As of February 1st, 2020, Adam Bierman is no longer the CEO of MedMen Enterprises.
MedMen Enterprises Inc. (CSE: MMEN) today announced that Adam Bierman, Co-Founder and Chief Executive Officer, has decided to step down as Chief Executive Officer of the Company effective February 1, 2020. The board of directors of the Company is in the process of forming a committee of directors that will be responsible for identifying and appointing a new CEO.
The committee expects to consider internal and external candidates and may engage a national search firm to aid in its efforts. In the interim, the board of directors has named the Company's Chief Operating Officer & Chief Technology Officer, Ryan Lissack, as Interim CEO. Mr. Bierman has agreed to continue to serve on the Company's board of directors, including as part of the board to be elected at the Company's upcoming shareholder meeting.
In addition, Mr. Bierman has agreed to surrender all of his Class A super voting shares back to the Company. As previously announced in December, MedMen Co-Founder Andrew Modlin granted a proxy over all of his Super Voting Shares to the Company's Executive Chairman, Ben Rose until December 2020. Mr. Modlin has also agreed to surrender all of his Super Voting Shares to the Company, which would occur upon the expiration of the proxy granted to Mr. Rose. As a result of the surrender of the Super Voting Shares, by the end of 2020, MedMen will have only one class of outstanding shares, the Class B subordinate voting shares (the "Subordinate Voting Shares"), each of which entitle the holder to one vote.
"The Board supports both Adam's decision to step aside for a new CEO to lead the Company, and his and Andrew's decision to surrender their voting rights to give all shareholders a stronger voice. This evolution will provide Adam the space to contribute to the future of MedMen and extend his commitment to the industry that he has helped pioneer," said Executive Chairman Ben Rose.
I continue to believe that MedMen is positioned to thrive. It's time for the next iteration of leadership to capitalize on the opportunity we have created. This has been an incredible journey and I will continue to be inspired by those around the globe working to make our world safer, healthier and happier through access to legal, regulated cannabis. Adam Bierman, former CEO of MedMen
The Company plans to release its financial results for the second quarter fiscal 2020 ended December 28, 2019 after market close on Wednesday, February 26, 2020. Following the release of these financial results, at 5:00 PM Eastern that same day, the Company will host a conference call and audio webcast with interim Chief Executive Officer, Ryan Lissack, and Chief Financial Officer, Zeeshan Hyder, to discuss the results in further detail.
Based on current holdings, after the elimination of the Super Voting Shares (a) Mr. Bierman will hold 1,893,047 Subordinate Voting Shares and 3,956,324 redeemable shares of MM CAN USA, Inc., each of which is redeemable for one Subordinate Voting Share, while Mr. Modlin will hold 2,091,065 Subordinate Voting Shares and 3,956,324 redeemable shares of MM CAN USA, Inc. Each of Mr. Bierman and Mr. Modlin hold 9,661,939 long-term incentive plan units issued by MedMen subsidiary MM Enterprises USA, LLC (the "LTIPs") and that ultimately are convertible into Subordinate Voting Shares. On a partially diluted basis, and assuming that each LTIP converts into one Subordinate Voting Share, Mr. Bierman and Mr. Modlin beneficially own 4.8% and 4.9% respectively, of the Subordinate Voting Shares, being equivalent to 4.8% and 4.9% respectively of the votes attached to all MedMen securities after elimination of the Super Voting Shares.
The Company has agreed to compensate Mr. Bierman in connection with his departure and the surrender of all the Super Voting Shares by himself and Mr. Modlin. A special committee of independent directors will be formed after the Company's next annual meeting of shareholders, currently scheduled for February 21, 2020. This special committee will have the mandate to obtain a third-party valuation of the Super Voting Shares and to consider if Mr. Bierman should receive additional compensation to that already received for his service to the Company in 2019. The Company has agreed to ensure that these determinations are made within 60 days of the shareholders meeting. The aggregate amount that is determined to be payable will be paid to Mr. Bierman in the form of securities, with 50% of the value to be paid in Subordinate Voting Shares and 50% of the value to be paid in the form of restricted stock units that are each convertible into Subordinate Voting Shares ("RSUs"). The precise number of Subordinate Voting Shares and RSUs will be determined using the 20-day volume weighted average price of the Subordinate Voting Shares at the date of issuance. The RSUs will have a 10-year term and will only be convertible if the daily volume weighted average price of the Subordinate Voting Shares is at least US$2.05 for 25 consecutive trading days.
The Company has also agreed to an amendment to Mr. Bierman's LTIPs, such that they will not vest as a result of his departure, which, as a result of the current price of the Subordinate Voting Shares, would have resulted in Mr. Bierman receiving no Subordinate Voting Shares. The LTIPs will now continue to be outstanding and vest upon the price for the Subordinate Voting Shares achieving the previously announced thresholds of C$10, C$15 and C$20, and will now also vest on a change of control of the Company.
The surrender of Mr. Bierman and Mr. Modlin's Super Voting Shares are subject to final consent from Stable Road Capital and its affiliates, one of the Company's secured lenders.
To learn more about MedMen, visit their company HQ here.
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