Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On November 14, 2022, the employment of Julius Kalcevich, Chief Financial
Officer of iAnthus Capital Holdings, Inc. (the "Company"), ceased. Effective as
of November 14, 2022, the Company appointed Philippe Faraut as Chief Financial
Officer of the Company.
Philippe Faraut brings over 20 years of senior CPG financial management and
leadership expertise to the Company. Since April 2021, Mr. Farauthas served as
the Chief Financial Officer and a member of the board of directors of Irwin
Naturals ("Irwin") (OTCQB: IWINF), a mass market nutraceutical brand, having led
Irwin's initial public offering and entrance into the psychedelic mental health
care space. Prior to that, from October 2016 until January, Mr. Faraut served as
Managing Partner of Bastiat Partners, an investment banking services firm, and
from 2015 until 2016, he served as Chief Investment Officer for Knight Global
LLC, a family office with a diversified asset portfolio. Mr. Faraut started his
finance career at Merrill Lynch in the Consumer Retail group in New York and
held senior positions at the Sage Group, Financo Inc. and Intrepid Investment
Bankers. He holds a Master of Business Administration degree from the Anderson
School at University of California, Los Angeles and a Bachelor of Science degree
from Glion Institute - Hotel Management School.
In connection with his appointment as Chief Financial Officer, iAnthus Capital
Management, LLC (including the Company and all of its subsidiaries,
collectively, the "Companies") entered into an employment agreement (the
"Employment Agreement") with Mr. Faraut, effective as of November 14, 2022,
setting forth the terms of his employment. Pursuant to the Employment Agreement,
Mr. Faraut will receive an annual base salary of $300,000 and beginning on
January 1, 2023, Mr. Faraut will be eligible to receive an annual incentive cash
bonus, in the sole discretion of the Company's board of directors ("Board"),
based upon criteria established annually by the Board. In addition, for the
period between November 14, 2022 and December 31, 2022, Mr. Faraut may be
awarded a discretionary incentive cash bonus based on individual and/or
corporate performance during such period. Except as provided below, Mr. Faraut
must be employed on the bonus payment date to be eligible to receive the bonus
for the applicable year.
On or prior to November 19, 2022 and on November 15 of each subsequent year,
pursuant to the Employment Agreement, Mr. Faraut will be entitled to receive
restricted stock units with respect to the common shares of the Company, having
an aggregate fair market value, as of the date of grant, of $300,000 (the
"RSUs"). The grant of the RSUs to Mr. Faraut will be subject to the terms and
conditions of the iAnthus Capital Holdings, Inc. Amended and Restated Omnibus
Incentive Plan and related equity award agreement. The RSUs will vest in three
equal annual installments on the first three anniversaries of the date of grant
of such RSUs, contingent on Mr. Faraut remaining employed through each vesting
date. The RSUs will immediately fully vest upon the consummation of a Change of
Control (as defined in the Employment Agreement). In addition, Mr. Faraut will
be entitled to receive personal time off benefits under Company's policies and
any other employee benefits pursuant to any benefit plans maintained by the
Company in a manner consistent with other similarly situated employees of the
Company. He will also be entitled to reimbursement of reasonable and necessary
business-related expenses.
In the event of a Change of Control of the Company, either while Mr. Faraut is
employed or during the first 12 months after the Company terminates Mr. Faraut's
employment without Cause (as defined in the Employment Agreement), or Mr. Faraut
resigns for Good Reason (as defined in the Employment Agreement), then he shall
be entitled to receive the following upon the consummation of the Change of
Control: (i) a lump-sum cash payment equal to the sum of (A) Mr. Faraut's then
current base-salary for 18 months and (B) the amount of any annual incentive
bonus paid to Mr. Faraut in the 12 months preceding the consummation of a Change
of Control of the Company and (ii) a fully vested grant of RSUs with an
aggregate fair market value equal to $450,000, based on the closing public
market price per share on the 30th day after the date of the Change of Control
of the Company. In the event that the Company terminates Mr. Faraut's employment
due to his death or disability, all unvested and outstanding RSUs held by Mr.
Faraut shall be accelerated and become fully vested on the date of such
termination. In the event that the Company terminates Mr. Faraut's employment
for any reason other than Cause, death or disability, or if Mr. Faraut resigns
for Good Reason, then he shall be entitled to receive the following: (i) to the
extent unvested, all RSUs held by Mr. Faraut shall be accelerated and become
fully vested on the date of termination (provided that if such termination of
employment is less than 180 days after a Change of Control of the Company, then
only 66.67% of any unvested RSUs shall be accelerated and become fully vested);
(ii) if Mr. Faraut is employed for at least one year, on the 60thdate following
the date of his termination of employment, Mr. Faraut will receive fully vested
RSUs with an aggregate fair market value equal to $300,000 (provided that if
such termination of employment is less than 180 days after a Change of Control
of the Company, then Mr. Faurat shall not be entitled to any such payment);
(iii) payment, over a 12 month period, of continuing compensation equal to the
sum of (A) 12 months of his then base salary and (B) the amount of any annual
incentive bonus paid to Mr. Faraut in the 12 months preceding the date of
termination (provided that if such termination of employment is less than 180
days after a Change of Control of the Company, then Mr. Faurat shall not be
entitled to any such payment); and (iv) if Mr. Faraut elects continuation
coverage pursuant to COBRA under the Company's group health plan, the Company
shall pay Mr. Faraut's COBRA premiums for such coverage until the earlier of (A)
12 months following the date of Mr. Faraut's termination of employment, or
(B) the date upon which Mr. Faraut accepts new employment that offers him
medical benefits. The foregoing severance benefits are subject to, among other
things, Mr. Faraut's execution and delivery of a general release of all claims
in favor of the Companies and their affiliates and subsidiaries.
In addition to the foregoing, the Employment Agreement includes
covenants prohibiting Mr. Faruat from (i) disclosing certain confidential
information and (ii) soliciting employees, contractors, consultants, vendors,
clients and prospective clients of the Companies or their affiliates.
The foregoing description of the Employment Agreement does not purport to be
complete and is subject to, and qualified in its entirety by reference to the
full text of the Employment Agreement, a copy of which is attached hereto as
Exhibit 10.1 and is incorporated herein by reference.
There are no family relationships between Mr. Faraut and any of our directors or
executive officers. Except as set forth herein, there is no arrangement or
understanding between Mr. Faraut and any other persons pursuant to which Mr.
Faraut was appointed as Chief Financial Officer of the Companies. Except as set
forth herein, there are no related party transactions involving Mr. Faraut that
are reportable under Item 404(a) of Regulation S-K.
Item 8.01 Other Events.
On November 15, 2022, the Company issued a press release announcing the
cessation of services of Julius Kalcevich as Chief Financial Officer of the
Company and the appointment of Philippe Faraut as Chief Financial Officer of the
Company.
A copy of the press release is attached hereto as Exhibit 99.1, and the
information contained therein is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1+ Employment Agreement by and between iAnthus Capital Management, LLC,
including iAnthusCapital Holdings, Inc. and all of its subsidiaries,
and Philippe Faraut dated November 14, 2022
99.1 Press release dated November 15, 2022
104 Inline XBRL for the cover page of this Current Report on Form 8-K
+ Indicates a management contract or any compensatory plan, contract or
arrangement.
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