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
Short-Term Incentive Program
The Board approved its short-term incentive ("STI") program for fiscal year 2023, which provides an annual cash incentive to the Company's executive leadership team, including the named executive officers, based on performance relative to defined financial and individual objectives. The STI program is a leveraged bonus design, where executives may earn between 0% and 200% of the target bonus opportunity, which is defined as a percentage of base salary for each executive. Per the STI program, performance is assessed based on predetermined criteria established and approved by the Board. The STI program measures financial performance based on the following weighted factors for executive officers: 20% free cash flow, 35% revenue and 35% adjusted Earnings before Interest, Tax, Depreciation, and Amortization ("Adjusted EBITDA"), in addition to a 10% weighting of non-financial performance metrics related to the achievement of defined leadership objectives.
Long-Term Incentive Program
With input from the CGCN Committee's external compensation consultant,
Stock Option Grants
The Board granted Options to purchase Canopy's common shares ("Common Shares")
on
Number of
Stock
Name Options
David Klein
Chief Executive Officer 997,876
Judy Hong
Chief Financial Officer 303,201
Julious Grant
Chief Commercial Officer 407,594
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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 PSUs issued will be based on two metrics: Relative Total
Shareholder Return ("RTSR") against a custom group of cannabis industry peers
approved by the Board and Adjusted EBITDA performance against predetermined
targets established and recommended by the CGCN Committee and approved by the
Board (as set forth below), with each weighted at 50%. The performance periods
for each metric will consist of three one-year periods (fiscal year 2023, fiscal
year 2024 and fiscal year 2025) and a three-year cumulative period beginning on
Target
Number of
Name PSUs
David Klein
Chief Executive Officer 498,938
Judy Hong
Chief Financial Officer 151,600
Julious Grant
Chief Commercial Officer 203,797
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 applicable award agreement. 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
Amendment to Employment Agreement and Service Delivery Agreement
As of
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The foregoing discussion of the Agreement Amendments is qualified in its entirety by reference to the Agreement Amendments, which are filed as Exhibits 10.2 and 10.3 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) (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with theSEC onJune 14, 2021 ). 10.2 Amendment to Executive Employment Agreement ofDavid Klein , datedJune 14, 2022 . 10.3 Amendment to Service Delivery Agreement, by and amongCanopy Growth USA LLC ,Brand House Group, N.A. Corporation andJulious Grant , datedJune 14, 2022 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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