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.