Item 1.01 Entry into a Material Definitive Agreement.
The disclosures set forth in Item 5.02 below regarding the amendments to the
employment agreements are incorporated by reference into this Item 1.01.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On July 9, 2015, with an effective date of July 1, 2015, Jammin Java Corp.
("we", "us" and the "Company"), entered into an Asset Purchase Agreement with
Black Rock Beverages, LLC ("BRB"), pursuant to which we sold our Black Rock
Beverage division and related assets to BRB (the "Sale Agreement"). Pursuant to
the Sale Agreement, BRB agreed to pay us $300,000, with $200,000 payable on the
closing date of the transaction (July 15, 2015), and $100,000 payable in 24
equal monthly installments, provided that if BRB's average sales do not meet a
minimum of $50,000 per month during each of the first six months following the
closing, the aggregate amount of $100,000 in payments due is reduced by $5,000
for each month such $50,000 monthly minimum is not met. Additionally, we agreed
to continue to pay the salary of one of our employees acquired in our original
acquisition of the Black Rock Beverage division in August 2013 and to continue
to cover the rent, for five months, on a warehouse located on Lipan St. in
Denver, Colorado, and BRB agreed to assume certain of our capital and vehicle
leases. We also agreed to a six month freeze on increasing any cost of goods
purchased by BRB for products sold through the Black Rock Beverage
operations. The Sale Agreement contains standard and customary indemnification
and confidentiality covenants and representations of the Company.
Item 3.02 Unregistered Sales of Equity Securities.
As described below under Item 5.02, which disclosures are incorporated by
reference in this Item 3.02, on June 30, 2015, our Board of Directors granted
stock options to purchase an aggregate of 6 million shares of our common stock
(2 million each to each of our executive officers and Chairman), with an
exercise price of $0.195 per share.
We believe that the grants described above were exempt from registration
pursuant to (a) Section 4(a)(2) of the Securities Act of 1933, as amended (the
"Securities Act"); and/or (b) Rule 506 of the Securities Act, and the
regulations promulgated thereunder. With respect to the transactions described
above, no general solicitation was made either by us or by any person acting on
our behalf. The transactions were all privately negotiated, and none involved
any kind of public solicitation. No underwriters or agents were involved in the
foregoing grants and we paid no underwriting discounts or commissions. The
securities sold are subject to transfer restrictions, and the certificates
evidencing the securities contain an appropriate legend stating that such
securities have not been registered under the Securities Act and may not be
offered or sold absent registration or pursuant to an exemption therefrom. All
recipients (a) were "accredited investors;" (b) had access to similar
documentation and information as would be required in a Registration Statement
under the Securities Act; and/or (c) were officers and directors of the Company.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 30, 2015, our Board of Directors approved and adopted the Company's 2015
Equity Incentive Plan (the "2015 Plan") and entered into First Amendments to
Amended and Restated Employment Agreements with Brent Toevs, the Company's Chief
Executive Officer, and Anh Tran, the Company's Chief Financial Officer (the
The First Amendments, (1) extended the termination date of Mr. Toevs' and Mr.
Tran's employment agreements (as amended and restated) for another three years,
which agreements now expire September 10, 2019; (2) provided that all unvested
options to purchase shares of the Company's common stock granted to Mr. Toevs
and Mr. Tran in August 2013 under and pursuant to our 2013 Equity Incentive
Plan, which originally had an exercise price of $0.46 per share, would be
re-priced to have an exercise price of $0.195 per share, provided no other terms
of the options were changed except for the re-pricing of 1,333,334 of the 2
million options previously granted; and (3) provided for the grant to each of
Mr. Toevs and Mr. Tran of options to purchase 2 million shares of the Company's
common stock at an exercise price of $0.195 per share, with 666,666 options
vesting on June 30, 2016 and 666,667 options vesting on June 30, 2017 and 2018,
The Board of Directors also re-confirmed the $10,000 per month compensation
payable to our Chairman, Rohan Marley, re-priced Mr. Marley's 1,333,334 unvested
stock options granted to Mr. Marley in August 2013, under and pursuant to our
2013 Equity Incentive Plan, to have identical terms as the options held by Mr.
Toevs and Mr. Tran which were re-priced in connection with their entries into
the First Amendments, as described above, and granted Mr. Marley new stock
options to purchase 2 million shares of common stock which have identical terms
as the stock options granted to Mr. Toevs and Mr. Tran in connection with their
entries into the First Amendments (described above).
The 2015 Plan is intended to secure for the Company the benefits arising from
ownership of the Company's common stock by the employees, officers, directors
and consultants of the Company, all of whom are and will be responsible for the
Company's future growth. The 2015 Plan is designed to help attract and retain
for the Company, qualified personnel for positions of exceptional
responsibility, to reward employees, officers, directors and consultants for
their services to the Company and to motivate such individuals through added
incentives to further contribute to the success of the Company. The 2015 Plan
provides an opportunity for any employee, officer, director or consultant of the
Company, subject to any limitations provided by federal or state securities
laws, to receive (i) incentive stock options (to eligible employees only); (ii)
nonqualified stock options; (iii) restricted stock; (iv) stock awards; (v)
restricted stock units; (vi) stock appreciation rights; (vii) performance units
and performance shares and stock awards; or (viii) any combination of the
The 2015 Plan is administered by the Board of Directors of the Company (the
"Board") and/or any authorized committee of the Board. The Board has the
exclusive right to interpret and construe the 2015 Plan, to select the eligible
persons who can receive an award, and to act in all matters pertaining to the
grant of an award and the determination and interpretation of the provisions of
the related award agreement, including, without limitation, the determination of
the number of shares subject to stock options and the option period(s) and
option price(s) thereof, the number of shares of restricted stock or shares
subject to stock awards or performance shares subject to an award, the vesting
periods (if any) and the form, terms, conditions and duration of each award, and
any amendment thereof consistent with the provisions of the 2015 Plan.
Subject to adjustment in connection with the payment of a stock dividend, a
stock split or subdivision or combination of the shares of common stock, or a
reorganization or reclassification of the Company's common stock, the maximum
aggregate number of shares of common stock which may be issued pursuant to
awards under the 2015 Plan is 17,500,000 shares. Such shares of common stock
shall be made available from the authorized and unissued shares of the Company.
The Board of Directors, in its sole discretion, shall determine the exercise
price of any options granted under the 2015 Plan which exercise price shall be
set forth in the agreement evidencing the option, provided however that at no
time shall the exercise price be less than $0.001 par value per share of the
Company's common stock. Also, the exercise price of incentive stock options may
not be less than the fair market value of the common stock subject to the option
on the date of the grant and, in some cases, may not be less than 110% of such
fair market value. The exercise price of non-statutory options also may not be
less than the fair market value of the common stock on the date of grant. The
exercise price of options granted under the 2015 Plan must be paid either in
cash at the time the option is exercised or, at the discretion of our Board, (1)
to the extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, a
promissory note; (2) other shares of common stock of the Company, provided the
shares have a fair market value on the date of surrender equal to the aggregate
exercise price of the shares as to which said option will be exercised; (3) to
the extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, in
accordance with any broker-assisted cashless exercise procedures approved by the
Company and as in effect from time to time; (4) by asking the Company to
withhold shares from the total shares to be delivered upon exercise equal to the
number of shares having a value equal to the aggregate exercise price of the
shares being acquired; (5) any combination of the foregoing methods of payment;
or (6) such other consideration and method of payment for the issuance of shares
to the extent permitted by applicable laws.
Options and other awards granted under the 2015 Plan may be exercisable in
cumulative increments, or "vest," as determined by our Board. Our Board has the
power to accelerate the time as of which an option may vest or be exercised.
Shares of restricted stock acquired under a restricted stock purchase or grant
agreement may, but need not, be subject to forfeiture to us or other
restrictions that will lapse in accordance with a vesting schedule to be
determined by the Board of Directors. In the event a recipient's employment or
service with our Company terminates, any or all of the shares of common stock
held by such recipient that have not vested as of the date of termination under
the terms of the restricted stock agreement may be forfeited to our Company in
accordance with such restricted stock agreement.
The expiration date of options and other awards granted under the 2015 Plan will
be determined by our Board. The maximum term of options and performance shares
under the 2015 Plan is ten years, except that in certain cases the maximum term
is five years.
Unless sooner terminated, the 2015 Plan will terminate ten years from the date
of its adoption by our Board.
The description of the 2015 Plan above is qualified in all respects by the
actual provisions of the 2015 Plan, which is attached to hereto as Exhibit 10.1
and incorporated in this Item 5.02 by reference.
Item 8.01 Other Events.
On June 30, 2015, our Board of Directors re-priced a total of 617,506 unvested
stock options originally granted under the 2013 Equity Incentive Plan held by
certain of our non-executive employees to have an exercise price of $0.195 per
On July 28, 2015, we entered into a Supply and Distribution Agreement with C&V
International Co., Ltd. ("C&V"), pursuant to which we agreed to supply C&V
coffee and Marley Coffee branded products for distribution by C&V, as our
exclusive distributor, in South Korea (a) through the food service, online,
grocery retail and convenience business channels; and (b) to Marley Coffee
branded Cafes operating in South Korea (which cafes are owned and operated by
third parties and with which we have no affiliation, other than in connection
with the supply of coffee and Marley Coffee branded products being sold at such
cafes). There are six current Marley Coffee branded cafes open in South Korea,
with the goal of expanding that number to thirty within the next three years.
C&V was also granted a right of first refusal (subject to certain terms and
conditions described in the agreement), for a period of two years from our entry
into the agreement (subject to the requirement to negotiate in good faith to
extend such right of first refusal period prior to the expiration thereof), to
become our exclusive distributor in each country in Asia that we may choose to
distribute products to in the future.
The agreement has a term through September 1, 2024, automatically renewable for
additional one year terms thereafter on each of the five anniversaries of the
end of the initial term, unless either party gives the other at least 90 days'
notice of their intention not to renew. The agreement may also be terminated by
either party upon the breach of any material term of the agreement by the other
party, provided the breaching party is given fifteen business days to cure any
breach, and such breach is not timely cured.
C&V agreed to pay us certain pre-agreed to prices for the products sold and we
agreed to sell such products to C&V at competitive price levels. We are also
required to meet certain minimum quantity and quality requirements in connection
with the supply of coffee and products under the agreement and C&V is required
to purchase all coffee and products from us, subject to certain rights to
acquire third party coffee, only to the extent that we fail to meet certain
quantity and quality requirements set forth in the agreement and further fail to
timely cure such failures.
The agreement contains usual and customary representations, covenants,
indemnification rights, limits on liability and confidentiality requirements.
Item 9.01 Financial Statements And Exhibits.
Exhibit No. Description
10.1* Jammin Java Corp. 2015 Equity Incentive Plan
10.2* First Amendment to Amended and Restated Employment
Agreement with Brent Toevs (June 30, 2015)
10.3* First Amendment to Amended and Restated Employment
Agreement with Anh Tran (June 30, 2015)
10.4 Form of 2013 Equity Incentive Plan Stock Award
Agreement (incorporated by reference to Exhibit 10.3
of the Company's Current Report on Form 8-K filed on
August 29, 2014)
10.5* Form of 2015 Equity Incentive Plan Stock Option
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