Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 17, 2021, the Board of Directors (the “Board”) of Stronghold Digital Mining, Inc., a Delaware corporation (the “Company”), voted to expand the size of the Board from five to six members.
Appointment of Matthew J. Smith
On November 17, 2021, the Board appointed Matthew J. Smith to the Board as a director to fill the vacancy created by the Board expansion, with a term expiring at the 2022 annual meeting of stockholders or until his successor is elected and qualified, or, if earlier, until his death, disability, resignation, disqualification, or removal from the Board. Based upon information requested from and provided by Mr. Smith concerning his background, employment and affiliations, including family relationships, the Board determined that Mr. Smith does not have any relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that Mr. Smith is “independent” as that term is defined under the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) and the listing requirements of the Nasdaq Stock Market. There are no transactions in which Mr. Smith has an interest requiring disclosure under Item 404(a) of Regulation S-K. There are no arrangements or understandings between Mr. Smith and any other persons pursuant to which he was appointed as a director of the Company.
Mr. Smith will receive the standard non-employee director compensation for his service as a director, which compensation currently consists of (i) an initial equity grant of 28,800 stock options, (ii) an annual retainer equal to $100,000, which will be paid in fully vested shares of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”) on a quarterly basis in arrears, and (iii) reimbursement for travel expenses and other reasonable out-of-pocket expenses. In addition, once a non-employee director obtains exposure to the Company’s Common Stock of $500,000 or greater, a director may choose to receive the annual retainer in U.S. Dollars or any other currency (including Bitcoin) in lieu of shares of the Company’s Common Stock.
On November 17, 2021, in connection with his appointment, the Company and Mr. Smith entered into the Company’s standard form of indemnification agreement, which requires the Company to indemnify Mr. Smith to the fullest extent permitted under Delaware law against liability that may arise by reason of Mr. Smith’s service to the Company, and to advance expenses incurred as a result of any proceeding against such individual as to which he could be indemnified.
The foregoing description is qualified in its entirety by reference to the full text of the copy of Indemnification Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference in this Item 5.02.
For a full description of the compensation program for the Company’s non-employee directors, please see the Company’s Registration Statement on Form S-1 filed with the SEC in connection with the Company’s initial public offering.
Matthew J. Smith, age 43, has served as the Founder and Managing Partner of Deep Basin Capital LP since January 2017. Mr. Smith has over 16 years of investment management experience in the energy, renewable, power and utility sectors across both public and private investments, including the roles of portfolio manager at Citadel’s Surveyor Capital Ltd. from June 2010 through January 2016, senior analyst in the energy and other cyclical sectors for Highfields Capital Management LP from January 2009 to December 2009 and Copper Arch Capital LLC from July 2005 to December 2007 and as a financial analyst at Equity Office Properties Trust from August 2001 to May 2003. Mr. Smith is a CFA Charterholder. Mr. Smith currently serves as an independent director and audit committee member on the board of Spartan Acquisition Corp III (NYSE: SPAQ), a role that he has held since May 2021. He holds a M.S. in Finance from the University of Wisconsin-Madison’s Applied Security Analysis Program (ASAP) and a B.B.A. from the University of Iowa Tippie College of Business.
The Company believes Mr. Smith is well qualified to serve as a director due to his extensive experience in the energy, renewable, power and utility sectors across both public and private investments.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
