Proxy Statement – Form DEF 14A
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under §240.14a-12 |
| ( |
N/A
(
Payment of Filing Fee (Check all boxes that apply):
| ☒ | No fee required. |
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
OF
AND
PROXY STATEMENT
FOR ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON
Notice of Annual General Meeting of Shareholders
The 2024 annual general meeting of shareholders (the "Meeting") of
The following matters will be considered at the Meeting:
| · | the election of five directors for the forthcoming year from the nominees proposed by the board of directors of the Corporation (the "Board"); |
| · | the appointment of GreenGrowth CPAs, as auditors for the Corporation and the authorization of the Board to fix the auditors' remuneration and terms of engagement; and |
| · | the transaction of such other business as may properly come before the Meeting or any adjournment(s) or postponement(s) thereof. |
The record date for the determination of shareholders of the Corporation entitled to receive notice of and to vote at the Meeting or any adjournment(s) or postponement(s) thereof is
A shareholder of the Corporation may attend the Meeting or may be represented by proxy. Registered shareholders of the Corporation who are unable to attend the Meeting or any adjournment(s) or postponement(s) thereof are requested to date, sign, and retuthe accompanying Proxy Instrument for use at the Meeting or any adjournment(s) or postponement(s) thereof.
To be effective, the enclosed Proxy Instrument must be returned to the Corporation's transfer agent by using the envelope provided or by mailing the Proxy Instrument to
If you are a non-registered shareholder (for example, if you hold shares of the Corporation in an account with a broker or another intermediary), you should follow the voting procedures described in the form of proxy or voting instruction form provided by your broker or intermediary or call your broker or intermediary for information as to how you can vote your shares. Without specific instructions, brokers and their agents and nominees are prohibited from voting shares for the broker's clients. Therefore, each non-registered shareholder should ensure that voting instructions are communicated to the appropriate person well in advance of the Meeting. Note that the deadlines set by your broker or intermediary for submitting your form of proxy or voting instruction form may be earlier than the dates described above.
You may also vote your shares in person at the Meeting. If you are a non-registered shareholder, you may not vote your shares at the Meeting, or any adjournment(s) or postponement(s) thereof, unless you obtain a legal proxy from the registered holder of the shares giving you the right to do so.
Whether or not you plan to attend the Meeting, we encourage you to read this proxy statement and promptly vote your shares. For specific instructions on how to vote your shares, please refer to the section entitled "How You Can Vote" and to the instructions on your proxy or voting instruction card.
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DATED as of By Order of the Board of Directors |
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| /s/ |
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| Chairperson |
TABLE OF CONTENTS
PROXY STATEMENT FOR THE 2024 ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON
This proxy statement contains information about the 2024 annual general meeting of shareholders (the "Meeting") of
All properly submitted proxies will be voted in accordance with the instructions contained in those proxies. If no instructions are specified, the proxies will be voted in accordance with the Board's recommendation for each of the matters outlined in the accompanying Notice of Meeting.
A shareholder whose shares are directly registered on the books of the Corporation maintained by the transfer agent ("Registered Shareholder") of the Corporation who has given a proxy may revoke the proxy at any time prior to use by: (i) attending the Meeting and voting in person; (ii) depositing an instrument in writing executed by such Registered Shareholder or by his or her attorney authorized in writing, or, if the Registered Shareholder is a corporation, by an authorized officer or attorney thereof: (a) at the registered office of the Corporation at any time prior to
We mailed this proxy statement and our annual report for the fiscal year ended
We are an "emerging growth company" under applicable
Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting
of Shareholders to be Held on
This proxy statement and our Annual Report for the fiscal year ended
are available for viewing, printing, and downloading at: ir.lowellfarms.com
A copy of our Annual Report will be furnished without charge to any shareholder upon written request to
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GENERAL INFORMATION ABOUT THE ANNUAL GENERAL MEETING AND VOTING
Proxy Materials
Why am I receiving these materials?
The Board is using this proxy statement to solicit proxies for use at the Meeting to be held on
As a shareholder, you are invited to attend the Meeting and are entitled and requested to vote on the business items described in this proxy statement. This proxy statement is furnished in connection with the solicitation of proxies by or on behalf of the management of the Corporation and the Board. This proxy statement is designed to assist you in voting your shares and includes information that we are required to provide under the rules of the
These proxy materials are being sent to both registered and non-registered shareholders. In some instances, the Corporation has distributed copies of the Notice of Meeting, the proxy statement, and the accompanying Proxy Instrument (collectively, the "Documents") to clearing agencies, securities dealers, banks and trust companies, brokerage houses, other custodians, nominees, and fiduciaries or their nominees (collectively "Intermediaries," and each an "Intermediary") for onward distribution to non-registered shareholders whose shares are held by or in the custody of those Intermediaries ("Non-Registered Shareholders" or "Beneficial Owners").
Existing regulatory policy requires Intermediaries to forward all proxy-related materials to and seek voting instructions from Non-Registered Shareholders in advance of shareholder meetings. The various Intermediaries have their own mailing procedures and provide their own retuinstructions to clients, which should be carefully followed by Non-Registered Shareholders in order to ensure that their subordinate voting shares ("Shares") are voted at the Meeting. Often the form of proxy supplied to a Non-Registered Shareholder by an Intermediary is identical to the form of proxy provided by the Corporation to Registered Shareholders. However, its purpose is limited to instructing the Registered Shareholder (i.e., the Intermediary or agent or nominee thereof) how to vote on behalf of the Non-Registered Shareholder. The majority of Intermediaries now delegate responsibility for obtaining instructions from clients to
There are two kinds of Non-Registered Shareholders: (i) those who object to their identity being known to the issuers of securities which they own ("Objecting Beneficial Owners" or "OBOs"), and (ii) those who do not object to their identity being made known to the issuers of securities which they own ("Non-Objecting Beneficial Owners" or "NOBOs"). Subject to the provisions of applicable Canadian securities laws, issuers may deliver proxy-related materials directly to their NOBOs.
The Corporation is not sending proxy-related materials directly to NOBOs and accordingly, NOBOs can expect to receive a scannable VIF from Broadridge. These VIFs are to be completed and returned to Broadridge in the envelope provided or by facsimile. In addition, Broadridge provides both telephone voting and Internet voting as described on the VIF itself which contains complete instructions. Broadridge will tabulate the results of the VIFs received from the NOBOs and will provide appropriate instructions to
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The Corporation intends to pay for an Intermediary to deliver the proxy-related materials to its OBOs and, as such, the Corporation's OBOs can expect to be contacted by Broadridge or their Intermediaries or an agent or nominee thereof.
Although Non-Registered Shareholders may not be recognized directly at the Meeting for the purposes of voting Shares registered in the name of an Intermediary or an agent or nominee thereof, a Non-Registered Shareholder may attend the Meeting as proxy holder for the Registered Shareholder and vote its Shares in that capacity. Should a Non-Registered Shareholder wish to attend the Meeting and indirectly vote its Shares as proxy holder for an applicable Registered Shareholder, such Non-Registered Shareholder should enter its own name in the blank space on the Proxy Instrument or VIF provided to such Non-Registered Shareholder and retusame in accordance with the instructions provided thereon.
What is included in the proxy materials?
The proxy materials include:
| · | our Notice of Meeting; |
| · | our proxy statement for the Meeting; |
| · | a Proxy Instrument or voting instruction card; and |
| · | our Annual Report. |
What information is contained in this proxy statement?
The information in this proxy statement relates to the proposals to be voted on at the Meeting, the voting process, our Board and board committees, corporate governance, the compensation of our directors and executive officers, and other required information.
I share an address with another shareholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy?
If you share an address with another shareholder, you may receive only one set of proxy materials unless you have provided contrary instructions.
A separate set of materials will be sent promptly following receipt of your request.
If you are a shareholder of record and wish to receive a separate set of proxy materials in the future, or if you have received multiple sets of proxy materials and would like to receive only one set in the future, please contact
Odyssey
[email protected]
If you are a Beneficial Owner and wish to receive a separate set of proxy materials in the future, or if you have received multiple sets of proxy materials and would like to receive only one set in the future, please contact your bank or broker directly.
Shareholders also may write to or email us at the address below to request a separate copy of the proxy materials:
Attn: Corporate Secretary
[email protected]
(831) 998-8214
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Who pays the cost of soliciting proxies for the Meeting?
The Corporation will bear the cost of solicitation. This solicitation of proxies is being made to shareholders by mail but may be supplemented by telephone or other personal contacts.
The Corporation will reimburse Intermediaries for forwarding proxy materials to beneficial shareholders.
What items of business will be voted on at the Meeting?
The business items to be voted on at the Meeting are:
| · | the election of directors for the forthcoming year from the nominees proposed by the Board of the Corporation; |
| · | the appointment of GreenGrowth CPAs as auditors for the Corporation and the authorization of the Board to fix the auditors' remuneration and terms of engagement; and |
| · | the transaction of such other business as may properly come before the Meeting or any adjournment(s) or postponement(s) thereof. |
What are my voting choices?
You may vote "FOR" or "WITHHOLD" for the election of nominees for election as directors, and "FOR" or "WITHHOLD" for the appointment of GreenGrowth CPAs, as auditors for the ensuing year and the authorization of the Board to fix the auditor's remuneration and set the terms of engagement.
How does the Board recommend that I vote?
Our Board recommends that you vote your shares "FOR" each of its nominees for election to the Board, and "FOR" the appointment of GreenGrowth CPAs as auditors for the ensuing year and the authorization of the Board to fix the auditor's remuneration and set the terms of engagement.
What vote is required to approve each item?
A quorum for the transaction of business at a meeting of shareholders is present if at least two shareholders who, in the aggregate, hold or represent in the aggregate not less than 20% of the issued shares entitled to be voted at the Meeting are present in person or represented by proxy, irrespective of the number of persons actually present at the Meeting.
If you indicate "WITHHOLD" in respect to the election of directors or the appointment and remuneration of the auditors, your vote will be counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Meeting. Broker non-votes will be counted for determining the presence or absence of a quorum for the transaction of business at the Meeting, but will not be considered votes cast with respect to the election of any director nominee, or the appointment and remuneration of the auditors.
| Proposal | Required Vote | |
| 1. The election of directors | Ordinary resolution, whereby only votes "FOR" will affect the outcome | |
| 2. Appointment and remuneration of auditors | Ordinary resolution, whereby only votes "FOR" will affect the outcome |
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What happens if additional items are presented at the Meeting?
As of the date of this proxy statement, management of the Corporation knows of no such amendments, variations, or other matters to come before the Meeting. However, if other matters properly come before the Meeting, it is the intention of the persons named in the enclosed Proxy Instrument to vote such proxy according to their best judgment.
Where can I find the voting results?
We expect to announce preliminary voting results at the Meeting and to publish final results in a current report on Form 8-K that we will file with the
How You Can Vote
What shares can I vote?
You are entitled to vote all the shares that you own on the Record Date, including (1) shares held directly in your name as the shareholder of record and (2) shares held for you as the Beneficial Owner through an Intermediary. As of the Record Date, there were 377 shareholders of record holding 18,256,282 Subordinate Voting Shares and 1 shareholder of record holding 20,259 Super Voting Shares.
REGISTERED SHAREHOLDERS HAVE THE RIGHT TO APPOINT A PERSON TO REPRESENT HIM, HER OR IT AT THE MEETING OTHER THAN THE PERSON(S) DESIGNATED IN THE PROXY INSTRUMENT either by striking out the names of the persons designated in the Proxy Instrument and by inserting the name of the person or company to be appointed in the space provided in the Proxy Instrument or by completing another proper form of proxy and, in either case, delivering the completed proxy to the Corporation's transfer agent by using the envelope provided or by mailing the proxy to
What is the difference between holding shares as a shareholder of record and as a Beneficial Owner?
Shareholder of Record
If your shares are registered directly in your name with our transfer agent,
Beneficial Owner
If your shares are held through an Intermediary, then it is likely that they are registered in the name of the nominee, and you are the Beneficial Owner of shares held in street name.
As the Beneficial Owner of shares held for your account, you have the right to direct the registered holder to vote your shares as you instruct, and you also are invited to attend the Meeting. Your Intermediary has provided a voting instruction card for you to use in directing how your shares are to be voted. However, since a Beneficial Owner is not the shareholder of record, you may not vote your shares at the Meeting, or any adjournment(s) or postponement(s) thereof, unless you obtain a legal proxy from the registered holder of the shares giving you the right to do so.
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How can I vote at the Meeting?
Shareholders who attend the Meeting may be provided with a ballot with which they can cast their vote or a vote may proceed by way of a show of hands.
Even if you plan to attend the Meeting, we recommend that you also submit your proxy or voting instructions as described herein so that your vote will be counted if you later decide not to attend.
How can I vote without attending the Meeting?
Whether you hold your shares as a shareholder of record or as a Beneficial Owner, you may direct how your shares are to be voted without attending the Meeting or any adjournment(s) or postponement(s) thereof. If you are a shareholder of record, you may vote by submitting a proxy. If you hold shares as a Beneficial Owner, you may vote by submitting voting instructions to the registered owner of your shares. Each registered shareholder submitting a proxy has the right to appoint one or more proxy holders (but not more than five) to represent the shareholder at the Meeting to the extent and with the powers conferred by the proxy.
For directions on how to vote, please refer to the following instructions and those included on your proxy or voting instruction card. A proxy form will not be valid unless completed and deposited in accordance with the instructions set out in the proxy form.
Voting by Internet
Shareholders may vote via the Internet by following the instructions on the proxy or voting instruction card.
Voting by Mail
Shareholders may vote by mail by signing, dating, and returning their proxy or voting instruction card to the address indicated on the proxy or voting instruction card.
How will my shares be voted?
Shares represented by properly executed proxies in favor of persons designated in the printed portion of the enclosed Proxy Instrument WILL, UNLESS OTHERWISE INDICATED BY THE SHAREHOLDER, BE VOTED FOR THE ELECTION OF DIRECTORS, AND FOR THE APPOINTMENT OF GREENGROWTH CPAs AS THE AUDITORS OF THE CORPORATION, AND THE AUTHORIZATION OF THE BOARD OF DIRECTORS TO FIX THE AUDITORS' REMUNERATION AND TERMS OF ENGAGEMENT. The shares represented by the Proxy Instrument will be voted or withheld from voting in accordance with the instructions of the shareholder on any ballot that may be called for and, if the shareholder specifies a choice with respect to any matter to be acted upon, the shares will be voted accordingly. The enclosed Proxy Instrument confers discretionary authority on the persons named therein with respect to amendments or variations to matters identified in the Notice of Meeting or other matters which may properly come before the Meeting. As of the date of this proxy statement, management of the Corporation knows of no such amendments, variations, or other matters to come before the Meeting. However, if other matters properly come before the Meeting, it is the intention of the persons named in the enclosed Proxy Instrument to vote such proxy according to their best judgment.
Will shares I hold in my brokerage account be voted if I do not provide timely voting instructions?
If your shares are held through a brokerage firm, they will be voted as you instruct on the voting instruction card provided by your broker. If you sign and retuyour card without giving specific instructions, your shares will be voted in accordance with the recommendations of our Board.
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If you do not retuyour voting instruction card on a timely basis, your broker will be prohibited from voting your shares without your instructions on the election of directors and on any other proposal. These "broker non-votes" will be counted only for the purpose of determining whether a quorum is present at the Meeting and not as votes cast. Such broker non-votes will have no effect on the outcome of the matter.
Will shares that I own as a shareholder of record be voted if I do not timely retumy proxy card?
Shares that you own as a shareholder of record will be voted as you instruct on your proxy card. If you sign and retuyour proxy card without giving specific instructions, they will be voted in accordance with the procedure set out above under the heading "How will my shares be voted?"
If you do not timely retuyour proxy card, your shares will not be voted unless you or your proxy holder attends the Meeting and any adjournment(s) or postponement(s) thereof and votes during the Meeting as described above under the heading "How can I vote at the Meeting?"
When is the deadline to vote by proxy?
If you hold shares as the shareholder of record, your vote by proxy must be received no later than
If you hold shares as a Beneficial Owner, please follow the voting instructions provided by Broadridge or your Intermediary.
May I change or revoke my vote?
Every proxy may be revoked by an instrument in writing that is received (1) at the registered office of the Company at any time up to and including
A proxy may also be revoked by any other manner permitted by law.
Shareholder Proposals and Director Nominations
What is the deadline to submit shareholder proposals to be included in the proxy materials for next year's annual meeting?
The Corporation is subject to the rules of both the
Shareholder proposals submitted pursuant to
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Additionally, to comply with the
The BCBCA also sets out the requirements for a valid proposal and provides for the rights and obligations of the Corporation and the submitter upon a valid proposal being made. Proposals submitted under the applicable provisions of the BCBCA that a shareholder intends to present at next year's annual meeting and wishes to be considered for inclusion in the Corporation's proxy statement and form of proxy relating to next year's annual meeting must be received at least three (3) months before the anniversary of the Corporation's last annual general meeting (in this case,
Proposals that are not timely submitted or are submitted to the incorrect address or other than to the attention of
See below under the heading "How may I nominate director candidates for consideration at a meeting?" for a description of the procedures through which shareholders may nominate director candidates for consideration.
How may I nominate director candidates for consideration at a meeting?
Shareholders who wish to submit director nominees for consideration must give written notice of their intention to do so to our corporate secretary at the address set forth below under the heading "How do I obtain additional copies of this proxy statement or voting materials?". Any such notice also must be in the form and include the information required by our Articles ("Articles") (which may be obtained as provided below under the heading "How may I obtain financial and other information about
How may I recommend candidates to serve as directors?
Shareholders may recommend director candidates for consideration by the Board by writing to our corporate secretary at the address set forth below under the heading "How do I obtain additional copies of this proxy statement or voting materials?" in accordance with the notice provisions described above under the heading "How may I nominate director candidates for consideration at a meeting?". To be in proper written form, such notice must set forth the nominee's name, age, business, and residential address, and principal occupation or employment for the past five (5) years, their direct or indirect beneficial ownership in, or control or direction over, any class of securities of the Corporation, including the number or principal amount and such other information on the nominee and the nominating shareholder as set forth in the Articles, which may be obtained in accordance with the instructions below under the heading "How may I obtain financial and other information about
Description of the Corporation's
As of the Record Date, there were 377 shareholders of record holding 18,256,282 Subordinate Voting Shares and 1 shareholder of record holding 20,259 Super Voting Shares.
The Subordinate Voting Shares are "restricted securities" within the meaning of such term under applicable Canadian securities laws. Under Canadian securities laws, a "restricted security" includes an equity security of a reporting issuer if there is another class of securities of the reporting issuer that carries a greater number of votes per security relative to the equity security.
Holders of Subordinate Voting Shares are entitled to notice of and to attend any meeting of the shareholders of the Corporation, except a meeting of which only holders of another particular class of shares of the Corporation have the right to vote. At each such meeting, holders of Subordinate Voting Shares are entitled to one vote in respect of each Subordinate Voting Share held.
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Holders of Super Voting Shares are entitled to notice of and to attend any meeting of the shareholders of the Corporation, except a meeting of which only holders of another particular class of shares of the Corporation have the right to vote. At each meeting of shareholders, holders of Super Voting Shares are entitled to 1,000 votes per share.
Obtaining Additional Information
How may I obtain financial and other information about
Financial and other information is provided in the Corporation's audited consolidated financial statements and management's discussion and analysis for the fiscal year ended
By writing to us, shareholders also may obtain, without charge, a copy of the Articles, Code of Ethics and Business Conduct ("Code of Conduct"), and Board committee charters.
What if I have questions for the Corporation's transfer agent?
If you are a shareholder of record and have questions concerning share certificates, ownership transfer, or other matters relating to your share account, please contact our transfer agent at the following address:
Odyssey
[email protected]
How do I obtain additional copies of this proxy statement or voting materials?
If you need additional copies of this proxy statement or voting materials, please contact us at:
Attn: Corporate Secretary
[email protected]
OVERVIEW OF PROPOSALS TO BE VOTED ON
Proposals 1 and 2 are included in this proxy statement at the direction of our Board. Our Board unanimously recommends that you vote "FOR" the election of the nominees in Proposal 1, and "FOR" the appointment and remuneration of auditors in Proposal 2.
PROPOSAL 1-ELECTION OF DIRECTORS
The Articles provide that the number of directors should not be fewer than three (3) directors. There are currently five directors of the Corporation. At the Meeting, it is proposed to elect five (5) directors.
The Board proposes to nominate at the Meeting each person whose name is set forth in the table below, each to serve as a director of the Corporation until the next annual meeting of shareholders at which the election of directors is considered, or until such person's successor is duly elected or appointed, unless such person resigns, is removed or otherwise ceases to be a director in accordance with the Articles or the BCBCA. The persons named in the accompanying Proxy Instrument intend to vote for the election of such persons at the Meeting, unless otherwise directed. Management does not contemplate that any of the nominees will be unable to serve as a director of the Corporation.
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The following table and the notes thereto set out the name of each of the current directors, each proposed by management to be nominated for election as a director of the Corporation at the Meeting, their respective positions, and the period during which they have been a director of the Corporation.
| Age | Position(s) | Location of Residence | Director Since | |||||
| 50 | Director and Chairperson | |||||||
| 50 | Chief Executive Officer, Interim Chief Financial Officer and Director | |||||||
| 40 | Director | |||||||
|
|
82 | Director | ||||||
| 46 | Director |
Notes:
(1) Member of the Audit Committee.
(2) Member of the
(3) Chair of the Audit Committee.
(4) Chair of the
Biographical Information
The biographies of the proposed nominees for the Board are set out below.
Throughout her career,
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The persons named in the accompanying Proxy Instrument (if named and absent contrary directions) intend to vote the shares represented thereby FOR the election of each of the aforementioned named nominees unless otherwise instructed on a properly executed and validly deposited proxy. Management of the Corporation does not contemplate that any nominees named above will be unable to serve as a director but, if that should occur for any reason prior to the Meeting, the persons named in the enclosed form of proxy reserve the right to vote for another nominee in their discretion.
Replacement or Removal of Directors
To the extent that directors are elected or appointed to fill casual vacancies or vacancies arising from the removal of directors, in both instances whether by shareholders or directors, the directors shall hold office until the remainder of the unexpired portion of the term of the departed director that was replaced.
Advance Notice Provision
Our Articles include an advance notice provision for the nomination for election of directors (the "Advance Notice Provision"). The Advance Notice Provision provides that any shareholder seeking to nominate a candidate for election as a director (a "Nominating Shareholder") at any annual meeting of the shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors, must give timely notice in proper written form.
In order for a nomination made by a Nominating Shareholder to be timely notice (a "Timely Notice"), the Nominating Shareholder's notice must be received by the corporate secretary of the Company at the principal executive offices or registered office of the
To be in proper written form, a Nominating Shareholder's notice to the corporate secretary must comply with all applicable provisions of the Articles and disclose or include, as applicable:
| (a) | as to each person whom the Nominating Shareholder proposes to nominate for election as a director (a "Proposed Nominee"): |
| (i) | the name, age, business, and residential address of the Proposed Nominee; |
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| (ii) | the principal occupation/business or employment of the Proposed Nominee, both presently and for the past five years; |
| (iii) | the number of securities of each class of securities of the Company beneficially owned, or controlled or directed, directly or indirectly, by the Proposed Nominee, as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; |
| (iv) | full particulars of any relationships, agreements, arrangements or understandings (including financial, compensation or indemnity related) between the Proposed Nominee and the Nominating Shareholder, or any affiliates or associates of, or any person or entity acting jointly or in concert with, the Proposed Nominee or the Nominating Shareholder; |
| (v) | any other information that would be required to be disclosed in a dissident proxy circular or other filings required to be made in connection with the solicitation of proxies for election of directors pursuant to the BCBCA or applicable securities law; and |
| (vi) | written consent of each Proposed Nominee to be named as a nominee and certifying that such Proposed Nominee is not disqualified from acting as a director under the provisions of subsection 124(2) of the BCBCA; and |
| (b) | as to each Nominating Shareholder giving the notice, and each Beneficial Owner, if any, on whose behalf the nomination is made: |
| (i) | their name, business, and residential address; |
| (ii) | the number of securities of the Company or any of its subsidiaries beneficially owned, controlled, or directed (directly or indirectly) by the Nominating Shareholder or any other person with whom the Nominating Shareholder is acting jointly or in concert with respect to the Company or any of its securities, as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; |
| (iii) | their interests in, or rights or obligations associated with, any agreement, arrangement, or understanding, the purpose or effect of which is to alter, directly or indirectly, the person's economic interest in a security of the Company or the person's economic exposure to the Company; |
| (iv) | any relationships, agreements, or arrangements, including financial, compensation, and indemnity related relationships, agreements, or arrangements, between the Nominating Shareholder or any affiliates or associates of, or any person or entity acting jointly or in concert with, the Nominating Shareholder and any Proposed Nominee; |
| (v) | full particulars of any proxy, contract, relationship arrangement, agreement, or understanding pursuant to which such person, or any of its affiliates or associates, or any person acting jointly or in concert with such person, has any interests, rights, or obligations relating to the voting of any securities of the Company or the nomination of directors to the Board; |
| (vi) | a representation that the Nominating Shareholder is a holder of record of securities of the Company, or a Beneficial Owner, entitled to vote at such meeting, and intends to appear in person or by proxy at the meeting to propose such nomination; |
| (vii) | a representation as to whether such person intends to deliver a proxy circular or form of proxy to any shareholder of the Company in connection with such nomination or otherwise solicit proxies or votes from shareholders of the Company in support of such nomination; and |
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| (viii) | any other information relating to such person that would be required to be included in a dissident proxy circular or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to the BCBCA or as required by applicable securities law. |
The chair of the meeting shall have the power to determine whether a nomination was made in accordance with the notice procedures set forth in the Articles and, if any proposed nomination is not in compliance with such provisions, must declare that such defective nomination will be disregarded.
Notwithstanding the foregoing, the Board may, in its sole discretion, waive any requirement in the Advance Notice Provision.
As of the date of this proxy statement, the Corporation has not received any nominations under the Advance Notice Provision.
Corporate Cease
To the Corporation's knowledge, no proposed director is, as at the date of this proxy statement, or has been, within the ten (10) years prior to the date of this proxy statement, a director, chief executive officer, or chief financial officer of any company (including the Corporation) that: (i) while that person was acting in that capacity was the subject of a cease trade order or similar order, or an order that denied the relevant company access to any exemption under securities legislation (an "Order") for a period of more than thirty (30) consecutive days; or (ii) after that person ceased acting in that capacity, was subject to an Order, which resulted from an event that occurred while that person was acting in the capacity of director, chief executive officer, or chief financial officer.
To the Corporation's knowledge, no proposed director is, as at the date of this proxy statement, or has been, within the ten (10) years prior to the date of this proxy statement, a director or executive officer of any company (including the Corporation) that while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver, receiver-manager, or trustee appointed to hold its assets.
To the Corporation's knowledge, no proposed director has, during the ten (10) years prior to the date of this proxy statement, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became subject to or instituted any proceedings, arrangement, or compromise with creditors, or had a receiver, receiver-manager, or trustee appointed to hold assets of the proposed director.
To the Corporation's knowledge, no proposed director has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for the proposed director.
Indebtedness of Directors, Executive Officers, and Employees
None of (i) the individuals who are, or at any time since the beginning of the last fiscal year of the Corporation were, a director or executive officer of the Corporation, (ii) the proposed nominees for election as a director of the Corporation, or (iii) any associates of the foregoing persons, is or at any time since the beginning of the most recently completed fiscal year of the Corporation has been, indebted to the Corporation or any of its subsidiaries or is a person whose indebtedness to another entity is, or at any time since the beginning of the most recently completed fiscal year of the Corporation has been, the subject of a guarantee, support agreement, letter of credit, or other similar arrangement or understanding provided by the Corporation or any of its subsidiaries.
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Requirements under the Business Corporations Act (
Pursuant to the BCBCA, directors and officers are required to act honestly and in good faith with a view to the best interests of the Corporation. Under the BCBCA, subject to certain limited exceptions, a director who holds a disclosable interest in a material contract or transaction into which we have entered or propose to enter shall not vote on any directors' resolution to approve the contract or transaction. A director or executive officer has a disclosable interest under the BCBCA in a material contract or transaction if the director or executive officer:
| · | has a material interest in the contract or transaction; |
| · | is a director or executive officer of a party who has a material interest in the contract or transaction; or |
| · | has a material interest in a party who has a material interest in the contract or transaction. |
Generally, as a matter of practice, directors or officers who have disclosed a material interest in any contract or transaction that the Board is considering will not take part in any Board discussion respecting that contract or transaction. If such directors were to participate in the discussions, they would abstain from voting in accordance with the BCBCA on any matters relating to matters in which they have disclosed a disclosable interest under the BCBCA.
Interests of Certain Persons in Matters to be Acted Upon
Other than the election of directors, management of the Corporation is not aware of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, of any person who has been a director or executive officer of the Corporation at any time since the beginning of the Corporation's last fiscal year or who is proposed to be a director of the Corporation or of any associate or affiliate of any such persons, in any matter to be acted upon at the Meeting.
Interests of Management of the Corporation and Others in Material Transactions
Other than as described elsewhere in this proxy statement, there are no material interests, direct or indirect, of any of our directors or executive officers, any shareholder that beneficially owns, or controls or directs, directly or indirectly, more than 10% of the voting rights attached to all outstanding voting securities of the Corporation, any director or executive officer of any such shareholder or any associate or affiliate of any of the foregoing persons, in any transaction since the commencement of the Corporation's most recently completed fiscal year or in any proposed transaction which in either such case has materially affected or would materially affect the Corporation or any of its subsidiaries on a consolidated basis.
OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE NOMINEES IN PROPOSAL 1.
PROPOSAL 2-APPOINTMENT AND REMUNERATION OF AUDITORS
The members of our Audit Committee and our Board believe the appointment of GreenGrowth CPAs as our independent registered public accounting firm is in the best interests of the Corporation and our shareholders. GreenGrowth CPAs has been the independent registered public accounting firm of the Corporation since
Principal Independent Accountant Fees and Services
Aggregate fees billed by GreenGrowth CPAs for the years ended
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| 2023($) | 2022($) | |||||||
| Audit Fees (1) | 129,560 | 129,560 | ||||||
| Audit-Related Fees | - | - | ||||||
| Tax Fees | - | - | ||||||
| All Other Fees | - | - | ||||||
| Total Fees Paid | 129,560 | 129,560 |
Note:
(1) Fees for audit service on an accrual basis.
Pre-Approval of Non-Audit Services
The Audit Committee will pre-approve the appointment of the independent auditor for any non-audit service to be provided to the Corporation. Before the appointment of the independent auditor for any non-audit service, the Audit Committee will consider the compatibility of the service with the independent auditor's independence. The Audit Committee may pre-approve the appointment of the independent auditor for any non-audit services by adopting specific policies and procedures, from time to time, for the engagement of the independent auditor for non-audit services. Such policies and procedures will be detailed as to the particular service, and the Audit Committee must be informed of each service, and the procedures may not include delegation of the Audit Committee's responsibilities to management. In addition, the Audit Committee may delegate to one or more members the authority to pre-approve the appointment of the independent auditor for any non-audit service to the extent permitted by applicable law provided that any pre-approvals granted pursuant to such delegation shall be reported to the Audit Committee at its next scheduled meeting.
Audit Committee Report
The material in this report is not "soliciting material," is not deemed "filed" with the
The primary purpose of the Audit Committee is to assist the Board in fulfilling its responsibilities for oversight of financial, audit and accounting matters. In addition, the Audit Committee reviews the financial reports and other financial information provided by the Corporation to regulatory authorities and its shareholders and reviews the Corporation's system of internal controls regarding finance and accounting, including auditing, accounting and financial reporting processes.
The Audit Committee has reviewed and discussed the audited financial statements of the Company for the fiscal year ended
Based on these reviews and discussions, the Audit Committee recommended to the Board that such audited financial statements be included in the Corporation's Annual Report for the year ended
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Audit Committee of the Board
OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE APPOINTMENT AND REMUNERATION OF OUR AUDITORS IN PROPOSAL 2.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The tables below sets forth information with respect to the beneficial ownership of our Super Voting Shares and Subordinate Voting Shares as of the Record Date by:
| · | each person or entity known by us to own beneficially more than 5% of our outstanding Subordinate Voting Shares; |
| · | each of our directors and executive officers individually; and |
| · | all of our executive officers and directors as a group. |
The Super Voting Shares carry 1,000 votes per share. The Subordinate Voting Shares carry one vote per share. As of the Record Date, the Subordinate Voting Shares represented approximately 47.3% of the voting power of our outstanding voting securities and approximately 51.3% of the voting power of our voting securities on a fully diluted basis, and the Super Voting Shares represented approximately 52.7% of the voting power of our outstanding voting securities and approximately 48.7% of the voting power of our voting securities on a fully diluted basis. Fully diluted calculations take into account Subordinate Voting Shares issuable upon the exercise of outstanding warrants and options and Subordinate Voting Shares subject to unvested restricted stock units.
The Super Voting Shares are held by
To our knowledge, except as discussed above, none of the shares listed below are held under a voting trust or similar agreement, except as noted. To our knowledge, there is no arrangement, including any pledge by any person of our securities or any of our parents, the operation of which may at a subsequent date result in a change in control of our company. Unless otherwise noted below, the address of each other person listed on the table is c/o
Beneficial ownership is determined in accordance with the rules of the
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To the knowledge of the directors and officers of the Corporation, except as set out below, no person beneficially owns or exercises control over, directly or indirectly, voting securities carrying 10% or more of the voting rights attached to any class of voting securities of the Corporation as of the Record Date:
Super Voting Shares
| Super Voting Shares Beneficially Owned | Percentage of Super Voting Shares Beneficially Owned (%) | |||||||
| 20,259 | 100.00 | % | ||||||
Subordinate Voting Shares
| Subordinate Voting Shares Beneficially Owned | Percentage of Subordinate Voting Shares Beneficially Owned (%) | |||||||
| Directors and Named Executive Officers: | ||||||||
| 332,500 | 1.80 | % | ||||||
| 356,976 | 1.93 | % | ||||||
| 261,144 | 1.43 | % | ||||||
| 45,000 | * | |||||||
| 42,500 | * | |||||||
| All executive officers and directors as a group (5 persons) | 1,038,120 | 5.45 | % | |||||
| 5% or Greater Stockholders: | ||||||||
| Beehouse Entities (6) | 2,960,068 | 16.31 | % | |||||
| 2,965,068 | 16.34 | % | ||||||
| 1,072,000 | 5.86 | % | ||||||
| 1,226,880 | 6.74 | % | ||||||
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Notes:
| * | Represents beneficial ownership of less than 1%. |
| (1) | Consists of Subordinate Voting Shares issuable upon the exercise of options held by |
| (2) | Consists of 101,976 Subordinate Voting Shares issuable upon redemption of Indus Redeemable Shares and 255,000 Subordinate Voting Shares issuable upon the exercise of options held by |
| (3) | Includes 46,000 Subordinate Voting Shares issuable upon redemption of Indus Redeemable Shares and 25,000 Subordinate Voting Shares issuable upon the exercise of options held by |
| (4) | Consists of Subordinate Voting Shares issuable upon the exercise of options held by |
| (5) | Consists of Subordinate Voting Shares issuable upon the exercise of options held by |
| (6) | Consists of 673,904 Subordinate Voting Shares held by |
| (7) | Consists of the Subordinate Voting Shares beneficially owned by the Beehouse Entities and 5,000 Subordinate Voting Shares held by |
| (8) | Consists of 675,454 outstanding Subordinate Voting Shares and 85,000 Subordinate Voting Shares issuable upon the exercise of warrants held by |
| (9) | Includes 50,000 Subordinate Voting Shares issuable upon the exercise of warrants. |
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SECURITY-BASED COMPENSATION ARRANGEMENTS
The following table provides information as of
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a) |
Weighted average exercise price of outstanding options, warrants, and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||||
| Equity compensation plans approved by stockholders (1) | 2,335,052 | $ | 7.94 | 1,113,193 | ||||||||
| Equity compensation plans not approved by stockholders | - | - | - |
Note:
(1) In connection with the RTO, the Company assumed the 2016 stock incentive plan of
GOVERNANCE
Board of Directors
Our business and affairs are managed, and all corporate powers are exercised, under the direction of our Board. Our Board establishes fundamental corporate policies and oversees our performance and the performance of our Chief Executive Officer and the other officers to whom our Board has delegated authority to manage day-to-day business operations.
The following table provides information with respect to our directors:
| Age | Position | |||
| 50 | Director and Chairperson | |||
| 50 | Chief Executive Officer, Interim Chief Financial Officer and Director | |||
| 40 | Director | |||
| 82 | Director | |||
| 46 | Director |
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Code of Conduct
The Board has adopted a Code of Ethics and Business Conduct (the "Code of Conduct") for directors, officers, and employees. The Code of Conduct is available on our website at https://ir.lowellfarms.com/corporate-governance/governance-documents. In addition, the Code of Conduct has been filed on, and is accessible through,
The Board expects its directors, officers, and employees to act ethically at all times and to acknowledge their adherence to the policies comprising the Code of Conduct. Any material issues regarding compliance with the Code of Conduct are required to be brought forward by management at either the Board or appropriate Board committee meetings or are referred to the executive officers of the Company, as may be appropriate in the circumstances. The Board or appropriate committee or executive officers determine what remedial steps, if any, are required. Any waivers from the Code of Conduct that are granted for the benefit of a director or executive officer may be granted only by the Board (or a committee thereof, as designated by the Board). No material waiver has ever been granted under the Code of Conduct.
Each director of the Corporation must disclose all actual or potential conflicts of interest and refrain from voting on matters in which such director has a conflict of interest. In addition, the director must excuse themselves from any discussion or decision on any matter in which the director is precluded from voting as a result of a conflict of interest.
Our Articles provide that the quorum necessary for the transaction of the business of the Board is a majority of the number of directors in office or such greater number as the directors may determine from time to time.
The Canadian Securities Administrators has issued corporate governance guidelines pursuant to Canadian National Policy 58-201- Corporate Governance Guidelines (the "Corporate Governance Guidelines"), together with certain related disclosure requirements pursuant to Canadian National Instrument 58-101-Disclosure of Corporate Governance Practices ("NI 58-101"). The Corporate Governance Guidelines are recommended as "best practices" for issuers to follow. We recognize that good corporate governance plays an important role in our overall success and in enhancing shareholder value. Accordingly, we have adopted certain corporate governance policies and practices that reflect our consideration of the recommended Corporate Governance Guidelines.
Role of the Board of Directors
Our Board is responsible for the stewardship of the Corporation and managing and supervising the management of our business and affairs, including providing guidance and strategic oversight to management. Our Board has the authority to exercise all such powers of the Corporation as are not, by the BCBCA or by our Articles, required to be exercised by the shareholders of the Corporation.
Board Leadership
The positions of Chairperson of the Board and Chief Executive Officer are held by different individuals:
Risk Oversight
Our Board is responsible for the general oversight of risks that affect us and oversees our enterprise risk management. Our Board receives regular reports on our operations from our Chief Executive Officer and other members of management. Our Board reviews these reports and makes inquiries in their business judgment.
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Our Board also fulfills its oversight role through two committees, the Audit Committee and the
Director Independence
Our Board of Directors includes
None of the directors are presently directors of other reporting issuers.
Orientation and Continuing Education
Each new director is given an outline of the nature of the Corporation's business, its corporate strategy and current issues within the Corporation. New directors are also required to meet with management of the Corporation to discuss and better understand the Corporation's business and are given the opportunity to meet with counsel to the Corporation to discuss their legal obligations as director of the Corporation.
In addition, management of the Corporation takes steps to ensure that its directors and officers are continually updated as to the latest corporate and securities policies which may affect the directors, officers and committee members of the Corporation as a whole. The Corporation continually reviews the latest securities rules and stock exchange policies. Any changes or new requirements are then brought to the attention of the Corporation's directors either by way of director or committee meetings or by direct communications from management to the directors.
Ethical Business Conduct
The Board has found that the fiduciary duties placed on individual directors by the Corporation's governing corporate legislation and the common law and the restrictions placed by applicable corporate legislation on an individual director's participation in decisions of the Board in which the director has an interest have been sufficient to ensure that the Board operates independently of management and in the best interests of the Corporation. Further, the Corporation's auditor has full and unrestricted access to the Audit Committee at all times to discuss the audit of the Corporation's financial statements and any related findings as to the integrity of the financial reporting process.
Nomination of Directors
Please refer to "- Board Committees -
Assessments
The Board monitors the adequacy of information given to directors, communication between the Board and management and the strategic direction and processes of the Board and committees.
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Certain Relationships and Related Transactions
The following includes a summary of transactions during our fiscal years ended
2022
Certain officers and directors purchased
During
2023
On
On
| · | The Company repurchased, and terminated upon such repurchase, all of the outstanding convertible debentures and the related warrants described above. |
| · | Each holder of convertible debentures received as the purchase price therefor, such holder's pro rata share, based on the proportion of the outstanding convertible debentures held by such holder, of (x) membership interests in BrandCo, to which the Company's intellectual property relating to its "Lowell Smokes" and " |
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| · | The Company entered into a license agreement with BrandCo for the "Lowell" trademarks, logos, and related intellectual property on an exclusive basis in the |
| · | The voting agreement of the Company, pursuant to which the former holders of the convertible debentures were entitled to nominate three out of seven members of the Company's board of directors and consent to the nomination of a fourth, and certain contractual operating covenants in favor of the former convertible debenture holders, was terminated. |
The transaction was considered to be a "related party transaction" pursuant to Multilateral Instrument 61-101 - Protection of Minority Shareholders in Special Transactions ("MI 61-101") of the Canadian Securities Administrators because insiders of the Company held convertible debentures and warrants. The Company was exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the transaction in reliance on Sections 5.5(b) and 5.7(1)(e) of MI 61-101.
Board and Committee Meetings; Executive Sessions
At regularly scheduled board and committee meetings, directors review and discuss management reports regarding our performance, prospects, and plans, as well as significant opportunities and immediate issues facing us. At least once a year, our Board also reviews management's long-term strategic and financial goals. The Chair, in consultation with the committee chairs and other directors, as appropriate, establishes the agenda for meetings of the Board. Committee agendas and schedules are set by or in consultation with the committee chair. During the year ended
Board Attendance at Annual Meeting of Shareholders
The Board's unwritten policy regarding director attendance at the annual meeting of shareholders is that directors are encouraged to attend. A majority of the Board attended the 2023 annual meeting of shareholders.
Board Committees
Audit Committee
Our Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee is appointed annually by the Board to assist the Board in fulfilling its oversight responsibilities relating to:
| · | the quality and integrity of the Corporation's financial statements; |
| · | the Corporation's compliance with legal and regulatory requirements; |
| · | the qualifications and independence of the independent registered public accounting firm (the "Independent Auditors"); |
| · | the oversight and performance of the Corporation's internal audit function and the Independent Auditors; and |
| · | any other matters delegated to the Committee by the Board. |
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As further described in the Audit Committee Charter, the Committee's primary duties and responsibilities relate to:
| · | maintenance by management of the reliability and integrity of the accounting policies and financial reporting and financial disclosure practices of the Corporation; |
| · | establishment and maintenance by management of processes to assure that an adequate system of internal controls is functioning within the Corporation; and |
| · | retention and termination of the Independent Auditors. |
Our Audit Committee currently consists of
| Independent(1) | Financially Literate(2) | |||
| Yes | Yes | |||
| Yes | Yes | |||
| No | Yes |
Notes:
| (1) | A member of the Audit Committee is independent if they have no direct or indirect 'material relationship' with the Corporation. A material relationship is a relationship that could, in the view of the Board, reasonably interfere with the exercise of a member's independent judgment. An executive officer of the Corporation, such as the Chief Executive Officer, is deemed to have a material relationship with the Corporation. |
| (2) | A member of the Audit Committee is financially literate if they have the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation's financial statements. |
| (3) |
The education and experience of each member of the Audit Committee that is relevant to the performance of their responsibilities as a member of the Audit Committee is described above under the heading "Proposal 1-Election of Directors."
Our Board has adopted a written charter for the Audit Committee, which sets out the Audit Committee's responsibilities, consistent with the Canadian National Instrument 52-110 - Audit Committees ("NI 52-110") a current copy of which is available on our website at https://ir.lowellfarms.com/corporate-governance/governance-documents. The Audit Committee has access to all books, records, facilities, and personnel and may request any information about us as it may deem appropriate. It has the authority to retain and compensate special legal, accounting, financial, and other consultants or advisors to advise the Audit Committee.
Both our independent auditors and internal financial personnel regularly meet privately with the Audit Committee and have unrestricted access to this committee. At no time since the commencement of the Corporation's most recently completed fiscal year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board. Our Audit Committee held four meetings during the year ended
The Corporation is a "venture issuer" as defined in NI 52-110 and as such is exempt from the requirements of Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110.
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| · | the Company's overall approach to corporate governance; |
| · | subject to the requirements of the Voting Agreement, the size, composition, and structure of the Board and its committees; |
| · | executive and director compensation; |
| · | executive compensation disclosure; |
| · | management development and succession; |
| · | orientation and continuing education for directors; |
| · | subject to the requirements of the Voting Agreement, identifying and recommending new director nominees; |
| · | promotion of a culture of integrity throughout the Company; |
| · | related party transactions and other matters involving conflicts of interest; and |
| · | any additional matters delegated to the |
Subject to the requirements of the Voting Agreement, the
| · | competencies, skills, and personal qualities that the Board considers to be necessary for the Board, as a whole, to possess; |
| · | competencies, skills, and personal qualities that the Board considers each existing director to possess; |
| · | competencies, skills, and personal qualities that each new director would bring to the Board; and |
| · | responsibilities that would materially interfere with or be incompatible with Board membership. |
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Subject to the requirements of the Voting Agreement, the
The Board has adopted a written charter setting forth the purpose, composition, authority, and responsibility of our
Our
Other Board Committees
The Board has no committees other than the Audit Committee and the
Communications with the Board of Directors
Shareholders and other interested parties may contact any member (or all members) of our Board (including, without limitation, the non-management directors as a group), any committee of our Board, or the chair of any such committee. Written correspondence may be sent to our Board, any committee, or any individual director, c/o Corporate Secretary,
EXECUTIVE OFFICERS
The following table provides information concerning our executive officers:
| Age | Position | |||
| 50 | Chief Executive Officer, Interim Chief Financial Officer and Director |
Note:
(1) Effective as of
Biographical Information
The biography of
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 requires that the Company's directors, executive officers and persons who beneficially own 10% or more of the Company's common stock file with the
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EXECUTIVE COMPENSATION
Compensation of Named Executive Officers
The Corporation's compensation practices are intended to retain, motivate and reward its executive officers for their performance and contribution to the Corporation's success. Executive officers may be compensated through some combination of cash and equity or equity-linked incentives, both short and long-term in nature. To date, compensation of executive officers, including the NEOs, has been determined by way of negotiation with such officers.
We are an "emerging growth company," as that term is used in the JOBS Act, and have elected to comply with the reduced compensation disclosure requirements available to emerging growth companies under the JOBS Act.
Summary Compensation Table
The following table provides the compensation paid to our principal executive officer and other executive officers whose total compensation exceeded
| Stock | Option | Nonequity Incentive Plan |
Nonqualified Deferred Compensation |
|||||||||||||||||||||||||||||
| Year | Salary | Bonus | Awards | Awards | Compensation | Earnings | Total | |||||||||||||||||||||||||
| 2023 | $ | 248,269 | $ | - | - | $ | 19,753 | $ | - | $ | - | $ | 268,022 | |||||||||||||||||||
| Chief Executive Officer and Interim Chief Financial Officer | 2022 | $ | 223,845 | $ | - | $ | - | $ | 24,418 | $ | - | $ | - | $ | 248,263 | |||||||||||||||||
| 2023 | $ | 24,800 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 24,800 | ||||||||||||||||||
| Former Chief Financial Officer | 2022 | $ | 55,095 | $ | - | $ | - | $ | 32,509 | $ | - | $ | - | $ | 87,604 | |||||||||||||||||
| 2023 | $ | 137,308 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 137,308 | ||||||||||||||||||
| Former Interim Chief Financial Officer |
______________
| (1) |
Effective as of |
| (2) | Departed the Company as of |
| (3) | Appointed Interim CFO as of |
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Executive Employment Agreements
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information regarding equity-based awards held by our named executive officers as of
| Option Awards | ||||||||||||||
| Number of | Number of | |||||||||||||
| Securities | Securities | |||||||||||||
| Underlying | Underlying | |||||||||||||
| Unexercised | Unexercised | Option | Option | |||||||||||
| Option (#) | Option (#) | Exercise | Expiration | |||||||||||
| Exercisable | Unexercisable | Price ($) | Date | |||||||||||
| 3,750 | 1,250 | $ | 8.50 | |||||||||||
| 46,875 | 3,125 | $ | 3.46 | |||||||||||
| 10,625 | 9,375 | 3.08 | ||||||||||||
| 11,250 | 11,250 | 0.82 | ||||||||||||
| 175,000 | - | 0.30 | ||||||||||||
| 6,250 | 18,750 | $ | 2.31 | |||||||||||
| 2,500 | 7,500 | 0.82 | ||||||||||||
| 7,500 | - | $ | 3.08 | |||||||||||
| 7,500 | - | 0.82 |
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Stock Option Plan and Other Incentive Plans
Equity Incentive Plan
The Corporation has adopted the Equity Incentive Plan, which was approved by its shareholders at the special meeting of shareholders held on
Purpose
The purpose of the Equity Incentive Plan is to promote the interests of the Corporation and its Shareholders by aiding the Corporation in attracting and retaining employees, officers, consultants, advisors and nonemployee directors capable of assuring the future success of the Corporation, to offer such persons incentives to put forth maximum efforts for the success of the Corporation's business and to compensate such persons through various stock and cash-based arrangements and provide them with opportunities for stock ownership in the Corporation, thereby aligning the interests of such persons with the Shareholders.
The Equity Incentive Plan permits the grant of (i) nonqualified stock options ("NQSOs") and incentive stock options ("ISOs") (collectively, "Options"), (ii) restricted stock awards, (iii) restricted stock units ("RSUs"), (iv) stock appreciation rights ("SARs"), (v) performance compensation awards ("Performance Awards"), (vi) payments (in cash, Subordinate Voting Shares, other securities, other awards or other property) equivalent to the amount of cash dividends paid by the Corporation to holders of Subordinate Voting Shares with respect to a number of Shares determined by the
Eligibility
Any of the Corporation's employees, officers, directors, consultants, independent contractors or advisors providing services to the Corporation or any of its affiliates, or any such person to whom an offer of employment or engagement with the Corporation or any of its affiliates is extended, are eligible to participate in the Equity Incentive Plan (the "Participants"). The basis of participation of an individual under the Equity Incentive Plan, and the type and amount of any Award that an individual will be entitled to receive under the Equity Incentive Plan, will be determined by the
The maximum number of Subordinate Voting Shares that may be issued under all Awards under the Equity Incentive Plan is 2,322,593 Subordinate Voting Shares. The maximum number of Subordinate Voting Shares that may be issued pursuant to ISOs is 600,000 Subordinate Voting Shares. Any shares subject to an Award under the Equity Incentive Plan that are forfeited, cancelled, expire unexercised, are reacquired by the Corporation, are settled in cash, or are used or withheld to satisfy tax withholding obligations of a Participant shall again be available for Awards under the Equity Incentive Plan.
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In the event of any dividend (other than a regular cash dividend) or other distribution (whether in the form of cash, Subordinate Voting Shares, other securities or other property), recapitalization, forward or reverse stock split, reorganization, merger, consolidation, split-up, split-off, combination, repurchase or exchange of Subordinate Voting Shares or other securities of the Corporation, issuance of warrants or other rights to acquire Subordinate Voting Shares or other securities of the Corporation, or other similar corporate transaction or event, which affects the Subordinate Voting Shares, the
If and so long as the Corporation is listed on the CSE (as is currently the case), the aggregate number of Subordinate Voting Shares issued or issuable to persons providing investor relations activities (as defined in CSE policies) as compensation within a one-year period, shall not exceed 1% of the total number of Subordinate Voting Shares then outstanding.
Awards
Options
Under the terms of the Equity Incentive Plan, unless the
Options granted under the Equity Incentive Plan will be subject to such terms, including the exercise price and the conditions and timing of exercise, as may be determined by the
Restricted Stock
A restricted stock award is a grant of Subordinate Voting Shares, which are subject to such restrictions as the
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RSUs
An RSU is a unit evidencing the right to receive a Subordinate Voting Share (or a cash payment equal to the fair market value of a Subordinate Voting Share) at some future date, provided that in the case of Participants who are liable to taxation under the Income Tax Act (
Stock Appreciation Rights
An SAR entitles the recipient to receive, upon exercise of the SAR, the excess of (i) the fair market value of one Subordinate Voting Share on the date of exercise over (ii) the grant price of the SAR as specified by the
Performance Awards
Participants may be granted Performance Awards that may be denominated or payable in cash, Subordinate Voting Shares (including, without limitation, restricted stock and RSUs), other securities, other Awards or other property. Performance Awards granted under the Equity Incentive Plan confer on the holder thereof the right to receive payments, in whole or in part, upon the achievement of one or more objective performance goals during such performance periods as the
Dividend Equivalents
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Other
General
Awards may be granted for no cash consideration or for any cash or other consideration as may be determined by the
No Option (or, if applicable, SARs) shall be exercisable, no Subordinate Voting Shares shall be issued, no certificates for Subordinate Voting Shares shall be delivered and no payment shall be made under the Equity Incentive Plan except in compliance with all applicable laws.
The Board may amend, alter, suspend, discontinue or terminate the Equity Incentive Plan and the
No award agreement may accelerate the exercisability of any Award or the lapse of restrictions relating to any Award in connection with a change in control event, unless such acceleration occurs upon the consummation of (or effective immediately prior to the consummation of, provided that the consummation subsequently occurs) such change in control event.
In the event of any reorganization, merger, consolidation, split-up, spin-off, combination, plan of arrangement, take-over bid or tender offer, repurchase or exchange of Subordinate Voting Shares or other securities of the Corporation or any other similar corporate transaction or event involving the Corporation (or the Corporation shall enter into a written agreement to undergo such a transaction or event), the
| · | termination of the Award, whether or not vested, in exchange for cash and/or other property, if any, equal to the amount that would have been attained upon the exercise of the vested portion of the Award or realization of the Participant's vested rights, |
| · | replacement of the Award with other rights or property selected by the |
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| · | assumption of the Award by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices, |
| · | that the Award shall be exercisable or payable or fully vested with respect to all Subordinate Voting Shares covered thereby, notwithstanding anything to the contrary in the applicable award agreement, or |
| · | that the Award cannot vest, be exercised or become payable after a date certain in the future, which may be the effective date of the event. |
To the full extent permitted by law, the members of the Board, the
Tax Withholding
The Corporation may take such action as it deems appropriate to ensure that all applicable federal, state, local and/or foreign payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from such Participant.
Legacy Incentive Plan
Pursuant to and upon completion of the RTO, the Corporation assumed the obligations under the Options outstanding at such time issued by
Purpose
The purpose of the Legacy Incentive Plan is to attract, retain, reward and motivate eligible individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Corporation and to incentivize them to expend maximum effort for the growth and success of the Corporation, so as to strengthen the mutuality of the interests between the eligible individuals and the shareholders of Indus.
Eligibility
If the outstanding Subordinate Voting Shares are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities by reason of any recapitalization, reclassification, reorganization, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in shares of Indus or other increase or decrease in such shares effected without receipt of consideration by Indus, an appropriate and proportionate adjustment shall be made by the
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Options
Each Option granted under the Legacy Incentive Plan may be designated by the
Subject to the limitations set forth in the Legacy Incentive Plan relating to ISOs, Options granted under the Legacy Incentive Plan and all rights to purchase Subordinate Voting Shares thereunder shall terminate no later than the tenth anniversary of the grant date of such Options, or on such earlier date as may be stated in the award agreement relating to such Option. In the case of Options expiring prior to the tenth anniversary of the grant date, the
No Options may be exercised prior to the satisfaction of the conditions and vesting schedule provided for in the Legacy Incentive Plan and in the award agreement relating thereto. Unless otherwise provided in the award agreement, 25% of the Options shall vest on each anniversary of the grant date, and there shall be no proportionate or partial vesting in the periods between the vesting dates and all vesting shall occur only on the aforementioned vesting dates.
Payment of the exercise price for the Subordinate Voting Shares purchased pursuant to the exercise of an Option shall be made by (i) cash, certified or cashier's check, bank draft or money order or (ii) any other method which the
Unless otherwise provided in an award agreement, upon the termination of the employment or other service of a participant with the Corporation for any reason, all of the participant's outstanding Options (whether vested or unvested) shall be subject to the rules of the Legacy Incentive Plan. Upon such termination, the participant's unvested Options shall expire. Notwithstanding anything in the Legacy Incentive Plan to the contrary, the
If a participant's termination of employment or other service is for any reason other than death, disability, cause or a voluntary termination within ninety (90) days after occurrence of an event which would be grounds for termination of employment or other service by the Corporation for cause, any Option held by such participant may be exercised, to the extent exercisable at termination, by the participant at any time within a period not to exceed ninety (90) days from the date of such termination, but in no event after the termination of the Option pursuant to its terms that are unrelated to termination of service. If a participant dies while in the employment or other service of the Corporation, any Option held by such participant may be exercised, to the extent exercisable at termination, by the participant's estate or the devisee named in the participant's valid last will and testament or the participant's heir at law who inherits the Option, at any time within a period not to exceed one hundred eighty (180) days after the date of such participant's death, but in no event after the termination of the Option pursuant to its terms that are unrelated to termination of service. In the event the termination is for cause or is a voluntary termination within ninety (90) days after occurrence of an event which would be grounds for termination of employment or other service by the Corporation for cause (without regard to any notice or cure period requirement), any Option held by the participant at the time of such termination shall be deemed to have terminated and expired upon the date of such termination.
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Change in Control
Upon the occurrence of a change in control of the Corporation, the
Right of Repurchase
Unless otherwise provided in an award agreement, Indus shall have the right to repurchase the Subordinate Voting Shares issued with respect to any participant, following such participant's termination of employment and service with the Corporation for any reason. The price for repurchasing the Subordinate Voting Shares shall be equal to the fair market value of the Subordinate Voting Shares, as determined on the day of such termination. Should Indus fail to exercise such repurchase right within one hundred and eighty (180) days following the later of (i) the date of such participant's termination of employment or service; or (ii) the date Subordinate Voting Shares are issued to the participant, Indus shall be deemed to have waived such right.
General
All awards granted pursuant to the Legacy Incentive Plan are to be evidenced by an award agreement. The terms of each award agreement need not be identical for eligible individuals provided that each award agreement shall comply with the terms of the Legacy Incentive Plan.
A participant may not transfer an award other than by will or the laws of descent and distribution. Awards may be exercised during the participant's lifetime only by the participant. No award shall be liable for or subject to the debts, contracts, or liabilities of any participant, nor shall any award be subject to legal process or attachment for or against such person. Any purported transfer of an award in contravention of the provisions of the Legacy Incentive Plan shall have no force or effect and shall be null and void, and the purported transferee of such award shall not acquire any rights with respect to such award. Notwithstanding anything to the contrary, the
Subject to the terms and conditions of the Legacy Incentive Plan, the
Other than the Equity Incentive Plan and the Legacy Incentive Plan, the Corporation does not have any incentive or compensation-based security plans under which awards are granted.
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DIRECTOR COMPENSATION
The following table summarizes the compensation paid to our non-employee directors for the year ended
| Stock Awards |
Total | |||||||
| $ | 1,846 | $ | - | |||||
| $ | 4,104 | $ | ||||||
| $ | 36,837 | $ | - | |||||
| $ | 4,104 | $ | ||||||
| $ | 538 | $ | - |
Compensation of Directors
The level of compensation for directors is determined on an ad hoc basis after consideration of various relevant factors, including the expected nature and quantity of duties and responsibilities, past performance, comparison with compensation paid by other issuers of comparable size and stage of development in the cannabis industry, and the availability of financial and other resources of the Corporation.
APPROVAL
The contents and the sending of this proxy statement have been approved by the Board of Directors of the Corporation.
| DATED as of By Order of the Board of Directors |
||
| /s/ |
||
| Chairperson |
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