Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
As previously reported on the Current Report on Form 8-K filed by TILT Holdings Inc. (the “Company”) on April 25, 2023 (the “Initial Form 8-K”), Tim Conder was appointed to serve as Interim Chief Executive Officer of the Company, effective April 21, 2023. Mr. Conder did not receive compensation for his service as Interim Chief Executive Officer. On September 26, 2023, the Board appointed Mr. Conder as the permanent Chief Executive Officer of the Company. The biographical information and other information on Mr. Conder included in the Initial Form 8-K is hereby incorporated by reference.
On September 26, 2023, the Company and Mr. Conder entered into an employment agreement (the “Employment Agreement”), pursuant to which Mr. Conder will serve as the permanent Chief Executive Officer of the Company. The Employment Agreement sets forth the principal terms and conditions of Mr. Conder’s employment including an employment term from September 26, 2023 and continuing until June 30, 2024 (the “Term”) and including a monthly base salary of $29,167 (the “Base Salary”) effective as of April 21, 2023, or $350,004 on an annualized basis. The Employment Agreement provides that Mr. Conder will receive a target performance bonus of $200,000 provided that Mr. Conder (i) has achieved on or prior to December 31, 2023 certain metrics and (ii) is still employed by the Company as of the earlier of the date of payment or January 31, 2024 (the “December 31, 2023 Performance Bonus”). The Employment Agreement provides that Mr. Conder will receive another target performance bonus of $200,000 provided that Mr. Conder (i) has achieved on or prior to June 30, 2024 certain metrics set forth therein and (ii) is still employed by the Company as of the earlier of the date of payment or June 30, 2024 (the “June 30, 2024 Performance Bonus”).
Pursuant to the terms of the Employment Agreement, Mr. Conder is entitled to receive an equity grant, under the Company’s Amended and Restated 2018 Stock and Incentive Plan, of 2,000,000 performance stock units (“PSUs”), of which up to 1,000,000 PSUs will vest on the first business day after December 31, 2023 (the “December 31, 2023 PSUs”) and up to 1,000,000 PSUs will vest on June 30, 2024 (the “June 30, 2024 PSUs”), each in the portions set forth therein, provided that Mr. Conder has achieved the metrics for the applicable vesting period and continues to be employed by the Company as of each vesting date.
Mr. Conder is also entitled to up to $25,500 of reimbursement for direct expenses within 14 days of execution of the Employment Agreement.
Following a request from Mr. Conder during the Term, the Company will donate $50,000 to one or more charitable organizations designated by Mr. Conder, provided that the Company will not be required to make donations in excess of $25,000 prior to January 1, 2024 and in excess of $12,500 from January 1, 2024 through March 31, 2024 and from and after April 1, 2024 through the end of the Term.
Throughout the course of his employment, Mr. Conder is entitled to participate in all group employee health, pension and welfare benefit plans and programs, and fringe benefit plans and programs.
Pursuant to the Employment Agreement, in the event of termination of Mr. Conder’s employment with the Company, however occurring, Mr. Conder is entitled to (i) the Base Salary through the date of termination, (ii) any accrued but unused vacation through the date of termination, and (iii) subject to submission of proper expense reports by Mr. Conder within 30 days of the date of termination, reimbursement for all expenses reasonably and necessarily incurred by Mr. Conder in connection with the business of the Company (together, the “Final Compensation”). In the event of termination without cause or resignation with good reason, in addition to the Final Compensation and subject to the execution of a release of claims in favor of the Company, Mr. Conder is entitled to receive (i) all previously accrued amounts, (ii) the Base Salary at applicable rates through the end of the Term, (iii) if Mr. Conder’s employment is terminated prior to payment of the December 31, 2023 Performance Bonus, to the extent Mr. Conder has achieved any applicable metrics, the corresponding portion of the December 31, 2023 Performance Bonus and (iv) if Mr. Conder’s employment is terminated prior to payment of the June 30, 2024 Performance Bonus, to the extent Mr. Conder has achieved any applicable metrics, the corresponding portion of the June 30, 2024 Performance Bonus.
