CANOPY GROWTH CORPORATION Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
As of
Long-Term Incentive Program
The Board approved changes to its long-term incentive ("LTI") program for executive officers whereby Canopy's executive officers' annual LTI grant of equity will now consist of 50% stock options and 50% performance share units ("PSUs"). The Company previously granted a combination of options and restricted stock units ("RSUs") to certain of its executive officers. The revised LTI program further aligns the interests of management with those of the Company's shareholders by linking PSU vesting with Relative Total Shareholder Return ("RTSR") and adjusted Earnings before Interest, Tax, Depreciation, and Amortization ("Adjusted EBITDA") rather than simple time-vesting RSUs.
Stock Option Grants
The Board granted options ("Options") to purchase Canopy's common shares
("Common Shares") on
Number of Stock
Name Options
David Klein 139,488
Chief Executive Officer
Rade Kovacevic 59,767
President and Chief Product Officer
Mike Lee 54,814
Executive Vice President & Chief Financial Officer
22,352
Chief Legal Officer and Corporate Secretary
Thomas Stewart 3,207
Chief Accounting Officer
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Each of the options granted has a six-year term, subject to earlier termination
upon the occurrence of certain events related to termination of employment, as
specified in the Options Grant Agreement. One-third of the options become
exercisable on each of the first, second and third anniversaries of the date of
grant, subject to the terms of the Option Grant Agreement. The options will
continue to vest upon the Retirement (as that term is defined in the Option
Grant Agreement) of the recipient at any time after
The foregoing discussion of the Option Grant Agreement is qualified in its entirety by reference to the Option Grant Agreement, which is incorporated herein by reference.
Performance Share Unit Grants
The number of performance share units ("PSUs") issued will be based on two
metrics: RTSR and Adjusted EBITDA, with each weighted at 50%. The forms of
Performance Stock Unit Grant Agreement are filed as Exhibits 10.4 and 10.5
hereto (the "PSU Grant Agreements"). The performance periods for each metric
will consist of three one-year periods (fiscal year 2022, fiscal year 2023 and
fiscal year 2024) and a three-year cumulative period beginning on
Name Target Number of PSUsDavid Klein 69,744 Chief Executive OfficerRade Kovacevic 29,883 President and Chief Product OfficerMike Lee 27,407
Executive Vice President and Chief Financial Officer
11,176
Chief Legal Officer and Corporate Secretary
Pursuant to the terms of the PSUs, for each of the persons in the table above,
the minimum PSU award is equal to 50% of the target number of PSUs, and the
maximum PSU award is 150% of the target number of PSUs. Unvested PSUs are
subject to forfeiture upon the occurrence of certain events related to
termination of employment, as specified in the PSU Grant Agreements. A
participant may vest in his right to receive the applicable number of PSUs if
the participant remains in continuous employment with the Company or any of its
subsidiaries until
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The foregoing discussion of the PSU Grant Agreements is qualified in its entirety by reference to the PSU Grant Agreements, which are incorporated herein by reference.
Grant of Restricted Stock Units
The Board granted RSUs under the Omnibus Incentive Plan on
Name Number of RSUsThomas Stewart 2,405
Chief Accounting Officer
Unvested RSUs are subject to forfeiture upon the occurrence of certain events
related to termination of employment as specified in the RSU Grant Agreements.
One-third of the awarded RSUs vest on each of the first, second and third
anniversaries of
The foregoing discussion of the RSU Grant Agreements is qualified in its entirety by reference to the RSU Grant Agreements, which are incorporated herein by reference.
Bonus Payments for Fiscal 2021
The following table sets forth the fiscal 2021 bonus amounts earned by the named executive officers identified below for their service during fiscal 2021. These bonus amounts were based on achievement of performance goals relating to revenue, adjusted EBITDA, free cash flow, as well as individual performance.
Name Bonus Amount David Klein$ 1,716,428 Chief Executive Officer Rade Kovacevic$ 524,054 1 President and Chief Product Officer Mike Lee$ 460,147
Executive Vice President and Chief Financial Officer
$ 279,496 1 Chief Legal Officer and Corporate Secretary Thomas Stewart$ 79,623 1 Chief Accounting Officer 1 As converted from Canadian dollars at theBank of Canada exchange rate of0.8269 Canadian dollars perU.S. dollar as ofJune 10, 2021 .
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Amendments to Employment Agreements
As of
All Employment Agreement Amendments
The employment agreements of each of Messrs. Klein, Lee, Kovacevic and Shaer were amended to, among other things:
• provide the Board with discretion as to the amounts of each type of LTI
award (i.e., options, RSUs and PSUs) for annual LTI grants and to
contemplate the revised LTI program described above, whereas previously
the amounts of each type of award was specified in each executive's
employment agreement;
• revise the termination of provisions to, among other things, provide
that, upon an executive's termination without Cause (as defined in the
Employment Agreement Amendments) or willful misconduct, such executive
will also be entitled to the vesting of any outstanding PSUs, at actual
performance levels, for all years already certified by the Board or any
responsible committee thereof;
• eliminate specific stock ownership requirements from the agreements
themselves and instead require each executive to adhere to and abide by
the Company's Share Ownership Policy, providing increased flexibility to
the Board to amend the Share Ownership Policy in the future as
appropriate; and
• certain other changes to IP and confidentiality obligations and
termination provisions.
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The foregoing discussion of the Employment Agreement Amendments is qualified in its entirety by reference to the Employment Agreement Amendments, which are filed as Exhibits 10.6 through 10.9 hereto and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 10.1 Option Grant Agreement (U.S. and Canadian Employees) 10.2 Restricted Stock Unit Grant Agreement (U.S. Employees) (For Settlement in Common Shares Only) 10.3 Restricted Stock Unit Grant Agreement (For Non-U.S. Employees) (For Settlement in Common Shares Only) 10.4 Performance Stock Unit Grant Agreement (U.S. Employees) (For Settlement in Common Shares Only) 10.5 Performance Stock Unit Grant Agreement (Canadian Employees) (For Settlement in Common Shares Only) 10.6 Amendment to Executive Employment Agreement ofDavid Klein , datedJune 8, 2021 10.7 Amendment to Executive Employment Agreement ofMike Lee , datedJune 8, 2021 10.8 Amendment to Executive Employment Agreement ofRade Kovacevic , datedJune 8, 2021 10.9 Amendment to Executive Employment Agreement ofPhil Shaer , datedJune 8, 2021 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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