| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers. |
Chief Executive Officer Transition
On October 7, 2022, Greenlane Holdings, Inc. (the
“Company”) announced that Nicholas Kovacevich, the Company’s Chief Executive Officer, will step down as Chief Executive
Officer on December 31, 2022 and transition into a new role within the Company as Chief Corporate Development Officer effective January
1, 2023 (the “Transition Date”). Mr. Kovacevich will continue to serve as a member of the Company’s Board of Directors
(the “Board”) after the Transition Date.
Craig Snyder, who joined the Company in March
2022 as Chief Commercial Officer and has served as the Company’s President since August 2022, will assume the position of Chief
Executive Officer on the Transition Date.
Board Refreshment
In addition to the Chief Executive Officer transition
described above, the Company also announced that it is exploring changes to the composition of the Board. The Nominating and Corporate
Governance Committee of the Board is conducting an ongoing search with an emphasis on candidates identified as providing specific skill
sets in areas such as consumer packaged goods, technology and innovation as the Company pursues the previously disclosed changes to its
business model.
Entry into Amended and Restated Employment Agreement with Nicholas
Kovacevich
On October 6, 2022, in connection with the Chief
Executive Officer transition described above, the Company entered into an amended and restated employment agreement (the “Amended
Employment Agreement”) with Mr. Kovacevich. In connection with his entry into the Amended Employment Agreement, Mr. Kovacevich’s
prior employment agreement with the Company was terminated.
The Amended Employment Agreement provides for
a term of employment commencing on October 6, 2022 and ending on December 31, 2023 (the “Initial Employment Period”), during
which time Mr. Kovacevich will serve as Chief Executive Officer through December 31, 2022 and will then serve as Chief Corporate Development
Officer for the remainder of the term of the Amended Employment Agreement. If Mr. Kovacevich’s employment continues following the
expiration of the term of the Amended Employment Agreement, the term of the Amended Employment Agreement shall automatically be extended
for successive one-year periods (the “Extended Employment Period” and together with the Initial Employment Period, the “Employment
Term”) unless either party gives written notice of termination not less than 60 days prior to the termination of the then-current
term. Pursuant to the Amended Employment Agreement, Mr. Kovacevich will continue to be paid a base salary of $400,000 until December 31,
2022, at which point his base salary will be reduced to $180,000, subject to annual review by the Compensation Committee of the Board
(the “Compensation Committee”). Mr. Kovacevich will also be eligible to receive an annual bonus based upon the attainment
of one or more pre-established performance goals or other established criteria set by the Board or the Compensation Committee. Mr. Kovacevich
is entitled to a cash bonus in the amount of $260,000 for the fiscal year ended December 31, 2022 and will be eligible to receive a bonus
of up to $100,000 in subsequent fiscal years. Mr. Kovacevich will also continue to be eligible to receive equity and other long-term incentive
awards under any applicable plan adopted by the Company during the term of his employment. In the sole discretion of the Compensation
Committee, Mr. Kovacevich’s bonus beginning with his bonus, if any, for the fiscal year ended December 31, 2023 may be paid in cash
or in equity awards.
Pursuant to the Amended Employment Agreement,
Mr. Kovacevich is terminable by the Company at any time (i) without cause (as defined in the Amended Employment Agreement and summarized
below), (ii) for cause, (ii) in the event of his death, or (ii) in the event of his disability that cannot be accommodated under the requirements
of law. Mr. Kovacevich may terminate the Amended Employment Agreement for any reason.
If the Amended Employment Agreement is terminated
by the Company without cause, Mr. Kovacevich is entitled to receive his base salary to the date of termination, any bonus that has accrued
but is unpaid as of the date of termination and any reimbursable expenses not yet reimbursed as of such date, in addition to the receipt
of outplacement services at the Company’s expense, provided that the cost of such services shall not exceed $20,000 or continue
for longer than 3 months. If terminated without cause, Mr. Kovacevich is also entitled to severance equal to 12 months of his base salary
in effect as of the end of the fiscal year ended December 31, 2022. Pursuant to the terms of the Amended Employment Agreement, Mr. Kovacevich
also has the right to resign his employment with the Company at any time after June 30, 2023 with 30 days’ notice and remain entitled
to receive the full severance described above.
In addition, if terminated without cause, Mr.
Kovacevich is entitled to a cash payment equal to the applicable COBRA premium payments that would be payable by Mr. Kovacevich to continue
his Company-provided healthcare services for himself and any dependents (the “Company Healthcare Plan”) covered at the time
of termination (collectively, the “COBRA Payment”). If terminated without cause, Mr. Kovacevich is entitled a COBRA Payment
equal to 12 months of coverage under the Company Healthcare Plan.
If the Amended Employment Agreement is terminated
by Company (i) for cause, (ii) in the event of Mr. Kovacevich’s death, or (iii) in the event of his disability that cannot be accommodated
under the requirements of law, or if Mr. Kovacevich terminates the Amended Employment Agreement for any reason, Mr. Kovacevich is entitled
to receive his base salary to the date of termination, any bonus that has accrued but is unpaid as of the date of termination and any
reimbursable expenses not yet reimbursed as of such date.
Pursuant to the terms of the Amended Employment
Agreement, “cause” means: (i) the conviction of Mr. Kovacevich of the commission of a felony or other crime involving moral
turpitude (including pleading guilty or no contest to such crime), whether or not such felony or other crime was committed in connection
with the business of the Company Group (as defined in the Amended Employment Agreement); (ii) the commission of any act or omission involving
willful misconduct, moral turpitude, misappropriation, embezzlement, dishonesty, or fraud in connection with the performance of the Executive
Officer’s duties and responsibilities hereunder; (iii) reporting to work under the influence of alcohol or illegal drugs, or other
conduct causing the Company Group public disgrace or disrepute, whether in conjunction with the performance of Mr. Kovacevich’s
duties on behalf of the Company Group or otherwise; (iv) willful failure or refusal to perform material duties and responsibilities as
reasonably directed by the Chief Executive Officer or Board; (v) any act or omission deliberately aiding or abetting a competitor of the
Company Group to the disadvantage or detriment of the Company Group; (vi) breach of any applicable fiduciary duty to the Company Group;
or (vii) any other material breach of the Amended Employment Agreement.
Mr. Kovacevich has agreed that during the Employment
Term he will not engage, directly or indirectly, as a partner, officer, director, stockholder (other than as the passive holder of less
than 2% of the outstanding stock of a publicly-traded corporation), member, manager, consultant, advisor, investor, creditor or employee
with a company that engages in a similar business as the Company, except on behalf of the Company or with the prior written approval of
the Chief Executive Officer or Board.
The foregoing description of the Amended Employment
Agreement does not purport to be complete and is qualified in its entirety to the full text of the Amended Employment Agreement, which
is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.