Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Chief Financial Officer
On August 6, 2024, Hut 8 Corp. (the “Company”) announced the appointment of Sean Glennan as the Company’s Chief Financial Officer, effective August 21, 2024 (the “Effective Date”).
Mr. Glennan, 41, most recently served as Managing Director in the Global Power, Utilities & Renewables group in Citigroup Global Market’s Investment Banking division, beginning in December 2021. Prior to serving as Managing Director, Mr. Glennan held various roles at Citigroup since August 2011.
Pursuant to the terms of Mr. Glennan’s employment agreement (the “Employment Agreement”) effective as of the Effective Date, Mr. Glennan will be employed with the Company for an indefinite term until his employment is terminated in accordance the terms of the Employment Agreement. Under the Employment Agreement, the Company agrees to provide Mr. Glennan: (i) an annual base salary of $400,000; (ii) an annual bonus with a target opportunity equal to 100% of base salary, subject to achievement of any applicable performance goals established by the board of directors; (iii) an equity award of restricted stock units equal to the quotient of $500,000 and the volume weighted average stock price of the Company’s common stock for the twenty (20) consecutive trading day period ending on the final trading day prior to the Effective Date (the “20-Day VWAP”); (iv) an equity award of performance stock units equal to the quotient of $500,000 and the 20-Day VWAP; and (v) eligibility to receive additional equity-based compensation in the future as determined by the board of directors. Mr. Glennan will be entitled to a pro-rata bonus for the 2024 calendar year, calculated at target.
Pursuant to the Employment Agreement, upon a termination of his employment by the Company without cause or if Mr. Glennan resigns for good reason, he will be entitled to the following additional payments and benefits: (i) any annual bonus awarded in respect of the year preceding the year of termination, but not yet paid; (ii) an annual bonus at target for the year in which his employment terminates; (iii) salary continuation payments for twelve (12) months; (iv) twelve (12) months COBRA continuation coverage at active employee rates; and (v) treatment of long-term incentive or other equity awards determined in accordance with the terms of the applicable plan and award agreements; provided that with respect to awards that vest solely based on continued service with the Company, such awards shall vest in any tranche scheduled to vest in accordance with the applicable award agreement during the 12-month post-termination period, which vesting shall occur on the ninety-first (91st) day after the date of termination.
Under the Employment Agreement, Mr. Glennan will be subject to certain non-competition and non-solicitation of customers, suppliers and employees restrictions for twelve (12) months following any termination of employment, in addition to non-disparagement and confidentiality obligations.
The Company expects that Mr. Glennan will enter into an indemnification agreement with the Company, a form of which was filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on November 11, 2023.
The selection of Mr. Glennan to serve as the Company’s Chief Financial Officer was not pursuant to any arrangement or understanding with respect to any other person. In addition, there are no family relationships between Mr. Glennan and any director or executive officer of the Company. Mr. Glennan has not been a party to any transaction with the Company or its subsidiaries of the type required to be disclosed pursuant to Item 404(a) of Regulation S-K, and no such transaction is currently contemplated.
The foregoing description of the Employment Agreement does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Employment Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2024.
