| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Permanent Chief Financial Officer
On March 31, 2022, Canopy Growth Corporation (the “Company”) announced, among other things, that Judy Hong, who had been serving as the Company’s Chief Financial Officer on an interim basis since November 18, 2021, was appointed as the Company’s permanent Chief Financial Officer (the “Appointment”).
Ms. Hong, 50, joined the Company in December 2019. Prior to Ms. Hong’s appointment as interim Chief Financial Officer, Ms. Hong led the Company’s Investor Relations team, served as Chief of Staff to the Company’s Chief Executive Officer and was a member of the Executive Management Committee. Prior to joining the Company, Ms. Hong spent over 20 years at Goldman Sachs & Co., having most recently served as a Managing Director of its Global Investment Research Division until September 2019. Ms. Hong holds a Master of Business Administration in Finance from the NYU Stern School of Business and a Bachelor of Science in Communications from Cornell University.
There are no arrangements or understandings between Ms. Hong and any other person pursuant to which she was selected as Chief Financial Officer. Ms. Hong does not have any family relationships with any of the Company’s directors, executive officers, or other person nominated or chosen by the Company to become a director or executive officer. There are no transactions between Ms. Hong and the Company that would be required to be reported under Item 404(a) of Regulation S-K.
Employment Agreement with Judy Hong
In connection with the Appointment, on March 29, 2022, the Company and Ms. Hong entered into an employment agreement (the “Employment Agreement”).
Pursuant to the Employment Agreement, as Chief Financial Officer, Ms. Hong reports to the Chief Executive Officer of the Company and is entitled to a base salary of US$395,000 per year.
Ms. Hong is eligible for a short-term annual incentive performance bonus of 75% of her base salary (the “Target Amount”), with a payout range of up to two times the Target Amount based upon the achievement of certain mutually developed financial, operational, strategic and individual performance objectives approved by the Company’s board of directors (the “Board”).
Ms. Hong is also entitled to participate in the Company’s Amended and Restated Omnibus Incentive Plan (the “Incentive Plan”). Pursuant to the Employment Agreement, Ms. Hong is eligible to receive, at least once every fiscal year, a long-term award grant equal to 300% of base salary (using the fair market value of the Company’s common shares on the date of grant), which may be comprised of stock options, restricted stock units, performance share units and/or any other form of equity authorized by the Incentive Plan. The Board, in its sole discretion, may determine the ratio of the various forms of equity that Ms. Hong is entitled to receive pursuant to the Incentive Plan.
Pursuant to the Employment Agreement, Ms. Hong’s employment with the Company will be “at will.” If the Company terminates Ms. Hong’s employment without cause, then, provided that Ms. Hong signs and returns to the Company a full and final employment separation, release and waiver of liability, the Company will provide (a) a lump sum payment equal to 18 months’ base salary, which shall be payable no later than two and a half months following the end of the calendar year in which the termination occurs; (b) a lump sum payment equal to 150% of the average actual annual amounts paid as a short-term annual incentive performance bonus during the prior two years, which shall be payable no later than two and a half months following the end of the calendar year in which the termination occurs; (c) any outstanding performance share units will vest at actual performance levels for all years already certified by the Board or any responsible committee thereof; and (d) if Ms. Hong were to elect continuation coverage under the Company’s medical plan pursuant to COBRA, a reimbursement to Ms. Hong for a portion of COBRA premium payments as further described in the Employment Agreement. The Company may also terminate Ms. Hong’s employment with cause, without further liability to Ms. Hong.
