Item 5.02 Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 15, 2019, the Board of Directors
(the “Board”) of Medicine Man Technologies (the “Company”) approved an employment agreement entered into
between the Company and Andrew Williams, the Company’s CEO dated as of January 25, 2019 (the “Agreement”). Pursuant
to the terms and subject to the conditions set forth in the Agreement, Mr. Williams shall receive: (i) $300,000 base salary per
annum; (ii) annual bonus determined by the Company determined based on certain considerations including the Company’s stock
price and trading volume, overall revenue growth and execution of the Company’s business plan; (iii) 1,000,000 shares of
the Company’s common stock if at any point the Company’s common stock appreciates to $8.00 per share.
In the event of Mr. Williams’ death
or Disability, as defined in the Agreement, the Company will pay to Mr. Williams or his estate or beneficiaries, as the case may
be, all earned but unpaid bonuses, and will continue to pay his then current base salary for six months following termination of
the Agreement, unless the Company provides Mr. Williams with life insurance in the aggregate amount of no less than $150,000.
Pursuant to the terms of the Agreement,
Mr. Williams agreed to certain covenants not to compete and customary nondisclosure obligations.
The Agreement provides for a term of three
years and may be terminated (i) mutually in writing by the parties or (ii) unilaterally by the Company for Good Cause as such term
is defined in the Agreement. In the event the Agreement is terminated by the Company without Good Cause, as such term is defined
in the Agreement or in the event Mr. Williams terminates for Good Reason, as such term is defined in the Agreement, Mr. Williams
shall be entitled to receive 12 months base salary and any earned but unpaid bonus. Pursuant to the terms of the Williams Agreement,
Mr. Williams is also entitled to reimbursement of reasonable business expenses and a monthly car allowance, as well as customary
health insurance provided to executives of the Company.
On May 15, 2019, the Board approved an
amendment dated as of April 23, 2019 (the “Amendment”) to an employment agreement entered into between the Company
and Joseph Puglise, the Company’s COO dated as of December 5, 2018 (the “Original Agreement”). The Amendment
clarifies certain terms set forth in the Original Agreement (the Original Agreement as amended, hereinafter, the “Puglise
Agreement”). Pursuant to the Puglise Agreement, Mr. Puglise shall receive: (i) $300,000 base salary per annum; (ii) a quarterly
bonus assessed based upon total revenue of existing business operations and divisions in effect as of the date of the Original
Agreement based on 1.5% of the Company’s gross revenue. In addition, Mr. Puglise received an option to acquire up to 2,000,000
shares of the Company’s common stock (the “Option”) at an exercise price of $1.49 per share, such purchase price
equal to the fair market value of the Company’s common stock as of the date of the Original Agreement, to vest and become
exercisable as follows: (i) 250,000 upon execution of the Original Agreement and 250,000 upon each of the first, second and third
year anniversaries of the Original Amendment; (ii) 250,000 if the Company achieves annual gross revenue in excess of 25,000,000
in calendar-year 2020 from the Company’s operations and divisions in effect as of date of the Original Agreement, which
includes MMT Licensing, Three-A-Light, Success Nutrients, Cultivation MAX, Cultivation Partnership Operations and Big Tomato;
(iii) 250,000 if the Company achieves annual gross revenue in excess of $40,000,000 in calendar-year 2021 from the Company’s
operation and divisions in effect as of date of the Original Agreement, which includes MMT Licensing, Three-A-Light, Success Nutrients,
Cultivation MAX, Cultivation Partnership Operations and Big Tomato; (iv) 500,000 if the VWAP of the Company’s common stock
is $5.00 or higher for five consecutive trading days at any time during the term of the Puglise Agreement.
The Option becomes fully vested upon the
occurrence of certain events as set forth in the Puglise Agreement, including upon the occurrence of a Change in Control as defined
in the Puglise Agreement.
In the event of Mr. Puglise’s death
or Disability, as defined in the Puglise Agreement, the Company will pay to Mr. Puglise or his estate or beneficiaries, as the
case may be, all earned but unpaid bonuses, and will continue to pay his current base salary for six months following termination
of the Agreement, unless the Company provides Mr. Puglise with life insurance in the aggregate of no less than $150,000.
Mr. Puglise has agreed to certain covenants
not to compete and customary nondisclosure obligations.
The term of the Puglise Agreement shall
be three years and may be terminated (i) mutually in writing by the parties or (ii) unilaterally by the Company for Good Cause
as such term is defined in the Agreement. In the event the Puglise Agreement is terminated by the Company without Good Cause, as
such term is defined in the Puglise Agreement or in the event Mr. Puglise terminates for Good Reason, as such term is defined in
the Agreement, Mr. Puglise shall be entitled to receive 12 months base salary and any earned but unpaid bonus. Pursuant to the
terms of the Puglise Agreement, Mr. Puglise is also entitled to reimbursement of reasonable business expenses, as well as customary
health insurance provided to executives of the Company.
The foregoing is merely a summary of the
Agreement and the Puglise Agreement and is qualified in their entirety by reference to each of the Williams and the Puglise Agreement.