MEDMEN ENTERPRISES, INC. : conclusion of a material definitive agreement, change of directors or key management, financial statements and supporting documents (form 8-K)



Item 1.01 Conclusion of a Material Definitive Agreement.

The information regarding the Custody Agreement (as defined below) set out in Section 5.02 of this current report on Form 8-K is incorporated by reference in this Section 1.01.

Item 5.02 Departure of directors or certain officers; Election of directors;

           Appointment of Certain Officers; Compensatory Arrangements of Certain
           Officers



At July 15, 2021, Medmen Enterprises Inc. (the “Company”) issued a press release announcing the appointment of Tom lynch, the Chairman of the Board of Directors of the Company (“Board”) and the current Interim Chief Executive Officer, as the permanent Chief Executive Officer of the Company from July 15, 2021. A copy of the press release is attached to this current report on Form 8-K as Exhibit 99.1.

At July 12, 2021, in connection with Mr. Lynch’s appoint as permanent managing director (“CEO”), the Company and SierraConstellation Partners LLC
(“SCP”) has entered into a Trading and Retention Bonus Agreement (the “Retention Agreement”). Previously in March 2020, the Company retained the services of SCP, an interim management and consulting company, to support the Company in the development and execution of its recovery and restructuring plan and Mr. Lynch to hold the position of Interim Chief Executive Officer of the Company. Mr. Lynch is a partner and senior general manager at SCP. As of March 27, 2021, the Company had paid $ 2,172,709
fees to SCP for interim management and restructuring support during the current fiscal year. In addition, during the nine months ended March 27, 2021, Mr. Lynch received 124,868 stock options.

In accordance with the Retention Agreement, the Company will pay SCP, as part of the continuing service of the CEO, a bonus in the aggregate amount of
$ 750,000 (the “Bonus Prize”), $ 500,000 of which will become due upon completion of a Transaction that takes place before June 1, 2022 (the “trade bonus”), and $ 250,000 of which will become payable payable on June 1, 2022, each subject to the continuous service of the CEO (the “retention bonus”). The Retention Bonus will be paid regardless of the completion of a Transaction before June 1, 2022. A “Transaction” means a transaction or series of transactions which constitute (i) the sale of all or substantially all of the assets of the Company, (ii) the sale of all or substantially all of the holdings of the Company, including through a sale or exchange of share capital or other equity interests, a merger, consolidation or other business combination, or (iii) the recapitalization or restructuring of all or substantially all of the capital and / or debt securities and / or other debts of the Company, the recapitalization or restructuring of which is carried out within the framework of an exchange transaction, a takeover bid, a reorganization plan, a plan of arrangement or the like. The occurrence of a Transaction and the effective date will be determined by the Board of the Company in its sole discretion. If a transaction is not concluded before June 1, 2022, the transaction bonus will not become payable and will be forfeited.

As a condition for SCP to receive part of the bonus reward, Mr. Lynch must serve continuously and actively as CEO of the Company on the applicable payment date of each portion of the bonus. If the CEO’s service with the Company is terminated prior to any payment date, the bonus will not become payable.


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If, before both June 1, 2022 and the date of completion of a Transaction, Mr. Lynch’s the service as CEO of the Company is terminated by the Company other than for cause, or Mr. Lynch terminates service with the Company for good reason, then (i) 100% of the transaction premium will become payable, and (ii) a prorated portion of the retention premium will become payable, based on the number of months served between June 1, 2021 and June 1, 2022. If, at the time of or after the completion of a Transaction and before June 1, 2022, Mr. Lynch’s the service as CEO of the Company is terminated by the Company other than for cause, or Mr. Lynch terminates service with the Company for good reason, then the retention premium will be payable in full. Yes Mr. Lynch’s service as CEO of the Company is terminated for any other reason, any unpaid portion of the transaction premium and retention premium will be forfeited. “Cause” means (i) an indictment, conviction or plea of ​​guilty or non-contestation for any indictable offense or other criminal offense involving fraud, embezzlement or moral turpitude, (ii) non- compliance with its obligations towards the Company or to follow the legal direction of the advice for any reason other than physical or mental illness or incapacity, or breach of a fiduciary duty, as determined in the sole discretion of the Board (iii) theft, fraud or dishonesty or in connection with the duties of the CEO, (iv) violation of the Company’s code of conduct or similar written policies, (v) willful misconduct unrelated to the Company or any of its affiliates having, or likely to have, a material negative impact on the Company or any of its affiliates (economically or its reputation), or (vi) an act of gross negligence or willful misconduct. “Good Reason” means, without the consent of the CEO, (i) any substantial reduction in responsibilities, powers, title or functions, (ii) any substantial reduction in base salary, (iii) a relocation of the CEO’s main place of business over 50 miles; provided that the CEO has given the Company written notice of termination, setting out the Company’s conduct which is deemed to constitute good reason, within 30 days of the occurrence of such event, and the Company fails to remedy such conduct within 30 days. The removal of the CEO from the board of directors is not a good reason.

Tom lynch, 52, was initially appointed Interim Chief Executive Officer of the Company in March 2020, elected to the Council in november 2020 and appointed president of december 2020. Mr. Lynch is currently a partner and senior general manager of SierraConstellation Partners. Before joining SierraConstellation Partners in july 2018, Mr. Lynch was co-founder and managing partner of
Woods Hole Capital Between july 2014 and july 2018. Before founding Woods Hole Capital, Mr. Lynch was President and CEO of Frederick’s of Hollywood group (a company listed on the stock exchange). Before joining Frederick’s, Mr. Lynch was the CEO of Mellon HBV later renamed Fursa Alternative Strategies. Mr. Lynch has held senior positions at Mellon Institutional Asset Management, UBS Global Asset Management and the Dreyfus Society. Mr. Lynch graduated from Saint-Anselme College. Given his experience in business and as a senior executive, the Company believes that Mr. Lynch is qualified to exercise the functions of director of the Company.

Except as described above in this section 5.02, there is no arrangement or agreement between Mr. Lynch and any other person by virtue of which he has been appointed to the post of Chief Executive Officer of the Company and Mr. Lynch has no direct or indirect material interest in a “related party” transaction to be disclosed in accordance with Article 404 (a) of the SK Regulation. There is no family relationship between Mr. Lynch and any director or executive officer of the Company.

A copy of the Custody Agreement is filed as Exhibit 10.1 to this current report on Form 8-K and is incorporated herein by reference. The foregoing description of the Conservation Agreement does not purport to be complete and is qualified in its entirety by reference to this exhibit.

Item 9.01 Financial statements and supporting documents.




 (d) Exhibits.




Exhibit No.   Exhibit
10.1            Transaction and Retention Bonus Agreement dated July 12, 2021 between
              MedMen Enterprises Inc. and SierraConstellation Partners LLC
99.1            Press Release dated July 15, 2021




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