Shares subject to this option shall vest and become exercisable on each successive monthly anniversary of the Vesting Commencement Date.]
	  

	  
	  
	  
	  

	  
	 Expiration Date: 
	  
	  

 
   
 By your signature and the signature of the Company’s representative below, you and the Company agree that this option is granted under and governed by the terms and conditions of the Company’s 2018 Stock and Incentive Plan and the attached Stock Option Agreement, both of which are made a part of this document.
  
 	OPTIONEE:	 	MEDMEN ENTERPRISES INC.	 
		 	 		 
	  
	  
	 By:
	  
	  

		 	 		 
		 	Title:		 
	 Print Name
	  
	  
	  
	  

 
    
 	 
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 MEDMEN ENTERPRISES INC.
2018 STOCK and incentive PLAN
STOCK OPTION AGREEMENT
   
 SECTION 1. GRANT OF OPTION.
  
 (a) Option.On the terms and conditions set forth in the Notice of Stock Option Grant and this Agreement, the Company grants to the Optionee on the Date of Grant the option to purchase at the Exercise Price the number of Shares set forth in the Notice of Stock Option Grant.This option is intended to be a Non‐Qualified Stock Option (NSO), as provided in the Notice of Stock Option Grant.
  
 (b) Stock Plan and Defined Terms.This option is granted pursuant to the 2018 Stock and Incentive Plan (the “Plan”), a copy of which the Optionee acknowledges having received.The provisions of the Plan are incorporated into this Agreement by this reference.Capitalized terms are defined in Section 9 of this Agreement, unless otherwise defined in Section 2 of the Plan.
  
 SECTION 2. RIGHT TO EXERCISE.
  
 (a) In General.Except as set forth below and subject to any other conditions of this Agreement, all or part of this option may be exercised prior to its expiration at the time or times set forth in the Notice of Stock Option Grant.
  
 (b) Change in Control.If within 12 months following a Change in Control, the Company terminates the Optionee’s service with the Company for reasons other than for Cause, then the option shall become immediately exercisable in full on the date of such termination, and the Optionee may exercise all or part of this option at any time before its expiration.
  
 SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION.
  
 Except as otherwise provided in this Agreement, this option and the rights and privileges conferred hereby shall not be sold, pledged or otherwise transferred (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process.
  
 SECTION 4. EXERCISE PROCEDURES.
  
 (a) Notice of Exercise.This option shall be exercisable by delivery of an exercise notice, in the form attached as Exhibit A (the “Exercise Notice”) or in a manner and pursuant to such procedures as the Board or Committee, as applicable, may determine, which shall state the election to exercise the option, the number of Shares with respect to which the option is being exercised (the “Exercised Shares”), the Purchase Price and such other representations and agreements as may be required by the Company.The Optionee shall deliver to the Company, at the time of giving the Exercise Notice, payment in a form permissible under Section 5 of this Agreement for the full amount of the Purchase Price. The option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice and payment of the Purchase Price, together with any applicable tax withholding or confirmation of such other arrangements satisfactory to the Company to enable it to satisfy all applicable tax withholding requirements.The Exercise Notice shall be signed by the person exercising this option.In the event that this option is being exercised by the representative of the Optionee, the Exercise Notice shall be accompanied by proof (satisfactory to the Company) of the representative’s right to exercise this option.
  
 (b) Issuance of Shares.After receiving a proper Exercise Notice, the Company shall cause to be issued Shares (either in certificate or book entry form, as determined by the Company) as to which this option has been exercised, registered in the name of the person exercising this option (or in the names of such person and his or her spouse as community property or as joint tenants with right of survivorship).
  
 (c) Withholding Taxes.In the event that the Company determines that it is required to withhold any tax as a result of the exercise of this option, the Optionee, as a condition to the exercise of this option, shall make arrangements satisfactory to the Company to enable it to satisfy all withholding requirements.The Optionee shall also make arrangements satisfactory to the Company to enable it to satisfy any withholding requirements that may arise in connection with the vesting or disposition of Shares purchased by exercising this option.
   
 	 
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 SECTION 5. PAYMENT FOR STOCK.
  
 (a) Cash.All or part of the Purchase Price may be paid in cash or cash equivalents.
  
 (b) Exercise/Sale.If Shares are publicly traded, all or part of the Purchase Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Exercised Shares and to deliver all or part of the sales proceeds to the Company.
  
 (c) Other.The Company may permit an Option to be exercised by any other method acceptable to the Company in its sole discretion.
  
 SECTION 6. TERM AND EXPIRATION.
  
 (a) Basic Term.This option shall in any event expire on the expiration date set forth in the Notice of Stock Option Grant, which date shall not exceed ten years after the Date of Grant (five years after the Date of Grant if this option is designated as an ISO in the Notice of Stock Option Grant, and the Optionee is a 10% owner as described in Section 6 of the Plan).
  
 (b) Termination of Service (Except by Death or Disability).If the Optionee’s service terminates for any reason other than death or Disability, then this option shall expire on the earliest of the following occasions:
  
 (i) The expiration date determined pursuant to Subsection (a) above;
  
 (ii) The date three months after the termination of the Optionee’s service for any reason other than Cause; or
  
 (iii) The date of termination of the Optionee’s service for Cause.
  
 The Optionee may exercise all or part of this option at any time before its expiration under the preceding sentence, but only to the extent that this option is then exercisable.In the event that the Optionee dies after termination of service but before the expiration of this option, all or part of this option may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option had become exercisable before the Optionee’s death. For avoidance of doubt, if the Optionee is employed by an Affiliate that is sold or otherwise ceases to be an Affiliate of the Company, the Optionee shall incur a termination of service.
  
 (c) Death or Disability of the Optionee.If the Optionee dies or becomes Disabled while in service, then this option shall expire on the earlier of the following dates:
  
 (i) The expiration date determined pursuant to Subsection (a) above; or
  
 (ii) The date 12 months after the Optionee’s death or Disability.
  
 In the event of Optionee’s death, all or part of this option may be exercised at any time before its expiration under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option had become exercisable before the Optionee’s death.
  
 (d) Leaves of Absence.For any purpose under this Agreement, service shall be deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company or an applicable Affiliate thereof in writing and if continued crediting of service for such purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company or an applicable Affiliate thereof).
   
 	 
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 SECTION 7. ADJUSTMENT OF SHARES.
  
 In the event of any transaction described in Section 4(c) of the Plan, the terms of this option (including, without limitation, the number and kind of Shares subject to this option and the Exercise Price) shall be adjusted as set forth in Section 4(c) of the Plan.In the event that the Company is a party to any corporate transaction, this option shall be subject to amendment as provided in Section 7(b) of the Plan.
  
 SECTION 8. MISCELLANEOUS PROVISIONS.
  
 (a) Rights as a Shareholder.Neither the Optionee nor the Optionee’s representative shall have any rights as a shareholder with respect to any Shares subject to this option until the Optionee or the Optionee’s representative becomes entitled to receive such Shares by filing an Exercise Notice and paying the Purchase Price pursuant to Sections 4 and 5 of this Agreement.
  
 (b) Compliance Matters.The Company may require from the Optionee such investment representation, undertaking or agreement, if any, as the Company may consider necessary in order to comply with applicable laws and policies of any applicable exchange. The Optionee understands and acknowledges that Shares to be issued upon exercise of this option may be issued subject to any restrictive legend or other transfer restrictions as may be required by applicable securities laws and stock exchange requirements.If the Shares are not exempt from California securities laws, then at least annually, the Company will deliver financial statements to the Optionee if he or she is not a key person within the Company or an Affiliate whose duties assure Optionee access to equivalent information.
  
 (c) No Retention Rights.Nothing in this option or in the Plan shall confer upon the Optionee any right to continue in service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Affiliate employing or retaining the Optionee) or of the Optionee, which rights are hereby expressly reserved by each, to terminate his or her service at any time and for any reason, with or without Cause.
  
 (d) Notice.The procedures required with respect to an Exercise Notice are governed by Sections 4 and 5 of this Agreement.Any other notice required by the terms of this Agreement shall be given in writing, including via electronic means, and shall be deemed effective (i) upon personal delivery, or upon deposit with governmental postal service, by registered or certified mail, with postage and fees prepaid, or (ii) if sent via electronic mail, upon the recipient’s acknowledgment of receipt of such electronic notice.Notice shall be addressed to the Company at its principal executive office and to the Optionee at the address that he or she most recently provided to the Company.
  
 (e) Entire Agreement.The Notice of Stock Option Grant, this Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof.They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof.
  
 (f) Choice of Law.This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State.
  
 SECTION 9. DEFINITIONS.
  
 In addition to the definitions set forth in the Plan, the following terms shall have the meanings ascribed herein (in the event a conflict exists, the meaning set forth in this Agreement shall prevail):
  
 (a) “Agreement” shall mean this Stock Option Agreement. 
   
 	 
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 (b) “Cause” shall mean any of the following, within the Company’s sole discretion: (i) a material violation of any applicable Company policy which is not cured within ten (10) days after written notice thereof; (ii) a material breach of any agreement with the Company which is not cured within ten (10) days after written notice thereof; (iii) willful and repeated failure to perform duties or gross neglect of duties (other than due to illness or incapacity) which is not cured within ten (10) days after written notice thereof; (iv) contravention of specific written lawful directions related to a duty or responsibility directed to be undertaken by the Board; (v) a conflict of interest with the Company which is not cured within twenty (20) days after written notice thereof; (vi) commission of an act, or a failure to act, that constitutes fraud, gross negligence or willful misconduct (including, but not limited to, embezzlement, misappropriation, or breach of fiduciary duty resulting or intending to result in personal gain at the expense of the Company); (vii) failure to comply with applicable confidentiality, non-solicitation and non-competition obligations to the Company, code of business conduct or other material policies of the Company that could, in the Board’s opinion, cause material injury to the Company; and (v) conviction of guilty or entry of a nolo contendere plea to: (a) a crime involving dishonesty or breach of trust; (b) an intentional tort which causes substantial loss, damage or injury to the property or reputation of the Company; (c) a misdemeanor which is materially and demonstrably injurious to the Company; or (d) a felony.
  
 (c) “Change in Control” shall mean:
  
 (i) the occurrence of any of the following events (each, a “Business Combination”):(a) the sale of more than 50% of the outstanding equity securities of the Company in a single transaction or in a series of transactions occurring during a period of not more than twelve months; (b) the Company is merged, amalgamated or consolidated with another corporation; or (c) a sale of substantially all of the assets of the Company to another entity, unless, following any of the foregoing Business Combinations in (a) through (c) above, all or substantially all of the individuals and entities that were the beneficial owners of the Company’s outstanding voting securities immediately prior to such Business Combination beneficially own immediately after the transaction or transactions, directly or indirectly, 50% or more of the combined voting power of the then outstanding voting securities (or comparable interests) of the entity resulting from such Business Combination (including an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more affiliates) in substantially the same proportions as their ownership of the Company’s voting securities immediately prior to such Business Combination; or
  
 (ii) in any twelve (12) month period, the individuals who, as of the beginning of the 12‐month period, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election or appointment, or nomination for election by Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors.
  
 (d) “Date of Grant” shall mean the date specified in the Notice of Stock Option Grant.
  
 (e) “Disability” means “disability” within the meaning of Section 22(e)(3) of the Code.
  
 (f) “Exercise Price” shall mean the amount for which one Share may be purchased upon exercise of this option, as specified in the Notice of Stock Option Grant.
  
 (g) “Notice of Stock Option Grant” shall mean the document so entitled to which this Agreement is attached.
  
 (h) “Optionee” shall mean the individual named in the Notice of Stock Option Grant.
  
 (i) “Purchase Price” shall mean the Exercise Price multiplied by the number of Shares with respect to which this option is being exercised.
    
 	 
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 EXHIBIT A – EXERCISE NOTICE
  
 MEDMEN ENTERPRISES INC.
2018 STOCK and incentive PLAN
STOCK OPTION AGREEMENT
   
 I hereby notify MedMen Enterprises Inc. (the “Company”) that I elect to purchase Class B Subordinate Voting Shares of the Company (the “Exercised Shares”) at the option exercise price of CDN$ per share (the “Exercise Price”) pursuant to that certain option (the “Option”) granted to me by Notice of Stock Option Grant and Stock Option Agreement on , 20 (the “Option Agreement”) under the Company’s 2018 Stock and Incentive Plan (the “Plan”). 
  
 Capitalized terms used herein and not otherwise defined herein have the same meaning as set forth in the Option Agreement or the Plan.
  
 Concurrently with the delivery of this Exercise Notice to the Company, I shall herewith deliver to the Company the full Purchase Price of the Exercised Shares in accordance with Section 5 of the Option Agreement, together with any and all withholding taxes due in connection with the exercise of the Option.
   
 	  
	 ❒
	I hereby exercise the Option in accordance with Section 5(a) of the Option Agreement.A certified cheque or bank draft is delivered with this Exercise Notice for the Purchase Price of the Exercised Shares.
	  
	  
	  

	  
	 ❒
	I hereby exercise the Option in accordance with Section 5(b) of the Option Agreement by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker to sell Exercised Shares and to deliver all or part of the sales proceeds to the Company.

 
    
 This Exercise Notice must be signed by the Optionee and delivered to the Company.See instructions and signature block on the following page.
  
 	 
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 Please deliver this Exercise Notice along with any required payment to:
   
 [NAME]
 [ADDRESS]
      
 	 Participant name:
	  
	  

	  
	  
	  

	  
	  
	  

	 Participant signature:
	  
	  

	  
	  
	  

	  
	  
	  

	 ____________________, _______ 
	  
	  

	 Date
	  
	  

	  
	  
	  

	 Participant address::
	  
	  

	  
	  
	  

	  
	  
	  

	 Social Security Number:
	  
	  

	  
	  
	  

	  
	  
	  

 
  
 	 
	7mmen_ex1012b.htm

EXHIBIT 10.12B
   
 MEDMEN ENTERPRISES INC. 
2018 STOCK AND INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD AGREEMENT
  
 This RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”) is made this ♦ day of ♦, ♦ (the “Effective Date”), by and between MedMen Enterprises Inc., a British Columbia corporation (the “Company”) and ♦, an [employee of] the Company (the “Participant”).
  
 1. Award. The Company hereby grants to Participant an award of the number of Restricted Stock Units listed in Section 2 hereof (the “Units”) according to the terms and conditions set forth herein and in the Company’s 2018 Stock and Incentive Plan (the “Plan”). Each Unit represents the right to receive one Class B Subordinate Voting Share (each a “Subordinate Voting Share”) of the Company, subject to the vesting requirements of this Agreement and the terms of the Plan. The Units are granted under Section 6(c) of the Plan. Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Plan. A copy of the Plan will be furnished upon request of Participant.
  
 2. Date of Grant; Vesting.
  
 (a) Number of Units Granted: __________________
  
 (b) Date of Grant: ____________________________
  
 (c) Vesting Date: Except as otherwise provided in this Agreement, 100% of the Units shall vest on _______________________, which is the second anniversary of the Date of Grant, provided the Participant has continuously provided services to the Company or an Affiliate through such Vesting Date. 
  
 3. Forfeiture; Early Vesting. 
  
 (a) If Participant ceases to perform services for the Company or any Affiliate for any reason (whether or not terminated for Cause, except as provided for below) prior to vesting of the Units pursuant to Section 2 hereof, all of Participant’s rights to all of the unvested Units shall be immediately and irrevocably forfeited, except as follows:
  
 (i) Termination following Change in Control. If within 12 months following a Change in Control (as defined below), the Company terminates the Participant’s service with the Company for reasons other than for Cause (as defined below), all Units granted hereunder not already forfeited under operation of this Section 3 shall become fully vested with all restrictions lifted, and be issued pursuant to Section 5(a) hereof; and 
  
 (ii) Death and Disability. Upon the Participant’s death or Disability (as defined below) all Units granted hereunder not already forfeited under operation of this Section 3 shall become fully vested with all restrictions lifted, and be issued pursuant to Section 5(a) hereof. 
  
 	 
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 (iii) Termination Not for Cause. If the Company terminates the Participant’s service with the Company for reasons other than for Cause after the Date of Grant but prior to the Vesting Date, a pro-rata number of Units not already forfeited under operation of this Section 3 shall become vested with restrictions lifted based on the following formula: 1/24 of the Units shall be deemed vested on each monthly anniversary of the Date of Grant, commencing on the Date of Grant and terminating on the date of termination. For the avoidance of doubt, no further Units shall vest following the date of termination and Participant’s rights to all of the remaining Units not vested pursuant to this Section 3(a)(iii) shall be immediately and irrevocably forfeited.
  
 Upon forfeiture, Participant will no longer have any rights relating to the unvested Units. 
  
 (b) “Cause” shall mean a (i) repeated failure to competently and diligently perform duties of Participant’s position with the Company (other than due to physical or mental illness); (ii) conviction of guilty or nolo contendere plea to, a misdemeanor which is materially and demonstrably injurious to the Company or any of its subsidiaries or any felony; (iii) commission of an act, or a failure to act, that constitutes fraud, gross negligence or willful misconduct (including without limitation, embezzlement, misappropriation or breach of fiduciary duty resulting or intending to result in personal gain at the expense of the Company or any of its subsidiaries); and (iv) violation of any applicable laws, rules or regulations (excluding federal laws, rules or regulations pertaining to the regulation of commercial cannabis in states that have legalized cannabis for medical and/or adult use) or failure to comply with applicable confidentiality, non-solicitation and non-competition obligations to the Company or any of its subsidiaries, corporate code of business conduct or other material policies of the Company or any of its subsidiaries in connection with or during performance of the Participant’s duties to the Company or any of its subsidiaries that could, in the Board’s opinion, cause material injury to the Company or any of its subsidiaries; and (v) failure to maintain applicable professional licenses or certifications. In the case of a violation or failure under (i), (iv) or (v), if such violation or failure is curable, such violation or failure shall only constitute “Cause” if it is not cured within thirty (30) days after notice thereof to the Participant; and 
  
 (c) “Change in Control” shall mean the occurrence of any of the following events (each, a “Business Combination”): (a) the sale of more than 50% of the outstanding equity securities of the Company in a single transaction or in a series of transactions occurring during a period of not more than twelve months; (b) the Company is merged, amalgamated or consolidated with another corporation; or (c) a sale of substantially all of the assets of the Company to another entity, unless, following any of the foregoing Business Combinations in (a) through (c) above, all or substantially all of the individuals and entities that were the beneficial owners of the Company’s outstanding voting securities immediately prior to such Business Combination beneficially own immediately after the transaction or transactions, directly or indirectly, 50% or more of the combined voting power of the then outstanding voting securities (or comparable interests) of the entity resulting from such Business Combination (including an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more affiliates) in substantially the same proportions as their ownership of the Company’s voting securities immediately prior to such Business Combination.
  
 	 
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 (d) Disability shall mean the Participant is disabled for purposes of the Company’s long term disability policy or program for employees, or if there is none, it shall mean a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months and as a result the Participant is (i) unable to engage in any substantial gainful activity or (ii) receiving income replacement benefits for a period of not less than 3 months under a Company accident or health plan covering employees of the Company.
  
 4. Restrictions on Transfer. The Units may not be sold, assigned, transferred or pledged, other than by will or the laws of descent and distribution, and any such attempted transfer shall be void. Neither the Units nor the Shares have been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or the securities laws of any state of the United States. The Units and the Shares may not be offered or sold, directly or indirectly, in the United States except pursuant to registration under the U.S. Securities Act and the securities laws of all applicable states or available exemptions therefrom, and the Company has no obligation or present intention of filing a registration statement under the U.S. Securities Act in respect of any of the Units or the Shares.
  
 5. Issuance of Shares; Rights as Shareholder.
  
 (a) Issuance of Shares. As soon as administratively practicable following the Participant’s vesting date under Section 2 or Section 3 hereof, as applicable, and the Participant’s satisfaction of any required tax withholding obligations (but in no event later than March 15th of the year following the year in which the vesting date occurs), the Company shall cause to be issued and delivered to the Participant a certificate or certificates evidencing Subordinate Voting Shares registered in the name of the Participant (or in the name of the Participant’s legal representatives, beneficiaries or heirs, as the case may be) or to instruct the Company’s transfer agent to electronically deliver such shares to the respective Participant. The number of Subordinate Voting Shares issued shall equal the number of Units vested, reduced as necessary to cover applicable withholding obligations in accordance with Section 6 hereof. If it is administratively impracticable to issue Subordinate Voting Shares within the time frame described above because issuances of Subordinate Voting Shares are prohibited or restricted pursuant to applicable securities laws or stock exchange rules or policies, then such issuance shall be delayed until such prohibitions or restrictions lapse.
  
 (b) Rights as Shareholder. Units are not actual Subordinate Voting Shares, but rather, represent a right to receive Subordinate Voting Shares according to the terms and conditions set forth herein and the terms of the Plan. Accordingly, the issuance of a Unit shall not entitle the Participant to any of the rights or benefits generally accorded to stockholders unless and until a Subordinate Voting Share is actually issued under Section 5(a) hereof. 
  
 	 
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 6. Taxes. 
  
 The Participant hereby agrees to make adequate provision for any sums required to satisfy the applicable federal, state, provincial, local or foreign employment, social insurance, payroll, income or other tax withholding obligations (the “Withholding Obligations”) that arise in connection with this Agreement. The Company may establish procedures to ensure satisfaction of all applicable Withholding Obligations arising in connection with this Agreement, including any means permitted in Section 8 of the Plan. The Participant hereby authorizes the Company, at its sole discretion and subject to any limitations under applicable law, to satisfy any such Withholding Obligations by (1) withholding a portion of the Subordinate Voting Shares otherwise to be issued in payment of the Units having a value equal to the amount of Withholding Obligation in accordance with such rules as the Company may from time to time establish, subject to any limitations required by ASC Topic 718 to avoid adverse accounting treatment; (2) withholding from the wages and other cash compensation payable to the Participant or by causing the Participant to tender a cash payment or other Subordinate Voting Shares to the Company; or (3) selling on the Participant’s behalf (using any brokerage firm determined acceptable to the Company for such purpose) a portion of the Subordinate Voting Shares issued in payment of the Units as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the Withholding Obligations. The Participant shall be responsible for all brokerage fees and other costs of sale, and the Participant further agrees to indemnify and hold the Company harmless from any losses, costs, damages or expenses relating to any such sale. The Company may refuse to deliver Subordinate Voting Shares if the Participant fails to comply with the Participant’s obligations in connection with the Withholding Obligations described in this paragraph.
  
 7. Miscellaneous.
  
 (a) Incorporation of Policies. This Award and all compensation awarded hereunder shall be subject to the terms of any clawback, noncompetition, confidentiality or nondisclosure policies or agreements as may be in place between the Participant and the Company or any Affiliate from time to time. 
  
 (b) Subject to Plan. This Award is subject to the terms and conditions of the Plan, but the terms of the Plan shall not be considered an enlargement of any benefits under this Agreement. In addition, this Award is subject to the rules and regulations promulgated pursuant to the Plan, now or hereafter in effect. A copy of the Plan will be furnished upon request of the Participant.
  
 (c) No Right to Continued Service. This Agreement shall not confer on the Participant any right with respect to continuance of service to the Company, nor will it interfere in any way with the right of the Company to terminate such service at any time.
  
 (d) Additional Agreements and Acknowledgements of U.S. Participant. If the Participant is a U.S. person, or was present in the United States at the time the Participant was offered the Units or at the time the Participant executed and delivered this Agreement, the U.S. Participant Supplement annexed hereto as Appendix A, will be deemed to be incorporated by reference into and form a part of this Agreement. “U.S. person” and “United States” are as defined in Regulation S under the U.S. Securities Act.
   
 (e) Data Privacy Consent. In order to administer the Plan and this Agreement and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Agreement (the “Relevant Information”). By entering into this Agreement, the Participant (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Participant may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate. The Participant will have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable law.
   
 	 
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 (f) Governing Law. The validity, construction and effect of the Plan and the Agreement, and any rules and regulations relating to the Plan and the Agreement, shall be determined in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein without giving effect to the conflict of laws principles.
  
 (g) Severability. If any provision of the Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Agreement under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Agreement, such provision shall be stricken as to such jurisdiction or the Agreement, and the remainder of the Agreement shall remain in full force and effect.
  
 (h) No Trust or Fund Created. Neither the Plan nor the Agreement shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and Participant or any other person.
  
 (i) Section 409A Provisions. The payment of Subordinate Voting Shares under this Agreement are intended to be exempt from the application of section 409A of the Internal Revenue Code, as amended (“Section 409A”) by reason of the short-term deferral exemption set forth in Treasury Regulation §1.409A-1(b)(4) and the Plan and this Agreement will be construed and administered accordingly. However, to the extent that any amount or benefit hereunder is determined to constitute “deferred compensation” subject to section 409A of the Internal Revenue Code, as amended and applicable guidance thereunder (“Section 409A”) then, notwithstanding anything in the Plan or this Agreement to the contrary, if such amount otherwise is payable or distributable to the Participant under the Plan or this Agreement solely by reason of the occurrence of a Change in Control or due to the Participant’s Disability or termination of employment, such amount or benefit will not be payable or distributable to the Participant by reason of such circumstance unless the Committee determines in good faith that (i) the circumstances giving rise to such Change in Control, Disability or separation from service meet the definition of a change in ownership or control, disability, or separation from service, as the case may be, in Section 409A(a)(2)(A) of the Code and applicable final regulations, or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A by reason of the short-term deferral exemption or otherwise (including, but not limited to, a payment made pursuant to an involuntary separation arrangement that is exempt from Section 409A under the “short-term deferral” exception). Further, any such payment or distribution that otherwise would be made to a Participant who is a specified employee as defined in Section 409A(a)(2)(B) of the Code on account of separation from service may not be made before the date which is six months after the date of the specified employee’s separation from service (or if earlier, upon the specified employee’s death) unless the payment or distribution is exempt from the application of Section 409A by reason of the short term deferral exemption or otherwise.
   
 (j) Incentive Compensation. By signing this Agreement, the Participant acknowledges that for the fiscal year ending on June 30,2019, any incentive compensation granted to Participant has been discontinued and Participant is no longer eligible for such incentive compensation. No previous stock award, option grant or RSU grant is affected by this Section 7(j).
  
 (k) Headings. Headings are given to the Sections and subsections of the Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Agreement or any provision thereof.
  
 [Signature page follows]
   
 	 
	5
	

	 

 
   
 IN WITNESS WHEREOF, the Company and Participant have executed this Agreement on the date set forth in the first paragraph.
  
 	  
	 MEDMEN ENTERPRISES INC. 
  
By: ____________________________________
  
 Its: _____________________________________
  
  
 PARTICIPANT 
_________________________________________
 Signature
  
 Print Name _____________________________ ♦
	  

 
  
 	 
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 Appendix A
  
 U.S. PARTICIPANT SUPPLEMENT
  
 If the Participant is a U.S. person, or was present in the United States at the time the Participant was offered the Units or at the time the Participant executed and delivered this Agreement, the Participant acknowledges and agrees that:
  
 	 1. 
	 The Units and any Subordinate Voting Shares (the “Shares”) that may be issued in respect of vested Units pursuant to the Plan have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and the issuance hereby is being made pursuant to an exemption from the registration requirements of the U.S. Securities Act and similar exemptions under applicable state securities laws. Accordingly, the Units are, and, upon issuance, the Shares will be, “restricted securities” as such term is defined in Rule 144 under the U.S. Securities Act, and, therefore may not be offered or sold by the Participant, directly or indirectly, without registration under the U.S. Securities Act and applicable state securities laws or in compliance with an available exemption therefrom. The Participant understands that any certificate(s) or any evidence of electronic distribution representing the Units and any Shares issued in respect of vested Units pursuant to the Plan will contain a legend in respect of such restrictions as set out in Section 3 below.

	  
	  

	 2. 
	 The Participant understands that if the Participant decides to offer, sell or otherwise transfer any of the Units or the Shares, the Participant may not offer, sell or otherwise transfer any of such securities directly or indirectly, unless:

 
  
 	  
	 (i) 
	 the sale is to the Company;

	  
	  
	  

	  
	 (ii) 
	 the sale is made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S under the U.S. Securities Act and in compliance with applicable local laws and regulations;

	  
	  
	  

	  
	 (iii) 
	 the sale is made in compliance with the exemption from the registration requirements under the U.S. Securities Act provided by Rule 144 thereunder, if available, and in accordance with applicable state securities laws; or

	  
	  
	  

	  
	 (iv) 
	 the securities are sold in a transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of securities, and the Participant has prior to such sale furnished to the Company an opinion of counsel or other evidence of exemption, in either case reasonably satisfactory to the Company.

 
   
 	 
	A-1
	

	 

 
  
 	 3. 
	 The certificate(s) or evidence of electronic distribution representing the Units and the Shares, and all certificate(s) or evidence of electronic distribution issued in exchange therefor or in substitution thereof, will be endorsed with the following or a similar legend until such time as it is no longer required under the applicable requirements of the U.S. Securities Act or applicable state securities laws:

 
  
 	  
	 “THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF MEDMEN ENTERPRISES INC. (THE “COMPANY”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF CLAUSE (C) OR (D), THE SELLER FURNISHES TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO SUCH EFFECT. THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER HEREOF TO EFFECT “GOOD DELIVERY” OF THE SECURITIES REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE.”
	  

 
   
 provided, that if the Units or the Shares are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation S under the U.S. Securities Act (“Regulation S”), the legend set forth above may be removed by providing an executed declaration to the registrar and transfer agent of the Company, substantially in the form attached as Exhibit I hereto (or in such other form as the Company may prescribe from time to time) and, if requested by the Company or the transfer agent, an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Company and the transfer agent to the effect that such sale is being made in compliance with Rule 904 of Regulation S; and provided, further, that, if any Units or Shares are being sold otherwise than in accordance with Regulation S and other than to the Company, the legend may be removed by delivery to the registrar and transfer agent and the Company of an opinion of counsel, of recognized standing reasonably satisfactory to the Company, that such legend is no longer required under applicable requirements of the U.S. Securities Act or state securities laws.
  
 	 4. 
	 If the undersigned is resident in the State of California on the effective date of the grant of the Units, then, in addition to the terms and conditions contained in the Plan and in this Notice, the undersigned acknowledges that the Company, as a reporting issuer under the securities legislation in certain Provinces of Canada, is required to publicly file with the securities regulators in those jurisdictions continuous disclosure documents, including audited annual financial statements and unaudited quarterly financial statements (collectively, the “Financial Statements”). Such filings are available on the System for Electronic Document Analysis and Retrieval (SEDAR), and documents filed on SEDAR may be viewed under the Company’s profile at the following website address: www.sedar.com. Copies of Financial Statements will be made available to the undersigned by the Company upon the undersigned’s request.

 
   
 	 
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 EXHIBIT I
 FORM OF DECLARATION FOR REMOVAL OF LEGEND
   
 	 TO: 
	 MedMen Enterprises Inc. (the "Company")

	  
	  

	 AND TO: 
	 Registrar and transfer agent for the common shares of the Company

 
   
 The undersigned (a) acknowledges that the sale of ____________________________________ (the "Securities") of the Company, represented by certificate number _________________________________, to which this declaration relates is being made in reliance on Rule 904 of Regulation S ("Regulation S") under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and (b) certifies that (1) the undersigned is not (A) an "affiliate" of the Company (as that term is defined in Rule 405 under the U.S. Securities Act), (B) a "distributor" as defined in Regulation S or (C) an affiliate of a distributor; (2) the offer of such securities was not made to a person in the United States and either (A) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (B) the transaction was executed on or through the facilities of the Toronto Stock Exchange, the TSX Venture Exchange, the Canadian Securities Exchange or another "designated offshore securities market", and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States; (3) neither the seller nor any affiliate of the seller nor any person acting on any of their behalf has engaged or will engage in any "directed selling efforts" in the United States in connection with the offer and sale of such securities; (4) the sale is bona fide and not for the purpose of "washing off" the resale restrictions imposed because the securities are "restricted securities" (as such term is defined in Rule 144(a)(3) under the U. S. Securities Act); (5) the seller does not intend to replace the securities sold in reliance on Rule 904 of Regulation S with fungible unrestricted securities; and (6) the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the U. S. Securities Act. Terms used herein have the meanings given to them by Regulation S.
  
 Dated _______________.
  
 	  
	 X 
	  

	  
	 Signature of individual (if Seller is an individual)
	  

	  
	  
	  

	  
	 X 
	  

	  
	 Authorized signatory (if Seller is not an individual)
	  

	  
	  
	  

	  
	  
	  

	  
	 Name of Seller (please print)
	  

	  
	  
	  

	  
	  
	  

	  
	 Name of authorized signatory (please print)
	  

	  
		  

	  
		  

	  
	 Official capacity of authorized signatory (please print)
	  

 
  
 	 
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 Affirmation by Seller's Broker-Dealer
(Required for sales pursuant to Section (b)(2)(B) above)
  
 We have read the foregoing representations of our customer, _________________________ (the "Seller") dated _______________________, with regard to the sale, for such Seller's account, of _________________ common shares (the "Securities") of the Company represented by certificate number ______________. We have executed sales of the Securities pursuant to Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), on behalf of the Seller. In that connection, we hereby represent to you as follows: 
  
 	 (1) 
	 no offer to sell Securities was made to a person in the United States;

	  
	  

	 (2) 
	 the sale of the Securities was executed in, on or through the facilities of the Toronto Stock Exchange, the TSX Venture Exchange, the Canadian Securities Exchange or another designated offshore securities market (as defined in Rule 902(b) of Regulation S under the U.S. Securities Act), and, to the best of our knowledge, the sale was not pre-arranged with a buyer in the United States;

	  
	  

	 (3) 
	 no "directed selling efforts" were made in the United States by the undersigned, any affiliate of the undersigned, or any person acting on behalf of the undersigned; and

	  
	  

	 (4) 
	 we have done no more than execute the order or orders to sell the Securities as agent for the Seller and will receive no more than the usual and customary broker’s commission that would be received by a person executing such transaction as agent.

 
   
 For purposes of these representations: "affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the undersigned; "directed selling efforts" means any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the Securities (including, but not be limited to, the solicitation of offers to purchase the Securities from persons in the United States); and "United States" means the United States of America, its territories or possessions, any State of the United States, and the District of Columbia.
  
 Legal counsel to the Company shall be entitled to rely upon the representations, warranties and covenants contained herein to the same extent as if this affirmation had been addressed to them.
  
 	 Dated: ______________________.
	  

	  
	  
	  

	  
	  

	 Name of Firm
	  

	  
	  
	  

	 By: 
	  
	  

	  
	 Authorized Officer
	  

	  
	  
	  

 
   
 	 
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