Item 1.01Entry into a Material Definitive Agreement.
Executive Employment Agreement
Effective September 16, 2021, the Company appointed Dr. Teddy C. Scott, Jr. as
Chief Executive Officer of the Company. The Company entered into an executive
employment agreement dated as of September 16, 2021 (the "Agreement") with Dr.
Scott, which sets forth the terms and conditions of Dr. Scott's employment as
Chief Executive Officer of the Company.
Dr. Scott's employment with the Company will be considered "at-will" employment,
and either the Company or Dr. Scott may terminate the Agreement with or without
cause. In the event of Dr. Scott's termination of employment, for any reason,
the Company shall pay to Dr. Scott: (i) any base salary earned, but unpaid,
through the date of termination of employment; (ii) reimbursement for
unreimbursed business expenses properly incurred by Dr. Scott, which shall be
subject to and paid in accordance with the Company's expense reimbursement
policy; and (iii) such equity compensation, if any, to which Dr. Scott may be
entitled as of the date of termination of employment.
The Company shall pay Dr. Scott an annualized base salary of $1.00. Effective
September 16, 2021, the Company will grant to Dr. Scott a non-qualified stock
option to purchase five million (5,000,000) shares of the Company's common
stock, with an exercise price equal to $4.50 per share, pursuant to the terms
and provisions of the Bakhu Holdings, Corp. 2020 Long-Term Incentive Plan (the
"Plan"), the Agreement and a stock option award agreement (the "Scott Option").
Six hundred twenty-five thousand (625,000) shares subject to the Scott Option
immediately vest on September 16, 2021, and ninety-three thousand eighty-five
(93,085) shares subject to the Scott Option shall vest on the first day of each
calendar month thereafter over a period of forty-seven (47) months; provided,
that in the 47th month following September 16, 2021 all shares subject to the
Scott Option that remain unvested shall vest.
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Pursuant to the terms of the Agreement, the Company shall indemnify Dr. Scott
against any and all losses incurred by reason of the fact that he is or was a
director, officer, agent or advisor of the Company, or is or was serving at the
request of the Company as a director, officer, employee, agent or advisor of
another corporation, partnership, joint venture, trust, limited liability
company or other entity or enterprise, in each case to the fullest extent
permitted by Nevada law.
Additionally, Dr. Scott will be subject to restrictions on solicitation of
employees and customers of the Company for a period of two (2) years following
the cessation of Dr. Scott's employment with the Company.
The foregoing summary description of the terms of the Agreement is a summary
only and does not purport to be complete, may not contain all information that
is of interest to the reader and is qualified in its entirety by reference to
the full text of such agreement, attached hereto as Exhibit 10.01.
Item 5.02Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of Director and President and Chief Executive Officer
On September 16, 2021, the Company accepted the resignation of Thomas K. Emmitt
as a member of the Board of Directors of the Company (the "Board") and as the
President and Chief Executive Officer of the Company, in each case effective as
of September 16, 2021. Mr. Emmitt served as the principal executive officer of
the Company.
Mr. Emmitt previously received a non-qualified stock option to purchase three
hundred thousand (300,000) shares of the Company's common stock on September 22,
2020 pursuant to the Plan (the "Emmitt Option"). Since the grant date of the
Emmitt Option, two hundred eighty thousand (280,000) shares subject to the
Emmitt Option have vested as of September 16, 2021 and the remaining twenty
thousand (20,000) shares subject to the Emmitt Option would have vested on
September 22, 2021 if Mr. Emmitt had remained a member of the Board through such
date. In connection with Mr. Emmitt's resignation, and in light of Mr. Emmitt's
long-standing service to the Company, the Board has agreed to accelerate the
vesting of the remaining twenty thousand (20,000) shares subject to the Emmitt
Option such that all shares subject to the Emmitt Option shall be vested as of
September 16, 2021.
Election of Director and Chair of the Board of Directors and Appointment of
President and Chief Executive Officer
On September 16, 2021, the Company elected Dr. Scott to serve as a member of the
Board and as the Chair of the Board of Directors of the Company and appointed
Dr. Scott as the President and Chief Executive Officer of the Company, in each
case effective as of September 16, 2021. Dr. Scott will serve as the principal
executive officer of the Company. Dr. Scott has not been named to serve on any
committee of the Board. There are no arrangements or understandings between Dr.
Scott and any other persons pursuant to which he was elected as a director. Dr.
Scott does not have a material interest in any transaction that is required to
be disclosed under Item 404(a) of Regulation S-K, and there is no family
relationship between Dr. Scott and any of the Company's other directors or
executive officers. Dr. Scott's biography is below:
Teddy C. Scott, age 55, Ph.D., J.D., has more than twenty (20) years of
experience in biotechnology research, intellectual property law and the cannabis
industry. Dr. Scott is the founder and former Chief Executive Officer of
PharmaCann, where he was Chief Executive Officer from 2014 to 2019, and he was
Chief Executive Officer of Ethos Cannabis from 2020 to 2021. Since 2019, Dr.
Scott is also a founder and currently serves as a director of SmartHealth
Catalyzer, a company that focuses on advancing biotechnology developed at
Midwestern universities. Dr. Scott's legal experience, primarily involving
patents, licensing and strategic partnerships focusing on the drug,
pharmaceutical and medical device areas, was at law firms including Polsinelli
PC from 2006 to 2015, of which he was a shareholder; Howrey LLP, from 2003 to
2006; Katten Muchin Zavis Rosenman, from 2001 to 2003; Wilson Sonsini Goodrich &
Rosati, from 2000 to 2001; and McDonnell Boehnen Hulbert & Berghoff, from 1998
to 2000. Dr. Scott earned a BS in Biochemistry from Texas Tech University in
1990; received a Ph.D. in Molecular Biophysics from the University of Texas
Southwestern Medical Center in 1997; attended the Southern
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Methodist University Dedman School of Law from 1997 to 1998; and received his
J.D., cum laude, from the Northwestern University Pritzker School of Law in
2000.
Dr. Scott has been recognized for his leadership in the development of the U.S.
cannabis industry by shaping production and development standards for creating
high quality, reliable cannabis products. After an extensive international
search, the Board found a direct skills match with the Company's objectives to
maximize its years of research and development and laboratory testing in cell
replication technology and related proprietary equipment, processes and
formulation to produce, manufacture and sell cannabis-related (cannabinoid)
products.
Item 8.01 Other Events.
On September 20, 2021, the Company issued a press release, a copy of which is
furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are either filed as a part hereof or
are incorporated by reference. Exhibit numbers correspond to the numbering
system in Item 601 of Regulation S-K.
Exhibit
Number Description of Exhibit
10.1 Executive Employment Agreement dated September 16, 2021 (1)
99.1 Press Release dated September 20, 2021
(1) Filed herewith
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