High Tide Inc 6-K, filed Jun 7, 2023
High Tide Inc. (HITI)
About this 6-K
High Tide Inc filed this 6-K on June 7, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of June 2023
Commission File Number: 001-40258
HIGH TIDE INC.
(Registrant)
11127 - 15 Street N.E., Unit 112
Calgary, Alberta
Canada T3K 2M4
(Address of Principal Executive Offices)
Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☐ Form 40-F ☒
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, thereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
|
|
HIGH TIDE INC. |
||
|
|
|
|
|
(Registrant) |
||
|
|
|
|
|
|||
|
Date: June 6, 2023 |
|
|
|
By |
|
/s/ Raj Grover |
|
|
|
|
|
|
|
Raj Grover |
|
|
|
|
|
|
|
President and Chief Executive Officer |
|
|
|
|
|
|
|
|
EXHIBIT INDEX
| Exhibit | Description of Exhibit | |
|
|
|
|
| 99.1 | Notice of Annual General and Special Meeting of Shareholders | |
| 99.3 | Form of Proxy | |
| 99.4 | Request for Financial Statements | |
Exhibit 99.1
HIGH TIDE INC.
NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS
TAKE NOTICE that the annual general and special meeting (the “Meeting”) of shareholders (the “Shareholders”) of common shares (“Common Shares”) of High Tide Inc. (the “Company”) will be held via live webcast at www.agmconnect.com/hiti2023 at 10:00 a.m. (Calgary time) on July 6, 2023. The Company is conducting an online-only Shareholders’ meeting. You will not be able to attend the Meeting physically.
The Meeting is being held for the following purposes:
| 1. | To receive the audited annual financial statements of the Company for the year ended October 31, 2022, together with the report of the auditor thereon; |
| 2. | To reappoint Ernst & Young LLP as auditor of the Company for the ensuing year and to authorize the board of directors of the Company (the “Board”) to fix the auditor’s remuneration; |
| 3. | To fix the number of directors at five; |
| 4. | To elect directors of the Company for the ensuing year, as more particularly set forth in the accompanying proxy and management information circular for the Meeting (the “Information Circular”); |
| 5. | To consider, and if thought fit, pass an ordinary resolution ratifying and confirming By-Law No. 3 of the Company, as described in the Information Circular; and |
| 6. | To transact such other business as may be properly brought before the Meeting or any adjournment(s) or postponement(s) thereof. |
The specific details of the foregoing matters to be put before the Meeting, as well as further information with respect to voting by proxy, are set forth in the Information Circular.
The record date for the determination of Shareholders entitled to receive notice of and to vote at the Meeting or any adjournment(s) or postponement(s) thereof is May 26, 2023 (the “Record Date”). Shareholders whose names have been entered in the register of Shareholders at the close of business on the Record Date will be entitled to receive notice of and to vote at the Meeting or any adjournment(s) or postponement(s) thereof.
Shareholders who choose to attend the Meeting will do so by following the instructions outlined the chart below. You will be able to access the Meeting using an internet connected device such as a laptop, computer, tablet or mobile phone, and the Meeting platform will be supported across browsers and devices that are running the most updates version of the applicable software plugins. Only registered Shareholders (“Registered Shareholders”) and duly appointed proxyholders (including non-registered (beneficial) Shareholders who have appointed themselves as proxyholder) will be entitled to attend, participate and vote at the meeting.
Notice-and-Access
The Company has elected to use for the Meeting the notice-and-access provisions under National Instrument 54- 101 - Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”) and National Instrument 51- 102 - Continuous Disclosure Obligations (“NI 51-102” and together with NI 54-101, the “Notice-and-Access Provisions”) of the Canadian Securities Administrators (the “CSA”). The Notice-and-Access Provisions are a set of rules developed by the CSA that reduce the volume of materials that must be physically mailed to Shareholders by allowing the Company to post its Information Circular and any additional materials online.
The Information Circular and all additional materials have been posted in full on the Company’s website at www.hightideinc.com/invest, through AGM Connect at www.agmconnect.com/hiti2023, under the Company’s System for Electronic Document Analysis and Retrieval (“SEDAR”) profile at www.sedar.com, and in the Company’s filings with the United States Securities Exchange Commission at www.sec.gov, instead of printing and mailing out paper copies. All Shareholders of record as of the Record Date, will receive a notice and access notification containing instructions on how to access the Information Circular and all additional materials.
Voting and Attending the Meeting
|
VOTING |
IF YOU HAVE RECEIVED PROXY FORM WITH A VOTER ID & MEETING ACCESS CODE FROM AGM CONNECT | IF YOU HAVE RECEIVED A PROXY OR VIF WITH A 16-DIGIT CONTROL NUMBER FROM AN INTERMEDIARY | |
|
Voting Method |
Registered Shareholders (your securities are held in your name in a physical certificate or DRS statement) |
Non-Registered Shareholders (your shares are held with a broker, bank, or other intermediary) |
Non-Registered Shareholders (your shares are held with a broker, bank, or other intermediary) |
|
Internet |
Login to https://app.agmconnect.com Using the Meeting Access Code and Voter ID provided to you complete the form to Submit Proxy |
Go to www.proxyvote.com Enter the 16- digit control number printed on the VIF and follow the instructions on screen | |
|
|
Complete, sign and date the proxy form and email to: voteproxy@agmconnect.com | N/A | |
|
Telephone |
Call 1-855-839-3715 to register your vote for the Meeting |
N/A | |
|
|
Enter your voting instructions, sign, date and return the form to AGM Connect in the enclosed envelope | Enter your voting instructions, sign, date and return completed VIF in the enclosed postage paid envelope | |
|
ATTENDING THE MEETING |
IF YOU HAVE RECEIVED PROXY FROM WITH A VOTER ID AND MEETING ACCESS CODE FROM AGM CONNECT |
IF YOU HAVE RECEIVED A PROXY OR VIF WITH A 16- DIGIT CONTROL NUMBER FROM AN INTERMEDIARY | |
|
Registered Shareholders (your securities are held in your name in a physical certificate or DRS statement) |
Non-Registered Shareholders (your shares are held with a broker, bank, or other intermediary) | Non-Registered Shareholders (your shares are held with a broker, bank, or other intermediary) | |
|
PRIOR TO THE MEETING |
Nothing needed.
|
Appoint yourself as proxyholder on your proxy and follow the instructions at www.agmconnect.com/hiti2023/ |
Appoint yourself as proxyholder as instructed herein and on the VIF. |
|
Nothing needed.
|
Following the proxy cut-off date, your appointed proxyholder will be provided with an AGM Connect Voter ID and Meeting Access Code |
AFTER submitting your proxy appointment, you MUST contact AGM Connect to obtain a Voter ID and Meeting Access Code at 1-855-839-3715 or voteproxy@agmconnect.com | |
|
JOINING THE VIRTUAL MEETING (at least 15 minutes prior to start of the Meeting) |
Register and login at http://app.agmconnect.com Registered Shareholders or validly appointed Proxyholders will need to provide an email address, AGM Connect Voter ID and the Meeting Access Code | ||
Shareholders may request to receive paper copies of the proxy materials in connection with the Meeting, at no cost, by emailing support@agmconnect.com, or by calling 1-855-839-3715, up to the date of the Meeting or any adjournment(s) or postponement(s) thereof, or thereafter by contacting the Company at 1-855-747-6420. Requests may be made up to one year from the date the Meeting materials were filed on SEDAR. In order to ensure that a paper copy of the Information Circular and additional materials can be delivered to a Shareholder in time for such Shareholder to review the Information Circular and return a form of proxy or voting instruction form prior to the deadline to receive proxies, it is strongly suggested that Shareholders ensure their request is received as early as possible. Shareholders who would like more information about the Notice-and-Access Provisions should review the “Notice-and-Access” section included in the Information Circular.
Your proxy or voting instructions must be received in each case no later than 10:00 a.m. (Calgary time) on July 4, 2023, or two business days preceding the date of any adjournment(s) or postponement(s) of the Meeting. If you are unable to attend the Meeting online, we encourage you to complete the enclosed form of proxy as soon as possible. If a Shareholder received more than one form of proxy because such holder owns Common Shares registered in different names or addresses, each form of proxy should be completed and returned. The Chair of the Meeting shall have the discretion to waive or extend the proxy deadline without notice. Shareholders are reminded to review the Information Circular before voting.
If you are not a Registered Shareholder and receive these materials through your broker or through another intermediary, please complete and return the voting instruction form in accordance with the instructions provided to you by your broker or by the other intermediary.
COVID-19
The Company has been carefully monitoring the outbreak of COVID-19. In light of the Company’s unwavering commitment to the health and well- being of its employees, customers, suppliers, partners, Shareholders, communities and other stakeholders, the Company will be conducting the Meeting in a virtual-only format. A virtual-only meeting format is being adopted in response to the COVID-19 situation in order to enfranchise and give all of our Shareholders an equal opportunity to participate at the Meeting regardless of their geographic location or the particular constraints, circumstances or risks they may be facing as a result of COVID-19.
DATED at Calgary, Alberta, May 26, 2023.
BY ORDER OF THE BOARD
/s/ “Harkirat (Raj) Grover”
Harkirat (Raj) Grover
President, Chief Executive Officer, and Director
Exhibit 99.2
This document is important and requires your immediate attention. If you are in doubt as to how to deal with it, you should consult with your investment dealer, broker, bank manager, lawyer, or other professional advisor.
NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
JULY 6, 2023
- AND -
MANAGEMENT INFORMATION CIRCULAR
HIGH TIDE INC.
NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS
TAKE NOTICE that the annual general and special meeting (the “Meeting”) of shareholders (the “Shareholders”) of common shares (“Common Shares”) of High Tide Inc. (the “Company”) will be held via live webcast at www.agmconnect.com/hiti2023 at 10:00 a.m. (Calgary time) on July 6, 2023. The Company is conducting an online-only Shareholders’ meeting. You will not be able to attend the Meeting physically.
The Meeting is being held for the following purposes:
| 1. | To receive the audited annual financial statements of the Company for the year ended October 31, 2022, together with the report of the auditor thereon; |
| 2. | To reappoint Ernst & Young LLP as auditor of the Company for the ensuing year and to authorize the board of directors of the Company (the “Board”) to fix the auditor’s remuneration; |
| 3. | To fix the number of directors at five; |
| 4. | To elect directors of the Company for the ensuing year, as more particularly set forth in the accompanying proxy and management information circular for the Meeting (the “Information Circular”); |
| 5. | To consider, and if thought fit, pass an ordinary resolution ratifying and confirming By-Law No. 3 of the Company, as described in the Information Circular; and |
| 6. | To transact such other business as may be properly brought before the Meeting or any adjournment(s) or postponement(s) thereof. |
The specific details of the foregoing matters to be put before the Meeting, as well as further information with respect to voting by proxy, are set forth in the Information Circular.
The record date for the determination of Shareholders entitled to receive notice of and to vote at the Meeting or any adjournment(s) or postponement(s) thereof is May 26, 2023 (the “Record Date”). Shareholders whose names have been entered in the register of Shareholders at the close of business on the Record Date will be entitled to receive notice of and to vote at the Meeting or any adjournment(s) or postponement(s) thereof.
Shareholders who choose to attend the Meeting will do so by following the instructions outlined the chart below. You will be able to access the Meeting using an internet connected device such as a laptop, computer, tablet or mobile phone, and the Meeting platform will be supported across browsers and devices that are running the most updates version of the applicable software plugins. Only registered Shareholders (“Registered Shareholders”) and duly appointed proxyholders (including non-registered (beneficial) Shareholders who have appointed themselves as proxyholder) will be entitled to attend, participate and vote at the meeting.
Notice-and-Access
The Company has elected to use for the Meeting the notice-and-access provisions under National Instrument 54- 101 - Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”) and National Instrument 51- 102 - Continuous Disclosure Obligations (“NI 51-102” and together with NI 54-101, the “Notice-and-Access Provisions”) of the Canadian Securities Administrators (the “CSA”). The Notice-and-Access Provisions are a set of rules developed by the CSA that reduce the volume of materials that must be physically mailed to Shareholders by allowing the Company to post its Information Circular and any additional materials online.
The Information Circular and all additional materials have been posted in full on the Company’s website at www.hightideinc.com/invest, through AGM Connect at www.agmconnect.com/hiti2023, under the Company’s System for Electronic Document Analysis and Retrieval (“SEDAR”) profile at www.sedar.com, and in the Company’s filings with the United States Securities Exchange Commission at www.sec.gov, instead of printing and mailing out paper copies. All Shareholders of record as of the Record Date, will receive a notice and access notification containing instructions on how to access the Information Circular and all additional materials.
Voting and Attending the Meeting
|
VOTING |
IF YOU HAVE RECEIVED PROXY FORM WITH A VOTER ID & MEETING ACCESS CODE FROM AGM CONNECT | IF YOU HAVE RECEIVED A PROXY OR VIF WITH A 16-DIGIT CONTROL NUMBER FROM AN INTERMEDIARY | |
|
Voting Method |
Registered Shareholders (your securities are held in your name in a physical certificate or DRS statement) |
Non-Registered Shareholders (your shares are held with a broker, bank, or other intermediary) |
Non-Registered Shareholders (your shares are held with a broker, bank, or other intermediary) |
|
Internet |
Login to https://app.agmconnect.com Using the Meeting Access Code and Voter ID provided to you complete the form to Submit Proxy |
Go to www.proxyvote.com Enter the 16- digit control number printed on the VIF and follow the instructions on screen | |
|
|
Complete, sign and date the proxy form and email to: voteproxy@agmconnect.com | N/A | |
|
Telephone |
Call 1-855-839-3715 to register your vote for the Meeting |
N/A | |
|
|
Enter your voting instructions, sign, date and return the form to AGM Connect in the enclosed envelope | Enter your voting instructions, sign, date and return completed VIF in the enclosed postage paid envelope | |
|
ATTENDING THE MEETING |
IF YOU HAVE RECEIVED PROXY FROM WITH A VOTER ID AND MEETING ACCESS CODE FROM AGM CONNECT |
IF YOU HAVE RECEIVED A PROXY OR VIF WITH A 16- DIGIT CONTROL NUMBER FROM AN INTERMEDIARY | |
|
Registered Shareholders (your securities are held in your name in a physical certificate or DRS statement) |
Non-Registered Shareholders (your shares are held with a broker, bank, or other intermediary) | Non-Registered Shareholders (your shares are held with a broker, bank, or other intermediary) | |
|
PRIOR TO THE MEETING |
Nothing needed.
|
Appoint yourself as proxyholder on your proxy and follow the instructions at www.agmconnect.com/hiti2023/ |
Appoint yourself as proxyholder as instructed herein and on the VIF. |
|
Nothing needed.
|
Following the proxy cut-off date, your appointed proxyholder will be provided with an AGM Connect Voter ID and Meeting Access Code |
AFTER submitting your proxy appointment, you MUST contact AGM Connect to obtain a Voter ID and Meeting Access Code at 1-855-839-3715 or voteproxy@agmconnect.com | |
|
JOINING THE VIRTUAL MEETING (at least 15 minutes prior to start of the Meeting) |
Register and login at http://app.agmconnect.com Registered Shareholders or validly appointed Proxyholders will need to provide an email address, AGM Connect Voter ID and the Meeting Access Code | ||
Shareholders may request to receive paper copies of the proxy materials in connection with the Meeting, at no cost, by emailing support@agmconnect.com, or by calling 1-855-839-3715, up to the date of the Meeting or any adjournment(s) or postponement(s) thereof, or thereafter by contacting the Company at 1-855-747-6420. Requests may be made up to one year from the date the Meeting materials were filed on SEDAR. In order to ensure that a paper copy of the Information Circular and additional materials can be delivered to a Shareholder in time for such Shareholder to review the Information Circular and return a form of proxy or voting instruction form prior to the deadline to receive proxies, it is strongly suggested that Shareholders ensure their request is received as early as possible. Shareholders who would like more information about the Notice-and-Access Provisions should review the “Notice-and-Access” section included in the Information Circular.
Your proxy or voting instructions must be received in each case no later than 10:00 a.m. (Calgary time) on July 4, 2023, or two business days preceding the date of any adjournment(s) or postponement(s) of the Meeting. If you are unable to attend the Meeting online, we encourage you to complete the enclosed form of proxy as soon as possible. If a Shareholder received more than one form of proxy because such holder owns Common Shares registered in different names or addresses, each form of proxy should be completed and returned. The Chair of the Meeting shall have the discretion to waive or extend the proxy deadline without notice. Shareholders are reminded to review the Information Circular before voting.
If you are not a Registered Shareholder and receive these materials through your broker or through another intermediary, please complete and return the voting instruction form in accordance with the instructions provided to you by your broker or by the other intermediary.
COVID-19
The Company has been carefully monitoring the outbreak of COVID-19. In light of the Company’s unwavering commitment to the health and well- being of its employees, customers, suppliers, partners, Shareholders, communities and other stakeholders, the Company will be conducting the Meeting in a virtual-only format. A virtual-only meeting format is being adopted in response to the COVID-19 situation in order to enfranchise and give all of our Shareholders an equal opportunity to participate at the Meeting regardless of their geographic location or the particular constraints, circumstances or risks they may be facing as a result of COVID-19.
DATED at Calgary, Alberta, May 26, 2023.
BY ORDER OF THE BOARD
/s/ “Harkirat (Raj) Grover”
Harkirat (Raj) Grover
President, Chief Executive Officer, and Director
TABLE OF CONTENTS
| NOTICE-AND-ACCESS | 3 |
| APPOINTMENT AND REVOCATION OF PROXIES | 4 |
| ADVICE TO BENEFICIAL HOLDERS OF COMMON SHARES | 5 |
| VOTING OF PROXIES | 6 |
| RECORD DATE AND QUORUM | 6 |
| INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON | 6 |
| VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES | 6 |
| CURRENCY | 7 |
| CORPORATE GOVERNANCE DISCLOSURE | 7 |
| PERFORMANCE GRAPH | 7 |
| STATEMENT OF EXECUTIVE COMPENSATION | 8 |
| Compensation Discussion and Analysis Introduction | 8 |
| Compensation Philosophy and Objectives | 8 |
| Elements of Compensation | 8 |
| Summary Compensation Table | 10 |
| Outstanding Option-Based and Share-Based Awards | 10 |
| Stock option plans and other incentive plans | 11 |
| Employment, Consulting and Management Agreements and Termination and Change of Control Benefits | 12 |
| Pension Disclosure | 14 |
| Incentive Plan Awards - Value Vested or Earned During the Year | 14 |
| Director Compensation | 14 |
| Director Compensation - Outstanding Option-Based and Share-Based Awards | 15 |
| Director Compensation - Incentive Plan Awards - Value Vested or Earned During the Year | 15 |
| SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLAN | 15 |
| INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS | 16 |
| INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS | 16 |
| PARTICULARS OF MATTERS TO BE ACTED UPON | 16 |
| OTHER BUSINESS | 20 |
| INDICATION OF OFFICER AND DIRECTORS | 20 |
| ADDITIONAL INFORMATION | 20 |
| OTHER MATTERS | 21 |
| SCHEDULE “A” CORPORATE GOVERNANCE GUIDELINES | 22 |
| AUDIT COMMITTEE DISCLOSURE | 26 |
| SCHEDULE “B” - AUDIT COMMITTEE CHARTER | 28 |
| SCHEDULE “C” - NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER | 35 |
| SCHEDULE “D” - CODE OF BUSINESS CONDUCT AND ETHICS | 39 |
| SCHEDULE “E” - COMPENSATION COMMITTEE CHARTER | 44 |
MANAGEMENT INFORMATION CIRCULAR
as at May 26, 2023
This management information circular (this “Information Circular”) is furnished in connection with the solicitation of proxies by the management of High Tide Inc. (the “Company”) for use at the annual general and special meeting (the “Meeting”) of its shareholders (the “Shareholders”) to be held virtually at 10:00 a.m. (Calgary time) on July 6, 2023 for the purposes set forth in the accompanying notice of the Meeting (the “Notice of Meeting”).
Information contained herein is given as of May 26, 2023, the effective date of this Information Circular (the “Effective Date”), unless otherwise stated. Shareholders can attend the Meeting by visiting www.agmconnect.com/hiti2023. You will not be able to attend the Meeting physically. If you plan to vote at the Meeting, it is important that you are connected to the internet at all times during the Meeting. It is your responsibility to ensure internet connectivity for the duration of the Meeting. We recommend that you log-in at least fifteen minutes before the Meeting starts. If you encounter any difficulties accessing the virtual Meeting during the log-in or Meeting time, please call the technical support number that will be posted on the Meeting log-in page.
In this Information Circular, (i) references to “the Company”, “we” and “our” refer to High Tide Inc., (ii) “Common Shares” means the common shares without par value in the capital of the Company, (iii) “Beneficial Shareholders” means Shareholders who do not hold Common Shares in their own name, (iv) “intermediaries” refers to brokers, investment firms, clearing houses and similar entities that own securities on behalf of Beneficial Shareholders, and (v) “Management” refers to the management of the Company.
Management will use the Notice-and-Access Provisions (as defined below) to conduct the solicitation of proxies in connection with this Information Circular. Proxies may also be solicited by telephone or email by directors, officers, or employees of the Company, or by agents engaged by the Company. Brokers, nominees, or other persons holding Common Shares in their names for others shall be reimbursed for their reasonable charges and expenses in forwarding proxies and proxy material to the beneficial owners of such Common Shares. The costs of soliciting proxies will be borne by the Company.
NOTICE-AND-ACCESS
The Company has elected to deliver the materials in respect of the Meeting pursuant to the notice-and-access provisions (“Notice-and-Access Provisions”) concerning the delivery of proxy-related materials to Shareholders found in section 9.1.1 of National Instrument 51-102 - Continuous Disclosure Obligations (“NI 51-102”), in the case of Registered Shareholders, and section 2.7.1 of National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”), in the case of Beneficial Shareholders. The Notice-and-Access Provisions are a set of rules that reduce the volume of proxy-related materials that must be physically mailed to Shareholders by allowing issuers to deliver meeting materials to Shareholders electronically by providing Shareholders with access to these materials online.
The use of the Notice-and-Access Provisions reduces paper waste and mailing costs to the Company. In order for the Company to utilize the Notice-and-Access Provisions to deliver proxy-related materials by posting this Information Circular (and if applicable, other materials) electronically on a website that is not System for Electronic Document Analysis and Retrieval (“SEDAR”), the Company must send a notice to Shareholders, including Beneficial Shareholders, indicating that the proxy-related materials have been posted and explaining how a Shareholder can access them or obtain a paper copy of those materials from the Company.
In accordance with the Notice-and-Access Provisions, a notice and a form of proxy or voting instruction form (“VIF”) has been sent to all Shareholders informing them that this Information Circular, the Notice of Meeting, annual audited consolidated financial statements of the Company for the year ended October 31, 2022 (the “Financial Statements”) and management’s discussion and analysis of the Company’s results of operations and financial condition for the year ended October 31, 2022 (the “MD&A”) are available online and explaining how these materials may be accessed, in addition to outlining relevant dates and matters to be discussed at the Meeting. This Information Circular, the Notice of Meeting, Financial Statements and MD&A have been posted in full on the Company’s website at www.hightideinc.com/invest, through AGM Connect at www.agmconnect.com/hiti2023, under the Company’s SEDAR profile at www.sedar.com, and in the Company’s filings with the United States Securities Exchange Commission (the “SEC”) at www.sec.gov.
Any Shareholder who wishes to receive a paper copy of the proxy material in connection with the Meeting must contact AGM Connect toll-free at 1-855-839-3715 and provide your Voter ID, or you may electronically submit a request by emailing support@agmconnect.com up to the date of the Meeting or any adjournment(s) or postponement(s) thereof, or thereafter by contacting the AGM Connect at 1-855-839-3715. In order to ensure that paper copies of the materials can be delivered to a requesting Shareholder in time for such Shareholder to review materials and return a form of proxy or VIF prior to the deadline to receive proxies, it is strongly suggested that Shareholders ensure their request is received as early as possible.
Shareholders who would like more information about the Notice-and-Access Provisions may contact the transfer agent, Olympia Trust Company at CSSnoticeandaccess@olympiatrust.com up to and including the date of the Meeting, including any adjournment(s) thereof.
APPOINTMENT AND REVOCATION OF PROXIES
Shareholders will receive a form of proxy for use at the Meeting. The persons named in the form of proxy are directors and/or officers of the Company. A Shareholder submitting a proxy has the right to appoint a nominee (who need not be a Shareholder) to represent such Shareholder at the Meeting other than the persons designated in the enclosed form of proxy by inserting the name of the chosen nominee in the space provided for that purpose on the form of proxy and by striking out the printed names.
Shareholders must provide AGM Connect with their appointee’s exact name and a valid email to access the Meeting. Appointees can only be validated at the Meeting using the unique Voter ID and Meeting Code provided to them by AGM Connect after their appointment has been received by the Shareholder. If Shareholder does not provide a valid email address, the appointee will not be able to access the Meeting.
A form of proxy will not be valid for the Meeting or any adjournment(s) or postponement(s) thereof unless it is signed by the Shareholder or by the Shareholder’s attorney authorized in writing or, if the Shareholder is a corporation, it must be executed by a duly authorized officer or attorney thereof. The proxy, to be acted upon, must be dated, completed, signed and deposited with AGM Connect: (i) by mail using the enclosed return envelope addressed to AGM Connect, 401 Bay Street, Suite 2704, Toronto ON, M4H 2Y4, (ii) by telephone at 1-855-839-3715 and follow the instructions provided (you will need to provide your unique Voter ID and Meeting), or (iii) via internet by following the instructions at www.agmconnect.com/hiti2023. If you vote through the internet, you may also appoint another person to be your proxyholder. Please login to https://app.agmconnect.com and complete the form on the voting page. You will require your unique Voter ID, Meeting Code (found on your Voter Information Sheet) and a valid email of choice. Your proxy or voting instructions must be received in each case no later than 5:00 p.m. (Calgary time) on July 4, 2023, or two business days preceding the date of any adjournment(s) or postponement(s) of the Meeting.
A Shareholder who has given a proxy may revoke it prior to its use, in any manner permitted by law, including by an instrument in writing executed by the Shareholder or by his attorney authorized in writing or, if the Shareholder is a corporation, executed by a duly authorized officer or attorney thereof and deposited at the registered office of the Company at Unit 112, 11127 - 15 Street N.E., Calgary, Alberta, T3K 2M4, any time up to and including the last business day preceding the day of the Meeting, or any adjournment(s) or postponement(s) thereof, at which the proxy is to be used or with the chair of the Meeting on the day of the Meeting or any adjournment(s) or postponement(s) thereof.
Registered Shareholders electing to submit a proxy may do so by completing, dating and signing the enclosed proxy and returning it to AGM Connect at 10:00 a.m. (Calgary Time) at least forty-eight hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the time set for the Meeting or any adjournment(s) or postponement(s) thereof.
ADVICE TO BENEFICIAL HOLDERS OF COMMON SHARES
The information set forth in this section is of significant importance to many Shareholders who hold Common Shares through brokers and their nominees, as a substantial number of Shareholders do not hold Common Shares in their own name. Shareholders who hold their Common Shares through their brokers, intermediaries, trustees or other persons, or who otherwise do not hold their Common Shares in their own name (referred to herein as “Beneficial Shareholders”) should note that only proxies deposited by Shareholders who appear on the records maintained by the Company’s registrar and transfer agent as registered holders of Common Shares will be recognized and acted upon at the Meeting. If Common Shares are listed in an account statement provided to a Beneficial Shareholder by a broker, those Common Shares will, in all likelihood, not be registered in the Shareholder’s name. Such Common Shares will more likely be registered under the name of the Shareholder’s broker or an agent of the broker. In Canada, the vast majority of such shares are registered under the name of CDS & Co. (the registration name for The Canadian Depository for Securities Limited, which acts as nominee for many Canadian brokerage firms). In the United States, the vast majority of such Common Shares are registered under the name Cede & Co. (the registration name for The Depositary Trust Company, which acts as nominee for many United States brokerage firms). Common Shares held by brokers (or their agents) on behalf of a broker’s client can only be voted or withheld at the direction of the Beneficial Shareholder. Without specific instructions, brokers and their agents and nominees are prohibited from voting shares for the broker’s clients. Each Beneficial Shareholder should therefore ensure that the voting instructions are communicated to the appropriate person well in advance of the Meeting.
Existing regulatory policy requires brokers and other intermediaries to seek voting instructions from Beneficial Shareholders in advance of shareholders’ meetings. The various brokers and intermediaries have their own mailing procedures and provide their own return instructions to clients, which should be carefully followed by Beneficial Shareholders in order to ensure that their Common Shares are voted at the Meeting. Often the form of proxy supplied to a Beneficial Shareholder by its broker (or the agent of the broker) is substantially similar to the instrument of proxy provided directly to the Registered Shareholders by the Company. However, its purpose is limited to instructing the Registered Shareholder (i.e. the broker or agent of the broker) how to vote on behalf of the Beneficial Shareholder. The Beneficial Shareholder is requested to complete and return the VIF to them by mail or facsimile. Alternatively, the Beneficial Shareholder can call 1-855-839-3715 or email: voteproxy@agmconnect.com to vote the Common Shares held by the Beneficial Shareholder.
Beneficial Shareholders who have not objected to their intermediary disclosing certain ownership information about themselves to the Company are called Non-Objecting Beneficial Owners (“NOBOs”). Beneficial Shareholders who have objected to their intermediary disclosing ownership information about themselves to the Company are called Objecting Beneficial Owners (“OBOs”). In accordance with the requirements of NI 54-101, the Company has elected to send the Notice of Meeting and this Information Circular (collectively, the “Meeting Materials”) directly to NOBOs.
The Meeting Materials are being sent to both Registered Shareholders and Beneficial Shareholders. If you are a Beneficial Shareholder, and the Company or its agent has sent these materials to you, your name and address and information about your holdings of securities have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding on your behalf. By choosing to send these materials to you directly, the Company (and not the intermediary holding on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii) executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions.
The Meeting Materials sent to the NOBOs who have not waived the right to receive meeting materials are accompanied by a VIF, instead of a proxy. By returning the VIF in accordance with the instructions noted on it, a NOBO can instruct the voting of the Common Shares owned by the NOBO. VIFs, whether provided by the Company or by an intermediary, should be completed and returned in accordance with the specific instructions of the VIF. The purpose of this procedure is to permit Beneficial Shareholders to direct the voting of the Common Shares which they beneficially own. Should a Beneficial Shareholder who receives a VIF wish to attend the Meeting or have someone else attend on the Beneficial Shareholder’s behalf, the Beneficial Shareholder may request a legal proxy as set forth in the VIF, which will grant the Beneficial Shareholder, or Beneficial Shareholder’s nominee, the right to attend and vote at the Meeting.
A Beneficial Shareholder who receives a VIF cannot use the form to vote Common Shares directly at the Meeting. The VIF must be returned to the intermediary (or instructions respecting the voting Common Shares must otherwise be communicated to the intermediary) well in advance of the Meeting in order to have the Common Shares voted.
Although a Beneficial Shareholder may not be recognized at the Meeting for the purposed of voting Common Shares registered in the name of the broker, a Beneficial Shareholder may attend the Meeting as proxyholder for the Registered Shareholder and vote Common Shares in that capacity. Beneficial Shareholders who wish to attend the Meeting and indirectly vote their Common Shares as proxyholder for the registered holder, should contact AGM Connect by emailing: support@agmconnect.com well in advance of the Meeting to determine the step necessary to permit them to indirectly vote their Common Shares as a proxyholder.
All references to Shareholders in this Information Circular and the accompanying VIF or proxy and Notice of Meeting are to Registered Shareholders unless specifically stated otherwise.
VOTING OF PROXIES
All Common Shares represented at the Meeting by properly executed proxies will be voted on any matter that may be called for and, where a choice with respect to any matter to be acted upon has been specified in the accompanying form of proxy, the Common Shares represented by the proxy will be voted in accordance with such instructions. In the absence of any such instruction, the persons whose names appear on the printed form of proxy will vote in favour of all the matters set out thereon.
The enclosed form of proxy confers discretionary authority upon the persons named therein. If any other business or amendments or variations to matters identified in the Notice of Meeting properly comes before the Meeting, then discretionary authority is conferred upon the person appointed in the proxy to vote in the manner they see fit, in accordance with their best judgment.
At the time of the printing of this Information Circular, Management knows of no such amendment, variation or other matter to come before the Meeting other than the matters referred to in the Notice of Meeting.
RECORD DATE AND QUORUM
The board of directors of the Company (the “Board”) has fixed the record date for the Meeting at the close of business on May 26, 2023 (the “Record Date”). The Shareholders of record as at the Record Date are entitled to receive notice of the Meeting and to vote those shares included in the list of the Shareholders entitled to vote at the Meeting prepared as at the Record Date.
The quorum for the transaction of business at a meeting of Shareholders is two persons who are, or who represent by proxy, Shareholders entitled to vote at the meeting who hold, in the aggregate, at least twenty five percent of the votes attached to the outstanding Common Shares.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
The directors and officers of the Company have an interest in the resolutions concerning the election of directors. Otherwise, no director or senior officer of the Company or any associate or affiliate of the foregoing has any substantial interest, direct or indirect, by way of beneficial ownership of Common Shares or otherwise in the matters to be acted upon at the Meeting, except for any interest arising from the ownership of Common Shares where the Shareholder will receive no extra or special benefit or advantage not shared on a pro rata basis by all holders of Common Shares.
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES
The voting securities of the Company consists of Common Shares. The Company is authorized to issue an unlimited number of Common Shares. As of the Effective Date, 75,086,823 Common Shares were issued and outstanding, with each such share carrying the right to one vote at the Meeting.
Other than as disclosed below, as at the Effective Date, to the knowledge of the Company, and based on the Company’s review of the records maintained by Olympia Trust Company, electronic filings with SEDAR, the SEC, and insider reports filed with System for Electronic Disclosure by Insiders (“SEDI”), no person or company beneficially owns, or controls or directs, directly or indirectly, ten percent or more of any class of voting securities of the Company, on a non-diluted basis.
| Name |
Aggregate Number of Common Shares |
Percentage of Outstanding Common Shares |
| Harkirat (Raj) Grover | 6,572,600(1) | 8.753% |
Note:
| 1. | Includes 4,035,662 Common Shares directly owned by Mr. Grover, as well as the following Common Shares, beneficially owned by Mr. Grover: (i) 274,657 Common Shares held by Grover Family Trust, a non-arm’s length entity to Mr. Grover, (ii) 750,887 Common Shares held by 2088550 Alberta Ltd., an entity wholly owned by Mr. Grover and his spouse, Roza Grover, (iii) 7,099 Common Shares held by Grover Investments Inc., an entity wholly owned by Mr. Grover and Ms. Grover, and (iv) 1,504,295 Common Shares held by Ms. Grover. |
CURRENCY
In this Information Circular, unless otherwise indicated, all references to “$” refer to Canadian dollars.
CORPORATE GOVERNANCE DISCLOSURE
The Company’s statement of corporate governance practices is set out in Schedule “A” to this Information Circular. Governance of the Company is governed by the nominating and corporate governance committee of the Company (the “Nominating and Corporate Governance Committee”), a copy of the Nominating and Corporate Governance Committee Charter is attached as Schedule “C” to this Information Circular.
PERFORMANCE GRAPH
The following graph compares the total cumulative return to a Shareholder who invested $100 in Common Shares on December 17, 2018, with the cumulative total returns of the S&P/TSX Composite Index and Horizons Marijuana Life Sciences Index ETF as at the October 31 year end date of the Company for each year following December 17, 2018:
Notes:
| 1. | As at December 18, 2018, the Company was trading on Canadian Securities Exchange under the symbol “HITI”. |
| 2. | Effective market opening on November 19, 2020, the Common Shares commenced trading on the TSX Venture Exchange (the “TSXV”) under the stock symbol “HITI”. |
| 3. | Effective market opening on June 2, 2021, the Common Shares commenced trading on the Nasdaq Capital Market (the “Nasdaq”) under the ticker symbol “HITI”. |
As described in this Information Circular, the compensation policy for the Company’s directors and Named Executive Officers (as defined below) is primarily tied to financial performance of the business and long-term Shareholder value and not specifically to Common Share performance.
STATEMENT OF EXECUTIVE COMPENSATION
Compensation Discussion and Analysis Introduction
The purpose of this Compensation Discussion and Analysis is to provide information about the Company’s philosophy, objectives and processes regarding executive compensation. This disclosure is intended to communicate the compensation provided to: (i) the Chief Executive Officer of the Company (the “CEO”), (ii) the Chief Financial Officer of the Company (the “CFO”), (iii) each of the three most highly compensated executive officers of the Company, if any, whose individual total compensation was more than $150,000 for the year ended October 31, 2022, (iv) each individual who satisfies the criteria under paragraph (iii) but for the fact the individual was not an executive officer of the Company, nor acting in a similar capacity, at as October 31, 2022 (collectively, the “Named Executive Officers”) and (v) the directors of the Company. During the year ended October 31, 2022, the Named Executive Officers of the Company were Harkirat (Raj) Grover, Rahim Kanji, Andy Palalas, Aman Sood, and Joy Avzar. The description of the Company’s compensation philosophy and objectives and the elements of such compensation for the year ended October 31, 2022 is set forth below:
Compensation Philosophy and Objectives
The executive compensation program adopted by the Company and applied to its executive officers is designed to attract and retain qualified and experienced executives who will contribute to the success of the Company. The executive compensation program attempts to ensure that the compensation of the senior executive officers provides a competitive base compensation package and a strong link between corporate performance and compensation. Senior executive officers are motivated through the program to enhance long-term shareholder value and rewarded for their yearly individual contribution in the context of overall annual corporate performance.
Elements of Compensation
The executive compensation program during the year, ended October 31, 2022 consisted of three principal components: base compensation, discretionary cash bonuses and long-term compensation in the form of compensation securities consisting of stock options (“Options”) and restricted share units (“RSUs”) issued pursuant to the Company’s equity incentive plan(s), including the Predecessor Plans (as defined below), as replaced by the Company’s 20% fixed equity incentive plan (the “Omnibus Plan”). For the year ended October 31, 2022, all executive compensation was determined and administered by the board of directors of the Company (the “Board”) based on recommendations by the compensation committee of the Company (the “Compensation Committee”).
Information with respect to the Compensation Committee and its policies and practices for the compensation of the directors and executive officers of the Company can be found in Schedule “E” attached to this Information Circular.
Compensation Components
To ensure market competitiveness, the Compensation Committee considers comparable compensation data from Canadian cannabis and consumer packaged goods companies that are generally of similar size and scope and that may represent the market in which the Company competes for executive talent. The composition of the external compensation peer group is reviewed periodically by the Compensation Committee for its ongoing business relevance to the Company. The publicly available compensation data from the external compensation peer group was used as a main factor in the review and consideration of compensation levels and the composition of compensation for the Company’s executive officers and directors.
The factors assessed by the Compensation Committee in determining the external compensation peer group included operational and geographical focus, exchanges where issuers’ securities are listed, market capitalization, total revenue, total assets, annual cash flows, and annual levels of capital expenditures.
The following table reflects the composition of the Company’s external compensation peer group for the year ended October 31, 2022:
| Canadian Reference Group |
| Fire & Flower Holdings Corp. |
| The Supreme Cannabis Company, Inc. |
| The Valens Company |
| Aurora Cannabis Inc. |
| Sundial Growers Inc. |
| Alcanna Inc. |
Base Compensation
Base compensation for the Named Executive Officers is set annually, having regard to the individual’s job responsibilities, contribution, experience and proven or expected performance, market conditions, as well as to the current and future financial condition of the Company. It is designed to provide income certainty and to attract and retain executives. In setting base compensation levels, consideration is given to such factors as level of responsibility, experience and expertise. Subjective factors such as leadership, commitment and attitude are also considered. Management and the Board have generally considered publicly available information regarding the compensation levels of executives of similarly sized companies within the industry in setting compensation. Although the Company strives to compensate the Named Executive Officers within industry expectations, the base compensation may, from time to time, be reviewed depending on the results of operations.
Named Executive Officers and directors are not permitted to purchase financial instruments (including prepaid variable forward contracts, equity swaps, collars, or units of exchange funds) that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the Named Executive Officer or director.
Discretionary Cash Bonus
The executive compensation program for the Named Executive Officers includes eligibility for discretionary incentive cash bonuses. The bonuses are awarded based on objectives set by the Board and Board’s assessment of the Company and its executive’s performance and contribution. Objectives may include strategic, financial, and operational performance goals, as well as personal performance objectives, including implementation of new strategic initiatives, the development of innovations, organizational development and other factors. The resulting bonus entitlements, if any, will therefore vary between Named Executive Officers.
Omnibus Plan
On April 19, 2022, the Board approved the Omnibus Plan, which was effective June 2, 2022, upon the Company receiving disinterested Shareholder approval at the 2022 Meeting, pursuant to which the Company is able to issue share-based and cash-based long-term incentives to eligible participants. The Omnibus Plan replaced the former Option plan (the “Stock Option Plan”) and RSU plan (the “RSU Plan”) of the Company (together, the “Predecessor Plans”). A copy of the Omnibus Plan is available under the Company’s SEDAR profile at www.sedar.com.
All directors, officers, employees, management company employees and consultants of the Company and/or its affiliates (“Participants”) are eligible to receive Awards (as defined below) under the Omnibus Plan, subject to the terms of the Omnibus Plan. Awards include Options, stock appreciation rights, restricted share awards, RSUs, performance shares, performance units, cash-based awards and other share-based awards (collectively, the “Awards”), under the Omnibus Plan.
To provide a long-term component to the executive compensation program, the Company adopted the Omnibus Plan. During the year ended October 31, 2022, the Company granted an aggregate total of 115,476 Awards to Named Executive Officers and Directors, comprised of 50,000 Options and 65,476 RSUs. The maximization of Shareholder value is encouraged by granting Awards. Recommendations for Awards have historically considered factors such as Awards made in previous years, the number of Awards outstanding per individual and the individual’s level of responsibility.
Risk Analysis
The Board and Compensation Committee considered risks associated with executive compensation and do not believe that the Company’s executive compensation policies and practices encourage its executive officers to take inappropriate or excessive risks. Aside from a fixed base salary, Named Executive Officers are compensated through the granting of Awards, which are compensation that is both “at risk” and associated with long-term value creation. The value of such compensation is dependent upon Shareholder return over the Option and RSU vesting periods which reduces the incentive for executives to take inappropriate or excessive risks as their long-term compensation is at risk.
Summary Compensation Table
The following table provides information concerning compensation of the Named Executive Officers for the years ended October 31, 2022, 2021 and 2020:
|
Name and Position |
Year |
Salary ($) |
Share- Based Awards ($) |
Option- Based Awards ($)(1) |
Non-Equity Incentive Plan Compensation | Pension Value ($) | All Other Compensation ($)(3) | Total Compensation ($) | |
|
Annual Incentive Plans ($)(2) |
Long-Term Incentive Plans ($) | ||||||||
|
Harkirat (Raj) Grover(4) President, CEO, and Director |
2022 2021 2020 |
450,000 330,000 310,932 |
Nil Nil Nil |
Nil 1,701,000 Nil |
264,000(5) 150,000 173,077 |
Nil Nil Nil |
Nil Nil Nil |
36,500 36,500 36,500 |
750,500 2,217,500 520,509 |
|
Rahim Kanji(6) CFO |
2022 2021 2020 |
225,000 165,000 155,466 |
Nil Nil Nil |
Nil 430,500 Nil |
66,000(5) 45,000 56,538 |
Nil Nil Nil |
Nil Nil Nil |
Nil Nil Nil |
291,000 641,800 212,004 |
|
Andy Palalas Chief Revenue Officer |
2022 2021 2020 |
200,000 165,000 155,466 |
Nil Nil Nil |
Nil 430,500 Nil |
66,000(5) 45,000 56,538 |
Nil Nil Nil |
Nil Nil Nil |
Nil 2,889 Nil |
268,889 643,389 212,004 |
|
Aman Sood(7) Chief Operating Officer |
2022 2021 2020(8) |
225,000 101,260 120,000 |
Nil 43,058(9) Nil |
Nil 430,500 N/A |
40,260(10) Nil 8,938 |
Nil Nil Nil |
Nil Nil Nil |
Nil Nil N/A |
265,260 531,760 128,938 |
|
Joy Avzar Vice President, Legal |
2022 2021 2020(8) |
220,000 220,000 220,000 |
Nil 112,992(9) Nil |
Nil 104,718 Nil |
33,000 Nil Nil |
Nil Nil Nil |
Nil Nil Nil |
Nil Nil Nil |
253,000 437,710 220,000 |
Notes:
| 1. | Based on the grant date fair value determined in accordance with International Financial Reporting Standards 2, Share- based Payment and estimated using the Black Scholes pricing model, with the following key assumptions for grants during 52 weeks ended October 31, 2021: risk-free interest rate 0.16% to 0.17% and expected volatility of 142% to 147. |
| 2. | Annual incentive plan compensation amounts were awarded based on performance relative to established performance targets. |
| 3. | Represents the fair value of other allowances provided. |
| 4. | Mr. Grover did not receive any compensation as a director of the Company during the fiscal years ended October 31, 2022, 2021 and 2020. |
| 5. | The Board approved a bonus payable as a percentage of salary in August 2021. These values are on the books as 2021 that were intended to be paid in 2022 but remain on the books as of October 31, 2022 as a payable/liability. |
| 6. | Mr. Kanji resigned from his position with the Company on February 28, 2023. |
| 7. | Mr. Sood was appointed as Chief Operating Officer on March 15, 2021. Mr. Sood was an employee of Meta Growth Corp. (“Meta”) prior to the Company’s plan of arrangement. |
| 8. | Represents 2020 compensation as an employee of Meta. |
| 9. | Represents an RSU award by Meta prior to the Company’s acquisition; however, the award was settled by the Company on March 23, 2021, after the acquisition. These RSUs were allocated prior to them becoming Named Executive Officers of the Company. |
| 10. | Mr. Sood’s 2021 bonus payable was prorated to 61% to reflect his appointment date of March 21, 2021. |
| 11. | Ms. Avzar was appointed as Vice President, Legal on November 18, 2020. |
Outstanding Option-Based and Share-Based Awards
The following table sets forth information with respect to the Options and RSUs held by the Named Executive Officers which were outstanding as of October 31, 2022:
| Option-Based Awards | Share-Based Awards | ||||||
|
Name and Position |
Number of Securities Underlying Unexercised Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Value of unexercised in-the- money Options ($) |
Number of Shares or Units of Shares that have not vested (#) |
Market Value or payout value of share- based awards that have not vested ($) |
Market value or payout value of vested share- based awards not paid out or distributed ($) |
| Harkirat (Raj) Grover President, CEO, & Director |
200,000 100,000 |
11.55 3.00 |
Mar. 19, 2024 Nov. 25, 2023 |
Nil Nil |
Nil | Nil | Nil |
|
Rahim Kanji CFO |
50,000 50,000 |
11.55 3.00 |
Mar. 19, 2024 Nov. 25, 2023 |
Nil Nil |
Nil | Nil | Nil |
|
Andy Palalas Chief Revenue Officer |
50,000 50,000 |
11.55 3.00 |
Mar. 19, 2024 Nov. 25, 2023 |
Nil Nil |
Nil | Nil | Nil |
|
Aman Sood Chief Operating Officer |
50,000 | 11.55 | Mar. 19, 2024 | Nil | Nil | Nil | Nil |
|
Joy Avzar Vice President, Legal |
20,000 4,669(1) 4,120(1) |
9.14 12.75 11.10 |
Aug. 18, 2024 Feb 26, 2023 Nov. 30, 2023 |
Nil Nil Nil |
Nil | Nil | Nil |
Note:
| 1. | Represents grants made by Meta prior to the Company’s acquisition; however, each grant will be settled by the Company. |
Stock Option Plans and Other Incentive Plans
Omnibus Plan
On April 19, 2022, the Board approved the Omnibus Plan, which replaced the Predecessor Plans.
Purpose of the Omnibus Plan
The Omnibus Plan serves several purposes for the Company. One purpose is to advance the interests of the Company by developing the interests of Participants in the growth and development of the Company by providing such persons with the opportunity to acquire a proprietary interest in the Company. All Participants are considered eligible to be selected to receive an Award under the Omnibus Plan. Another purpose is to attract and retain key talent and valuable personnel, who are necessary to the Company’s success and reputation, with a competitive compensation mechanism. Finally, the Omnibus Plan aligns the interests of Participants with those of Shareholders by devising a compensation mechanism which encourages the prudent maximization of distributions to Shareholders and long-term growth. The Omnibus Plan is administered by the Board, and/or if applicable, a committee of the Board.
Omnibus Plan Maximum, Limits and Vesting Restrictions
The maximum number of Common Shares available and reserved for issuance, at any time, under the Omnibus Plan, together with any other security-based compensation arrangements adopted by the Company, including the Predecessor Plans, was fixed at 20% of the issued and outstanding Common Shares on the Effective Date, namely 12,617,734 Common Shares.
Common Shares underlying outstanding Awards that for any reason expire or are terminated, forfeited or cancelled shall again be available for issuance under the Omnibus Plan. Also, any Common Shares forfeited, cancelled or otherwise not issued for any reason under the predecessor Options and/or predecessor RSUs pursuant to the Stock Option Plan and RSU Plan, respectively, shall be available for grants under the Omnibus Plan. Any predecessor Options and/or predecessor RSUs outstanding under the Predecessor Plans shall remain subject to the terms of those awards and the Stock Option Plan and RSU Plan, respectively.
Awards that by their terms are to be settled solely in cash shall not be counted against the maximum number of Common Shares available for the issuance of Awards under the Omnibus Plan.
No Awards, other than Options, may vest before the date that is one year following the date it is granted or issued, although the vesting required of any such Awards may be accelerated for a Participant who dies or who ceases to be an eligible Participant under the Omnibus Plan in connection with a Change in Control (as such term is defined in the Omnibus Plan), take-over bid, reverse takeover or other similar transaction.
The aggregate number of Awards which may be granted to any one Participant that is a consultant of the Company in any 12-month period must not exceed 2% of the issued Common Shares calculated at the first such grant date. In addition, the aggregate number of Options granted to all persons retained to provide investor relations activities must not exceed 2% of the issued Common Shares in any 12-month period calculated at the first such grant date (and including any Participant that performs investor relations activities and/or whose role or duties primarily consist of investor relations activities) and any such Options granted to any person retained to provide investor relations activities must vest in a period of not less than 12 months from the date of grant of the Award and with no more than 25% of the Options vesting in any three month period notwithstanding any other provision of the Omnibus Plan. The maximum aggregate number of Common Shares that are issuable pursuant to all Awards granted or issued to Insiders (as such term is defined in the Omnibus Plan), as a group, must not exceed 10% of the issued and outstanding Common Shares at any point in time, unless the Company has obtained the requisite disinterested Shareholder approval. The maximum aggregate number of Common Shares that are issuable pursuant to all Awards granted or issued in any 12-month period to Insiders, as a group, must not exceed 10% of the issued and outstanding Common Shares, calculated as at the date any Award is granted or issued to any Insider, unless the Company has obtained the requisite disinterested Shareholder approval. The maximum aggregate number of Common Shares issuable pursuant to Awards granted to any one Participant in any 12-month period must not exceed 5% of the issued and outstanding Common Shares, calculated on the date the Award is granted or issued to the Participant, unless the Company has obtained the requisite disinterested Shareholder approval. Participants who provide investor relations activities may not receive any Awards other than Options.
As at October 31, 2022, the Company had issued an aggregate total of 2,384,726 Awards outstanding under the Omnibus Plan, comprised of 2,252,583 Options and 132,143 RSUs and a total of 10,233,008 Common Shares remained authorized for issuance under the Omnibus Plan.
Employment, Consulting and Management Agreements and Termination and Change of Control Benefits
Other than as provided for at common law and as disclosed below, (i) there is no agreement or arrangement that provides for payments to the Named Executive Officers or directors at, following or in connection with any termination (whether voluntary, involuntary or constructive), resignation, retirement, a change of control of the Company or a change in the Named Executive Officers’ or directors’ responsibilities and (ii) there are no contracts, agreements, plans or arrangements that provide for payments to a Named Executive Officer or director at, following or in connection with respect to change of control of the Company, or severance, termination or constructive dismissal of or a change in a Named Executive Officer’s or director’s responsibilities.
Harkirat (Raj) Grover - President, CEO and Director
Pursuant to an executive employment agreement, effective January 1, 2019, between the Company and Harkirat (Raj) Grover (the “Grover Agreement”), Mr. Grover may terminate his employment with the Company for any reason by giving a minimum of 120 days written notice to the Company. In the event the Company chooses to waive the 120- day written notice period, in whole or in part, Mr. Grover is entitled to receive pay in lieu of notice for the remainder of the notice period, which was not worked, paid based solely on his base salary. The Grover Agreement also provides that the Company may terminate Mr. Grover’s employment without cause by payment of a lump sum equal to the greater of: (i) two times the sum of Mr. Grover’s annual base salary, annual value of perquisites and annualized value of benefit plans; and (ii) the value of one and one half months of Mr. Grover’s annual base salary for each complete year of service from the commencement of Mr. Grover’s employment as President of Smoker’s Corner (January 1, 2010), to a maximum of 36 months, and two times the sum of the annual value of perquisites and annualized value of benefit plans. In 2021, the Grover Agreement was amended such that provisions for severance upon a change of control and termination without cause were updated. In the event of termination upon a change of control, Mr. Grover is entitled to be paid a lumpsum payment equal to 24 months of his then base salary and in the event of termination without cause, Mr. Grover is entitled to be paid a lumpsum payment equal to 24 months of his then base salary. In addition, all vested, but granted Options will become immediately vested. For illustration purposes, assuming that (i) Mr. Grover’s employment is terminated without notice by the Company, (ii) Mr. Grover’s annual base salary, annual value of perquisites and annualized value of benefit plans is $486,500, and (iii) pursuant to the Grover Agreement, Mr. Grover is entitled to the value of one and one half months of Mr. Grover’s annual base salary for each complete year of service from the commencement of Mr. Grover’s employment as President of Smoker’s Corner (January 1, 2010), to a maximum of 36 months, and two times the sum of the annual value of perquisites and annualized value of benefit plans at the time of such termination, the Company estimates that Mr. Grover may be entitled to a lump sum payment of approximately $1,423,000.
Rahim Kanji - CFO
Pursuant to an executive employment agreement, effective May 27, 2019, between the Company and Rahim Kanji (the “Kanji Agreement”), Mr. Kanji’s employment with the Company may terminate for any reason by giving a minimum of 30 days written notice by the Company. In the event the Company chooses to waive the 30-day written notice period, in whole or in part, Mr. Kanji is entitled to receive pay in lieu of notice for the remainder of the notice period paid solely based on his base salary. In 2021, the Kanji Agreement was amended such that provisions for severance upon a change of control and termination without cause were updated. In the event of termination upon a change of control, Mr. Kanji is entitled to be paid a lumpsum payment equal to 18 months of his then base salary and in the event of termination without cause, Mr. Kanji is entitled to be paid a lumpsum payment equal to 12 months of his then base salary. The final payment would also include all accrued but unpaid base salary, vacation pay, and expenses properly incurred in the carrying out of his duties to the date of termination less required withholdings. In addition, all vested, but granted Options will become immediately vested.
Andy Palalas - Chief Revenue Officer
Pursuant to an executive employment agreement, effective August 10, 2018, between the Company and Andy Palalas (the “Palalas Agreement”), Mr. Palalas’ employment with the Company may terminate for any reason by giving a minimum of 60 days written notice by the Company. In the event the Company chooses to waive the 60-day written notice period, in whole or in part, Mr. Palalas is entitled to receive pay in lieu of notice for the remainder of the notice period, paid solely based on his base salary. In 2021, the Palalas Agreement was amended such that provisions for severance upon a change of control and termination without cause were updated. In the event of termination upon a change of control, Mr. Palalas is entitled to be paid a lumpsum payment equal to 12 months of his then base salary and in the event of termination without cause, Mr. Palalas is entitled to be paid a lumpsum payment equal to 12 months of his then base salary. The final payment would also include all accrued but unpaid base salary, vacation pay, and expenses properly incurred in the carrying out of his duties to the date of termination less required withholdings. In addition, all vested, but granted Options will become immediately vested.
Aman Sood - Chief Operating Officer
Pursuant to an executive employment agreement, effective March 21, 2021, between the Company and Aman Sood (the “Sood Agreement”), Mr. Sood’s employment with the Company may terminate for any reason by giving a minimum of one month per year of service up to a maximum of 24 months. In the event the Company chooses to waive the written notice period, in whole or in part, Mr. Sood is entitled to receive pay in lieu of notice for the remainder of the notice period, paid solely based on his base salary. Subsequently, the Sood Agreement was amended such that provisions for severance upon a change of control and termination without cause were updated. In the event of termination upon a change of control, Mr. Sood is entitled to be paid a lumpsum payment equal to 18 months of his then base salary and in the event of termination without cause, Mr. Sood is entitled to be paid a lumpsum payment equal to 12 months of his then base salary. The final payment would also include all accrued but unpaid base salary, vacation pay and expenses properly incurred in the carrying out of his duties to the date of termination less required withholdings. In addition, all vested, but granted Options will become immediately vested.
Joy Avzar - Vice President, Legal
Pursuant to an executive employment agreement, effective October 4, 2018, as amended February 26, 2019, July 5, 2019, February 21, 2020, November 1, 2022, between Meta and Joy Avzar (the “Avzar Agreement”), Ms. Avzar’s employment with the Company may terminate without cause or resignation in connection to a change of control or material merger, if such termination occurs within 3 months before and 12 months after the transaction, resulting in a change of control or material merger (the “Avzar Agreement Termination”). In connection with Avzar Agreement Termination, Ms. Avzar is entitled to (i) receive all accrued and unpaid vacation, expense reimbursements, wages, earned but unpaid bonus and other benefits provided under the Company’s plans, policies and arrangements, (ii) lump sum payment equal to the sum of 150% of Ms. Avzar’s base salary and a portion of annual target bonus, prorated monthly based on the number of months of completed service for the fiscal year of Avzar Agreement Termination, (iii) upon a transaction, outstanding equity and Options will fully vest and Ms. Avzar will receive the maximum time permitted under the Omnibus Plan to exercise such holdings, (iv) paid premiums for health benefits will continue until the earlier of 12 months from the last day of employment or the date she and/or her dependents become covered under similar plans, (v) if eligible for vehicle benefits, continuation of such benefit, for a six month period following termination, and (v) outplacement or financial services to a maximum spend of $10,000. In addition, Ms. Avzar’s employment can be terminated at anytime by the Company, without cause, and in which case, Ms. Avzar will receive a one time lump sum payment in the amount of $200,000 less required witholdings.
Pension Disclosure
The Company does not have a pension plan or any other plan that provides for payments or benefits at, following or in connection with retirement and is not currently providing a pension to any directors of the Company or Named Executive Officers. The Company does not have a deferred compensation plan.
Incentive Plan Awards - Value Vested or Earned During the Year
The following table sets forth information with respect to the value of Awards granted pursuant to the Omnibus Plan and Predecessor Plans to the Named Executive Officers that vested during the year ended October 31, 2022:
|
Name & Principal Position |
Option-based awards - Value vested during year ($) |
Share-Based Awards - Value Vested During Year ($) |
Non-Equity Incentive Plan Compensation ($) |
| Harkirat (Raj) Grover | Nil | Nil | Nil |
| Rahim Kanji | Nil | Nil | Nil |
| Andy Palalas | Nil | Nil | Nil |
| Aman Sood | Nil | Nil | Nil |
| Joy Avzar | Nil | Nil | Nil |
Director Compensation
The following table sets forth all compensation to the non-Named Executive Officer directors during the year ended October 31, 2022:
|
Name |
Fees Earned ($) |
Share- Based Awards ($) |
Option- Based Awards ($) |
Annual Incentive Plans ($) |
Pension Value ($) | All Other Compensation ($) | Total Compensation ($) |
| Nitin Kaushal | 75,000 | 33,928 | Nil | Nil | Nil | Nil | 108,928 |
| Arthur Kwan | 75,000 | 31,101 | Nil | Nil | Nil | Nil | 106,101 |
| Andrea Elliott | 75,000 | 31,101 | Nil | Nil | Nil | Nil | 106,101 |
|
Christian Sinclair |
75,000 | 28,273 | Nil | Nil | Nil | Nil | 103,273 |
Note:
| 1. | Based on the grant date fair value determined in accordance with International Financial Reporting Standards 2, Share- based Payment and estimated using the Black Scholes pricing model, with the following key assumptions for grants during 52 weeks ended October 31, 2022: risk-free interest rate 2.6% and expected volatility of 85%. |
The Board, with assistance of the Compensation Committee, reviews the Company’s approach to director compensation. The Compensation Committee considers many factors, including whether compensation fairly reflects the responsibilities and risks involved. The review of the Company’s director compensation includes benchmarking against other Canadian cannabis and consumer packaged goods companies. Annual retainers have been intended to provide an appropriate level of fixed compensation that will assist in director retention and recruitment.
Director Compensation - Outstanding Option-Based and Share-Based Awards
The following table sets forth information with respect to the Awards granted pursuant to the Omnibus Plan and Predecessor Plans to the non-Named Executive Officer directors that were outstanding as of October 31, 2022:
| Option-Based Awards | Share-Based Awards | ||||||
|
Name and Position |
Number of Securities Underlying Unexercised Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Value of unexercised in-the- money Options ($) |
Number of Shares or Units of Shares that have not vested (#) |
Market Value or payout value of share- based awards that have not vested ($) |
Market value or payout value of vested share- based awards not paid out or Distributed ($) |
| Nitin Kaushal | 66,667 | 3.00 | Nov. 25, 2023 | Nil | 26,667 | 52,801 | Nil |
| Arthur Kwan | 66,667 | 3.00 | Nov. 25, 2023 | Nil | 26,667 | 52,801 | Nil |
| Andrea Elliott | 66,667 | 3.90 | Jan. 04, 2024 | Nil | 16,369 | 32,411 | Nil |
| Christian Sinclair |
16,666 6,867(1) 6,867(1) |
3.00 15.48 12.75 |
Nov. 25, 2023 Feb. 27, 2023 Feb. 26, 2023 |
Nil | 13,333 | 26,399 | Nil |
Note:
1. Represents grants made by Meta prior to the Company’s acquisition; however, each grant will be settled by the Company.
Director Compensation - Incentive Plan Awards - Value Vested or Earned During the Year
The following table sets forth information with respect to the value of Awards granted pursuant to the Omnibus Plan and Predecessor Plans to the non-Named Executive Officer directors that vested during the year ended October 31, 2022:
|
Name |
Option-based awards - Value vested during year ($) |
Share-Based Awards - Value Vested During Year ($) |
Non-Equity Incentive Plan Compensation ($) |
| Nitin Kaushal | Nil | 32,928 | Nil |
| Arthur Kwan | Nil | 31,101 | Nil |
| Andrea Elliott | Nil | 31,101 | Nil |
| Christian Sinclair | Nil | 28,273 | Nil |
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLAN
The following table sets forth securities of the Company that are authorized for issuance under its equity compensation plan as at the end of the Company’s most recently completed fiscal year, ending October 31, 2022:
|
Plan Category |
Number of Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights. |
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($) |
Number of Common Shares Remaining Available for Issuance Under Equity Compensation Plans (Excluding Outstanding Securities Reflected in Column 1) |
| Equity compensation plans approved by securityholders | 2,384,726(1) | 5.82 | 10,233,008 |
Note:
| 1. | These securities include 325,584 Common Shares issuable under the Omnibus Plan, and 2,059,142 Common Shares pursuant to the Company's Predecessor Plans. |
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
None of the directors of the Company, proposed nominees for election as directors, executive officers or their respective associates or affiliates, or other Management are indebted to the Company as of the Effective Date or were indebted to the Company at any time during the fiscal year ended October 31, 2022.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Management is not aware of any material interest, direct or indirect, of any informed person of the Company, or any associate or affiliate of any such informed person, in any transaction since the commencement of the Company’s fiscal year ended October 31, 2022, or in any proposed transaction, that has materially affected or would materially affect the Company or any of its subsidiaries.
PARTICULARS OF MATTERS TO BE ACTED UPON
| 1. | Financial Statements |
The Financial Statements and the report of the auditor thereon will be received at the Meeting. No vote will be taken on the Financial Statements. The Financial Statements and the report of the auditor have been provided to each Shareholder entitled to receive a copy of the Notice of Meeting and this Information Circular and who requested a copy of the Financial Statements and the report of the auditor thereon. The Financial Statements are also available on the Company’s website at www.hightideinc.com/invest, through AGM Connect at www.agmconnect.com/hiti2023, under the Company’s SEDAR profile at www.sedar.com, and in the Company’s filings with the SEC at www.sec.gov.
| 2. | Reappointment of Auditor |
Ernst & Young LLP has acted as the Company’s auditor since August 6, 2020. The directors propose to nominate Ernst & Young LLP as the auditor of the Company, to hold office until the earlier of the close of the next annual meeting of Shareholders or their removal by the Company, at a remuneration to be fixed by the audit committee of the Company (the “Audit Committee”). Approval of the appointment of the auditor will require a majority of the votes cast in respect thereof by Shareholders present in person or by proxy at the Meeting.
Absent contrary instructions, Common Shares represented by proxies in favour of the Management nominees will be voted in favour of reappointing Ernst & Young LLP as auditor of the Company until the earlier of the close of the next annual meeting of Shareholders or their removal by the Company, at a remuneration to be fixed by the Audit Committee.
| 3. | Fixing the Number of Directors |
The term of office for each director is from the date of the Meeting at which he is elected until the annual meeting next following or until his or her successor is duly elected or appointed. At the Meeting, the Shareholders will be asked to consider and, if thought fit, approve an ordinary resolution fixing the number of directors to be elected at the Meeting at five.
Absent contrary instructions, Common Shares represented by proxies in favour of the Management nominees will be voted in favour of fixing of the size of the Board at five.
| 4. | Election of Directors |
At the Meeting, a board of five directors will be proposed to be elected for a term that will expire upon the earlier of the next annual meeting of Shareholders or upon their successor being duly elected or appointed, unless his or her office is earlier vacated (the “Proposed Board”). Management has been informed that each of the proposed nominees listed below is willing to serve as a director if elected.
The following table sets forth certain information regarding the Proposed Board, their respective positions with the Company, principal occupations or employment during the last five years, the dates on which they became directors of the Company and the approximate number of Common Shares beneficially owned by them, directly or indirectly, or over which control or direction is exercised by them as of the Effective Date:
|
Name of Nominee, Current Position with the Company, and Province/State and Country of Residence |
Occupation, Business or Employment(1) |
Director Since |
Number of Voting Securities(2) |
| Harkirat (Raj) Grover President, CEO and Director Alberta, Canada | Mr. Grover is the founder of the Company, and has served as the President, CEO, and the Executive Chairman of the Board since the incorporation of the Company in February 2018. | February 8, 2018 |
6,572,600(6) (8,753%) |
|
Christian Sinclair(3)(4)(5) Director Manitoba, Canada |
Mr. Sinclair is a proud member of the Opaskwayak Cree Nation (“OCN”). He graduated from Margaret Barbour Collegiate Institute in 1988 and subsequently went on to serve in the Canadian military from 1988 to 1995, participating in tours of duty in Cyprus (1990 Recon) and Somalia (1992-93 Special Forces). In 2003, Mr. Sinclair was named as one of Canada’s Top 40 under 40. He was the co-founder of the Manitoba Indigenous Summer Games and the General Manager for the 2002 North American Indigenous Games in Winnipeg. In 2016, Mr. Sinclair was elected as Onekanew (Chief) for the OCN. Since then, he has been appointed as one of the co-chairs of a task force created to lead the process of implementing the Government of Manitoba’s Northern Economic Development Strategy and is presently working as an economic development consultant for First Nations major resource projects. |
November 18, 2020 |
42,817 (0.057%) |
|
Arthur Kwan(3)(4)(5) Director Alberta, Canada |
Mr. Kwan is the President and Chief Executive Officer of The Newly Institute, an inter-disciplinary mental health clinical company. Previously, he was the President and Chief Executive Officer of CannaIncome Fund and was an investment banker with Scotia Capital, PI Financial, and Paradigm Capital. Mr. Kwan brings over 20 years of investment banking, capital markets, and leadership experience. |
August 24, 2018 |
157.467 (0.210%) |
|
Nitin Kaushal(3)(5) Director Ontario, Canada |
Mr. Kaushal has served as a member of the Board since October 2018. Mr. Kaushal is the President of Anik Capital Corp. and has over 35 years of experience in the financial services industry. Recently, he retired from PricewaterhouseCoopers LLP (Canada), where he was a Managing Director in their Corporate Finance Practice. | October 16, 2018 |
94,489 (0.126%) |
|
Andrea Elliott(3)(4) Director Ontario, Canada |
Ms. Elliott is the Executive Vice President, Direct to Consumer at Moose Knuckles Canada - a successful global Canadian luxury outerwear brand. Previously, Ms. Elliott founded r2 retail resources, an independent consultancy that supported domestic and international retailers with strategic initiatives, growth plans, e-commerce ideation and SG&A improvements. Ms. Elliott was also previously Vice President and General Manager of PVH Canada Retail (Calvin Klein, Van Heusen, IZOD & Bass), an Executive Vice President at PricewaterhouseCoopers LLP (Canada) and Chief Operating Officer with Karabus Management - a wholly-owned subsidiary of PricewaterhouseCoopers LLP (Canada) focused on the retail industry. |
January 4, 2021 |
48,498 (0.065%) |
Notes:
| 1. | Information furnished by the respective director nominees. |
| 2. | Voting securities of the Company beneficially owned, or controlled or directed, directly or indirectly as of the Effective Date. Information regarding voting securities held does not include voting securities issuable upon the exercise of Options, warrants or other convertible securities of the Company. Information in the table above is derived from the Company’s review of insider reports filed with SEDI and from information furnished by the respective director nominees. |
| 3. | Member of Nominating and Corporate Governance Committee. |
| 4. | Member of Compensation Committee. |
| 5. | Member of the Audit Committee. |
| 6. | Includes 4,035,662 Common Shares directly owned by Mr. Grover, as well as the following Common Shares, beneficially owned by Mr. Grover: (i) 274,657 Common Shares held by Grover Family Trust, a non-arm’s length entity to Mr. Grover (ii) 750,887 Common Shares held by 2088550 Alberta Ltd., an entity wholly owned by Mr. Grover and his spouse, Roza Grover, (iii) 7,099 Common Shares held by Grover Investments Inc., an entity wholly owned by Mr. Grover and Ms. Grover, and (iv) 1,504,295 Common Shares held by Ms. Grover. |
Corporate Cease Trade Orders or Bankruptcies
Other than as described below, no member of the Proposed Board is, or has been, within the past ten years before the Effective Date, a director or executive officer of any company that, while that person was acting in that capacity: (i) was the subject of a cease trade or similar order or an order that denied the issuer access to any exemption under securities legislation for a period of more than thirty consecutive days; or (ii) was subject to an event that resulted, after the person ceased to be a director or executive officer, in the issuer being the subject of a cease trade or similar order or an order that denied the issuer access to any exemption under securities legislation for a period of more than thirty consecutive days.
No member of the Proposed Board is, or has been, within the past ten years before the Effective Date, a director or executive officer of any issuer 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.
Mr. Kaushal served as a director of 3 Sixty Risk Solutions Ltd. (“3 Sixty”) from June 2019 to April 12, 2021. On June 9, 2020, 3 Sixty announced that it was not able to file its annual financial statements and accompanying management’s discussion and analysis for the financial year ended December 31, 2019 within the period prescribed for such filings.
3 Sixty made an application for a management cease trade order (the “MCTO”) and, on June 18, 2020, the MCTO was issued by the Ontario Securities Commission (the “OSC”) and restricted all trading in securities of 3 Sixty by its directors and officers until two business days following the completion of the required filing. On July 15, 2020, the OSC revoked the MCTO and issued a failure-to-file cease trade order (the “FFCTO”) in replacement of it, ordering that all trading in the securities of 3 Sixty would cease, except in accordance with the condition of the FFCTO, if any, for so long as the FFCTO remains in effect. As of the Effective Date, the FFCTO remains in effect. According to 3 Sixty’s public disclosure, it will seek to have the FFCTO revoked, and trading reinstated once all outstanding continuous disclosure documents have been filed.
Mr. Kaushal served as a director of Flower One Holdings Inc. (“Flower One”) from December 28, 2020 to March 31, 2023. On October 17, 2022, Flower One announced that it had commenced a voluntary proceeding under the Companies Creditors Arrangement Act in the Supreme Court of British Columbia to go private. A monitor was appointed on October 25, 2022. Flower One went private and Mr. Kaushal resigned from the board on March 31, 2023.
Personal Bankruptcies
No member of the Proposed Board has, within the ten years before the Effective Date, 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 such person’s assets.
Penalties or Sanctions
No member of the Proposed Board has: (i) 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, other than penalties for late filing of insider reports; or (ii) been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable Shareholder in deciding whether to vote for a proposed director.
It is the intention of the persons named in the enclosed form of proxy, if not expressly directed to the contrary in such form of proxy, to vote such proxies FOR the election of each of the members of the Proposed Board specified above as directors of the Company, to serve for a term that will expire upon the earlier of the next annual meeting of Shareholders or upon their successor being duly elected or appointed. If, prior to the Meeting, any vacancies occur in the proposed nominees herein submitted, the persons named in the enclosed form of proxy intend to vote FOR the election of any substitute nominee or nominees recommended by Management and FOR each of the remaining proposed nominees.
| 5. | Confirm By-Law No. 3 |
The Board resolved to adopt By-Law No. 3, which sets out advance notice requirements that apply in certain circumstances involving nominations of individuals for election as directors of the Company (the “Advance Notice By-Law”). A copy of the Advance Notice By-Law is attached to this Information Circular as Schedule “F” and is also available SEDAR at www.sedar.com, and in the Company’s filings with the SEC at www.sec.gov. The summary of the Advance Notice Bylaw set out below is qualified in its entirety by the full text of the Advance Notice By-Law.
Purpose of the Advance Notice By-Law
The purpose of the Advance Notice By-Law is to provide Shareholders, the Board, and Management with a clear framework for the nomination of directors, to help ensure: the orderly conduct of business at Shareholder meetings; and that Shareholders will have adequate time and sufficient information to evaluate potential nominees to the Board. Among other things, the Advance Notice By-Law fixes a deadline by which Shareholders must submit director nominations to the Company prior to any meeting of the Shareholders at which directors are to be elected. It also specifies the information that a nominating Shareholder must include in their notice to the Company for the notice to be in proper form and for any proposed nominee to be eligible for election at the applicable meeting of the Shareholders.
Summary of Terms of the Advance Notice By-Law
The Advance Notice By-Law provides that advance notice to the Company must be provided in circumstances where nominations of individuals for election to the Board are made pursuant to: a) a "proposal" made in accordance with the Business Corporations Act (Alberta) (the "ABCA"), or b) a requisition of a meeting made pursuant to the ABCA, or by a person (a "Nominating Shareholder") who: (i) at the close of business on the date that notice of a proposed nomination is given to the Company (as contemplated by the Advance Notice By-Law) and at the close of business on the record date for notice of the applicable meeting, is entered in the Company's securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting and establishes such beneficial ownership to the satisfaction of the Chair of the meeting; and (ii) complies with the notice and other procedures set out in the Advance Notice By-Law. The Advance Notice By-Law fixes a deadline by which notice of a proposed nomination must be provided to the Secretary of the Company prior to any meeting of the Shareholders at which directors are to be elected, and outlines the specific information that a Nominating Shareholder must include in such notice. No person nominated by a Shareholder will be eligible for election as a director unless nominated in accordance with the provisions of the Advance Notice By-Law. In the case of an annual meeting of Shareholders, notice to the Secretary of the Company must be given not less than 30 days and not more than 65 days prior to the date of the annual meeting; provided, however, that if the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be given not later than the close of business on the 10th day following such public announcement. In the case of a special meeting of Shareholders (which is not also an annual meeting) called for the purpose of electing directors (whether or not called for other purposes), notice to the Secretary of the Company must be given not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting was made. The Board may, in its sole discretion, waive any requirement of the Advance Notice By-Law and may delegate such discretion to the Chair of any meeting of the Shareholders.
Confirmation and Approval of Advance Notice By-Law by Shareholders
In accordance with the ABCA, the Advance Notice By-Law is in effect until it is confirmed, confirmed as amended or rejected by Shareholders at the Meeting, and if confirmed or confirmed as amended, the Advance Notice By-Law will continue in effect in the form in which it is so confirmed. If shareholders do not confirm the Advance Notice By-Law at the Meeting, it will thereafter cease to have effect. For greater certainty, the Corporation's existing by-laws are not affected by the Advance Notice By-Law and will continue in effect, unamended.
At the Meeting, Shareholders will be asked to consider and, if thought advisable, approve the following ordinary resolution respecting confirmation of the Advance Notice By-Law (the "Advance Notice By-Law Resolution"):
"BE IT RESOLVED, as an ordinary resolution of the shareholders of High Tide Inc. (the “Company”) that:
| 1. | By-Law No 3 of the Company providing, among other things, for advance notice of nominations of directors of the Company, in the form attached as Schedule "A" and as described in the management information circular of the Company, dated May 26, 2023, is hereby ratified and confirmed as a by-law of the Company; |
| 2. | notwithstanding that this resolution has been passed by the holders of common shares of the Company, the Board is hereby authorized and empowered, to revoke this resolution, without any further approval of the Shareholders, at any time if such revocation is considered necessary or advisable by the Directors; and |
| 3. | any officer or director of the Company is hereby authorized and directed, for and on behalf of the Company, to execute and deliver all applications, declarations, instruments and other documents, and to do or cause to be done all such other acts and things, as such officer or director may consider necessary or advisable to give effect to the foregoing paragraphs of this resolution including, without limitation, the execution, signing or filing of any such document or the doing of any such act or thing being conclusive evidence of such determination." |
Adoption of the Advance Notice By-Law has been conditionally approved by the TSXV, subject to confirmation of passage of the Advance Notice By-Law Resolution by the Shareholders at the Meeting and delivery of an opinion of legal counsel confirming that all necessary steps have been taken to validly effect and adopt the Advance Notice By-Law in accordance with applicable law. In order to be passed, the foregoing ordinary resolution must be approved by a simple majority of the votes cast by Shareholders who vote in person or by proxy at the Meeting.
The Board recommends that Shareholders vote FOR the foregoing ordinary resolution at the Meeting. Absent contrary intentions, Common Shares represented by proxies in favour of the Management nominees will vote FOR such ordinary resolution confirming the Advance Notice By-Law Resolution.
OTHER BUSINESS
Management is not aware of any other business to come before the Meeting other than as set forth in the Notice of Meeting. If any other business properly comes before the Meeting, it is the intention of the persons named in the form of proxy to vote the Common Shares represented thereby in accordance with their best judgment on such matter.
INDICATION OF OFFICER AND DIRECTORS
All of the directors and executive officers of the Company have indicated that they intend to vote their Common Shares in favour of each of the above resolutions. In addition, unless authority to do so is indicated otherwise, the persons named in the enclosed form of proxy intend to vote the Common Shares represented by such proxies in favour of each of the above resolutions.
ADDITIONAL INFORMATION
Additional information relating to the Company is on SEDAR at www.sedar.com, and in the Company’s filings with the SEC at www.sec.gov.
Financial information is provided in the Company’s comparative financial statements and MD&A for the fiscal year ended October 31, 2022, which is filed on SEDAR at www.sedar.com, and with the SEC at www.sec.gov. Shareholders may contact the Company at Unit 112, 11127 - 15 Street N.E., Calgary, Alberta, T3K 2M4, Attention: Chief Executive Officer, to request copies without charge of the Financial Statements and MD&A.
OTHER MATTERS
Management is not aware of any other matter to come before the Meeting other than as set forth in the Notice of Meeting. If any other matter properly comes before the Meeting, it is the intention of the persons named in the enclosed form of proxy to vote the shares represented thereby in accordance with their best judgment on such matter.
The contents of this Information Circular and its distribution to Shareholders have been approved by the Board.
DATED at Calgary, Alberta, April 19, 2023.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ “Harkirat (Raj) Grover”
Harkirat (Raj) Grover
President, Chief Executive Officer and Director
SCHEDULE “A” CORPORATE GOVERNANCE GUIDELINES
Capitalized terms used in this Schedule “A” but not otherwise defined herein shall have the meanings ascribed thereto in the Information Circular to which this Schedule “A” is appended.
Corporate Governance
Corporate governance relates to the activities of the Board, the members of which are elected by and are accountable to the Shareholders and takes into account the role of the individual members of Management who are appointed by the Board and who are charged with the day-to-day management of the Company. National Policy 58-201 - Corporate Governance Guidelines (“NP 58-201”) establishes corporate governance guidelines which apply to all public companies. These guidelines are not intended to be prescriptive but to be used by issuers in developing their own corporate governance practices. The Board is committed to sound corporate governance practices, which are both in the interest of the Shareholders and contribute to effective and efficient decision making.
Pursuant to National Instrument 58-101 - Disclosure of Corporate Governance Practices (“NI 58-101”), the Company is required to disclose its corporate governance practices, as summarized below. The Board will continue to monitor such practices on an ongoing basis and, when necessary, implement such additional practices as it deems appropriate.
Board of Directors
The Board is currently composed of five directors:
| 1. | Harkirat (Raj) Grover; |
| 2. | Christian Sinclair; |
| 3. | Nitin Kaushal; |
| 4. | Arthur Kwan; and |
| 5. | Andrea Elliott. |
NI 58-201 suggests that the board of directors of every reporting issuer should be constituted with a majority of individuals who qualify as “independent” directors, within the meaning set out under National Instrument 52-110 - Audit Committees (“NI 52-110”), which provides that a director is independent if he or she has no direct or indirect “material relationship” with the company. “Material relationship” is defined as a relationship which could, in the view of a company’s board of directors, be reasonably expected to interfere with the exercise of a director’s independent judgment. In assessing NI 58-101 and making the foregoing determinations, the circumstances of each director have been examined in relation to a number of factors.
Of the current directors, Harkirat (Raj) Grover is the President and CEO of the Company and is therefore not considered to be “independent”. The remaining directors, Christian Sinclair, Nitin Kaushal, Arthur Kwan and Andrea Elliott are considered to be independent directors since they are independent of Management and free from any material relationship with the Company.
The Board has a majority of independent directors, and takes the following additional steps to facilitate its independence:
| 1. | The Company established the Compensation Committee, which is made up of all independent directors; |
| 2. | The Compensation Committee sets Management compensation; and |
| 3. | On operational matters of the Company involving the performance of its CEO, the Compensation Committee meets independently. |
In the event of a conflict of interest at a meeting of the Board, the conflicted director will in accordance with corporate law and in accordance with his or her fiduciary obligations as a director of the Company, disclose the nature and extent of his or her interest to the meeting and abstain from voting on or against the approval of such participation.
Directorships
The following directors currently serve on the board of directors of the reporting issuers (or equivalent) listed below, each of which are reporting issuers in one or more jurisdictions:
| Name | Name of Other Reporting Issuer(s) |
| Harkirat (Raj) Grover | N/A |
| Christian Sinclair | N/A |
|
Nitin Kaushal |
Delta 9 Cannabis Inc. FSD Pharma Inc. Viemed Healthcare Inc. Everyday People Financial Corp. |
|
Arthur Kwan |
Bow Lake Capital Corp. Reem Capital Corp. Friday’s Dog Inc. |
| Andrea Elliott | N/A |
Board Meetings
The attendance for each director for Board meetings and committee meetings, since the beginning of the most recently completed financial year, is as follows:
|
Name |
Board Meetings Attended |
Audit Committee Meetings Attended |
Nominating and Corporate Governance Committee Meetings Attended |
Compensation Committee Meetings Attended |
| Harkirat (Raj) Grover | 100% | NA | NA | NA |
| Nitin Kaushal | 100% | 100% | NA | NA |
| Arthur Kwan | 100% | 100% | 100% | 100% |
| Andrea Elliott | 100% | NA | 100% | 100% |
| Christian Sinclair | 100% | 100% | 100% | 100% |
In addition to the meetings referenced above, there were numerous informal meetings between Management and the committees. The independent directors do not hold regularly scheduled meetings at which non-independent directors and members of Management are not present. However, the Board believes that appropriate structures and procedures are in place to ensure that it can function independently of Management and the Board periodically holds independent sessions at the end of Board meetings. Additionally, all committees of the Board are composed entirely of independent directors and hold meetings at which the independent directors discuss matters they deem relevant to the Company. Independent directors are also in frequent informal communication with one another.
The Chairman of the Board is Harkirat (Raj) Grover, a non-independent director and executive officer of the Company. The Chairman focuses on promoting a culture of openness and debate among directors, helping to build and maintain constructive relationships between the independent and non-independent directors. When chairing Board meetings, the Chairman ensures that all views are heard and that the independent directors have an opportunity to challenge Management constructively.
Board Mandate
The Board has not developed a written mandate. The Board is satisfied that roles and responsibilities are delineated in a satisfactory matter, having regard to various considerations such as (but not limited to) the particular expertise of the directors, their respective availability and independence.
Position Descriptions
The Board has not developed written position descriptions for the chair of the Board and the chair of the Board’s committees, however the chair of the committees are charged with the responsibility of administering the applicable committee mandates, each of which is can be obtained from the Company, upon request made to #112, 11127 15th Street NE, Calgary, AB T3K 2M4 Attention: Chief Financial Officer, free of charge to any Shareholder.
The CEO has entered into a written employment agreement, which delineates the role and expectations of such position.
Orientation and Continuing Education
New Board members receive an orientation package, which includes reports on operations and results, and public disclosure filings by the Company. Board meetings are sometimes held at the Company’s facilities and are combined with tours and presentations by Management and employees to give the Board additional insight into the Company’s business. In addition, Management makes itself available for discussion with all Board members.
The Company does not provide formal continuing education to the Board, though it is encouraged for all members. Management does provide regular reporting, both on the Company’s operations and opportunities, as well industry trends and opportunities.
Ethical Business Conduct
The Board has adopted a Code of Business Conduct and Ethics (the “Code”). The Code is incorporated by reference into, and form an integral part of, this Information Circular. A copy of which is attached to this Information Circular as Schedule “D”. The Company will, upon request made to #112, 11127 15th Street NE, Calgary, AB T3K 2M4 Attention: Chief Financial Officer, provide a copy of the Code free of charge to any Shareholder.
In accordance with the Code, the Board monitors ethical conduct of the Company and ensures that it complies with applicable legal and regulatory requirements, such as those of relevant securities commissions and stock exchanges. The Code also specifically addresses additional matters such as conflicts of interest, corporate opportunities, etc. In addition to the Code, the Board has found that the fiduciary duties placed on individual directors by the Company’s governing corporate legislation and the common law, as well as the restrictions placed by applicable corporate legislation on the individual director’s participation in decision 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 Company.
In accordance with applicable corporate laws, directors are obliged to disclose any potential conflicts in accordance with, and subject to such procedures and remedies, as applicable, under the ABCA.
The Board considers that the policies and procedures outlined above are sufficient to promote a culture of ethical business conduct. If ever in doubt, Management seeks guidance from the Board and/or outside advisors to ensure that such levels of conduct are adhered to.
Nomination of Directors
The Board has appointed a Nominating and Corporate Governance Committee, which is comprised entirely of independent directors, namely Arthur Kwan (Chair), Christian Sinclair and Andrea Elliott. The Nominating and Corporate Governance Committee fulfills the function of identifying new candidates for Board nomination. When the Board identifies the need to fill a position on the Board, the Board requests that current directors forward potential candidates for consideration.
The Nominating and Corporate Governance Committee is responsible for determining the qualification, skills and expertise required on the Board, as well as for the screening of potential candidates and the delivery of recommendations to the Board.
For a complete description of the Nominating and Corporate Governance Committee’s responsibilities, powers and operations, please refer to the Nominating and Corporate Governance Committee Charter, a copy of which is attached to this Information Circular as Schedule “C”.
Compensation
The Board has appointed a Compensation Committee, which is comprised entirely of independent directors, namely Andrea Elliott (Chair), Christian Sinclair and Arthur Kwan. The Compensation Committee reviews all Board and officer compensation and makes recommendations in respect thereof, which the Board then reviews in consideration of approval thereof.
The purpose of our Compensation Committee is to (i) make recommendations to the Board relating to evaluation and compensation of the Corporation’s executives, (ii) oversee incentive, equity-based and other compensatory plans in which executive officers and key employees of the Company participate, (iii) review and participate in determining director compensation and (iv) prepare any report on executive compensation required by the rules and regulations of applicable securities regulatory authorities and stock exchanges.
For a complete description of the Compensation Committee’s responsibilities, powers and operations, please refer to the Compensation Committee Charter, a copy of which is attached to this Information Circular as Schedule “E”.
Other Board Committees
The Board has no standing committees other than the Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee.
Assessments
The Nominating and Corporate Governance Committee is mandated to conduct an annual evaluation by the directors on the effectiveness of the Board and its committees and proposing any necessary modifications to the functioning and governance of the Board and committees that may result from such evaluation processes.
Director Term Limits and Other Mechanisms of Board Renewal
The Company has not adopted director term limits. As the Company is a relatively junior company, continuity of Board members is considered a high priority at this stage of the Company’s existence and development.
Policies Regarding the Representation of Women on the Board
The Company has not adopted a written policy relating to the identification and nomination of women directors. Though the Board recognizes the importance of a reasonable degree of gender balance over the long term, at the present stage of the Company’s existence and development, it is imperative that the directors of the Company be the best available individuals, irrespective of gender.
Consideration of the Representation of Women in the Director Identification and Selection Process
The Nominating and Corporate Governance Committee (in addition to the Board) considers the level of representation of women on the Board in identifying and nominating candidates for election or re-election to the Board, however the Nominating and Corporate Governance Committee’s (and the Board’s) priority at the present stage of the Company’s existence and development is to seek out the best available candidates, irrespective of gender. It should be noted that one of the directors of the Company is a woman.
Consideration Given to the Representation of Women in Executive Officer Appointments
The Nominating and Corporate Governance Committee (in addition to the Board) does consider the level of representation of women in executive officer positions when making executive officer appointments, however the Nominating and Corporate Governance Committee's (and the Board’s) priority at the present stage of the Company’s existence and development is to seek out the best available candidates, irrespective of gender.
Issuer’s Targets Regarding the Representation of Women on the Board and in Executive Officer Positions
The Company has not adopted such targets to date, as the Company’s priority at the present stage of the Company’s existence and development is to seek out the best available candidates, irrespective of gender.
Number of Women on the Board and in Executive Officer Positions
The Company currently has one woman director, representing 20% of the Board. Vice President and Legal Counsel, Vice President, Human Resources and Senior Director of Strategic Operations are all positions held by women.
Board Diversity Matrix (reporting year ended October 31, 2022)
| Total Number of Directors - 5 | Female | Male | Non-Binary | Did not Disclose |
| Part I : Gender Identity | ||||
| Directors | 1 | 4 | 0 | 0 |
| Part II : Demographic Background | ||||
| First Nations (Cree) | - | 1 | - | - |
| Asian | - | 3 | - | - |
| Caucasian | 1 | - | - | - |
| LGBTQ+ | 0 | 0 | - | - |
| Did not disclose | - | - | - | - |
AUDIT COMMITTEE DISCLOSURE
Pursuant to NI 52-110, the Company is required to have an audit committee comprised of not less than three directors, a majority of whom are not officers, control persons or employees of the Company or an affiliate of the Company. NI 52-110 requires the Company, to disclose annually in its information circular certain information concerning the constitution of its audit committee and its relationship with its independent auditor.
Audit Committee’s Charter
The Board is responsible for reviewing and approving the unaudited interim financial statements, and annual audited financial statements, together with other financial information of the Company and for ensuring that Management fulfills its financial reporting responsibilities. The Audit Committee assists the Board in fulfilling this responsibility. The Audit Committee meets with Management to review the financial reporting process, unaudited interim financial statements, and annual audited financial statements, together with other financial information of the Company. The Audit Committee reports its findings to the Board for its consideration in approving the unaudited interim financial statements, and annual audited financial statements, together with other financial information of the Company for issuance to the Shareholders.
Pursuant to NI 52-110, the Audit Committee is required to have a charter. A copy of the Company’s Audit Committee Charter is attached hereto as Schedule “B” to this Information Circular.
Composition of the Audit Committee
The following are the members of the Audit Committee:
| Name | Independence(1) | Financial Literacy(2) |
| Nitin Kaushal (Chair) | Independent | Financially literate |
| Arthur Kwan | Independent | Financially literate |
| Christian Sinclair | Independent | Financially literate |
Notes:
| 1. | Within the meaning of subsection 1.4 of NI 52-110. |
| 2. | Within the meaning of subsection 1.6 of NI 52-110. |
Relevant Education and Experience
Nitin Kaushal, CPA, CA - Mr. Kaushal has served as a member of the Board since October 2018. Mr. Kaushal is the President of Anik Capital Corp. and has over 30 years of experience in the financial services industry. Recently, he retired from PricewaterhouseCoopers LLP (Canada), where he was a Managing Director in their Corporate Finance Practice.
Arthur Kwan, CFA, ICD.D - Mr. Kwan is the President and Chief Executive Officer of The Newly Institute, an interdisciplinary mental health clinical company. Previously, he was the President and Chief Executive Officer of CannaIncome Fund and was an investment banker with Scotia Capital, PI Financial, and Paradigm Capital. Mr. Kwan brings over 20 years of investment banking, capital markets, and leadership experience.
Christian Sinclair - Mr. Sinclair is a proud member of the Opaskwayak Cree Nation. He graduated from Margaret Barbour Collegiate Institute in 1988 and subsequently went on to serve in the Canadian military from 1988 to 1995, participating in tours of duty in Cyprus (1990 Recon) and Somalia (1992-93 Special Forces). In 2003, Mr. Sinclair was named as one of Canada’s Top 40 under 40. He was the co-founder of the Manitoba Indigenous Summer Games and the General Manager for the 2002 North American Indigenous Games in Winnipeg. In 2016, Mr. Sinclair was elected as Onekanew (Chief) for the Opaskwayak Cree Nation. Since then, he has been appointed as one of the co- chairs of a task force created to lead the process of implementing the Government of Manitoba’s Northern Economic Development Strategy and is presently working as an economic development consultant for First Nations major resource projects.
Audit Committee Oversight
At no time since the commencement of the Company’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.
Reliance on Certain Exemptions
Other than as disclosed below, at no time since the commencement of the Company’s most recently completed fiscal year has the Company relied on an exemption from the provisions of NI 52-110.
Prior to the appointment of Christian Sinclair to the Board and the Company’s listing on the NASDAQ, the Company relied on upon the exemption in Section 6.1 of NI 52-110, the exemption for venture issuers in relation to the requirement that every audit committee member be independent.
Pre-Approval Policies and Procedures
The Audit Committee has not adopted specific policies and procedures for the engagement of non-audit services, but all such services will be subject to the prior approval of the Audit Committee.
External Auditor Service Fees
Aggregate fees paid or payable to the auditor related to the fiscal periods indicated were as follows:
| Fiscal Year ended October 31, 2022 | Fiscal Year ended October 31, 2021 | |
| Audit Fees | $2,289,350 | $1,355,000 |
| Audit-related Fees(1) | Nil | Nil |
| Tax Fees(2)(3) | Nil | Nil |
| All Other Fees(4) | Nil | Nil |
| Total | $2,289,350 | $1,355,000 |
Notes:
| 1. | Consist of fees for professional services and expenses relating to the audit of the annual financial statements and review of our quarterly financial information. Fees charged for assurance and related services reasonably related to the performance of an audit, and not included under “Audit Fees”. |
| 2. | Consist of fees for professional services and expenses reasonably relating to the audit of the annual financial statements or review of our quarterly financial information and are not reported as “Audit Fees”. Fees charged for tax compliance, tax advice and tax planning services. |
| 3. | Consist of fees for tax-related services related primarily to tax consulting and tax planning. |
| 4. | Fees for services other than disclosed in any other row, including fees related to the review of the MD&A. |
SCHEDULE “B” - AUDIT COMMITTEE CHARTER
| 1. | PURPOSE |
The Audit Committee (the “Committee”) shall be established by resolution of the board of directors (the “Board”) of High Tide Inc., a corporation existing under the laws of Alberta (the “Company”).
The Committee is responsible for:
| 1. | Assisting the Board in fulfilling its oversight responsibilities as they relate to the Company’s accounting policies and internal controls, financial reporting practices and legal and regulatory compliance, including, among other things: |
| a) | Monitoring the integrity of the Company’s financial statements, corporate accounting and financial reporting processes and financial information that will be provided to shareholders and others; |
| b) | Reviewing the Company’s compliance with certain legal and regulatory requirements; |
| c) | Evaluating the independent auditors’ qualifications and independence; and |
| d) | Monitoring the performance of the Company’s internal audit function and the Company’s independent auditors as well as any other public accounting firm engaged to perform other audit, review or attest services. |
| 2. | Providing an open avenue of communication among the independent auditors, financial and senior management and the Board; and |
| 3. | Annually evaluating the performance of the Committee. |
While the Committee has the duties and responsibilities set forth in this Charter, the role of the Committee is oversight. The Committee is not responsible for planning or conducting the audit or determining whether the Company’s financial statements are complete and accurate and in accordance with applicable accounting rules. Such activities are the responsibility of the Company’s independent auditors and management. The Committee has direct responsibility for the appointment, compensation, oversight and replacement, if necessary, of the independent auditors, including the resolution of disagreements between management and the independent auditors regarding financial reporting, and any other registered public accounting firm with respect to which the Committee is required to have such responsibility.
The Committee also oversees the activities of the internal audit function, including hiring and performance management in respect of the most senior internal audit executive, who maintains a direct reporting relationship with the Chair of the Committee (“Chair”).
The Committee and each of its members shall be entitled to rely on:
| 1. | The integrity of those persons and organizations within and outside of the Company from which it receives information; |
| 2. | The accuracy of the financial and other information provided to the Committee by such persons or organizations absent actual knowledge to the contrary (which shall be promptly reported to the Board); |
| 3. | Representations made by management as to any audit and non-audit services provided by the independent auditors to the Company. |
| 2. | COMPOSITION AND QUALIFICATIONS |
The Committee shall be appointed by the Board and shall be comprised of at least three directors (as determined from time to time by the Board), one of whom shall be appointed by the Board as Chair. If a Chair is not so appointed, the members of the Committee may elect a Chair by majority vote. Committee members may be removed by the Board in its discretion.
Unless otherwise permitted by applicable phase-in rules and exemptions, each member of the Committee shall meet the ‘independence’ requirements of Section 10A-3 of the Securities Exchange Act of 1934, as amended, the National Association of Securities Dealers Automated Quotations (“NASDAQ”) and all other applicable laws and regulations. The Committee may avail itself of any phase-in compliance periods available to the Company that are afforded by applicable rules of the NASDAQ, and all other applicable laws and regulations. The Committee may also avail itself of exemptions available to U.S. listed issuers under National Instrument 52-110 - Audit Committees of the Canadian Securities Administrators.
All members of the Committee must be able to read and understand financial statements, including a balance sheet, income statement and cash flow statement. All members of the Committee shall have a working familiarity with basic finance and accounting practices, and at least one member of the Committee shall, be an “audit committee financial expert” as defined by the Securities and Exchange Commission or otherwise have accounting or related financial management expertise as interpreted by the Board in its business judgment.
A Committee member invited to sit on another public company’s audit committee must notify the Board. If a Committee member or proposed Committee member simultaneously serves on the audit committees of two other public companies, the Board must determine whether or not such simultaneous service would impair the ability of such member to effectively serve on the Committee.
No member of the Committee shall receive from the Company or any of its affiliates any compensation other than the fees to which he or she is entitled as a director of the Company or a member or chair of a committee of the Board. Such fees may be paid in cash and/or shares, options or other in-kind consideration ordinarily available to directors.
| 3. | MEETINGS |
The Committee shall meet as frequently as the Chair deems appropriate subject to the provisions of this Charter, which be at least quarterly. The Committee may meet with the independent auditors, internal auditors, and management separately, to the extent the Committee deems necessary and appropriate.
| A. | Frequency |
The Committee shall hold regularly scheduled meetings at least quarterly and such special meetings as circumstances dictate. The Chair, any member of the Committee, the independent external auditors, the Chair of the Board, Chief Executive Officer (“CEO”) or Chief Financial Officer (“CFO”) may call a meeting of the Committee by notifying the Corporate Secretary, who will notify the members of the Committee.
| B. | Agenda and Notice |
The Chair shall establish the meeting dates and the meeting agenda. The Chair or Corporate Secretary shall send proper notice of each Committee meeting and information concerning the business to be conducted at the meeting, to the extent practical, to each member prior to each meeting.
Any written material provided to the Committee shall be appropriately balanced (i.e. relevant and concise) and shall be distributed in advance of the respective meeting with sufficient time to allow Committee members to review and understand the information.
| C. | Holding and Recording Meetings |
Committee meetings may be held in person or telephonically or by video conference. The Committee shall keep written minutes of its meetings and submit such minutes to the Board.
| D. | Quorum |
A majority of the members of the Committee shall constitute a quorum.
| E. | Executive Sessions |
The Committee will meet periodically (not less than annually) in separate executive sessions with each of the CFO or any other executive officer, the principal accounting officer and/or the senior internal auditing executive (or any other personnel responsible for the internal audit function), and the independent auditors.
| 4. | COMPENSATION |
The compensation of Committee members shall be determined by the Board and/or a subcommittee of the Board.
| 5. | RESPONSIBILITIES OF THE COMMITTEE |
| A. | System of Financial Controls |
The Committee shall oversee the process by which management shall design, implement, amend, maintain, and enforce a comprehensive system of financial controls (including the right internal and external people and resources, policies, processes and enforcement) aimed at ensuring the integrity and compliance of the Company’s books and records with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, and sound business practices, as well as protecting the value of the Company’s assets and safeguarding the credibility of its brand, employees, management team, Board, and shareholders.
System of financial controls will embody the adoption of best practices in financial controls and foster honesty, integrity, accuracy, and transparency in all aspects of the Company. Best practices include but are not limited to: setting the right tone at the top; active review of business performance by executive management, with regular reporting to and oversight by the Board; an accurate, stable and reliable general ledger; a robust internal audit function; unambiguous compliance with IFRS; and full transparency and ongoing dialogue with the Board, management and external auditors.
| B. | Annual Audit Review |
The Committee shall review and discuss the annual audited financial statements including the independent auditors’ audit and audit report thereon, and the annual management’s discussion and analysis of financial condition and results of operations of the Company with management and the independent auditors. In connection with such review, the Committee will:
| 1. | Review the scope of the audit, the audit plan and audit procedures utilized; |
| 2. | Review with the independent auditors any audit problems or difficulties encountered during their audit, including any change in the scope of the planned audit, any restrictions placed on the scope of the audit or access to requested information, and any significant disagreements with management, and management’s response to such problems or difficulties; |
| 3. | Resolve any differences in financial reporting between management and the independent auditors; |
| 4. | Review with management, internal auditors, and independent auditors, the adequacy of the Company’s internal controls, including information systems controls and security and bookkeeping controls and any significant findings and recommendations with respect to such controls; |
| 5. | Review reports required to be submitted by the independent auditors concerning: |
| a) | All critical accounting policies and practices used in the preparation of the Company’s financial statements; |
| b) | All alternative treatments of financial information within IFRS that have been discussed with management, ramifications of such alternatives, and the accounting treatment preferred by the independent auditors; and |
| c) | Any other material written communications between the independent auditors and management, such as any management letter or schedule of unadjusted differences. |
| 6. | Review and discuss: |
| a) | The integrity of the annual audited financial statements and quarterly financial statements with management and the independent auditors, including the notes thereto and all matters required by applicable auditing standards, and the written disclosures required by applicable auditing standards regarding the independent auditors’ independence; |
| b) | Major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles, and major issues as to the adequacy of the Company’s internal controls and any special audit steps adopted in light of material control deficiencies; and |
| c) | Analyses prepared by management and/or the independent auditors setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analysis of the effects of alternative IFRS methods on the financial statements and the effects of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company. |
| 7. | Inquire about and review with management and the independent auditors any significant risks or exposures faced by the Company and discuss with management the steps taken to minimize such risk or exposure. Such risks and exposures include, but are not limited to, threatened and pending litigation, claims against the Company, tax matters, regulatory compliance and correspondence from regulatory authorities, and environmental exposure; and |
| 8. | Discuss policies and procedures concerning earnings press releases and review the type and presentation of information to be included in earnings press releases (paying particular attention to any use of “pro forma” and “adjusted” or other non-IFRS information), as well as financial information and earnings guidance provided to analysts and rating agencies. |
| C. | Quarterly Reviews |
Review and discuss the quarterly financial statements and the quarterly management’s discussion and analysis of financial condition and results of operations of the Company with management and the internal auditors, and the independent auditors, together with the independent auditors’ review thereof pursuant to professional standards and procedures for conducting such reviews, as established by IFRS and applicable securities laws. In connection with the quarterly reviews, the Committee shall inquire about and review with management and the independent auditors any significant risks or exposures faced by the Company and discuss with management the steps taken to minimize such risk or exposure.
| D. | Other Financial Information |
Review and discuss with management, where appropriate, financial information contained in any prospectuses, annual information forms and Form 40-F, annual reports to shareholders, management proxy circulars, material change disclosure and Form 6-K of a financial nature and similar disclosure and other documents prior to the filing or public disclosure of such documents or information.
| E. | Oversight of Independent External Auditors |
The Company’s independent auditors shall report directly to and are ultimately accountable to the Committee. In connection with its oversight of the performance and independence of the independent auditors, the Committee will:
| 1. | Have the sole authority and direct responsibility to appoint, retain, compensate, oversee and replace (subject to shareholder approval, if deemed advisable by the Board or if required under applicable law) the independent auditors; |
| 2. | Have authority to approve the engagement letter and all audit, audit-related, tax and other permissible non- audit services proposed to be performed by the independent auditors and the related fees for such; |
| 3. | Obtain confirmation and assurance as to the independent auditors’ independence, including ensuring that they submit on a periodic basis (not less than annually) to the Committee a formal written statement delineating all relationships between the independent auditors and Company. The Committee shall actively engage in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors and shall take appropriate action in response to the independent auditors’ report to satisfy itself of their independence; |
| 4. | At least annually, obtain and review a report by the independent auditors describing the firm’s internal quality-control procedures, any material issues raised by the most recent internal quality-control review or peer review of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; |
| 5. | Meet with the independent auditors prior to the annual audit to discuss planning and staffing of the audit; |
| 6. | Review and evaluate the performance of the independent auditors, as the basis for a decision to reappoint or replace the independent auditors; |
| 7. | Set clear hiring policies for employees or former employees of the independent auditors, including but not limited to, as required by all applicable laws and listing rules; and |
| 8. | Assure regular rotation of the lead audit partner and consider whether rotation of the independent auditors is required to ensure independence. |
| F. | Oversight of Internal Audit |
In connection with its oversight responsibilities, the Committee shall have authority over and direct responsibility for the internal audit function at the Company at all times. In the Committee’s discretion, the internal audit function or parts thereof may be outsourced to a third-party vendor, provided that such vendor follows the standards and guidelines established by the Committee. The Head of Internal Audit (or the third-party vendor providing internal audit function support, if applicable) will report directly to the Committee or its designee. The Head of Internal Audit or relationship manager of the vendor providing internal audit function support, as applicable, shall report at least annually to the Committee regarding the internal audit function’s organizational structure and personnel.
In overseeing internal audit, the Committee will:
| 1. | Review the appointment or replacement of the senior internal auditing executive, if any, or, if outsourced, the third-party vendor providing internal audit services; |
| 2. | Review, in consultation with management, the independent auditors and senior internal auditing executive, if any, the plan and scope of internal audit activities; |
| 3. | Review internal audit activities, budget and staffing; and |
| 4. | Review significant reports to management prepared by the internal auditing department and management’s responses to such reports. |
| G. | Disclosure Controls & Procedures (“DC&P”) and Internal Controls over Financial Reporting (“ICFR”) |
| 5. | Monitor and review the Company’s disclosure policy and the mandate of its nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”), on an annual basis; |
| 6. | Receive and review the quarterly report of the Nominating and Corporate Governance Committee on its activities for the quarter; |
| 7. | On a quarterly basis, review management’s assessment of the design effectiveness of the Company’s DC&P and ICFR including any significant control deficiencies identified and the related remediation plans; |
| 8. | Review management’s assessment of the operating effectiveness of the Company’s DC&P (quarterly) and ICFR (annually) including any significant control deficiencies identified and the related remediation plans; |
| 9. | Review and discuss any fraud or alleged fraud involving management or other employees who have a role in Company’s ICFR and the related corrective and disciplinary actions to be taken; |
| 10. | Discuss with management any significant changes in the ICFR that are disclosed, or considered for disclosure on a quarterly basis; and |
| 11. | Review and discuss with the CEO and CFO the procedures undertaken in connection with the CEO and CFO’s certifications for the annual and interim filings with the securities commissions. |
| H. | Risk Assessment and Risk Management |
The Committee shall discuss the Company’s major business, operational, and financial risk exposures and the guidelines, policies and practices regarding risk assessment and risk management, including derivative policies, insurance programs and steps management has taken to monitor and control major business, operational and financial risks.
| I. | Ethical Standards |
The Committee shall establish, maintain and oversee the Company’s code of business conduct and ethics (the “Code”), a copy of which is attached hereto as Appendix I to Schedule “B”. The Committee shall be responsible for reviewing and evaluating the Code periodically and will recommend any necessary or appropriate changes thereto to the Board for consideration. The Committee shall also assist the Board with the monitoring of compliance with the Code and consider any waivers of the Code (other than waivers applicable to the directors or executive officers, which shall be subject to review by the Board as a whole).
| J. | Related Party Transactions |
The Committee shall review and approve related-party transactions or recommend related-party transactions for review by independent members of the Board.
| K. | Submission of Complaints |
The Committee shall establish procedures for receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; the confidential, anonymous submission by directors, officers, employees, consultants and contractors of the Company of concerns regarding questionable accounting or auditing matters and the investigation of such matters with appropriate follow-up actions.
| L. | Legal Compliance |
On at least an annual basis, the Committee shall review with the Company’s legal counsel and management, all legal and regulatory matters and litigation, claims or contingencies, including tax assessments, licence or concession defaults or notifications, health and safety violations or environmental issues, that could have a material effect upon the financial position of the Company, and the manner in which these matters may be, or have been, disclosed in the financial statements.
| M. | Regulatory Developments |
The Committee shall monitor and provide reports to the Board with respect to developments in accounting rules and practices, income tax laws and regulations, and other regulatory requirements that affect matters within the scope of the Committee’s authority and responsibilities.
| N. | Other Responsibilities |
The Committee shall perform such other duties as may be required by law or requested by the Board or deemed appropriate by the Committee. The Committee shall discharge its responsibilities, and shall assess the information provided to the Committee, in accordance with its business judgment. The Committee shall have the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it shall deem appropriate.
| 6. | COMMITTEE ADMINISTRATIVE MATTERS |
| A. | Independent Advisors |
The Committee shall have authority to engage, provide appropriate funding for and cause the Company to pay the compensation to obtain advice and assistance from outside legal, accounting or other advisors to carry out its responsibilities.
| B. | Funding |
The Company shall provide appropriate funding, as determined by the Committee, for payment of compensation to the independent auditors or any other registered public accounting firm engaged for the purpose of rendering or issuing an audit report or performing other audit, review or attest services for the Company; to any other advisors engaged by the Committee; and for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
| C. | Access to Records and Personnel |
The Committee shall have full access to any relevant records of the Company that it deems necessary to carry out its responsibilities. The Committee may request that any officer or other employee of the Company or any advisor to the Company meet with members of the Committee or its advisors, as it deems necessary to carry out its responsibilities.
| D. | Reports to Board |
The Committee shall report regularly to the Board with respect to Committee activities and its conclusions with respect to the independent auditors, with recommendations to the Board as the Committee deems appropriate.
| E. | Annual Meeting Planner |
Prior to the beginning of a fiscal year, the Committee shall submit an annual planner for the meetings to be held during the upcoming fiscal year, for review and approval by the Board to ensure compliance with the requirements of this Charter.
| F. | Education and Orientation |
Members of the Committee shall be provided with appropriate and timely training to enhance their understanding of auditing, accounting, regulatory and industry issues applicable to the Company.
New Committee members shall be provided with an orientation program to educate them on the Company’s business, their responsibilities and the Company’s financial reporting and accounting practices.
| G. | Review of This Charter |
The Committee shall review and reassess annually the adequacy of this Charter and recommend any proposed changes to the Board.
| H. | Evaluation of Committee |
The Committee is responsible for developing and conducting an annual self-assessment of its performance. The Committee shall report to the full Board on the results of its assessment each year and shall make any appropriate recommendations to further enhance the Committee’s performance.
This Charter was approved by the Board on June 21, 2021.
SCHEDULE “C” - NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER
| 1. | PURPOSE |
The Nominating and Corporate Governance Committee (the “Committee”) shall assist the board of directors (the “Board”) of High Tide Inc., a corporation existing under the laws of Alberta (the “Company”), in fulfilling its responsibilities relating to the director nomination process and the development and implementation of sound corporate governance practices.
| 2. | COMPOSITION AND QUALIFICATIONS |
The Committee shall be appointed by the Board and shall be comprised of at least two directors (as determined from time to time by the Board), one of whom shall be appointed by the Board as Chair of the Committee (a “Chair”). If a Chair is not so appointed, the members of the Committee may elect a Chair by majority vote. Committee members may be removed by the Board in its discretion.
The Chair and each member of the Committee shall serve until his or her successor is duly appointed, or until his or her earlier death, resignation or removal by the Board.
At any time that the Company is neither a foreign private issuer (as such term is defined by the rules of the United States Securities and Exchange Commission) nor a “controlled company” (as such term is defined in the National Association of Securities Dealers Automated Quotations (“NASDAQ”) listing rules), unless otherwise permitted by applicable phase-in rules and exemptions, each member of the Committee will qualify as an “independent director” as defined by the NASDAQ listing standards then in effect and the National Instrument 52-110 - Audit Committees.
No independent member of the Committee shall receive from the Company or any of its affiliates any compensation other than the fees to which he or she is entitled as a director of the Company or a member of a committee of the Board. Such fees may be paid in cash and/or shares, options or other in-kind consideration ordinarily available to directors.
| 3. | MEETINGS |
The Committee shall hold regularly scheduled meetings and such special meetings as circumstances dictate. The Committee shall report regularly regarding the Committee’s activities and actions to the Board.
| A. | Agenda and Notice |
The Chair shall establish the meeting dates and the meeting agenda. In setting the agenda for a meeting, the Chair shall encourage the Committee members, Chief Executive Officer (“CEO”) and other executive officers, and other members of the Board to provide input in order to address emerging issues.
The Chair or Company Secretary shall send proper notice of each Committee meeting and information concerning the business to be conducted at the meeting, to the extent practical, to each member prior to each meeting. The Chair or a majority of the members of the Committee may call a special meeting of the Committee at any time.
Any written material provided to the Committee shall be appropriately balanced (i.e. relevant and concise) and shall be distributed in advance of the respective meeting with sufficient time to allow Committee members to review and understand the information.
| B. | Holding and Recording Meetings |
Committee meetings may be held in person, video conference or telephonically. Action may be taken by the Committee upon the affirmative vote of a majority of the members. The Committee shall keep written minutes of its meetings and submit such minutes to the Board.
| C. | Action Without Meeting |
Action may be taken by the Committee without a meeting if all of the members of the Committee indicate their approval thereof in writing.
| D. | Quorum |
A majority of the members of the Committee shall constitute a quorum.
| 4. | COMPENSATION |
The compensation of Committee members shall be determined by the Board and/or a committee of the Board.
| 5. | RESPONSIBILITIES AND POWERS OF THE COMMITTEE |
Subject to the terms of any agreement between shareholders of the Company and Company, the Committee has direct responsibility and power to perform the following duties:
| A. | Director Nomination and Board Succession Planning |
The Committee shall develop and recommend to the Board appropriate qualifications and criteria for the selection of Board and Committee members. When requested by the Board, the Committee shall consider and recommend for approval by the Board candidates qualified to be nominated for election as directors and to each of the Committees of the Board. For such purpose, the Committee shall develop a succession plan for the Board, including maintaining a list of qualified candidates.
In making its recommendations, the Committee should consider:
| 1. | The competencies and skills that the Committee considers to be necessary for the Board to possess; |
| 2. | The competencies and skills that the Committee considers each existing Director possesses; |
| 3. | The competencies and skills each new nominee will bring to the boardroom; |
| 4. | The diversity of candidates (abilities, experience, perspective, education, gender, background, race and national origin); and |
| 5. | Whether each new nominee can devote sufficient time and resources to his or her duties as a Board member. |
The Committee shall be responsible for assessing the independence of directors within the meaning of securities laws and stock exchange rules applicable to the Company and addressing any potential conflict of interest situations.
The Committee shall assist the Board with the review of the size and composition of the Board and its committees, with a view to facilitating effective decision-making.
| B. | Board Orientation and Education |
The Committee shall assist in the orientation of newly elected or appointed directors, including in becoming acquainted with the nature and operation of the Company’s business and its governance practices including an understanding of the role of the Board and its committees, as well as the contribution individual directors are expected to make (particularly with respect to the commitment of time and resources that the Company expects from its directors).
The Committee shall also ensure that the Company provides continuing education opportunities for all members of the Board, so that directors maintain or enhance their skills and abilities as directors and that their knowledge and understanding of the Company’s business remains current.
| C. | Board and Committee Evaluation |
The Committee will develop appropriate qualifications and criteria for the Board as a whole and for individual directors. The Committee shall ensure that the Board and its committees are assessed on an annual basis regarding their effectiveness and contribution. An assessment will consider, in the case of the Board or a Board committee, the Board Governance Practices and Mandate/Charters.
| D. | Corporate Governance |
The Committee shall periodically review and make recommendations in respect of the Company’s corporate governance principles and practices, associated disclosure and the Company’s Code of Business Conduct and Ethics and other related corporate policies as recommended by the CEO and accepted by the Committee. The Committee shall for such purpose periodically review proposed, new or amended regulatory requirements or stock exchange rules relating to corporate governance as advised by the Head of the Legal Department.
The Committee shall assist the Board and the standing committees of the Board in reviewing the Mandate of the Board, the Charters of the standing committees and the position descriptions for the Chair of the Board and the Chair of each Board committee.
| E. | Strategic Planning |
The Committee will regularly review the strategic plan and goals of the organization, along with ensuring that they are formally reviewed annually. The Committee will review and approve the overall strategic planning process and ensure that systems are in place for measuring and monitoring the plan.
| F. | Risk Assessment |
Assessment of principle risks to the organization will be governed by the Committee, along with ensuring appropriate systems and steps are implemented to manage those risks.
| G. | Other Responsibilities |
The Committee shall perform such other duties with respect to Board nominations, corporate governance and related matters as may be delegated from time to time by the Board or may be required by law or deemed appropriate by the Committee. The Committee shall discharge its responsibilities, and shall assess the information provided to the Committee, in accordance with its business judgment. The Committee shall have the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it shall deem appropriate.
| 6. | COMMITTEE ADMINISTRATIVE MATTERS |
| A. | Independent Advisers |
The Committee shall have authority to engage, provide appropriate funding for and cause the Company to pay the compensation to obtain advice and assistance from outside legal and executive search firms or accounting and other advisors to carry out its responsibilities.
| B. | Access to Records and Personnel |
The Committee shall have full access to any relevant records of the Company that it deems necessary to carry out its responsibilities. The Committee may request that any officer or other employee of the Company or any advisor to the Company meet with members of the Committee or its advisors, as it deems necessary to carry out its responsibilities.
| C. | Reports to Board |
The Committee shall report periodically to the Board regarding Committee matters and/or the meetings of the Committee with such recommendations to the Board as the Committee deems appropriate.
| D. | Annual Meeting Planner |
Prior to the beginning of a fiscal year, the Committee shall submit an annual planner for the meetings to be held during the upcoming fiscal year, for review and approval by the Board to ensure compliance with the requirements of this Charter.
| E. | Education and Orientation |
Members of the Committee shall be provided with appropriate and timely training to enhance their understanding of industry governance practices, disclosure requirements and the governance practices applicable to the Company.
New Committee members shall be provided with an orientation program to educate them on the Company’s business, their responsibilities and the Company’s governance practices.
| F. | Review of This Charter |
The Committee shall review and assess annually the adequacy of this Charter and recommend any proposed changes to the Board for approval.
The procedures outlined in this Charter are meant to serve as guidelines, and the Committee may adopt such different or additional procedures as it deems necessary from time to time.
| G. | Evaluation of Committee |
The Committee is responsible for developing and conducting an annual self-assessment of its performance. The Committee shall report to the full Board on the results of its assessment each year and shall make any appropriate recommendations to further enhance the Committee’s performance.
This Charter was approved by the Board on June 21, 2021.
SCHEDULE “D” - CODE OF BUSINESS CONDUCT AND ETHICS
| 1. | PURPOSE |
The purpose of this Code of Ethics (this “Code”) is to communicate High Tide Inc.’s (the “Company”) commitment to conducting business with integrity, honesty and respect, in compliance with applicable laws, regulations and policies, and in a manner that preserves the Company’s reputation and deters unethical behavior and wrongdoing.
This Code provides an overview of requirements, standards and expectations as guidance in duties and dealings with, and when acting as a representative of, the Company. It is not intended to cover every issue that may arise and may be supplemented by other policies that may be adopted by the Company from time to time.
| 2. | APPLICATION |
This Code applies to all members of the board of directors (the “Board”), officers, employees, consultants, contractors and agents (collectively “Representatives”) of the Company and its affiliates and subsidiaries worldwide. Adherence to this Code is a condition of employment with or providing services to the Company.
| 3. | ETHICS AND INTEGRITY |
| A. | Standards of Good Professional Ethics |
All of the Company’s business activities and affairs must be carried out ethically and honest. The Company expects all Representatives to conduct themselves with honesty and integrity and to avoid even the appearance of improper behavior. Anything less is unacceptable and may be treated as a serious breach of duty.
| B. | Good Ambassadorship |
All Representatives are ambassadors of the Company, its subsidiaries, and brands. All Representatives shall represent the Company professionally, and act and communicate in a manner which upholds its good reputation and image at all times. This includes the use of social media and other forms of digital or other communications. As Representatives’ actions are seen to reflect those of the Company, all actions must reflect the policies and standards of the Company.
| C. | Compliance with Laws, Code and Policies |
All Representatives shall comply with the laws, rules and regulations of the jurisdictions where they carry out their duties and all jurisdictions where the Company conducts its business activities. All Representatives shall comply with this Code and all the Company’s policies that apply to them.
| D. | Bribery |
In the United States and Canada, and in many other countries, it is illegal and/or contrary to applicable ethical codes, to provide, offer or accept a kickback or bribe. A kickback or bribe may be defined as any money, fee, commission, credit, gift, gratuity, loan, reward, advantage, benefit, thing of value or compensation of any kind that is provided, directly or indirectly, and that has as one of its purposes, the improper obtaining or rewarding of favorable treatment in a business transaction. The Company’s policy is that kickbacks and bribes are illegal and not allowed. Bribery, anti- kickback or similar laws could be applicable when a Representative receives or is offered payments, gifts or gratuities that might unduly influence the Company’s business judgment or practices.
Representatives must comply with this Code and all the Company’s policies that apply to them, and, if offered payments, gifts or other gratuities that might unduly influence the conduct of the Company’s business, should seek guidance from the Corporate Secretary.
| E. | Vendors, Suppliers, Customers and other Third Parties |
The Company is committed to treating all of its vendors, suppliers, customers and other third parties fairly, honestly and courteously. Representatives are to avoid unfair tactics and favoritism, and never take unfair advantage of any third party through manipulation, concealment, misrepresentation of material facts or any other unfair practice. Legally, the Company may be held liable for the actions of any third party acting on the Company’s behalf, including agents, representatives, business partners or promoters, as if the Company had performed such actions. All agreements with vendors, suppliers, customers and third parties must be in writing and reviewed by their relevant executive officer and must specify the goods and services to be provided and the fees to be paid. Such agreements must be in line with reasonable competitive and market practices, the principles established in this Code and relevant corporate policies. Throughout the business relationship, Representatives must continuously and properly monitor such third parties to prevent misconduct.
| F. | Fair Competition |
Antitrust laws are designed to protect competition in the United States and Canada. Generally speaking, the following types of topics, and any others that may limit competition, should never be discussed with a competitor (including a potential or prospective competitor): prices, pricing policy, discounts or rebates (including competitive bidding practices); costs, profits, or profit margins; terms or conditions of sale, including credit terms and return policies; division of markets, market territories, customers or sales territories; market share of any products; marketing, advertising or promotional plans; controlling, preventing or reducing the supply of any product; pricing or promotional practices of wholesalers, dealers, distributors or customers; classifying, rejecting, terminating or allocating customers; or any other non-public and/or competitively sensitive information about the Company or a competitor. Each Representative is responsible for making sure that his or her actions on behalf of the Company do not in any way violate or appear to violate antitrust laws or regulations. When in doubt, seek assistance from your relevant executive officer.
| G. | Fair Dealing |
All business dealings undertaken on behalf of the Company, including with its security holders, customers, suppliers, competitors and employees, must be conducted in a manner that preserves the Company’s integrity and reputation. The Company seeks to avoid misrepresentations of material facts, manipulation, concealment, abuse of confidential information, or any other illegal or unfair practices in all activities undertaken by or on behalf of the Company.
| H. | Conflicts of Interest |
Representatives shall act honestly and in good faith in discharging their duties with a view to the best interests of the Company. This means that Representatives are expected to put the interests of the Company before their own. Representatives shall avoid situations involving a conflict, or potential conflict, between their personal, family or business interests, and the interests of the Company and shall promptly disclose any such conflict, or potential conflict, to their relevant executive officer.
| I. | Corporate Opportunities |
Representatives are prohibited from taking for themselves personally opportunities that arise through the use of corporate property, information or position and from using the Company property, information or position for personal gain. Representatives are also prohibited from competing with the Company, directly or indirectly, and owe a duty to the Company to advance the legitimate interests of the Company when the opportunity arises.
| J. | Gifts and Entertainment |
Representatives shall perform their duties and arrange their personal business affairs in a manner that does not interfere with their independent exercise of judgment. Generally, Representatives shall not give or accept any gift, favour, entertainment, special accommodation or other items of value, to or from any vendors, suppliers, potential candidates, potential or actual business partners or other third parties except in strict compliance with the Company’s Anti-Bribery and Anti-Corruption Compliance guidance, this Code, and with applicable law. No one working for the Company shall accept financial compensation of any kind, nor any special discount, loan or favor, from persons, corporations or organizations having dealings or potential dealings with the Company.
| K. | Charitable and Political Activities |
The Company values the culture of giving, of social engagement and of caring for others. The Company wants to foster good relations within the communities where it operates. Representatives are encouraged to participate in local activities that address the needs of the communities in which they live and work and to participate as a private citizen in government and the political process, using your own money and your own time. It should always be clear to outside observers that these are your personal actions and not actions taken on behalf of the Company. Make involvement in charitable or political activities is not prohibited by other Company policies or suggestive of anything improper, and do not use, without specific written authorization, any Company funds or resources to help or promote any charitable cause or political candidate or party.
| 4. | SAFE, RESPECTFUL AND INCLUSIVE WORKPLACE |
| A. | No Discrimination and Harassment |
No discrimination, and harassment is accepted and providing a collegial working environment in which all individuals are treated with dignity and respect is mandatory. Every individual has the right to work in a professional atmosphere which promotes equal opportunities and prohibits discriminatory practices. Any discrimination or harassment, including but not limited to, the basis of age, color, creed, disability, ethnic origin, gender, marital status, national origin, political belief, race, religion, sexual orientation, gender identity, gender expression or any other characteristics protected by law, is strictly prohibited.
| B. | Workplace Safety |
The Company is committed to providing a safe and healthy work environment that complies with all relevant laws and regulations. Workplace violence is not tolerated. Any misuse of alcohol or legal drugs (prescribed or un- prescribed), or the use of any illegal drugs, may jeopardize job safety and/or performance, and is prohibited in the workplace. No Representative shall enter the workplace under the influence of alcohol or such drugs that may impair safety and/or performance.
| 5. | SAFEGUARDING THE COMPANY’S ASSETS AND INFORMATION |
| A. | Protection and Proper Use of the Company’s Assets |
All Representatives shall deal with the Company’s assets, including all data, information (confidential or otherwise), records, products, material, facilities, inventory, “know-how”, trade secrets, trademarks, copyrights and other intellectual property, and equipment, with the strictest integrity and with due regard to the interests of the Company. The Company must maintain the accuracy, confidentiality, privacy and security of these types of information in order to comply with all applicable privacy laws. Similarly, Representatives must not disclose commercially confidential or otherwise sensitive information. The Company’s assets may not to be used for personal gain or benefit. In addition, all Representatives must act in a manner to protect such assets from loss, damage, misuse, theft, misappropriation, The Company expects its employees to use internet access for business-related purposes (i.e., to communicate with customers and suppliers, to research relevant topics and to obtain useful business information). All existing policies apply to conduct on the internet, particularly (but not exclusively) those policies dealing with intellectual property protection, privacy, misuse of the Company’s resources, sexual harassment, information and data security and confidentiality. All employees must take special care to maintain clarity, consistency and integrity of the Company’s corporate image and standing.
| B. | Confidentiality of Information |
Information is one of the Company’s key assets. It is the Company’s policy to ensure that its proprietary and confidential information, including proprietary and confidential information that has been entrusted to the Company by others (“Confidential Information”), is adequately safeguarded. All Representatives are responsible for protecting Confidential Information, including information about the Company’s business, assets, opportunities, suppliers and competitors, from unauthorized advertent or inadvertent disclosure.
| C. | Communications |
Representatives should take care to ensure that all business records and communications (including email, texts, and instant messages) are clear and accurate. Please remember that business communications may be shared or become public through litigation, government investigation, or publication in the media. Potential risks from inaccurate or misleading statements include claims of false advertising, misrepresentation, breach of contract, securities fraud, unfair disclosure, and competition violations. Representatives may not give an endorsement or other statement on behalf of the Company or personal endorsement that identifies your affiliation with the Company, except when approved by their relevant executive officer. In addition, Representatives may not discuss the Company’s business, including financial condition, business or financial performance, products, or business prospects with anyone, including but not limited to financial analysts, actual, or potential investors without the prior approval of their relevant executive officer. All requests for a representative of the Company to participate in conferences (including speaking on a panel or attending a dinner or any event that targets the financial community) must be referred to their relevant executive officer for approval. If any such analysts or investors contact you, please refer such inquiries to the President.
| D. | Inside Information and Insider Trading Laws |
Representatives are prohibited from buying or selling shares of the Company if they are aware of nonpublic material information about the Company (also referred to as “inside information”). Trading in shares while in possession of nonpublic material information is a violation of insider trading laws. Material information can be positive or negative. Information is “material” if it would influence a reasonable investor in deciding whether to buy, sell or hold the Company’s shares or, if disclosed to the public, would reasonably be expected to have a significant effect on the market price or value of the shares. Possible examples include financial information such as consolidated sales numbers, financial projections or the Company’s financial performance, the hiring or departure of key personnel, or significant inventory issues. Information is considered to be “public” two trading days after it has been widely released to the public through a press release or by making a SEDAR filing, giving the public markets adequate time to digest the material information. Representatives are prohibited from disclosing inside information. Only certain individuals who are authorized may publicly disclose nonpublic material information. Improper disclosure, even accidentally, can violate insider trading laws. Disclosing nonpublic material information to other people, including immediate family members or friends, or recommending the purchase or sale of the Company’s shares to others while aware of nonpublic material information, is known as “tipping” and is illegal. A person who receives the information (i.e., is “tipped”) and then trades in the Company’s shares or informs others of that information is also in violation of insider trading laws.
| E. | Financial Integrity and Responsibility |
Representatives are expected to act responsibly and exercise sound judgment with respect to matters involving company finances. Representatives must adhere to all applicable accepted accounting standards and practices, keep accurate, complete and timely records, submit accurate and complete reports as required, comply with the Company’s system of internal controls, and sign only those documents you believe to be correct and complete. The Company will not (i) establish any undisclosed or unrecorded funds or assets for any purpose, (ii) enter into side agreements or other informal arrangements, either written or oral or (iii) not take any actions or fail to take any actions that would cause its financial records or financial disclosure to fail to comply with generally accepted accounting principles and all applicable laws, rules and regulations. All Representatives must cooperate fully and completely with the Company’s accounting and audit teams, as well as the Company’s independent public accountants and counsel, providing them with complete and accurate information and assistance. Representatives are prohibited from coercing, manipulating, misleading or improperly influencing the Company’s internal or external auditors at any time. Representatives are prohibited from knowingly making, or causing or encouraging any other person from making, in any of the Company’s public disclosure, any false or misleading statements or any omissions of any information necessary to make the disclosure complete and accurate in all material respects. If you suspect or observe any irregularities relating to financial integrity and responsibility, immediately report them to their relevant executive officer or the nominating and corporate governance committee of the Company (the “Nominating and Corporate Governance Committee”).
| F. | Compliance |
The Nominating and Corporate Governance Committee is responsible for reviewing and evaluating this Code at least annually and will recommend any necessary or appropriate changes to the Board for consideration.
| G. | Reporting Violations of this Code |
All Representatives shall adhere to High Tide’s commitment to conduct its business and affairs in a lawful and ethical manner. All Representatives are encouraged to talk to their relevant executive officer or the management team when in doubt about the best course of action in a particular situation and to report any breach or suspected breach of law, regulation, this Code or any of the Company’s corporate policies.
The Company prohibits retaliatory action against any Representative who, in good faith, reports a possible violation of this Code. Any Representative who believes he or she has been retaliated against should promptly report it to their relevant executive officer.
| H. | Consequences of Violation of this Code |
Representatives may be required to certify their understanding of and compliance with this Code from time to time as applicable. Failure to comply may result in severe consequences, which could include internal disciplinary action or termination of employment or consulting arrangements without notice. Violation may also violate certain Canadian and/or other laws. If it appears a Representative may have violated such laws, the Company may refer the matter to the appropriate authorities, which could lead to legal proceedings, penalties, fines or imprisonment.
| I. | Waiver of this Code |
Waivers or exceptions may be granted only in advance and under exceptional circumstances by the Nominating and Corporate Governance Committee. Any waiver of this with respect to a member of the Nominating and Corporate Governance Committee may be granted only by the audit committee of the Company. Any waiver with respect to a director or executive officer of the Company may be granted only by the Board. Any such waiver shall be disclosed to the extent and in the manner required by applicable laws or stock exchange rules.
This Code was approved by the Board on June 21, 2021.
SCHEDULE “E” - COMPENSATION COMMITTEE CHARTER
| 1. | PURPOSE |
The Compensation Committee (the “Committee”) shall assist the board of directors (the “Board”) of High Tide Inc., a corporation existing under the laws of Alberta (the “Company”), in fulfilling its governance responsibilities relating to oversight of the Company’s compensation policies, succession planning, performance evaluations, plans and programs, compensation of the Company’s directors, Chief Executive Officer (“CEO”) and other executives officers and the Company’s equity-based and incentive compensation programs. The term “compensation” shall include salary, long-term incentives, bonuses, perquisites, equity incentives, severance arrangements, retirement benefits and other related benefits and benefit plans.
| 2. | COMPOSITION AND QUALIFICATIONS |
The Committee shall be appointed by the Board and shall be comprised of at least two directors and a maximum of five voting members (as determined from time to time by the Board), one of whom shall be appointed by the Board as Chair of the Committee (the “Chair”). If a Chair is not so appointed, the members of the Committee may elect a Chair by majority vote. Committee members may be removed by the Board in its discretion.
The Chair and each member of the Committee shall serve until their successor is duly appointed, or until their earlier death, resignation or removal by the Board.
At any time that the Company is neither a “foreign private issuer” (as such term is defined by the rules of the United States Securities and Exchange Commission) nor a “controlled company” (as such term is defined in the National Association of Securities Dealers Automated Quotations (“NASDAQ”) listing rules), unless otherwise permitted by applicable phase-in rules and exemptions, each member of the Committee will qualify as an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code, a “non-employee director” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and an “independent director” as defined by the NASDAQ listing standards then in effect and the National Instrument 52-110 - Audit Committees.
No member of the Committee shall receive from the Company or any of its affiliates any compensation other than the fees to which he or she is entitled as a director of the Company or a member of a committee of the Board. Such fees may be paid in cash and/or shares, options or other in-kind consideration ordinarily available to directors. No director who serves as board member of any other company shall be eligible to serve as a member of the Committee unless the Board has determined that such simultaneous service would not impair the ability of such member to effectively serve on the Committee. Determinations as to whether a particular director satisfies the requirements for membership on the Committee shall be made by the nominating and corporate governance committee of the Board.
The CEO shall appoint an employee to serve as a liaison to the Committee.
| 3. | MEETINGS |
The Committee shall hold regularly scheduled meetings and such special meetings as circumstances dictate. The Committee shall report regularly regarding the Committee’s activities and actions to the Board.
| A. | Agenda and Notice |
The Chair shall establish the meeting dates and the meeting agenda. In setting the agenda for a meeting, the Chair shall encourage the Committee members, CEO and other executive officers, and other members of the Board to provide input to address current and emerging issues.
The Chair or Company Secretary shall send proper notice of each Committee meeting and information concerning the business to be conducted at the meeting, to the extent practical, to each member prior to each meeting. The Chair or a majority of the members of the Committee may call a special meeting of the Committee at any time.
Any written material provided to the Committee shall be appropriately balanced (i.e. relevant and concise) and shall be distributed in advance of the respective meeting with sufficient time to allow Committee members to review and understand the information.
The Committee shall meet as frequently as it deems necessary, but no less than three times per year.
| B. | Holding and Recording Meetings |
Committee meetings may be held in person, video conference or telephonically. Action may be taken by the Committee upon the affirmative vote of a majority of the members. The Committee shall keep written minutes of its meetings and submit such minutes to the Board.
| C. | Action without Meeting |
Action may be taken by the Committee without a meeting if all of the members of the Committee indicate their approval thereof in writing.
| D. | Quorum |
A majority of the members of the Committee shall constitute a quorum.
| 4. | COMPENSATION |
The compensation of Committee members shall be determined by the Board.
| 5. | RESPONSIBILITIES AND POWERS OF THE COMMITTEE |
The Committee has direct responsibility and power to perform the following duties:
| A. | Overall Compensation Strategy |
The Committee shall evaluate and recommend to the Board for approval the compensation plans and programs advisable for the Company, as well as evaluating and recommending to the Board for approval the modification or termination of existing plans and programs.
| B. | Executive Compensation Philosophy |
The Committee shall review and approve the Company’s goals and objectives relevant to overall executive compensation philosophy based on the principles that compensation should, to a significant extent, be reflective of the financial performance of the Company, and ensure that the administration of the Company’s executive compensation plans, policies and practices conform to this philosophy.
| C. | Executive Officer Evaluation and Compensation |
The Committee shall review and approve goals and objectives relevant to CEO and other executive officer compensation, evaluate the performance of the CEO and other executive officers in light of those goals and objectives and with appropriate input from other independent directors, determine and recommend to the Board for approval, the compensation levels for the CEO and other executive officers based on this evaluation with the deliberations and voting on the CEO’s compensation to be conducted without the CEO present.
As part of the annual review of the performance of the CEO and other executive officers, the Committee shall satisfy itself as to the integrity and values of the executive officers and the contribution of the executive officers in creating a positive culture throughout the organization and shall report those determinations to the Board.
| D. | Appointment or Removal of the CEO and Other Executive Officers |
The Committee shall assist the Board with the selection and appointment of the CEO and provide oversight to the appointment and termination of other executive officers of the Company.
The Committee shall consider and make recommendations to the Board in respect of the terms of the service/employment contracts of the CEO and other executive officers and any proposed changes to these contracts. The Committee shall also ensure that contractual terms on termination, and any payments made, are fair to the individual and the Company, that poor performance is not rewarded and that the duty to mitigate loss is fully recognized. The hiring or termination of employment of any executive officer by any representative of the Company other than the Board may be subject to review and approval by the Committee.
| E. | Director Compensation |
The Committee shall periodically evaluate and make recommendations to the Board with respect to appropriate forms and amounts of compensation for non-employee directors of the Company to ensure that it properly aligns the interests of directors with the long-term interests of the Company and shareholders and that it realistically reflects the responsibilities and risks involved in being an effective director of the Company.
| F. | Equity-Based and Incentive Compensation Plans |
The Committee shall administer the Company’s equity-based plans and management incentive compensation plans and make recommendations to the Board about amendments to such plans and the adoption of any new employee incentive compensation plans.
| G. | Position Description for the CEO |
Together with the CEO, the Committee shall develop a clear position description for the CEO, delineating roles and responsibilities between the Board and the executive officers.
| H. | Succession Planning |
The Committee shall assist the Board in overseeing that succession planning programs are in place for the CEO and other executive officers. An annual succession planning review for the CEO and key executives will occur.
| I. | Disclosure |
The Committee shall review and discuss with management the Company’s proposed compensation disclosures and based on such review and discussion, make a recommendation to the Board as to such disclosures in annual reports, as applicable. The Committee shall produce an annual Committee report for inclusion in the Company’s annual report, in compliance with applicable rules and regulations.
| J. | Insurance Coverage |
The Committee shall review and establish appropriate insurance coverage for the directors and executive officers.
| K. | Other Responsibilities |
The Committee shall perform such other duties as may be required by law or requested by the Board or deemed appropriate by the Committee. The Committee shall discharge its responsibilities, and shall assess the information provided to the Committee, in accordance with its business judgment. The Committee shall have the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it shall deem appropriate.
The Committee will receive and provide feedback on management reports on significant human resources initiatives, including but not limited to formal engagement surveys, employee training, etc.
| 6. | COMMITTEE ADMINISTRATIVE MATTERS |
| A. | Independent Advisers |
The Committee shall in its sole discretion, appoint, retain or obtain the advice of compensation consultants, legal counsel or other advisers (“advisors”). The Committee shall have the sole authority and direct responsibility to approve such advisors’ fees and other retention terms, to oversee the work of and to terminate the services of such advisors, and the authority and responsibility to pay from Company funds reasonable compensation to such advisors, as determined by the Committee.
Before selecting or obtaining the advice of such firm or expert (other than in-house legal counsel), the Committee shall consider all factors relevant to the independence of such consultant, legal counsel or adviser from management, including the factors set forth in the NASDAQ listing standards then in effect and any other applicable laws, rules or regulations.
| B. | Access to Records and Personnel |
The Committee shall have full access to any relevant records of the Company that it deems necessary to carry out its responsibilities. The Committee may request that any officer or other employee of the Company or any advisor to the Company meet with members of the Committee or its advisors, as it deems necessary to carry out its responsibilities.
| C. | Reports to Board |
The Committee shall report periodically to the Board regarding Committee matters and/or the meetings of the Committee with such recommendations to the Board as the Committee deems appropriate.
| D. | Annual Meeting Planner |
Prior to the beginning of a fiscal year, the Committee shall submit an annual planner for the meetings to be held during the upcoming fiscal year, for review and approval by the Board to ensure compliance with the requirements of this Charter.
| E. | Education and Orientation |
Members of the Committee shall be provided with appropriate and timely training or information to enhance their understanding of industry compensation practices, compensation disclosure requirements and the compensation strategy applicable to the Company.
| F. | Review of This Charter |
The Committee shall review and assess annually the adequacy of this Charter and recommend any proposed changes to the Board for approval. The procedures outlined in this Charter are meant to serve as guidelines, and the Committee may adopt such different or additional procedures as it deems necessary from time to time.
| G. | Evaluation of Committee |
The Committee is responsible for developing and conducting an annual self-assessment of its performance. The Committee shall report to the full Board on the results of its assessment each year and shall make any appropriate recommendations to further enhance the Committee’s performance.
| 7. | CHAIR DUTIES AND RESPONSIBILITIES |
The Chair has the following duties and responsibilities:
| (a) | Provide overall leadership to enhance the effectiveness of the Committee, including overseeing the structure, composition, membership and activities delegated to the Committee; |
| (b) | Chairing every meeting of the Committee and encouraging free and open discussion at the meetings. Encouraging Committee members to ask questions and express viewpoints during meetings; |
| (c) | Scheduling and setting the agenda for the Committee meetings with input from other Committee members, CEO and management, as appropriate, and ensuring that there is sufficient time during Committee meetings to fully discuss agenda items; |
| (d) | Facilitating the timely, accurate and proper flow of information to and from the Committee; |
| (e) | Arranging for management, external advisors and others to attend and present to the Committee, as appropriate; |
| (f) | Taking all other reasonable steps to ensure that the responsibilities and duties of the Committee are well understood by the Committee members and executed as effectively as possible; |
| (g) | Foster ethical and responsible decision-making by the Committee and its individual members; |
| (h) | As needed or appropriate, enable the Committee to meet in separate, regularly scheduled, non-management, closed sessions with, or without external advisors; |
| (i) | Following each meeting of the Committee report to the Board on the activities, findings and any recommendations of the Committee; and |
| (j) | Carry out such duties as may be reasonably requested by the Board. |
This Charter was approved by the Board on June 21, 2021.
SCHEDULE “F” - HIGH TIDE INC. BY-LAW NO. 4
A by-law relating generally to the advance notice requirements for the nomination of persons for election to the board of directors (the “Board”) of High Tide Inc. ("High Tide" or the "Company").
| 1. | Introduction. The purposes of this By-Law (the "Advance Notice By-Law") are to |
| (a) | establish the conditions and framework under which holders of common shares of the Company (collectively the "Shareholders", and each a "Shareholder") may exercise their right to submit persons for nomination to the Board (a “Nomination Notice”); |
| (b) | establish a window within which a Nomination Notice must be submitted by a Shareholder to the Company prior to any meeting of Shareholders at which directors are to be elected; and |
| (c) | set out the information that a Shareholder must include in the Nomination Notice for it to be in proper form, to promote the orderly conduct of Shareholder meetings and ensure that all Shareholders will have adequate time and sufficient information to evaluate potential nominees to the Board. |
| 2. | Nomination Procedures. Subject only to the Business Corporations Act (Alberta), as amended from time to time (the "Act"), the Articles of Incorporation of High Tide, as amended (the "Articles"), and applicable securities legislation of each relevant province and territory of Canada, as amended from time to time (including the written rules, regulations and forms made or promulgated under any applicable statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commissions and similar regulatory authorities of each province and territory of Canada (collectively, "Applicable Securities Laws")), only persons who are nominated in accordance with the following procedures will be eligible for election as directors of the Company at any meeting of the Shareholders at which directors are to be elected. For greater certainty, this Advance Notice By-Law does not apply to: |
| (a) | the appointment, by the Board, of a director to fill a vacancy on the Board; or |
| (b) | the appointment, by the Board, of a director or directors between annual meetings of the Shareholders in accordance with the Articles. |
| 3. | Manner of Nomination. Nomination Notices may be made at any annual meeting of Shareholders, or at any special meeting of Shareholders if one of the scheduled items of business for such special meeting is the election of directors. Such Nomination Notice will be accepted only if made in the following manner: |
| (a) | by or at the direction of the Board, including pursuant to a notice of meeting; |
| (b) | by or at the direction or request of one or more Shareholders of the Company pursuant to a proposal duly made in accordance with the Act, or a requisition of a meeting of the Shareholders duly made in accordance with the Act; or |
| (c) | by any person (a "Nominating Shareholder") who: |
| i. | at the close of business on the date the Nomination Notice is provided to the Secretary of the Company as provided below, and on the record date for notice of such meeting, is entered in the securities register of the Company as a holder of one or more shares carrying the right to vote at such meeting, or who beneficially owns shares that are entitled to be voted at such meeting and who establishes to the satisfaction of the chair of the meeting such beneficial ownership; and |
| ii. | who complies with the notice and other procedures set out in this Advance Notice By-Law. |
| 4. | Timely and Proper Notice. In addition to any other applicable requirements, for a Nomination Notice made by a Nominating Shareholder to be timely, valid, and accepted, such Nominating Shareholder must have given notice in proper written form to the Secretary of the Company at the head office of the Company: |
| (a) | in the case of an annual meeting (including an annual and special meeting) of Shareholders, not less than 30, nor more than 65, days prior to the date of the meeting, provided, however, that if the annual meeting of Shareholders is to be held on a date that is less than 50 days after the date (the "Notice Date") on which disclosure in a news release disseminated through a national news service in Canada, or in a document publicly filed by the Company (under its profile) on the System for Electronic Document Analysis and Retrieval at www.sedar.com (“Public Announcement”) of the date of the annual meeting was made, notice by the Nominating Shareholder must be given not later than the close of business on the 10th day following the Notice Date; and |
| (b) | in the case of a special meeting of Shareholders (which is not also an annual meeting) called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the 15th day following the day on which the first Public Announcement of the date of the special meeting was made. |
Each of the notice periods set out in Sections 3(a) and 3(b) above shall be reset if the meeting is adjourned or postponed, and for this purpose the Notice Date shall be the date of the first Public Announcement of the adjournment or postponement.
| 5. | Proper Form of Notice. To be in proper written form, a Nominating Shareholder's notice to the Secretary of the Company must set out: |
| (a) | as to each person whom the Nominating Shareholder proposes to nominate for election as a director: |
| i. | the name, age, business address and residential address of the person; |
| ii. | the principal occupation, business or employment of the person for the most recent five years including, without limitation, the name and principal business of any company in which any such employment is carried on; |
| iii. | the number of securities of each class of voting securities of the Company or any of its subsidiaries beneficially owned, or in respect of which control or direction is exercised, directly or indirectly, by the person as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred as of the date of the Notice) and as of the date of such notice; |
| iv. | any other information relating to the person that would be required to be disclosed in a dissident's proxy circular in connection with solicitations of proxies for the election of directors pursuant to the Act or Applicable Securities Laws (or both); and |
| v. | a duly completed personal information form in the form prescribed by the principal stock exchange on which the securities of the Company are listed for trading; and |
| (b) | as to the Nominating Shareholder: |
| i. | the name and address of such Nominating Shareholder; |
| ii. | the number of securities of each class of voting securities of the Company or any of its subsidiaries beneficially owned, or over which control or direction (or both) is exercised, directly or indirectly, by such person, alone or together with any joint actor or joint actors, as of the record date for the meeting (if such date shall then have been made publicly available and shall have occurred as of the date of the Notice) and as of the date of such notice; |
| iii. | full particulars of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the notice by, or on behalf of, such Nominating Shareholder, whether or not such instrument or right shall be subject to settlement in underlying securities of the Company, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such Nominating Shareholder with respect to securities of the Company; |
| iv. | full particulars of any proxy, contract, arrangement, agreement, understanding or relationship pursuant to which such Nominating Shareholder has a right to vote or to direct or to control the voting of any shares of the Company; |
| v. | whether such Nominating Shareholder intends to deliver a proxy circular or form of proxy to any Shareholders of the Company in connection with the Nomination Notice or otherwise solicit proxies or votes from Shareholders of the Company in support of such nomination; and |
| vi. | any other information relating to such Nominating Shareholder that would be required to be disclosed in a dissident's proxy circular or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to the Act or any Applicable Securities Laws. |
References to Nominating Shareholder in this Section shall be deemed to refer to each Shareholder that makes a Nomination Notice where more than one Shareholder is involved in making the Nomination Notice.
| 6. | Consent to Serve as Director. The Nomination Notice must be accompanied by the written consent of each nominee to being named as a nominee and to serve as a director, if elected. |
| 7. | Other Information. The Company may require any proposed nominee to furnish such other information as the Company may request to: |
| (a) | determine the eligibility of such proposed nominee to serve as an independent director of the Company or that could be material to a reasonable shareholder's understanding of the independence, or lack thereof, of such proposed nominee, or |
| (b) | satisfy the requirements of applicable stock exchange rules. |
| 8. | Notice to be Updated. In addition, to be considered timely and in proper written form, a Nomination Notice must be promptly updated and supplemented, if necessary, so that the information provided or required to be provided shall be true and correct as of the record date for the meeting. |
| 9. | Eligibility for Election. No person shall be eligible for election as a director of the Company unless nominated in accordance with the provisions of this Advance Notice By-Law; provided, however that nothing in this Advance Notice By-Law shall be deemed to preclude discussions by a Shareholder (as distinct from the nomination of a person or persons for election to the Board) at a meeting of Shareholders of any matter in respect of which such Shareholder would have been entitled to submit a proposal pursuant to the provisions of the Act. The chair of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set out in this Advance Notice By-Law and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such nomination is defective and cannot be accepted. If such a determination is made, the person will not be considered to be duly nominated for purposes of the applicable meeting and will not be eligible for election as a director. |
| 10. | Increase in Number of Directors. Notwithstanding any provision of this Advance Notice By-Law, if the number of directors to be elected at a meeting of the Shareholders is increased, with effect after the date by which the Nomination Notice would otherwise be required to be given hereunder in order to be effective for the applicable meeting of Shareholders, a notice with respect to nominees for the additional directorships required hereunder shall be considered timely if it is given no later than the close of business on the 10th day following the date on which the first Public Announcement of such increase was made by the Company. |
| 11. | Means of Giving Notice. Notwithstanding anything to the contrary in the by-laws, Nomination Notices given to the Secretary of the Company pursuant to this Advance Notice By-Law may only be given by personal delivery, facsimile transmission or by email (provided that the Secretary of the Company has stipulated an email address for the purposes of this Nomination Notice), and shall be deemed to have been given and made only at the time it is served by personal delivery, received by email (at the address as aforesaid) or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received) to the Secretary of the Company at the address of the head office of the Company; provided that if such delivery or electronic communication is made on a day that is not a business day or later than 5:00 p.m. (Calgary time) on a day that is a business day, then such delivery or electronic communication shall be deemed to have been made on the first subsequent day that is a business day. |
| 12. | Waiver of Notice Requirements. Notwithstanding the foregoing, the Board may, in its sole discretion, waive any requirement in this Advance Notice By-Law or may delegate such discretion to the Chair of any meeting of the Shareholders. |
| 13. | Inconsistencies with Other By-Laws. In the event any provision of any other by-law of the Company now in force is inconsistent with or in conflict with any provision of this Advance Notice By-Law, the provisions of this Advance Notice By-Law will govern and prevail to the extent necessary to remove the inconsistency or conflict. |
Exhibit 99.3
Exhibit 99.4
