Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
As described below, TILT Holdings Inc. (the "Company") entered into an amendment
to an executive employment agreement as well as two executive employment
agreements with various officers of the Company.
Dana R. Arvidson
On December 1, 2022, the Company entered into an amendment (the "Amendment') to
the executive employment agreement with Dana R. Arvidson dated June 23, 2021
(the "Arvidson Employment Agreement"). Pursuant to the Amendment, Mr. Arvidson
is to serve as the Chief Financial Officer of the Company for an employment term
of four years commencing on December 1, 2022. All other terms of the Arvidson
Employment Agreement remain unamended and in full force and effect.
Brad Hoch
On November 29, 2022, the Company entered into an executive employment agreement
with Brad Hoch, to be effective December 1, 2022 (the "Hoch Employment
Agreement"), pursuant to which Mr. Hoch will serve as the Chief Accounting
Officer of the Company. The Hoch Employment Agreement sets forth the principal
terms and conditions of his employment including an employment term of four
years commencing on December 1, 2022, and including an annualized base salary of
$300,000. The Hoch Employment Agreement provides that Mr. Hoch may be eligible
to receive an incentive bonus, in an amount to be determined by the Company, in
its sole discretion, based upon business factors. Any incentive bonus shall have
a 60% payout at target and consist of two components: 80% of the incentive bonus
shall be based upon Company financial performance and 20% of the incentive bonus
shall be comprised of individual performance goals.
On June 26, 2020, Mr. Hoch was granted an equity grant, as determined by the
Board, pursuant to the Company's Amended and Restated 2018 Stock and Incentive
Plan (the "Plan"), for [options to purchase] 400,000 common shares ("2020
Options"). The 2020 Options have vested. On June 26, 2020, pursuant to the
Company's Share Grant Agreement and outside of the Plan, Mr. Hoch was granted an
additional equity award of 41,509 common shares free of any vesting restrictions
and fully vested as of June 26, 2020 ("Additional Award" together with the 2020
Options, the "2020 Hoch Equity Awards"). The Hoch Employment Agreement does not
modify the terms of the 2020 Hoch Equity Awards and they remain in full force
and effect. The vesting schedule for any unvested equity awards shall be
accelerated if Mr. Hoch's employment is terminated either by the Company without
cause, by Mr. Hoch for good reason, as a result of the death or disability, or
if Mr. Hoch's employment is terminated as a result of change in control.
Throughout the course of his employment, Mr. Hoch is entitled to participate in
in all group welfare benefit and retirement plans and programs and other fringe
benefit plans and program.
Pursuant to the Hoch Employment Agreement, in the event of termination for cause
by the Company or resignation without good reason, Mr. Hoch is entitled to
receive accrued amounts (including accrued but unpaid base salary and any
accrued but unused paid time off, reimbursement for unreimbursed expenses and
any such executive benefits including any unpaid incentive bonus earned as well
as equity compensation, if vested). In the event of termination without cause or
resignation with good reason, Mr. Hoch is entitled to receive accrued amounts
and a severance payment equal to a flat twelve months of Mr. Hoch's annual base
salary, subject to Mr. Hoch's execution of a release of claims in favor of the
Company. For all outstanding equity awards granted to Mr. Hoch, the time vesting
schedule for PSUs, for which the stock price vesting conditions have been met,
will be accelerated to the date of termination and for RSUs Mr. Hoch shall
receive 12 months service credit for each year of service. In addition, if Mr.
Hoch timely and properly elects health continuation coverage under COBRA, the
Company shall provide a partial reimbursement for monthly health care insurance
premiums increase paid by Mr. Hoch for himself and his dependents.
Upon the occurrence of a change of control event, Mr. Hoch would receive any
accrued amounts and a lump sum severance payment equal to a flat eighteen months
(or 1.5x) of Mr. Hoch's annual base salary, plus his full incentive bonus for
that fiscal year, subject to Mr. Hoch's execution of a general release in favor
of the Company. In addition, all target common share prices from Mr. Hoch's
equity award will be deemed to have been met. If Mr. Hoch's equity award is
equitably assumed by the ongoing corporation based on its value at the change in
control event, vesting will occur in accordance with the original time vesting
schedule. If Mr. Hoch's employment is terminated without cause after the change
of control event, any unvested portion of Mr. Hoch's equity award will vest upon
the termination date. Notwithstanding the forgoing, if the ongoing corporation
does not equitably assume Mr. Hoch's equity award, vesting will accelerate to
the change of control date. Additionally, if Mr. Hoch's timely and properly
elected continuing health coverage under COBRA, Mr. Hoch will receive partial
reimbursement for the monthly health care insurance premiums increase paid by
Mr. Hoch for himself and his dependents.
Christopher Kelly
On December 1, 2022, the Company entered into an executive employment agreement
with Christopher Kelly, to be effective December 1, 2022 (the "Kelly Employment
Agreement"), pursuant to which Mr. Kelly will serve as the Chief Revenue Officer
of the Company. The Kelly Employment Agreement sets forth the principal terms
and conditions of Mr. Kelly's employment including an employment term of four
years commencing on December 1, 2022 and including an annualized base salary of
$250,000. The Kelly Employment Agreement provides that he may be eligible to
receive an incentive bonus, in an amount to be determined by the Company, in its
sole discretion, based upon business factors. Any incentive bonus shall have a
60% payout at target and consist of two components: 80% of the incentive bonus
shall be based upon Company financial performance and 20% of the incentive bonus
shall be comprised of individual performance goals.
Pursuant to the terms of the Kelly Employment Agreement, Mr. Kelly is eligible
for an equity grant, pursuant to the Plan, representing a total of 562,500
common shares, to be composed of 30% restricted stock units ("RSUs") which would
be time-based and [the shares underlying the RSUs would be] awarded if Mr. Kelly
meets his tenure requirement and 70% performance stock units ("PSUs") which
would be performance-based and [the shares underlying the PSUs] would be awarded
if the Company meets the stock price target for a particular period ("Kelly
Equity Awards"). The Kelly Equity Awards, when granted, shall vest, subject to
the achievement of performance conditions as well as Mr. Kelly's continued
employment by the Company, in accordance with the following vesting schedule:
(i) twenty-five (25)% percent of the PSUs and RSUs shall vest on May 23, 2023;
(ii) an additional twenty-five (25)% percent shall vest on May 23, 2024; (iii)
an additional twenty-five (25)% percent shall vest on May 23, 2025; and (iv) the
final twenty-five (25)% percent shall vest on May 23, 2026. Throughout the
course of his employment, Mr. Kelly is entitled to participate in in all group
welfare benefit and retirement plans and programs and other fringe benefit plans
and program.
Pursuant to the Kelly Employment Agreement, in the event of termination for
cause by the Company or resignation without good reason by Mr. Kelly, he is
entitled to receive accrued amounts (including accrued but unpaid base salary
and any accrued but unused time off, reimbursement for unreimbursed expenses and
any such executive benefits including any unpaid incentive bonus earned as well
as equity compensation, if vested). In the event of termination without cause or
resignation with good reason, Mr. Kelly is entitled to receive accrued amounts
and a severance payment equal to a flat twelve months of Mr. Kelly's annual base
salary, subject to Mr. Kelly's execution of a release of claims in favor of the
Company. For all outstanding equity awards granted to Mr. Kelly, the time
vesting schedule for PSUs, for which the stock price vesting conditions have
been met, will be accelerated to the date of termination, and for RSUs, Mr.
Kelly shall receive 12 months service credit for each year of service. In
addition, if Mr. Kelly timely and properly elects health continuation coverage
under COBRA, the Company shall provide a partial reimbursement for monthly
health care insurance premiums increase paid by Mr. Kelly for himself and his
dependents.
Upon the occurrence of a change of control event, Mr. Kelly would receive any
accrued amounts and a lump sum severance payment equal to a flat eighteen months
(or 1.5x) of Mr. Kelly's annual base salary, plus his full incentive bonus for
that fiscal year, subject to Mr. Kelly's execution of a general release in favor
of the Company. In addition, all target common share prices from Mr. Kelly's
equity award will be deemed to have been met. If Mr. Kelly's equity award is
equitably assumed by the ongoing corporation based on its value at the change in
control event, vesting will occur in accordance with the original time vesting
schedule. If Mr. Kelly's employment is terminated without cause after the change
of control event, any unvested portion of Mr. Kelly's equity award will vest
upon the termination date. Notwithstanding the forgoing, if the ongoing
corporation does not equitably assume Mr. Kelly's equity award, vesting will
accelerate to the change of control date. Additionally, if Mr. Kelly timely and
properly elected continuing health coverage under COBRA, Mr. Kelly will receive
partial reimbursement for the monthly health care insurance premiums increase
paid by Mr. Kelly for himself and his dependents.
The foregoing descriptions of the Amendment, the Hoch Employment Agreement, and
the Kelly Employment Agreement do not purport to be complete and are qualified
in their entirety by reference to the full text of such agreement, copies of
which are attached as Exhibits 10.1, 10.2 and 10.3 hereto, respectively, and are
incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1* Amendment to Executive Employment Agreement dated December 1, 2022 by
and between TILT Holdings Inc. and Dana Arvidson.
10.2* TILT Executive Employment Agreement dated November 29, 2022 by and
between TILT Holdings Inc. and Brad Hoch.
10.3* TILT Executive Employment Agreement dated December 1, 2022 by and
between TILT Holdings Inc. and Christopher Kelly.
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document.
* Indicates a management contract or compensatory plan, contract or arrangement
in which directors or executive officers participate.
© Edgar Online, source Glimpses
TILT HOLDINGS INC. 
