UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
The information set forth in Item 5.02 of this Current Report on Form 8-K regarding the Employment Agreements (as defined in Item 5.02, below) is incorporated by reference into this Item 1.02.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Scott Garrison as Chief Operating Officer and Taylor Monnig as Chief Technology Officer
Effective May 7, 2024, Scott Garrison has been appointed as the new Chief Operating Officer of CleanSpark, inc. (the "Company"). Mr. Garrison, 59 years of age, was previously Senior Vice President of Growth of the Company, a position he has held since November 2020, and has overseen the construction and launching of the Company's data centers. From March 2013 to November 2021, Mr. Garrison served as President of the Integration Center, a company which delivers technology solutions to businesses around the world by bringing industry-leading companies and ideas under one roof. From January 2017 to December 2019, Mr. Garrison served as President of Global Lighting Supply, a provider of internationally sourced decorative and architectural lighting for hospitality, residential, corporate and commercial environments. Mr. Garrison holds a Class A Certification from PGA of America.
Effective May 7, 2024, Taylor Monnig has been appointed as the new Chief Technology Officer of the Company. Mr. Monnig, 31 years of age, was previously Senior Vice President of Mining Technology of the Company, a position he has held since August 2022, and has overseen the development of the Company's miner performance. From April 2018 to August 2022, Mr. Monnig served as Founder and Chief Operating Officer of TMGcore, a provider of high-performance computing solutions and manufacturer of commercial-grade hardware, specializing in liquid immersion cooling technology. Mr. Monnig holds a Bachelor of Arts degree in Mass Communication and Media Studies from Arizona State University.
Effective May 7, 2024, the Company entered into employment agreements with each of Mr. Garrison (the "Garrison Employment Agreement") and Mr. Monnig (the "Monnig Employment Agreement" and, together with the Garrison Employment Agreement, the "Employment Agreements"). Each Employment Agreement provides for an annual base salary of $335,000 payable according to the Company's normal payroll practices, which amount will be reviewed annually and is subject to adjustment by the Compensation Committee of the Company's Board of Directors. In addition, each of Mr. Garrison and Mr. Monnig (collectively referred to herein as the "Executive Officers") will be entitled to receive (i) an annual discretionary cash bonus equal to 100% of his base salary, paid at the sole discretion of the Company's Compensation Committee on advice from the Company's Chief Executive Officer, and (ii) 100,000 restricted stock units, which will vest in three equal amounts, with one-third vesting on September 30, 2024, and one-third vesting on each of the next two anniversaries of such initial vesting date.
Each Employment Agreement can be terminated (i) with cause by the Company, (ii) by such Executive Officer for any reason upon 30 days advance prior written notice, or (iii) by the Company for any reason (other than for cause) upon 30 days advanced prior written notice.
Furthermore, each Executive Officer, (i) upon termination by the Company for cause or such Executive Officer’s resignation without good reason, shall be entitled to receive the accrued and unpaid portion of his base salary, any reimbursement for business travel and other expenses to which he is entitled under the Employment Agreement and such employee benefits (including equity compensation), if any, to which such Executive Officer may be entitled under the Company’s employee benefit plans as of the date of such Executive Officer’s termination; and (ii) upon termination by the Company without cause or such Executive Officer’s resignation for good reason, (x) upon signing and returning an effective release of claims, shall be entitled to receive severance equal to the sum of one-half plus an additional one-twelfth for each annual period, rounded up, of employment by such Executive Officer at the Company, multiplied by such Executive Officer’s base salary for the year in which the date of such Executive Officer’s termination occurs, which shall be paid within 10 business days following the date of such Executive Officer’s termination, (y) monthly COBRA reimbursement for such Executive Officer and his dependents until the earliest of (A) the twelve-month anniversary of the date of such Executive Officer’s termination, (B) the date such Executive Officer is no longer eligible to receive COBRA continuation coverage and (C) the date on which such Executive Officer becomes eligible to receive substantially similar coverage from another employer or other source and (z) the treatment of any outstanding equity awards shall be determined in accordance with the terms of the Company’s 2017 Incentive Plan, as amended, and such Executive Officer’s applicable award agreements.
The foregoing description of the Employment Agreements does not purport to be complete, and is qualified in its entirety by reference to the complete text of such Employment Agreements, copies of which are filed herewith as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and are incorporated herein by reference.
There is no arrangement or understanding between either Executive Officer and any other person pursuant to which such Executive Officer was appointed as Chief Operating Officer or Chief Technology Officer, as applicable. There are no family relationships between either Executive Officer and any of the Company’s directors, executive officers or persons nominated or chosen by the
Company to become a director or executive officer. Neither of the Executive Officers is a participant in, nor is either Executive Officer to be a participant in, any related-person transaction or proposed related-person transaction required to be disclosed by Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in connection with these appointments.
Item 7.01 Regulation FD Disclosure.
On May 8, 2024, the Company issued a press release announcing the appointment of Mr. Garrison as Chief Operating Officer and of Mr. Monnig as Chief Technology Officer. A copy of this press release is attached hereto as Exhibit 99.1 and is being incorporated herein by reference.
This Current Report on Form 8-K, including Exhibit 99.1 attached hereto, contains forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed in these forward-looking statements.
The information set forth under Item 7.01 of this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such section. The information in Item 7.01 of this Current Report, including Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing, except as expressly set forth by specific reference in such a filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
Description |
10.1 |
Employment Agreement by and between CleanSpark, Inc. and Scott Garrison, dated May 7, 2024. |
10.2 |
Employment Agreement by and between CleanSpark, Inc. and Taylor Monnig, dated May 7, 2024. |
99.1 |
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104 |
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the lnline XBRL document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CLEANSPARK, INC. |
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Date: |
May 8, 2024 |
By: |
/s/ Zachary Bradford |
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Name: Zachary Bradford |
Employment Agreement
This Employment Agreement (the "Agreement") is made and entered into as of May 7, 2024 by and between Scott Garrison (the "Executive") and CleanSpark, Inc., a Nevada domestic corporation (the "Company").
WHEREAS, the Company desires to employ the Executive on the terms and conditions set forth herein; and
WHEREAS, the Executive desires to be employed by the Company on such terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants, promises, and obligations set forth herein, the parties agree as follows:
(a) For each fiscal year of the Employment Term, the Executive shall be eligible to receive an annual bonus (the "Annual Bonus"). However, the decision to provide any Annual Bonus and the amount and terms of any Annual Bonus shall be in the sole and absolute discretion of the Compensation Committee, under advisement by the CEO. The terms established is provided herein at Exhibit A, which Exhibit may be amended from time to time for at the sole discretion of the Compensation Committee on recommendation from the CEO.
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Items 5.1(a)(i) through 5.1(a)(iv) are referred to herein collectively as the "Accrued Amounts."
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To terminate the Executive's employment for Good Reason, the Executive must provide written notice to the Company of the existence of the circumstances providing grounds for termination for Good Reason within 5 business days of the initial existence of such grounds and the Company must have at least 10 business days from the date on which such notice is provided to cure such circumstances. If the Executive does not terminate the Executive's employment for Good Reason within 30 days after the first occurrence of the applicable grounds, then the Executive will be deemed to have waived the Executive's right to terminate for Good Reason with respect to such grounds.
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Notwithstanding any other provision contained herein, all payments made in connection with the Executive's Disability shall be provided in a manner which is consistent with federal and state law.
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For purposes of this Section 6, "Prohibited Activity" is activity in which the Executive contributes the Executive's knowledge, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, agent, employee, partner, director, stockholder, officer, volunteer, intern, or any other similar capacity to an entity engaged in the same or similar business as the Company, including those engaged in the business of server centers or cryptocurrency mining. Prohibited Activity also includes activity that may require or inevitably requires disclosure of trade secrets, proprietary information, or Confidential Information.
Nothing herein shall prohibit the Executive from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided that such ownership represents a passive investment and that the Executive is not a controlling person of, or a member of a group that controls, such corporation.
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This Section 6 does not, in any way, restrict or impede the Executive from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. The Executive shall promptly provide written notice of any such order to the CEO.
The Executive further understands and acknowledges that the Company's ability to reserve these for the exclusive knowledge and use of the Company is of great competitive importance and commercial value to the Company, and that improper use or disclosure by the Executive is likely to result in unfair or unlawful competitive activity. As a condition of the Executive's employment with the Company, the Executive shall enter into and abide by the Company's confidentiality agreements, as may be requested from all executives of the Company, and which may be updated from time to time.
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(a) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year;
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(b) any reimbursement of an eligible expense shall be paid to the Executive on or before the last day of the calendar year following the calendar year in which the expense was incurred; and
(c) any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.
If to the Company:
CleanSpark, Inc.
10624 S Eastern Ave., Ste A-638
Henderson, NV 89052 Attn: Legal
If to the Executive:
[redacted]_______________
The Executive's acceptance of employment with the Company and the performance of the Executive's duties hereunder will not conflict with or result in a violation of, a breach of, or a default under any contract, agreement, or understanding to which the Executive is a party or is otherwise bound.
The Executive's acceptance of employment with the Company and the performance of the Executive's duties hereunder will not violate any non-solicitation, non-competition, or other similar covenant or agreement of a prior employer or third-party.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
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CleanSpark, Inc.
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By /s/ Zachary Bradford Name: Zachary Bradford Title: CEO |
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EXECUTIVE
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Signature: /s/ Scott Garrison Print Name: Scott Garrison |
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Exhibit A: Base Salary, Bonus, or Other Incentive Programs (this schedule may be updated in accordance with the provisions of the Employment Agreement
Base Salary: $335,000 as at Effective Date
Discretionary Bonus: 100% of Base Salary, non-accrued and determined and paid at the sole discretion of the Compensation Committee on advice from CEO. CEO may also grant additional spot bonus’s from time to time based on employee performance, subject to ratification by the Compensation Committee.
Bonus % (if other than discretionary): None. Non-Equity Incentive Plans may be later added, with milestones and key performance indicators at sole discretion of the Compensation Committee under advice from CEO.
Equity incentive plan: 100,000 RSUs – subject to time based vesting conditions. 1/3 will vest annually on September 30, 2024/2025/2026. Employee will also be eligible for the long-term incentive plan(s) that are expected to be put in place in future periods.
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