Document:

Exhibit 10.6

 

AMENDMENT

TO

EMPLOYMENT AGREEMENT

 

This Amendment to Employment
Agreement (this “Amendment”) is entered into by and between MICHAEL MONA III, an individual (“Executive”),
and CV SCIENCES, INC., a Delaware corporation (the “Company”) as of March 16, 2017 (the “Effective Date”),
with reference to the following facts:

 

RECITALS

 

A.               
On July 6, 2016 Executive and the Company entered into that certain Employment Agreement (the “Agreement”),
a copy of which is attached hereto and incorporated herein by this reference as Exhibit A;

 

B.                
Each of the parties hereto desires to enter into this Amendment to amend the Agreement as set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.                 
Bonus Compensation. A new subsection (c) of Section 2.2 is added to the Agreement, as follows:

 

“(c)Additional
Bonus Compensation. Upon the closing of a Liquidity Event, the Company shall pay (or arrange for the payment) to Executive
in cash the sum equal to two percent (2%) of the Gross Closing Proceeds (the “Liquidity Bonus”), subject to a cumulative
cap of $750 million for payment of the Liquidity Bonus and any liquidity bonus payable to Michael Mona, III.

 

(i)                
“Liquidity Event” shall mean and include (A) a licensing of the CBD Drug Product or any other intellectual property
asset of the Company, or (B) (i) the direct or indirect sale or transfer, in a single transaction or a series of related transactions,
by the stockholders of the Company of voting securities, in which the holders of the outstanding voting securities of the Company
immediately prior to such transaction or series of transactions hold securities possessing less than twenty percent (20%) of the
total combined voting power of all outstanding voting securities of the Company or of the acquiring entity immediately after such
transaction or series of related transactions, (ii) a merger or consolidation in which the Company is not the surviving entity,
except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger
or consolidation hold, in the aggregate, securities possessing more than fifty percent (50%) of the total combined voting power
of all outstanding voting securities of the surviving entity (or the parent of the surviving entity) immediately after such merger
or consolidation, (iii) a reverse merger in which the Company is the surviving entity but in which the holders of the outstanding
voting securities of the Company immediately prior to such merger hold as a result of holding Company securities prior to such
transaction, in the aggregate, securities possessing less than fifty percent (50%) of the total combined voting power of all outstanding
voting securities of the Company or of the acquiring entity immediately after such merger, or (iv) the sale, transfer or other
disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company,
except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such transaction(s)
receive as a distribution with respect to securities of the Company, in the aggregate, securities possessing more than fifty percent
(50%) of the total combined voting power of all outstanding voting securities of the acquiring entity immediately after such transaction(s).
A “CBD Drug Product” means an FDA-approved drug utilizing Cannabidiol as the active pharmaceutical ingredient.

 

 

 

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(ii)             
“Gross Closing Proceeds” shall mean shall mean and include all cash sums payable to the Company or its stockholders
in connection with a Liquidity Event at the closing of a transaction constituting a Liquidity Event, and not including any deferred
payments, earnouts, ongoing royalty payments or other contingent or deferred compensation.

 

(iii)           
If any payments to Executive in connection with a Liquidity Event would be subject to the excise tax under Sections 280G
or 4999 of the Internal Revenue Code on excess parachute payments, the Company will "gross up" Executive’s compensation
to offset the excise tax, except that (a) if the aggregate parachute payments that would otherwise be made to Executive do not
exceed 110% of the maximum amount of parachute payments that can be made without triggering the excise tax, the parachute payments
will be reduced to the extent necessary to avoid the imposition of the excise tax and no "gross up" will be paid, and
(b) if the aggregate parachute payments that would otherwise be made to Executive exceed 110% of the maximum amount of parachute
payments that can be made without triggering the excise tax, the full amount of those parachute payments will be made, and Executive
will individually bear fifty percent (50%) of the excise tax and the Company will "gross up" Executive’s compensation
to account for the remaining fifty percent (50%) of the excise tax.

 

As an example, if the amount
that would be payable to Executive in connection with a Liquidity Event without triggering the excise tax is $900,000, and the
actual amount payable pursuant to this Agreement is $975,000, then pursuant to subsection (a) above, the Company may reduce the
payment by $75,000 so that the payment made to Executive does not trigger the excise tax. The Company may take this action because
the amount payable to Executive is less than 110% of the amount that may be paid without triggering the excise tax (which is $990,000).
If, on the other hand, the amount payable pursuant to this Agreement is $1 million, then because such amount exceeds 110% of the
maximum amount that could be paid without triggering the excise tax, the Company may not reduce the payment. In such event, and
pursuant to subsection (b), above, Executive shall be responsible for the full amount of the excise tax but the Company shall “gross
up” his compensation equal to fifty percent (50%) of the excise tax imposed upon Executive.”

 

2.                 
Liquidity Bonus on Termination. A new subsection 4.7(c) shall be added as follows:

 

“Subsequent
to termination of Executive’s employment with the Company for any reason other than for Cause (as defined herein), Executive
shall be entitled to receive the Liquidity Bonus regardless of whether Executive continues to be engaged by the Company in any
capacity at the time of the Liquidity Event.”

 

3.                 
Conflict. If there is a conflict between the terms and conditions of this Amendment and the terms and conditions
of the Agreement, the terms and conditions of this Amendment shall control. Except as modified by this Amendment, the terms and
conditions of the Agreement shall remain in full force and effect.

 

 

 

[signature page follows]

 

 

 

 

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IN WITNESS WHEREOF,
the undersigned have executed this Amendment as of the Effective Date.

 

CV SCIENCES, INC.

 

 

By: /s/ James McNulty                                  

Name: James McNulty

Its: Chairman, Compensation Committee

 

 

 

/s/ Michael Mona III                                    

Michael Mona III

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit A

 

EMPLOYMENT AGREEMENT

 

[see attached]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	4Exhibit 10.7

 

AMENDMENT

TO

STOCK OPTION AGREEMENT

 

This Amendment to Stock
Option Agreement (this “Amendment”) is entered into by and between MICHAEL MONA, JR., an individual (“Executive”),
and CV SCIENCES, INC., a Delaware corporation (the “Company”) as of March 16, 2017 (the “Effective Date”),
with reference to the following facts:

 

RECITALS

 

A.               
On July 6, 2016 Executive and the Company entered into that certain Non-Qualified Stock Option Agreement (the “Agreement”),
a copy of which is attached hereto and incorporated herein by this reference as Exhibit A;

 

B.                
Each of the parties hereto desires to enter into this Amendment to amend the Agreement as set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.                 
Vesting Agreement. Subparagraphs (a)(i) through (iii) are superseded and replaced as follows, as related to the
Options not yet vested as of the Effective Date:

 

(i)                
“Thirty-four percent (34%) when the Company has final meeting minutes from a pre-investigational new drug application
(“IND”) meeting as authorized by the FDA for a drug development program utilizing CBD as the active pharmaceutical
ingredient;

 

(ii)             
Thirty-three percent (33%) when the Company is granted an IND; and

 

(iii)           
Thirty-three percent (33%) when the Company commences its first human dosing under the IND.”

 

2.                 
Vesting Acceleration. Section 2(b) of the Agreement is amended and restated as follows:

 

“(b)Notwithstanding
the foregoing, the right to exercise the Option shall accelerate automatically and vest in full (notwithstanding the provisions
above) effective as of immediately upon Optionee’s Involuntary Termination or prior to the consummation of the “Change
in Control” (as defined below) unless this Option is to be assumed by the acquiring or successor entity (or parent thereof)
or a new option or New Incentives (as defined below) are to be issued in exchange therefor, as provided in subsection (c) below.”

 

 

 

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3.                 
Definition of “Misconduct”. A final sentence of Section 2(f) is added, as follows:

 

“It is agreed that any
termination of Optionee’s employment, or change in Optionee’s position with the Company in connection with the current
action by the Securities and Exchange Commission shall not constitute Misconduct for any purposes under the is Agreement, and shall
be deemed an Involuntary Termination unless Optionee is found to have committed willful fraud as determined by a court of competent
jurisdiction by final and non-appealable adjudication, in which case termination shall be deemed for Misconduct.”

 

4.                 
Termination of Employment or Services. Section 8(a) of the Agreement is superseded and replaced, as follows:

 

“If the Optionee's employment
is terminated for any reason other than Cause (as defined below), death or Disability (as defined below), then the Options shall
immediately vest notwithstanding the termination of Optionee’s employment in accordance with paragraph 2(a), above. If the
Company terminates the Optionee's employment or service for Cause, then the Optionee may at any time within ninety (90) days after
the effective date of termination of employment or service exercise the vested portion of the Option to the extent that the Optionee
was entitled to exercise the Option at the date of termination.”

 

A final sentence to Section
8(d) of the Agreement is added as follows:

 

“It is agreed that any
termination of Optionee’s employment, or change in Optionee’s position with the Company in connection with the current
action by the Securities and Exchange Commission shall not constitute Cause for any purposes under the is Agreement, and shall
be deemed an Involuntary Termination unless Optionee is found to have committed willful fraud as determined by a court of competent
jurisdiction by final and non-appealable adjudication, in which case termination shall be deemed for Misconduct.”

 

5.                 
Conflict. If there is a conflict between the terms and conditions of this Amendment and the terms and conditions
of the Agreement, the terms and conditions of this Amendment shall control. Except as modified by this Amendment, the terms and
conditions of the Agreement shall remain in full force and effect.

 

 

[signature page follows]

 

 

 

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IN WITNESS WHEREOF,
the undersigned have executed this Amendment as of the Effective Date.

 

CV SCIENCES, INC.

 

 

 

By: /s/ James McNulty                                  

Name: James McNulty

Its: Chairman, Compensation Committee

 

 

 

 

/s/ Michael Mona, Jr.                                   

Michael Mona, Jr.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit A

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

[see attached]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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