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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 4, 2023

Great Elm Group, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware

001-39832

85-3622015

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

800 South Street, Suite 230, Waltham, MA

 

02453

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 375-3006

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.001 per share

GEG

The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)

7.25% Notes due 2027

GEGGL

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

On May 5, 2023, Great Elm Group, Inc. (the “Company”) issued the press release furnished as Exhibit 99.1 to this report.

The foregoing information (including the Exhibit 99.1 hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 4, 2023, Peter A. Reed resigned as Chief Executive Officer of the Company, effective immediately following the filing of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023. Mr. Reed will continue to be available for consultation through May 5, 2024.

In connection with Mr. Reed’s separation, on May 4, 2023, the Company entered into a severance agreement (the “Severance Agreement”) and a consulting agreement (the “Consulting Agreement”) with Mr. Reed. The Severance Agreement and the Consulting Agreement provide for cash payments for consulting services of $20,833 per month and healthcare-related benefits through May 5, 2024. Mr. Reed will also vest in 9,183 shares of unvested common stock of Great Elm Capital Corp. (“GECC”) awarded to Mr. Reed by the Company (50% in September 2023 and 50% in September 2024). The Company will also grant to Mr. Reed, subject to a one-year lock up, $300,000 of shares of common stock of GECC held by the Company with the number of shares determined based on a 10-day volume-weighted average price of GECC’s common stock on the 10 trading days following May 5, 2023. Additionally, Mr. Reed’s option to purchase (1) 125,000 shares of the Company’s common stock may be exercised until September 18, 2027, (2) 213,000 shares of the Company’s common stock may be exercised until September 18, 2027, and (3) 57,143 shares of the Company’s common stock may be exercised until August 6, 2024. The Severance Agreement and the Consulting Agreement are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively.

On May 4, 2023, the Company appointed Jason W. Reese, age 57, as the Company’s Chairman and Chief Executive Officer, effective immediately following Mr. Reed’s resignation. Mr. Reese has been the Executive Chairman of the Company’s Board of Directors (the “Board”) since February 2020. Mr. Reese is the Co-Founder, Chairman and Chief Executive Officer of Imperial Capital Asset Management, LLC (“ICAM”) and the Co-Founder of Imperial Capital, LLC (“Imperial Capital”), both founded in 1997. ICAM is a registered investment advisor which has managed various hedge funds, investment partnerships, a private REIT and a private equity fund. Imperial Capital is a registered broker-dealer and an affiliate of ICAM. Prior to ICAM and Imperial Capital, Mr. Reese was a principal with Gordon Investment Corporation, a merchant banking firm in New York and Dallas, where he focused on investing in distressed real estate transactions, high yield securities and leveraged buyouts. Prior to his time with Gordon, Mr. Reese worked in the Corporate Finance Group at PaineWebber in New York. Mr. Reese is currently on the board of directors of City Ventures, LLC, a California-based private home builder. Mr. Reese graduated with honors from Yale University with a B.S. in Electrical Engineering.

Certain information regarding transactions with related persons between the Company and Mr. Reese is disclosed under the heading “Certain Relationships and Related Transactions” in the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on October 11, 2022, which information is incorporated by reference into this Item 5.02.

On May 4, 2023, the Company entered into an offer letter (the “Offer Letter”) with Mr. Reese in connection with his appointment as Chief Executive Officer. Under the Offer Letter, Mr. Reese’s annual compensation will consist of a base salary of $500,000, which will be subject to annual increase based on Company and individual performance and market conditions, as determined by the Board. Additionally, Mr. Reese will be eligible to participate in the Great Elm Capital Management, Inc. Discretionary Bonus Plan, and the target amount for any target bonus for each of the first five years of employment will be 200% of base salary. Mr. Reese will also be granted an option to purchase up to 2,000,000 shares of the Company’s common stock, which will vest and become exercisable upon the achievement of certain milestones. The Offer Letter is attached hereto as Exhibit 10.3.

Item 8.01 Other Events.

On May 5, 2023, the Company issued the press release attached as Exhibit 99.2 to this report announcing the officer appointment noted under Item 5.02 above.

 


 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit

Number

Description

10.1

 

Severance Agreement, dated May 4, 2023, by and between Great Elm Group, Inc. and Peter A. Reed

10.2

 

Consulting Agreement, dated May 4, 2023, by and between Great Elm Group, Inc. and Peter A. Reed

10.3

 

Offer Letter, dated May 4, 2023, by and between Great Elm Group, Inc. and Jason W. Reese

99.1

 

Press Release, dated May 5, 2023

99.2

 

Press Release, dated May 5, 2023

104

 

The cover page from this Current Report on Form 8-K, formatted as inline XBRL

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

GREAT ELM GROUP, INC.

 

 

 

 

Date: May 5, 2023

 

/s/ Brent J. Pearson

 

 

By: Brent J. Pearson

 

 

Title: Chief Financial Officer

 

 


EX-10 2 geg-ex10_1.htm EX-10.1 EX-10

Exhibit 10.1

CONFIDENTIAL SEPARATION AND GENERAL RELEASE AGREEMENT

This Confidential Separation and General Release Agreement (this “Agreement”) is made and entered into by and among Peter A. Reed (“Executive”) and Great Elm Group, Inc. (“GEG”), Great Elm Capital Corp., Inc. (“GECC”), and Great Elm Capital Management, Inc. (“GECM”), and their parent, successor, predecessor, affiliate and related entities (collectively, the “Company”). References to the “Parties” means the Executive and the Company.

RECITALS

WHEREAS, Executive is currently employed as Chief Executive Officer (“CEO”) of GEG and the Chief Investment Officer (“CIO”) of GECM;

WHEREAS, Executive intends to tender his resignation effective May 5, 2023 from his role as CEO and CIO; and

WHEREAS, the Company has agreed to accept Executive’s resignation under the terms and conditions set forth in this Agreement in exchange for Executive’s execution of this Agreement, including the general release of claims provided herein.

NOW, THEREFORE, for and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

1.
Resignation.
(a)
The Parties agree that, except as set forth in paragraph 10 below, this Agreement supersedes the Offer Letter between Executive and the Company dated September 18, 2017, and is intended to fully and finally resolve all matters or issues relating to Executive’s employment and directorship relationship with and separation from the Company, including, but not limited to, Section 10 of the Offer Letter.
(b)
Executive’s employment with the Company will terminate effective May 5, 2023 (the “Separation Date”). Effective as of the Separation Date, Executive agrees to unconditionally and irrevocably resign from all director or officer positions (or equivalent positions) that he holds at the Company, or any affiliates thereto, including, but not limited to, as a member of any committee of the board of directors at each such entity.
(c)
Following the Separation Date, Executive will provide consulting services to the Company as set forth in the Consulting Agreement, annexed hereto as Exhibit A.
2.
Consideration. In consideration for the execution and non-revocation of this Agreement by Executive and compliance with the terms made herein, the Company agrees as follows:
(a)

 

 

 


 

GEG Options. Executive acknowledges and agrees that Executive was granted an option to purchase shares of the Company’s Common Stock (the “Option”) pursuant to the Company’s 2016 Long-Term Incentive Plan and applicable Award Agreements. In consideration for the execution and non-revocation of this Agreement and compliance with the terms herein, the Company agrees that Executive will continue to be subject to the terms and conditions of the Equity Documents despite his Resignation Date of the following Options: (x) 125,000 of the 461,165 expiring shares subject to the September 18, 2017 Option Grant, as amended on September 16, 2022; (y) 213,000 subject to the September 19, 2017 Option Grant; and (z) 57,143 subject to the August 6, 2019 Option Grant.
(b)
GECC Shares.
(i)
9,183 of Executive’s unvested Shares awarded pursuant to September 24, 2021 Grant, which will continue to vest according to the schedule set forth therein.
(ii)
The Company will grant to Executive $300,000 worth of GECC shares to be priced with the 10-day trading VWOP post GECC’s announcement of Q1 2023 earnings. Executive acknowledges and agrees that he will be restricted from selling any of the GECC shares awarded pursuant to the paragraph for a period of one year from the grant date, and further acknowledges that the determination as to their value will be made in the sole, good-faith determination of the Company.
(c)
Benefits.
(i)
Executive will cease to be covered under the Company’s medical, dental and vision insurance plans on May 31, 2022.
(ii)
If Executive timely elects continued group health COBRA coverage, the Company shall pay for the premium associated with continued group medical coverage until the earliest of the following: (x) the date that the Company has paid for 12 months of premiums for such COBRA coverage, (y) the date Executive becomes eligible for group health insurance through a new employer, or (z) the date Executive ceases to be eligible for COBRA coverage for any reason.
(d)
Sufficiency of Consideration. The Parties agree that the payments being made to Executive in this paragraph 2 are good and sufficient consideration for this Agreement. Executive understands and agrees that he would not receive the monies and/or benefits specified in this paragraph 2 above, without Executive’s agreement to execute the Agreement, and without his fulfillment of the promises contained herein. The Parties further agree that these amounts are greater than what Executive is entitled to receive from the Company.
3.
Tax Consequences. The Company makes no representations or warranties with respect to the tax consequences of the payments and any other consideration provided to Executive or made on Executive’s behalf under the terms of this Agreement. Executive acknowledges and agrees that Executive is responsible for payment, if any, of local, state, and/or federal taxes on the payments and any other consideration provided hereunder by the Company and any penalties or assessments thereon. Executive further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of (a) Executive’s failure to pay or delayed payment of federal or state taxes, or (b)

 

 

 


 

damages sustained by the Company by reason of any such claims, including attorneys’ fees and costs.
4.
General Release and Waiver of Claims.
(i)
In exchange for the consideration provided in the Agreement, Executive, knowingly, voluntarily, unconditionally and irrevocably, hereby compromise, settle, waive, and release the Company and its predecessors, parent and subsidiary organizations, affiliates, and partners, and their past, present, and future officers, directors, shareholders, investors, agents, attorneys, and employees (in their individual and corporate capacities) (collectively, the “Released Parties”) from any and all past, present, or future claims, demands, obligations, or causes of action, whether based on tort, contract, statutory or other theories of recovery for anything that has occurred up to and including the Effective Date of the Agreement. Such claims include those Executive may have or has against the Released Parties, or which may later accrue to or be acquired by Executive against the Released Parties, whether or not directly or indirectly related to the employment relationship between the Company and Executive.
(ii)
In addition, Executive specifically agrees to release and waive any claims for wrongful termination, discrimination, harassment or retaliation under federal, state or local law or regulation, and any other claims arising in any way from Executive’s hire, employment, benefits, compensation (including any and all claims salary, wages, bonus, commissions, incentive compensation, vacation and severance that may be legally waived and released), termination, or separation from employment with the Company, and any conduct by the Company, through the Effective Date of the Agreement. Executive hereby expressly waives and releases any and all claims or rights arising under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, as amended (ADA), the Family and Medical Leave Act (FMLA), the Fair Labor Standards Act (FLSA) (to the extent permitted by law), the Equal Pay Act, the Lilly Ledbetter Fair Pay Act, the Executive Retirement Income Security Act (ERISA) (excluding claims for vested benefits), Sections 1981 through 1988 of U.S.C. Tile 42, the Fair Credit Reporting Act (FCRA), the Worker Adjustment and Retraining Notification Act (WARN), the National Labor Relations Act (NLRA), the Age Discrimination in Employment Act, as amended by the Older Workers Benefits Protection Act (ADEA), the Uniform Services Employment and Reemployment Rights Act (USERRA), the Rehabilitation Act, the Genetic Information Nondiscrimination Act (GINA), the Families First Coronavirus Response Act (FFCRA), the Immigration Reform and Control Act (IRCA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Occupational Safety and Health Act (OSHA), the Executive (whistleblower) civil protection provisions of the Corporate and Criminal Fraud Accountability Act (Sarbanes-Oxley Act), any other federal, state, local or foreign law (statutory, regulatory, or otherwise) that may be legally waived and released, and any and all claims arising under common law, tort, contract, and quasi-contract law, including but not limited to claims of breach of an express or implied contract, tortious interference with contract or prospective business advantage, breach of the covenant of good faith and fair dealing, promissory estoppel, detrimental reliance, invasion of privacy, nonphysical injury, personal injury or sickness or any other harm, wrongful or retaliatory discharge, fraud, defamation, slander, libel, false imprisonment, and negligent or intentional infliction of emotional distress, claims arising by virtue of his status as a stockholder, and any and all claims for compensatory or punitive damages, attorneys’ fees, costs or other expenses. The identification of specific statutes is for purposes of example only, and the omission of any specific statute or law will not limit the scope of this general release in any manner.

 

 

 


 

5.
Representations by Executive. Subject to paragraph 8, Executive represents that (a) he has no complaint, charge, or claim pending against the Released Parties, either individually or in concert with any other person or entity, with any court, agency, board, department, or other body or office, and, to his knowledge, no other person or entity has initiated or, to the extent within his control, will initiate any such proceeding on his behalf, and (b) he will not, to the fullest extent permitted by law, whether directly or indirectly or whether individually or collectively, initiate, assert, file, prosecute, maintain, commence, institute, sponsor, assist, advise, represent, or facilitate any complaint, action, proceeding, investigation, arbitration, lawsuit, or claim or any legal, equitable, or administrative proceeding of any nature, concerning any of the claims released in this Agreement against the Released Parties. Executive further represents that he has been paid, fully and accurately, all remuneration owed to him as a result of his employment with the Company, or the termination of that employment, including, but not limited to, all salary, wages, overtime, vacation pay, bonus pay, profit-sharing, stock options, stock, expenses, termination benefits, commissions, or any other compensation, with the sole exception of the consideration set forth in this Agreement.
6.
Representations by Company. In exchange for the consideration provided in the Agreement, the Company, knowingly, voluntarily, unconditionally and irrevocably, hereby compromise, settle, waive, and release Executive from any and all claims, actions, causes of action, grievances, suits, charges, or complaints of any kind or nature whatsoever, that the Company ever had or now has, whether known or unknown, suspected or unsuspected, and whether arising in tort, contract, statute, or equity, before any federal, state, local, or private court, agency, arbitrator, mediator, or other entity, regardless of the relief or remedy, including, but not limited to, any statutory claim, tort claim, employment, or other contract or implied contract claim, breach of contract, breach of an implied covenant of good faith and fair dealing, defamation, invasion of privacy, or any other claim, arising out of or in connection with or involving Executive’s employment with the Company. Notwithstanding the foregoing, the Company does not release and expressly preserves any claims that may arise out of Executive’s fraud or any misconduct or willful inaction that has or may result in material, financial, reputational or other harm to the Company and/or its affiliates or subsidiaries, provided, however the Company represents that, at this time, the Company is not presently aware of any facts or circumstances that would give rise to a claim or action by the Company against Executive.
7.
ADEA Waiver. Executive acknowledges that he is knowingly and voluntarily waiving and releasing any rights Executive may have under the federal Age Discrimination in Employment Act (“ADEA Waiver”) and that the consideration given for the ADEA Waiver is in addition to anything of value to which Executive is already entitled. Executive furthers acknowledges that: (a) ADEA Waiver does not apply to any claims that may arise after Executive signs this Agreement; (b) Executive should consult with an attorney prior to executing this Agreement; (c) Executive has 21 calendar days within which to consider this Agreement (although he may choose to execute it earlier); (d) Executive has 7 calendar days following the execution of the Agreement to revoke it; and (e) the Agreement will not be effective until the eighth day after Executive signs it, provided that Executive has not revoked it (“Effective Date”). To revoke the Agreement, Executive must email to Renee Fricks a written notice of revocation at rfricks@greatelmcap.com, prior to the end of the 7-day period.

 

 

 


 

Executive agrees that any modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original 21-day consideration period (the last day of such consideration period, the “Deadline”). Executive acknowledges that his consent to this Agreement is knowing and voluntary. The offer will be automatically withdrawn if Executive does not sign the Agreement by the Deadline.
8.
Matters Not Waived. Notwithstanding paragraphs 5 and 7 of this Agreement, Executive is not waiving, releasing, or giving up any claim for workers’ compensation or unemployment benefits, savings plan benefits, or any claim that cannot be legally waived. Executive is also not waiving his right to file or participate in an investigative proceeding with or to provide information to the government and any federal, state, or local governmental agency (“Agency”), including, by way of example only, the Equal Employment Opportunity Commission, the Securities and Exchange Commission, or the National Labor Relations Board. Executive is, however, to the fullest extent permitted by law, waiving his right to accept, recover, or retain any individualized monetary relief or other individual remedies from the Company in connection with any waived claim or any charge filed with an Agency, regardless of whether Executive or another party files such a claim or charge, and if Executive recovers such relief, he will assign, and hereby does assign, to the Company his right and interest to such relief to the fullest extent permitted by law. This Agreement does not affect, however, Executive’s right to receive and retain an award from an Agency for information provided to an Agency. In addition, the Executive’s right to indemnification, whether by virtue of his former service as an executive officer or as a member of the Board, for all periods arising prior to the Effective Date will continue in full force and effect.
9.
No Admission of Liability. Nothing in this Agreement shall constitute or be treated as an admission by the Company or Released Parties of any liability, wrongdoing, or violation of law.
10.
Cooperation. The Parties agree that certain matters in which Executive will be or was involved during his employment may necessitate his cooperation in the future. Accordingly, following the Separation Date, to the extent reasonably requested by the Company and subject to Executive’s professional commitments, Executive will cooperate with the Company in connection with matters arising out of Executive’s service to the Company, such cooperation to include without limitation the providing of truthful testimony in any hearing or trial as requested by the Company or any affiliate of the Company; provided, however, that the Company will make reasonable efforts to minimize disruption of Executive’s other activities.
11.
Continuing Obligations. At all times in the future, Executive will remain bound by and agree to comply with Section 9 of the Offer Letter and the CIAA, which are incorporated herein by reference. Breach. In the event that Executive breaches any of his obligations under this Agreement or as otherwise imposed by law, the Company will be entitled to recover all relief provided by law or equity, including recovery of benefits or other consideration paid or provided under this Agreement.
12.
Non-Disparagement. To the fullest extent permitted by law and except as otherwise provided in this Agreement, Executive agree that he will not disparage or encourage or induce others to disparage the Company or any of the Released Parties.

 

 

 


 

To the fullest extent permitted by law and except as otherwise provided in this Agreement, the Company agrees to instruct the Board and the executive leadership team not to disparage or encourage or induce others to disparage the Executive. For the purpose of this Agreement, “disparage” includes, without limitation, making comments or statements online, or to any person or entity that would adversely affect in any manner (a) the conduct of the business of the Company, the Executive or any of the Released Parties (including, but not limited to, any business plans or prospects) or (b) the reputation of the Company, the Executive or any of the Released Parties. A breach of this provision will be deemed to be a material breach of this Agreement. Nothing in this Agreement prohibits the Company or the Executive from providing truthful information as required or permitted by law, including in a legal proceeding or a government investigation.
13.
Arbitration Agreement. Executive and the Company agree that any and all claims or disputes arising out of or relating to this Agreement shall be resolved by final, binding and confidential arbitration before a single arbitrator in Boston, Massachusetts (or another mutually agreeable location) conducted under the Judicial Arbitration and Mediation Services (JAMS) Streamlined Arbitration Rules & Procedures, which can be reviewed at http://www.jamsadr.com/rules-streamlined-arbitration/. Before engaging in arbitration, Executive and the Company agree to first attempt to resolve the dispute informally or with the assistance of a mediator. Executive and the Company each acknowledge that by agreeing to this arbitration procedure, Executive and the Company waive the right to resolve any such dispute, claim or demand through a trial by jury or judge or by administrative proceeding. The arbitrator, and not a court, shall also be authorized to determine arbitrability, except as provided herein. The arbitrator may in his or her discretion award attorneys’ fees and costs to the prevailing party. All claims or disputes must be submitted to arbitration on an individual basis and not as a representative, class and/or collective action proceeding on behalf of other individuals. Any issue concerning the validity of this representative, class and/or collective action waiver must be decided by a Court and if for any reason it is found to be unenforceable, the representative, class and/or collective action claim may only be heard in Court and may not be arbitrated. Claims will be governed by their applicable statutes of limitations. This arbitration agreement does not cover any action seeking only emergency, temporary or preliminary injunctive relief (including a temporary restraining order) in a court of competent jurisdiction in accordance with applicable law to protect a party’s confidential or trade secret information. This arbitration agreement shall be governed by and construed and interpreted in accordance with the Federal Arbitration Act.
14.
Governing Law. Except as to the arbitration provision, this Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Massachusetts.
15.
Entire Agreement. Executive agrees that this Agreement and the documents specifically incorporated herein by reference, constitute the entire agreement and understanding between Executive and the Company or any affiliate of the Company, with respect to the subject matter hereof and supersedes all prior and contemporaneous written or oral agreements, discussions, representations, warranties or understandings between Executive and the Company or any affiliate of the Company, including, but not limited to, any offer letter and any incentive compensation agreement entered into by and between Executive and the Company; provided, however, that nothing in this Agreement modifies, supersedes, voids, or otherwise alters the documents specifically identified in this Agreement (except as expressly modified herein), or any other continuing obligations Executive owes the Company which survive the termination of employment.

 

 

 


 

This Agreement may be modified only in a written document signed by Executive and a duly authorized officer of the Company.
16.
Severability. The provisions of this Agreement are severable. If any provision of this Agreement is held invalid or unenforceable, such provision shall be deemed deleted from this Agreement and such invalidity or unenforceability shall not affect any other provision of this Agreement, the balance of which will remain in and have its intended full force and effect; provided, however that if such invalid or unenforceable provision may be modified so as to be valid and enforceable as a matter of law, such provision shall be deemed to have been modified so as to be valid and enforceable to the maximum extent permitted by law.
17.
Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one agreement. Executive and the Company agree that execution via DocuSign or a similar service, or of a scanned image, shall have the same force and effect as execution of an original, that an electronic signature or scanned image of a signature shall be deemed an original and valid signature, and that the Agreement may not be challenged on the basis of such signatures.

.

[Signature Page Follows]

 

 

 

 

 


 

 

 

/s/ Peter A. Reed Execution Date: May 4, 2023

Peter A. Reed

 

 

 

 

 

 

By: /s/ Nichole Milz Execution Date: May 4, 2023

Nichole Milz

Chief Operating Officer

 

 

 

 

 

 


EX-10 3 geg-ex10_2.htm EX-10.2 EX-10

Exhibit 10.2

 

Consulting Agreement

 

 

This consulting agreement (this “Agreement”) is effective as of May 5, 2023 by and between Peter Reed (“Consultant”) and Great Elm Capital Management, LLC. (“Great Elm”).

 

GREAT ELM wishes to engage Consultant to provide the consulting services described herein below, and Consultant desires to provide such services to Great Elm upon the terms and conditions set forth in this Agreement. Both parties hereby agree as follows:

 

1.
Services to Be Provided. Subject to the supervision and direction of Jason Reese, CEO of Great Elm Group, Inc. or his designee, Consultant shall work with Great Elm to (a) provide project work on finalization of the DME or Forest Transactions that closed in January 2023, (b) make introductions and facilitate conversations in furtherance of any opportunities that may be suitable for Great Elm (each, an “Opportunity”) and (c) perform other services reasonably incidental to the foregoing or as may be reasonably requested by Great Elm (collectively, the “Services”). Consultant acknowledges and agrees that (a) any decision to pursue or not pursue an Opportunity shall be made by Great Elm in its sole and absolute discretion and (b) it shall not have any authority to bind Great Elm with respect to any Opportunity or otherwise.

 

2.
Monthly Retainer. Great Elm agrees to pay Consultant $20,833.33 per month during the term of this Agreement as compensation for performing the Services. Such amounts shall be paid to Consultant on the 5th of the month beginning on May 5, 2023 and ending on April 5, 2024.

 

3.
Independent Contractor Status. Consultant acknowledges that it is acting as an independent contractor and not in any other capacity in connection with its engagement hereunder and nothing herein shall render Consultant an employee, partner, joint venturer or agent of Great Elm for any purpose.

 

4.
Term and Termination. Term and Termination. This Agreement shall commence on the date hereof and continue for 12 months until May 4, 2024.

 

5.
Taxes: Great Elm shall not be responsible for withholding taxes with respect to Consultant’s compensation hereunder.

 

6.
Benefits: Consultant shall have no claim against Great Elm hereunder or otherwise for vacation pay, sick leave, retirement benefits, social security, worker’s compensation, health or disability benefits, unemployment insurance benefits, or employee benefits of any kind.

 

7.
Confidentiality: Consultant agrees that any non-public information relating to Great Elm, including, without limitation, any investments, potential investments or strategies on which Consultant is working in connection with the Services (“Confidential Information”), shall be used by Consultant solely for purposes of performing its duties hereunder.

 


 

 

Consultant shall maintain the confidentiality of all such Confidential Information and shall not disclose such Confidential Information to any party without Great Elm’s prior written consent.

 

8.
Consultant Acknowledgments: Consultant acknowledges and agrees that:

 

a.
Consultant will not provide Great Elm with any information, including without limitation, any material non-public information, that it is not permitted to disclose pursuant to a confidentiality obligation, fiduciary duty or other contractual arrangement that it may have.

 

b.
Consultant does not have any reason to believe that the Services may present a conflict of interest for Consultant, and Consultant agrees to promptly disclose any conflict of interest to Great Elm, including, without limitation, any (i) economic interests held by Consultant and (ii) relationships that Consultant may have, in each case, with respect to any Opportunity.

 

c.
Consultant acknowledges that Great Elm is relying on the assurances by Consultant hereunder and that the above representations are true, correct and complete in all material respects.

 

9.
Reimbursement of Expenses. Great Elm shall reimburse Consultant for reasonable out-of-pocket expenses incurred by Consultant in connection with the performance of its obligations under this Agreement for which reasonably detailed invoices have been provided.

 

10.
Work Product. The parties acknowledge and agree that any reports, recommendations, and other materials created or produced by Consultant in connection with the performance of its duties hereunder shall constitute the exclusive property of Great Elm.

 

11.
Entire Agreement. This Agreement, constitutes and sets forth the entire agreement and understanding of the parties relating to the subject matter hereof, and no prior or contemporaneous written or oral agreements with respect thereto not specifically contained herein shall be valid or enforceable.

 

12.
Amendment. No amendment to this Agreement shall be binding unless executed in writing by each party hereto.

 

13.
Assignment. Neither party hereto may transfer, assign (by operation of law or otherwise), subcontract or delegate its duties under this Agreement without the prior written consent of the other party, which consent may be withheld in such party’s sole discretion, and any attempted transfer, assignment, subcontract or delegation without such consent shall be of no force and effect.

 

 


 

 

14.
Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Massachusetts without regard to conflict of law principles thereof.

 

15.
Severability. If any provisions of this Agreement shall be held invalid by the court with jurisdiction over the parties hereto with respect to any person or circumstances, then the remainder of this Agreement and the application of such provision to other persons and circumstances shall not be affected and shall be construed to give effect thereto to the fullest extent possible.

 

16.
Notices. Any notices required to be given hereunder shall be in writing, and given by telecopy, personal delivery, receipted delivery service or by certified mail, return receipt requested, prepaid and properly addressed to the party to be served at the following addresses:

 

 

If to Consultant: Peter Reed

42 Pembroke Rd.

Wellesley, MA 02482

Email: preed1227@gmail.com

 

If to Great Elm: Great Elm Capital Management, Inc.

800 South Street, Suite 230

Waltham, MA 02453

Attn: Adam Kleinman

Email: akleinman@greatelmcap.com

 

Notices shall be effective on the date delivered by electronic mail, personal delivery or receipted delivery service, or three days after the date mailed.

 

17.
Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, each of their respective successors and permitted assigns.

 

18.
Remedies. Consultant agrees that it would be difficult to measure any damages caused to Great Elm which might result from any breach by Consultant of its obligations under this Agreement, and that in any event money damages would be an inadequate remedy for any such breach. Accordingly, Consultant agrees that if it breaches, or proposes to breach, any portion of this Agreement, Great Elm shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate preliminary equitable relief to restrain any such breach without showing or proving any actual damage to Great Elm.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and first above written.

 

 


 

 

CONSULTANT

 

By: /s/ Peter Reed

Name: Peter Reed

 

 

GREAT ELM CAPITAL MANAGEMENT, INC.

 

By: /s/ Nichole Milz

Name: Nichole Milz

Title: CHIEF OPERATING OFFICER

 

 

 

 


EX-10 4 geg-ex10_3.htm EX-10.3 EX-10

Exhibit 10.3

Great Elm Group, Inc.

 

May 4, 2023

 

VIA EMAIL
 

 

Dear Jason,

 

We are excited about the opportunity to have you increase your role at Great Elm Group, Inc. (“GEG” and, together with each other subsidiary of GEG, collectively or individually, as the context may require, “Great Elm”). As you are aware, GEG is committed to hiring dedicated and experienced employees, all of whom are equally committed to our goals and have the desire to contribute in a positive, challenging and rewarding environment.

 

This letter is to confirm our offer to you of the expanded role of Chief Executive Officer of GEG along with continuing in your role as Chairman of the Board of Directors of GEG (the “GEG Board”). The terms of your offer are set forth in this letter agreement (the “Employment Agreement”) as follows:

 

1.
Effective Date of Hire. The start date of the expanded role as CEO of GEG will be May 5, 2023 (such actual start date of employment, the “Effective Date of Hire”). By accepting our offer, you confirm that you are not and will not be in breach of any obligation to your former employer, partnership or third party including any obligation to keep in confidence any proprietary information of such employer, partnership or third party.

 

2.
Title and Obligations. Your title will be Chief Executive Officer of GEG and Chairman of the GEG Board. In this position, you will report to the GEG Board. During your employment with Great Elm, you will perform your duties faithfully and to the best of your ability and will devote such time and energy as is necessary to complete your responsibilities to Great Elm as reasonably determined by the Board. Notwithstanding the foregoing, it is understood that you may (a) continue to serve in the roles outlined in Exhibit A, (b) hold investments in any of the entities set forth on Exhibit A or any investment vehicles managed by such entities, (c) hold investments in GEG or any investment vehicles managed by subsidiaries of GEG, (d) hold (i) investments in any non-asset management entity and (ii) hold passive investments in any asset management entity which do not exceed ten percent (10%) of the equity interests of such entity, or (e) engage in religious, charitable or other community activities; provided that, in the case of clauses (a), (b), (d) and (e) above, such roles, investments, services and activities do not, individually or in the aggregate, interfere with the performance of your duties under this Employment Agreement or otherwise create a conflict of interest with GEG in any material respect. For the avoidance of doubt, except as expressly set forth above, you may not engage in other business activities or serve on the boards of other asset management businesses without the prior written consent of the GEG Board. You shall comply with GEG’s policies and rules, as they may be in effect from time to time during your employment.

 

3.
Compensation. You will receive an initial annual salary of five hundred thousand dollars ($500,000), which will be paid in accordance with Great Elm’s standard payroll policies and subject to applicable withholdings and other required deductions. The base salary shall be subject to annual increase based on company and individual performance and market conditions, as determined by the GEG Board. The base salary in effect at any given time is referred to herein as the “Base Salary”. Your position is considered exempt under the administrative exemption classification.

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Great Elm Group, Inc.

You acknowledge that you will not receive any compensation for your service on the GEG Board following the Effective Date of Hire; provided, that (a) any equity compensation granted to you for service on the GEG Board for calendar year 2023 shall continue to vest in accordance with the terms of the award agreements governing such grants, including, without limitation, your continuous service with the Company on each vesting date thereunder, (b) the equity compensation granted to you on September 20, 2022 for your service as Chairman of the GEG Board for the Company’s fiscal year ended June 30, 2022 shall continue to vest in accordance with the terms of the award agreement governing such grant, including, without limitation, your continuous service with the Company on each vesting date thereunder and (c) you shall be eligible for additional equity compensation for your service as Chairman of the GEG Board for the period from July 1, 2022 to the Effective Date of Hire as determined by the Compensation Committee in its sole discretion.

 

4.
Discretionary Bonus Plan. Additionally, you will be eligible to participate in the Great Elm Capital Management, Inc. Discretionary Bonus Plan (the “Discretionary Bonus Plan”). The target amount for any annual bonus (the “Target Bonus”) under the Discretionary Bonus Plan for each of the first five (5) years of employment will be 200% of your Base Salary. The GEG Board will determine whether you have earned any such Target Bonus based upon the achievement of key financial performance and strategic objectives to be mutually agreed upon between you and the GEG Board. The Discretionary Bonus Plan year is currently July 1st through June 30th and such bonuses, if any, are paid on an annual basis on or before September 15th. The Target Bonus for the 2023 Discretionary Bonus Plan year will be pro-rated based on the number of days you are employed during the 2023 Discretionary Bonus Plan year, taking into account your service as Chairman of the GEG Board prior to this Employment Agreement. Payment of any Target Bonus will be an amount to be determined in cash and/or equity, issued at the GEG Board’s sole discretion, both subject to applicable tax withholdings; provided that you will not be eligible to earn any such bonus unless you are employed by Great Elm on the date when such bonus is paid.

 

It is understood and agreed that the Discretionary Bonus Plan and cycles discussed in this Section 4 are not a contractual entitlement or expectation that a bonus or the full Target Bonus will be received. If Great Elm, in its discretion, makes a bonus payment in respect to a particular bonus year, such an award does not imply any expectation or entitlement in respect of future bonus years or any other periods. Great Elm retains the sole right to modify the payment schedule of the Discretionary Bonus Plan in its discretion and all determinations by Great Elm regarding the interpretation and application of such program shall be final and binding.

 

5.
Equity. Subject to the approval of the Compensation Committee of the GEG Board (the “Compensation Committee”), you will be granted an option (the “Option”) to purchase up to 2,000,000 shares of the common stock of GEG (the “Common Stock”). The Option will vest and become exercisable based on the achievement of both (i) certain Stock Price Vesting Triggers as set forth in the Stock Price Milestone Table below, and (ii) the Service-Based Vesting Requirement (as defined below). For each of the five (5) vesting tranches set forth in the Stock Price Milestone Table below, the Stock Price Vesting Trigger will be deemed achieved as of the first date following the date of grant of the Option that the 30 calendar-day trailing average of the trading price of the Common Stock (as measured by the volume-weighted average price (VWAP)) (the “Reference Price”) equals or exceeds the applicable Stock Price Vesting Trigger.

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Great Elm Group, Inc.

Following satisfaction of a Stock Price Vesting Trigger for a tranche of the Option, twenty percent (20%) of the shares subject to such tranche will vest and become exercisable on the one -year anniversary of the Effective Date of Hire, forty percent (40%) of the shares subject to such tranche will vest and become exercisable on the two-year anniversary of the Effective Date of Hire; sixty percent (60%) of the shares subject to such tranche will vest and become exercisable on the three-year anniversary of the Effective Date of Hire; eighty percent (80%) of the shares subject to such tranche will vest and become exercisable on the four-year anniversary of the Effective Date of Hire; and one hundred percent (100%) of the shares subject to the tranche will vest and become exercisable on the five-year anniversary of the Effective Date of Hire, subject to your continued employment with GEG or any Subsidiary or Affiliate thereof (each, as defined in the GEG Amended and Restated 2016 Long-Term Incentive Compensation Plan (the “Plan”) through each vesting date (the “Service-Based Vesting Requirement”). Should any Stock Price Trigger be achieved after the one-year anniversary of the Effective Date of Hire but prior to the two-year anniversary, then twenty percent (20%) of the shares subject to that tranche will vest and become exercisable immediately while forty percent (40%) of the shares subject to that tranche will vest and become exercisable on the two-year anniversary of the Effective Date of Hire, sixty percent (60%) of the shares subject to that tranche will vest and become exercisable on the three-year anniversary of the Effective Date of Hire, eighty percent (80%) of the shares subject to that tranche will vest and become exercisable on the four-year anniversary of the Effective Date of Hire and one hundred percent (100%) of the shares subject to that tranche will vest and become exercisable on the five-year anniversary of the Effective Date of Hire, in each case, subject to your continued employment with GEG or any Subsidiary or Affiliate thereof through the applicable anniversary. For the avoidance of doubt, once a Stock Price Vesting Trigger has been achieved pursuant to the Stock Price Milestone Table it will be deemed satisfied regardless of whether the Reference Price subsequently becomes less than the applicable Stock Price Vesting Trigger, including as of the date any Service-Based Vesting Requirement is satisfied. Subject to Section 8(d) below, any portion of the Option that fully vests according to Section 5 shall be exercisable until the earlier of (a) the ten-year expiration date of the Option and (b) a Change of Control (as defined in the Plan) or other corporate event at GEG contemplated by the Plan, in which case exercise shall, in each case, be as provided under the Plan.

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Great Elm Group, Inc.


 

 

Stock Price Milestone Table

Performance Range

Stock Price Vesting Triggers (30-day average)

5-Year Annual Stock Price Appreciation

Cumulative Number of Shares Subject to Stock-Price Based Option that Will Be Vested

< Threshold

Below $4.02

<15%

0

Threshold

$4.02

15%

400,000

Target

$6.00

25%

800,000

Upside

$8.00

32%

1,200,000

Stretch

$10.00

38%

1,600,000

Outperform

$12.00

43%

2,000,000

 

a.
General Terms. The exercise price per share of the Option will be equal to the Reference Price as of the date the Option is granted, as determined by the Compensation Committee when the Option is granted. The Option will be subject to the terms and conditions applicable to options granted under the Plan, as described in the Plan and the applicable Stock Option Agreement. Upon a Change of Control, the Service-Based Vesting Requirement and all Stock Price Vesting Triggers of the Option will be deemed satisfied as described in the applicable Stock Option Agreement.

 

b.
Additional Equity. The Compensation Committee will consider granting you additional equity awards, in its sole and absolute discretion, on or after the three-year anniversary of the Effective Hire Date.

 

6.
Deductions. At any time during your employment, or upon the termination of your employment with Great Elm, Great Elm may deduct from any compensation amounts due you from Great Elm any money owed by you to Great Elm or any of its affiliates to the greatest extent permitted under applicable law. Such sums, include, without limitation, repayment of loans or advances made to you by Great Elm or any of its affiliates, overpayment of compensation or other benefits received by you from Great Elm, the cost of any damage to or loss of Great Elm’s property caused by you, and any loss suffered by Great Elm or any of its affiliates as a result of your dishonesty or fraud.

 

7.
“At-Will” Employment. The employment relationship between you and GEG is “at will.” This means that, except as set forth in the Notice Period provision included in your Terms of Employment, either you or GEG can terminate the employment relationship at any time with or without notice and with or without cause. This “at will” relationship between you and us cannot be changed or modified except as provided in an express written agreement stating that the at-will relationship has been changed and signed by a member of the GEG Board (not including you) as provided in the Terms of Employment. No representation by an employee or representative can change this policy or establish an employment contract or any term thereof.

 

8.
Severance Benefits.

Page 4


 

Great Elm Group, Inc.

a.
Involuntary Termination Prior to Change of Control. If, prior to the five (5) year anniversary of the Effective Date of Hire, you experience a separation from service (as defined in Treasury Regulations Section 1.409A-1(n) by GEG (or a successor, if appropriate) without Cause – other than as a result of your death or Disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code (the “Code”)) – or as a result of your resignation for Good Reason (as defined below) (such termination or resignation, an “Involuntary Termination”), in either case, prior to a Change of Control, and provided you comply with the Conditions (as defined below), then you will be entitled to receive the following severance payments and benefits:

 

i.
Base Salary Severance. You will receive an amount in cash equal to two million dollars ($2,000,000), less all applicable withholdings and deductions, which will be paid to you in a single lump-sum payment within thirty (30) days following the Release Deadline (as defined below).
ii.
Target Bonus Severance. You will receive a pro-rated amount of your Target Bonus as in effect for the year in which such Involuntary Termination occurs (based on actual performance for the Discretionary Bonus Plan Year, but pro-rated based on the number of days you were employed with GEG during such year relative to 365 days), which will be paid to you in a single lump-sum payment within thirty (30) days following the Release Deadline.
iii.
Vesting Acceleration. The Service-Based Vesting Requirement of the Option will be deemed satisfied and the remaining unvested shares subject to the Option will remain outstanding and eligible to vest for a period of one (1) year following the date of such Involuntary Termination, subject to satisfaction of the applicable Stock Price Vesting Trigger within such one (1) year period following the date of such Involuntary Termination. Any portion of the Option that vests according to this section shall be exercisable until the earlier of (x) the ten-year expiration date of the Option and (y) a Change of Control or other corporate event at GEG contemplated by the Plan, in which case exercise shall, in each case, be as provided under the Plan.
b.
Involuntary Termination Within 2 Years Following a Change of Control. If, prior to the five (5) year anniversary of the Effective Date of Hire, you experience an Involuntary Termination (A) upon the consummation of, or (B) within two (2) years following, a Change of Control, and, in each case provided you comply with the Conditions, then you will be entitled to receive the following severance payments and benefits:

 

i.
Base Salary Severance. You will receive an amount in cash equal to three million dollars ($3,000,000), less all applicable withholdings and deductions, which will be paid to you in a single lump-sum payment within thirty (30) days following the Release Deadline (as defined below).
ii.
Target Bonus Severance. You will receive a pro-rated amount of your Target Bonus as in effect for the year in which such Involuntary Termination occurs (based on actual performance for the Discretionary Bonus Plan Year, but pro-rated based on the number of days you were employed with GEG during such year relative to 365 days), which will be paid to you in a single lump-sum within thirty (30) days following the Release Deadline.

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Great Elm Group, Inc.

iii.
Vesting Acceleration. Upon a Change of Control, the Service-Based Vesting Requirement and all Stock Price Vesting Triggers of the Option will be deemed satisfied. In the event your Option is not exercised in connection with such Change of Control pursuant to the Plan, your Option shall be exercisable until the earlier of (x) the ten-year expiration date of the Option and (y) a Change of Control or other corporate event at GEG contemplated by the Plan, in which case exercise shall, in each case, be as provided under the Plan.

 

c.
Termination Due to Death or Disability. If, prior to the 5 year anniversary of the Effective Date of Hire, you experience a separation from service (as defined in Treasury Regulations Section 1.409A-1(n)) by GEG (or a successor, if appropriate) due to your death or Disability, and provided you comply with the Conditions, then you will be entitled to receive the following severance payments and benefits:
i.
Target Bonus Severance. You will receive a pro-rated amount of your Target Bonus as in effect for the year in which such separation from service due to death or Disability occurs (based on actual performance for the Discretionary Bonus Plan Year, but pro-rated based on the number of days you were employed with Great Elm during such year relative to 365 days), which will be paid to you in a single lump-sum within thirty (30) days following the Release Deadline.
ii.
Vesting Acceleration. The Service-Based Vesting Requirement of the Option will be deemed satisfied and the remaining unvested shares subject to the Option will remain outstanding and eligible to vest for a period of one (1) year following the date of separation of service due to death or Disability, subject to satisfaction of the applicable Stock Price Vesting Trigger within such one (1) year period following the date of such separation of service. Any portion of the Option that vests according to this section shall be exercisable until the earlier of (x) the ten-year expiration date of the Option and (y) a Change of Control or other corporate event at GEG contemplated by the Plan, in which case exercise shall, in each case, be as provided under the Plan.
d.
Termination for Cause. If you experience a separation from service (as defined in Treasury Regulations Section 1.409A-1(n)) by GEG (or a successor, if appropriate), for Cause, you shall not be entitled any severance benefits and the Option (including any vested portion thereof) shall immediately terminate in its entirety upon first notification to you of such termination for Cause.

 

e.
Resignation without Good Reason. If you experience a separation from service (as defined in Treasury Regulations Section 1.409A-1(n)) by GEG (or a successor, if appropriate, as a result of your resignation without Good Reason, you shall not be entitled to any severance benefits and the Option shall cease vesting for all purposes as of the date of notice to Great Elm of your resignation without Good Reason. Any portion of the Option that vests according to this section shall be exercisable until the earlier of (x) the ten-year expiration date of the Option and (y) a Change of Control or other corporate event at GEG contemplated by the Plan, in which case exercise shall, in each case, be as provided under the Plan.

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Great Elm Group, Inc.

 

f.
Definitions.
i.
For purposes of this Employment Agreement, “Cause” means (a) your theft, dishonesty, misconduct, or falsification of any of the Great Elm’s or its affiliates’ records; (b) any action by you outside of the scope of your employment agreement with Great Elm that has a material detrimental effect on Great Elm’s reputation or business as reasonably determined by the GEG Board; (c) your substantial failure or inability to perform any reasonably assigned duties within the scope of your employment agreement with Great Elm that has not been cured within thirty days of written notice from Great Elm to you, in each case, as determined by the GEG Board in its sole discretion; (d) your material violation of any Great Elm policy; (e) your charge, indictment or conviction (including any plea of guilty or no contest) of any criminal act (other than traffic violations); or (f) a material breach by you of any written agreement with Great Elm or its affiliates which, to the extent curable, has not been cured within ten business days’ of written notice from Great Elm to you thereof.
ii.
For purposes of this Employment Agreement, “Conditions” means (i) you have returned all material Great Elm property in your possession that was obtained in connection with your employment within ten (10) business days of written request therefor, (ii) you have complied with your continuing obligations under the Terms of Employment and (iii) you have executed a full and complete separation and release agreement, in the form attached hereto as Exhibit B (the “Release”), which shall include, among other provisions, a mutual general release of all claims that you may have against Great Elm and its affiliates and a mutual nondisparagement in favor of you and Great Elm and its affiliates, and such Release has become effective no later than the 30th day after the date of your separation from service or such later date as may be required by applicable law (the “Release Deadline”).
iii.
For purposes of this Employment Agreement, “Good Reason” means your resignation from GEG within six (6) months after the occurrence of any of the following events: (a) without your prior written consent, the significant reduction of your duties, authority, responsibilities, job title, or reporting relationships relative to your duties, authority, responsibilities, job title, or reporting relationships as in effect immediately prior to such reduction, or the assignment to you of such significantly reduced duties, authority, responsibilities, job title, or reporting relationships; (b) without your express prior written consent, a reduction of your base salary as in effect immediately prior to such reduction or GEG’s failure to pay such amounts when due; or (c) the relocation of your principal place of work to a facility or a location more than twenty five miles from your then present location, without your prior written consent; provided, however, that in each case, your resignation shall not constitute Good Reason unless (i) you provide GEG with written notice of the applicable event or circumstance within ninety (90) days after you first have knowledge of it, which notice reasonably identifies the event or circumstance that you believe constitutes grounds for Good Reason, and (ii) GEG fails to correct the event or circumstance so identified within thirty (30) days after receipt of such notice.

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Great Elm Group, Inc.

9.
Section 409A. For purposes of Code Section 409A, the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”), each payment that is paid pursuant to this Employment Agreement is hereby designated as a separate payment. The parties intend that all payments made or to be made under this Employment Agreement comply with, or are exempt from, the requirements of Section 409A so that none of the payments or benefits will be subject to the adverse tax penalties imposed under Section 409A, and any ambiguities herein will be interpreted to so comply or be so exempt. Notwithstanding the foregoing, if any of the payments provided in connection with your separation from service do not qualify for any reason to be exempt from Section 409A and you are, at the time of your separation from service, a “specified employee,” as defined in Treasury Regulation Section 1.409A-1(i) (i.e., you are a “key employee” of a publicly traded company), each such payment will not be made until the first regularly scheduled payroll date of the 7th month after your separation from service and, on such date (or, if earlier, the date of your death), you will receive all payments that would have been paid during such period in a single lump sum.
10.
Best Net After Tax Adjustment. If any amounts or benefits payable to you would be subject to any excise tax imposed by Section 4999 of the Code (such excise tax together with any such interest and penalties, shall be referred to as the “Excise Tax”), then a calculation shall first be made under which such payments or benefits provided to you are reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax (the “4999 Limit”). Great Elm shall then compare (1) your Net After-Tax Benefit (as defined below) assuming application of the 4999 Limit with (2) your Net After-Tax Benefit without application of the 4999 Limit. If (1) is greater than (2), you will receive only those amounts and/or benefits up to the 4999 Limit. If (2) is greater than (1), then you will be entitled to receive all such amounts and benefits without adjustment and shall be solely liable for any and all Excise Tax related thereto.

 

For purposes of this Employment Letter, “Net After-Tax Benefit” means the sum of (i) all payments that you receive or are entitled to receive that are contingent on a change in the ownership or effective control of Great Elm or in the ownership of a substantial portion of the assets of Great Elm within the meaning of Section 280G(b)(2) of the Code, less (ii) the amount of federal, state, local, employment, and Excise Tax (if any) imposed with respect to such payments.

 

If amounts must be reduced pursuant to this Section 10, Great Elm shall (to the extent feasible) reduce accelerated equity incentive vesting first (to the extent the value of such accelerated vesting for 280G purposes is not determined pursuant to Treasury Regulation Section 1.280G-1 Q&A 24(c)), followed by cash payments and in the order in which such payments would be made (with payments made closest to the Change in Control being reduced first), followed by accelerated equity incentive vesting (to the extent the value of such accelerated vesting is determined pursuant to Treasury Regulation Section 1.280G-1 Q&A 24(c)), and followed last by the continued health and welfare benefits.

 

The calculations in this Section 10 shall be made by a certified public accounting firm, executive compensation consulting firm, or law firm designated by Great Elm and reasonably acceptable to you, and shall be determined using reasonable assumptions and approximations concerning applicable taxes and relying on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.

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Great Elm Group, Inc.

The costs of performing such calculations shall be borne exclusively by Great Elm.

11.
Location. It is understood that your position will be based at 3801 PGA Blvd., Suite 603, Palm Beach Gardens, FL 33410, which will become GEG’s headquarters following your appointment as CEO.
12.
Paid Time Off. Executives with GEG do not accrue paid time off. Professional time off may be taken as needed, subject to GEG’s policies as in effect from time to time, and we expect our professionals to act responsibly with regards to time off (vacation, sick, personal). Professional time off does not apply to leaves of absences, which are covered separately under GEG’s policies as in effect from time to time.

 

12.
Employee Health & Welfare Benefits. You will be eligible to participate in the employee health and welfare benefit programs on the first of the month following your Effective Date of Hire and you will be eligible to participate in the 401(k) plan of Great Elm as of your Effective Date of Hire. A summary of our current program is attached for your review. You recognize that Great Elm has the right, in its sole discretion, to amend, modify or terminate its benefit programs without creating any rights to you.
13.
Compliance, Legal & Operations. You agree to comply with the policies and procedures of the Compliance, Legal and Operations departments, as interpreted at the discretion of Compliance, Legal and/or Operations department professionals, which includes but is not limited to trading standards, trading terms and language, and accounts that Great Elm approves for opening and dealing.
14.
Terms of Employment. Your employment is contingent upon (1) your execution of the attached Terms of Employment, (2) you not being in breach of any obligations to any former employers, (3) receipt of an acceptable background screening, and (4) your eligibility to work in the United States to comply with the Immigration Reform and Control Act of 1986.

 

15.
Employer of Record. You acknowledge that GEG’s benefits, payroll, and other human resource management services may be provided through one or more of its affiliates or a professional employer organization. As a result of this arrangement, the affiliate or the professional employment organization will be considered your employer of record for these purposes; however, the GEG Board will be responsible for reviewing your performance, setting your schedule and otherwise directing your work at Great Elm.

 

16.
Merger of Terms. This Employment Agreement, along with the Terms of Employment, sets out the terms and conditions of your employment with GEG and supersedes any prior written or oral agreements, term sheets, understandings or promises with GEG concerning the terms and conditions of such employment. Any discussions that you may have had with anyone concerning such matters are not part of this Employment Agreement unless they are described herein. To the extent any inconsistency exists between the Employment Agreement (and the Terms of Employment) and any other provisions related to your employment, then this Employment Agreement (and the Terms of Employment) shall govern.

 

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Great Elm Group, Inc.

You will have new hire orientation with Human Resources during which, we will provide you with a general orientation to include employee benefits. You will be expected to present and/or provide the following during your orientation: 1) Form I-9 eligible identification and 2) recent statements of all brokerage accounts.

 

Time is of the essence with respect to this opportunity. In that regard, this offer expires on May 4, 2023 at 5:00PM ET. Please acknowledge your agreement with the above terms and conditions and return the executed copy to Great Elm via email, facsimile or mail as follows:

 

c/o Olivia Pine

Vice President, HR

3801 PGA Boulevard, Suite 603

Palm Beach Gardens, Florida 33410

Email: opine@greatelmcap.com Fax: 561.214.7998

 

 

We are pleased to have you join us and we are confident you will make an important contribution. Should you have any questions, please feel free to call Olivia Pine at any time 561.214.7942.

 

Sincerely,

 

 

 

/s/ James Parmelee

James Parmelee

Chair of the Compensation Committee

 

 

 

 

 

Agreed and Accepted

 

 

 

 

/s/ Jason Reese May 4, 2023

Jason Reese Date

 

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Great Elm Group, Inc.

Exhibit A

 

 

Imperial Capital Group, LLC

 

Imperial Capital, LLC

 

Imperial Capital Group Holdings, LLC

 

Imperial Capital Group Holdings II, LLC

 

Imperial Capital Group Holdings Net Jets

 

Imperial Capital Asset Management, LLC

 

Imperial Capital Asset Management Holdings, LLC

 

 

Imperial Capital Reese

 

Bulldog Capital

 

Sienna Capital

 

2415 Casa de Marbella

 

Pueblo Development Group, Inc.

 

City Ventures Board

 

Long Ball Partners, LLC

 

Monomoy Partners, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Great Elm Group, Inc.

GREAT ELM GROUP, INC.

 

TERMS OF EMPLOYMENT

 

Imperial Capital Leverage Income Fund Subject to your agreement to these terms, we welcome you as an employee of Great Elm Group, Inc. (the “Company”). Like most other organizations, we have certain policies essential to maintaining our high professional standards and protecting our valuable confidential and trade secret information. As a condition of your employment with the Company, please read this agreement (hereinafter “Agreement”) carefully and then sign it where indicated to confirm that you understand and agree to it.

 

CONFIDENTIALITY/AND TRADE SECRET INFORMATION.

 

(a) Company Information. You agree at all times during the term of your employment with the Company and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm, corporation or other entity (other than Imperial Capital Group Holdings, LLC (“ICGH”) pursuant to a non-disclosure agreement acceptable to the Company and ICGH, the “NDA”)) without written authorization of the Board of Directors of the Company, any Confidential Information of the Company which you obtain or create in connection with your employment with the Company or service on its Board of Directors. You understand that “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, suppliers, , investment strategy, portfolio information, valuation data, marketing plans, operations or business plans, budgets, marketing plans, licenses, finances, budgets or other business information disclosed to you by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment or created by you during the period of your employment, whether or not during working hours as well as confidential or proprietary information provided to the Company by third parties. You further understand that Confidential Information does not include any items obtained as a result of your ownership interest in the Company pursuant to the NDA; or which has become publicly and widely known and made generally available or readily ascertainable through no wrongful act of yours or of others who were under confidentiality obligations as to the item or items involved.

(b) Nothing in this Agreement is intended to, or should be interpreted as preventing, prohibiting or discouraging you from making disclosures as permitted under applicable law or from bringing to the attention of federal, state, or local government officials, any regulatory agency, such as the Securities and Exchange Commission, or any self-regulatory organization (SRO), any information which you believe concerns a possible violation of law, regulation or SRO regulation, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. You do not need the prior authorization of the Company to make any such reports or disclosures and you are not required to notify the Company that you have made such reports or disclosures. You understand and acknowledge that the federal Defend Trade Secrets Act (“DTSA”) provides that an individual shall not be held criminally or civilly liable for the disclosure of a trade secret that is made (i) in confidence to a government official or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, you understand and acknowledge that the DTSA provides that an individual who files a retaliation lawsuit against an employer for reporting a suspected violation of law may disclose a trade secret to his/her attorney and use the trade secret information in court, but only if the individual (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order.

 


 

Great Elm Group, Inc.

 

RETURNING COMPANY DOCUMENTS. You agree that, at the time of termination of your employment with the Company or within ten (10) business days of written request therefor, you will deliver to the Company any and all devices, records, data, notes, reports, proposals, lists, correspondence, other documents or property, or reproductions of any aforementioned items developed by you pursuant to your employment. It is understood that the Company’s request for the return of documents will not include any items obtained as a result of your ownership interest in the Company which have become publicly and widely known and made generally available or readily ascertainable through no wrongful act of your or others who were under confidentiality obligations as to the item or items involved. You acknowledge that (i) any Company property situated on its premises is subject to inspection by Company personnel and (ii) you have no expectation of privacy with respect to the Company’s telecommunications, networking or information processing systems (including, without limitation, files, e-mail messages, and voice messages relating to the Company) and that your activity relating to the Company and any files or messages on or using any of those systems with respect to the Company may be monitored or reviewed, in each case, at any time without notice

 

INSIDE INFORMATION/INSIDER TRADING. As a condition of your employment, you will be required to agree to the Company’s standard Insider Trading Policy which defines the trading window outside of which you, or persons related to you, may not trade in Company Securities.

 

CODE OF ETHICS. We have adopted a Code of Ethics and Conduct with respect to our obligations to our clients. As a condition of your employment with the Company, you hereby agree to follow that Code of Ethics and all other policies and procedures of the Company.

 

NOTICE PERIOD. You recognize and agree that it is reasonable and necessary for the Company to protect its Confidential Information and Trade Secrets and to provide a smooth transition in the event that your employment with the Company is terminated. Consequently, you agree that you will provide the Company with ninety (90) days prior written notice (the “Notice”) of your intention to terminate your employment with the Company (the “Notice Period”). During the Notice Period, the Company may choose to discontinue or otherwise limit your access to information, and the Company may, at its sole discretion, elect to (a) require you to continue to perform your regular duties, or (b) require you to discontinue your regular duties, including prohibiting you from further entry to any of the Company’s premises other than the office in Palm Beach Gardens, Florida. The Company may also reduce the term of the Notice Period by accelerating the termination of your employment to an earlier date that the Company selects in its sole discretion.

 

NO SOLICITATION OF EMPLOYEES. To meet the demands of our clients, the Company invests substantial time and resources in identifying for hire and training quality employees. In addition, the identities, compensation information and skill set of the Company’s employees constitutes Confidential Information and Trade Secrets.

 


 

Great Elm Group, Inc.

In recognition of our investment, and to protect the Company’s Confidential Information and Trade Secrets, you agree that while you are employed by us, and (a) for a period of 6 months thereafter if you resign without Good Reason (as defined in the Employment Agreement, as defined below) or are terminated for Cause (as defined in the Employment Agreement) or (b) for a period of one (1) year thereafter if your employment with the Company ends due to an Involuntary Termination as set forth in Section 8 (a) and 8 (b) and the Company complies with its obligations in 8 (a) (i-iii) or 8 (b) (i-iii), in each case, starting with the date any applicable Notice Period begins (such 6 or 12 month period, as applicable, the “Restricted Period”), you will not, without the prior written consent of the Company, whether on your own behalf or on behalf of or in conjunction with any other person, directly or indirectly, in any manner, solicit, induce, recruit or encourage any employee to leave the Company’s employment.

 

NO COMPETITION. You understand that the nature of your position gives you access to and knowledge of Confidential Information and Trade Secrets that places you in a position of trust and confidence with the Company. You further acknowledge and agree that the Company’s ability to safeguard its Confidential Information and Trade Secrets for the exclusive knowledge and use of the Company is of great competitive importance and commercial value to the Company, and that improper use or disclosure by you is unlikely to result in unfair or unlawful competitive activity. Because of the Company’s legitimate business interests as described in this Agreement and the good and valuable consideration offered to you, the receipt and sufficiency of which is acknowledged, during the term of your employment and during the Restricted Period, you will not, without the prior written consent of the Company, directly or indirectly, on your own account or on behalf of or in conjunction with any other person or organization, whether as owner, partner, investor, operator, manager, officer, director, consultant, agent, employee, co-venturer, advisor, representative or otherwise, engage, participate, promote, assist or invest or actively prepare to engage, participate, promote, assist or invest in any Competing Business. “Competing Business” means any business, regardless of size or the form of the business, that (a) manages, sponsors, promotes, operates or engages in investment strategies or any other business activities similar to any of those engaged by (i) Great Elm Capital Corp. or its subsidiaries, including, without limitation, Great Elm Specialty Finance, LLC, Prestige Capital Finance, LLC, Great Elm Healthcare Finance, LLC, Sterling Commercial Credit, LLC and Lenders Funding, LLC (ii) Monomoy Properties REIT, LLC or its subsidiaries, (iii) Monomoy BTS Corp. and its subsidiaries, (iv) Tacora Capital, LP or its affiliates or (v) any other business or investment strategy in which the Company or its subsidiaries is engaged in any material respect at the time your employment with the Company ends, or (b) owns or controls a significant interest in any entity that directly or indirectly engages in any of the foregoing; provided that none of the entities set forth on Exhibit A to that certain Employment Agreement, dated as of the date hereof, between you and the Company (the “Employment Agreement”), shall be deemed to be a Competing Business for purposes of this section; provided further that during the Restricted Period, none of the entities set forth on Exhibit A may solicit or raise third party capital for any business or investment strategy described in clauses (a) and (b) above other than accepting subscriptions from existing investors in the entities set forth on Exhibit A in the ordinary course of business for (x) any business or investment strategy in which such entities are engaged in any material respect as of the time your employment with the Company begins or (y) any new business or investment strategy that is not described in clauses (a) and (b) above. Nothing herein shall prohibit you from (i) holding investments in any non-asset management entity and (ii) holding any passive investments in asset management businesses which do not exceed ten percent (10%) of the equity interests of such entity, subject to Section 2 of the Employment Agreement.

 

MONOMOY AGREEMENT. For the avoidance of doubt, nothing in this Agreement shall limit or modify the obligations of Imperial Capital Asset Management, LLC (“ICAM”) and its affiliates under that certain Purchase Agreement, dated May 4, 2022, between ICAM and Great Elm Capital Management, Inc. (“GECM”), including, without limitation, Section 4.6 thereof, which obligations shall remain in full force and effect.

 


 

Great Elm Group, Inc.

 

LITIGATION AND REGULATORY COOPERATION. During and after your employment, you shall reasonably cooperate with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while you were employed by the Company. Your full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after your employment, you also shall reasonably cooperate with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while you were employed by the Company. The Company shall reimburse you for any reasonable out of pocket expenses incurred in connection with the performance of your obligations herein.

 

ENFORCEMENT/ DAMAGES. Because your breach of this Agreement may cause the Company irreparable harm for which money is inadequate compensation, you agree that the Company will be entitled to injunctive relief to enforce this Agreement, in addition to actual damages, punitive damages and other available remedies.

 

ASSIGNMENT. To advise our clients, we must perform extensive investment analysis. This analysis requires the application of many analytical tools and inventions. Some of these tools and inventions are developed during the course and scope of our work and are designed for internal use only. As used in this Agreement, the term “Work Product” means all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable, copyrightable, registerable as a trademark, reduced to writing, or otherwise), or any part thereof, which relates to the Company’s actual or anticipated business, research and development or existing or future products or services and which are or were conceived, developed or made by you (whether or not during usual business hours, whether or not by the use of the facilities of the Company or any of its affiliates, and whether or not alone or in conjunction with any other person) while employed by the Company together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing. You acknowledge and agree that all such Work Product belong to and shall be the sole property of the Company, and you hereby assign all of your right, title and interest in and to such Work Product to the Company, including all intellectual property rights therein. You shall promptly disclose all Work Product to the Company, shall execute at the request of the Company any assignments or other documents the Company may deem necessary to protect or perfect its rights therein, and shall assist the Company, at the Company’s expense, in obtaining, defending and enforcing the Company’s rights therein. You hereby appoint the Company as your attorney-in-fact to execute on your behalf any assignments or other documents deemed necessary by the Company to protect or perfect the Company’s rights to any Work Product.

 

“AT WILL” EMPLOYMENT. The employment relationship between you and the Company is “at will.” This means that, except as set forth in the Notice Period provision above, either you or the Company can terminate the employment relationship at any time with or without notice and with or without cause.

 


 

Great Elm Group, Inc.

This at will relationship between you and us cannot be changed or modified except as provided in an express written agreement stating that the at-will relationship has been changed, and signed by a member of the Great Elm Group Board of Directors (not including you). No representation by an employee or representative can change this policy or establish an employment contract or any term thereof. This is the full and complete agreement between you and the Company on this subject.

 

AMENDMENT AND BINDING EFFECT. This Agreement may not be amended except by an instrument in writing signed by both parties. This Agreement shall be binding on your heirs, executors, administrators, and other legal representatives and assigns, and is for the benefit of the Company and its successors, assigns, subsidiaries or related entities.

 

SEVERABILITY. While the provisions contained in this Agreement are considered by you and the Company to be reasonable in all circumstances, it is recognized that some provision may fail to technical reasons. Accordingly, it is hereby agreed and declared that if any one or more of such provisions shall, either by itself or themselves or taken with others, be adjudged to be invalid as exceeding what is reasonable in all circumstances for the protection of the interest of the Company, but would be valid if any particular restrictions or provisions were deleted or restricted or limited in a particular manner, then the said provisions shall apply with any such deletions, restrictions, limitations, reductions, curtailments, or modifications as may be necessary to make them valid and effective and the remaining provisions shall be unaffected thereby.

 

ARBITRATION. You and the Company each voluntarily promise and agree to arbitrate any dispute or claim between you, on the one hand, and the Company on the other hand, during, regarding, relating to or arising out of in any way your employment with the Company and you knowingly thereby waive any right to a jury trial or court proceedings. You and the Company recognize that arbitration is a more efficient means of resolving any disputes and, therefore, the mutual promises to arbitrate by you and the Company, constitute adequate consideration for each other and for this agreement to arbitrate. The parties further agree that such binding arbitration pursuant to this agreement shall be the sole and exclusive remedy for resolving any such claims or disputes. Although the decision of the arbitrator shall be the sole and exclusive remedy for any dispute, the decision may be subject to enforcement by a court.

 

1. Claims Covered by This Agreement.

 

a. Claims and disputes covered by this agreement include all claims by you against the Company (as defined below), and all claims that the Company may have against you, whether or not arising out of your employment (or its termination), including, without limitation, those arising under:
 

1) Any federal, state, or local laws, regulations, or statutes prohibiting employment discrimination (such as, without limitation, race, sex, sexual orientation, gender identity, national origin, age, disability, medical condition, pregnancy, genetic information, religion), retaliation, or harassment of any kind.

 

2) Any alleged or actual agreement or covenant (oral, written, or implied) between you and the Company.

 


 

Great Elm Group, Inc.

 

3) Any Company policy or compensation or benefit plan, unless the decision in question was made by an entity other than the Company.

 

4) Any public policy or tort.

5) Any federal, state, or other governmental law, statute, regulation, or ordinance.

6) Any other claim for personal, emotional, physical, or economic injury.

 

b. The only disputes between you and the Company which are not included within this mutual agreement to arbitrate are:

1) Any claim by you for workers’ compensation benefits or unemployment benefits.

2) Any claim by you for benefits under a Company employee benefit plan which provides its own arbitration procedure.

 

3) Any claims which, as a matter of law, cannot be subject to mandatory arbitration.

 

2. Class/ Collective Action Waiver; Provisional Remedies.

 

To the extent permitted by law, you agree that you may only bring claims under this Agreement in your individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding. You and the Company agree that nothing in this agreement is intended to prevent either you or the Company from obtaining emergency injunctive relief, or other provisional remedies from a court on the ground that the arbitration award to which you or the Company may be entitled may be rendered ineffectual without the injunctive or provisional relief. You agree to submit to the exclusive jurisdiction of any available federal or state court located in Palm Beach Gardens, FL for such proceeding.

3. Arbitration Procedure.

 

a. A written request for arbitration will be served on the other party.

b. At the time a written arbitration request is made, the arbitration will be conducted in accordance with the then-current Employment Arbitration rules of the Judicial Arbitration and Mediation Services (“JAMS”), except as those Employment Arbitration Rules are modified by or inconsistent with the procedures below. A copy of the JAMS Employment Arbitration Rules can be accessed on the worldwide web at www.jamsadr.com or obtained from the Company’s Human Resources Department.

 

i. The arbitration will be held in the state and county of your primary employment at the time of the act giving rise to the dispute.

 

ii. The arbitrator’s fees will be paid by the Company. Each party will pay for the fees and expenses of its own attorneys, experts, witnesses, and preparation and presentation of evidence and post-hearing briefs unless the party prevails on a claim for which attorneys’ fees are recoverable by applicable statute or contract.

 


 

Great Elm Group, Inc.

 

iii. The arbitrator shall be neutral, and will have experience in arbitrating employment disputes. The arbitrator shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to, any claim that all or any part of this Agreement is void or voidable. The arbitrator shall have the authority to grant any party all remedies otherwise available by law, including injunctions, but the arbitrator shall not have the power to grant any remedy that would not be available in state or federal court. The arbitrator shall apply the applicable statute of limitations to any claim. The arbitrator may not consolidate more than one person’s claims and may not otherwise preside over any form of a representative or class proceeding.

 

iv. Discovery shall be conducted in accordance with the then-current Employment Arbitration rules of JAMS. The arbitration shall provide discovery adequate to give the parties access to documents and witnesses that are essential to the dispute.

 

v. Each party shall have the right to subpoena witnesses and documents for the arbitration.

 

vi. The Arbitrator shall render a written award and opinion that includes the essential findings and conclusions upon which the decision is based. The arbitrator’s decision must be issued no later than thirty (30) days after a dispositive motion is heard and/or an arbitration hearing has been completed. The arbitrator’s decision regarding the claims shall be final and binding upon the parties and shall be enforceable in any court having jurisdiction thereof.

 

vii. Any action to enforce or vacate the arbitrator’s award shall be governed by the Federal Arbitration Act if applicable, and otherwise by applicable state law.

 

c. This is the complete agreement of the parties on the subject of arbitration of disputes of claims. This agreement shall survive the termination of your employment and can only be revoked or modified by a writing signed by you and a member of the GEG Board (other than you) which specifically states an intent to revoke or modify this agreement to arbitrate. If any provision of this agreement to arbitrate is adjudged to be void or otherwise unenforceable in whole or in part, such adjudication shall not affect the validity of the remainder of such agreement.

 

MISCELLANEOUS PROVISIONS.

a. For purposes of this Agreement, “Great Elm Group, Inc.” or “the Company” means Great Elm Group, Inc. and all related entities including Great Elm Capital Corp., GECM, and all successors and assigns of any of the above.

 

b. This Agreement and the Employment Agreement, together with all of the Company’s policies and procedures relating to employees, as in effect from time to time (collectively, “Employment Documents”), constitute our entire agreement with respect to your employment with the Company and no prior negotiations, drafts, arrangements or understandings with respect thereto shall be of any effect. This is the complete agreement of the parties on the subjects contained herein.

 


 

Great Elm Group, Inc.

 

c. If any sentence, phrase, paragraph, subparagraph or portion of this Agreement is found to be illegal or unenforceable, such action shall not affect the validity or enforceability of the remaining sentences, phrases, paragraphs, subparagraphs or portions of this Agreement

 

d. You have the right to have this Agreement reviewed by a counsel of your own choice.

 

e. This Agreement is not, and shall not be construed to create, any contract of employment, express or implied, nor does this agreement in any way alter the “at will” status of your employment.

 

Please refer to the Company’s complete policies and procedures governing your employment.

 

ASK FOR HELP. If you are ever unsure about whether some action would be consistent with our policies, you agree to ask us. Similarly, any time you encounter a situation and you are unsure what to do, you agree to tell us and ask for help.

 

ACKNOWLEDGMENT. By signing below, you acknowledge that you have read this carefully, understand and will comply with the agreements set forth in this form. You understand that none of these agreements can be changed or eliminated without written authorization of a member of the GEG Board (other than you).

 

 

DATE: May 4, 2023

 

 

SIGNATURE: /s/ Jason Reese

 

 

PRINT NAME: Jason Reese

 

 

 

 

 

 

 

 

 

 

 

 

 

 


EX-99 5 geg-ex99_1.htm EX-99.1 EX-99

Exhibit 99.1

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GREAT ELM GROUP REPORTS FISCAL 2023 THIRD QUARTER

FINANCIAL RESULTS

 

Company to Host Conference Call at 9:00 a.m., ET on May 5, 2023

 

WALTHAM, MA, May 5, 2023 -- Great Elm Group, Inc. (“we,” “our,” “GEG,” “Great Elm,” or “the Company”), (NASDAQ: GEG), an alternative asset manager, today announced financial results for its fiscal third quarter ended March 31, 2023.

 

Leadership Update and Transactions Overview

 

Today, we announced the following leadership change as detailed in our separate press release:
o
The Board of GEG appointed Jason Reese, the Executive Chairman of GEG’s Board of Directors since 2020, to the additional role of Chief Executive Officer, effective immediately following Mr. Reed’s resignation.
o
Peter Reed resigned as GEG’s Chief Executive Officer, effective immediately following the filing of GEG’s Form 10-Q for the fiscal quarter ended March 31, 2023.
On January 3, 2023, GEG sold its Durable Medical Equipment (“DME”) business for $80 million. After settling all obligations, the transaction resulted in approximately $26 million in net cash proceeds and 346,028 shares of Quipt Home Medical Corp. (“Quipt”) common stock.
On January 17, 2023, GEG exercised a put right for the remaining 19% of the equity interests in Forest Investments, Inc. (“Forest”), following its sale of 61% of the equity interests in Forest on December 30, 2022, resulting in combined cash proceeds from the Forest sales of approximately $45 million.
As of March 31, 2023, GEG had over $84 million of cash and cash equivalents on its balance sheet to deploy across its growing alternative asset management platform.

 

Financial and Operational Highlights

 

Assets under management totaled $630.7 million as of March 31, 2023, representing approximately 2% sequential growth from December 31, 2022, and up approximately 4% fiscal year-to-date.
Fee paying assets under management totaled $438.3 million as of March 31, 2023, approximately unchanged from December 31, 2022, and up approximately 7% fiscal year-to-date.
GEG total revenue grew for the third quarter by 92% to $1.9 million, compared to $1.0 million for the same period in the prior year, primarily attributable to the acquisition of the management agreement for Monomoy Properties REIT, LLC and its subsidiaries (collectively, “Monomoy REIT”).
GEG reported net loss from continuing operations for the third quarter of $0.5 million, compared to a net loss from continuing operations of $6.5 million in the prior-year period, primarily driven by improved net realized and unrealized gains on investments.
GEG recorded Adjusted EBITDA of ($1.2) million for the third quarter, compared to an Adjusted EBITDA of ($1.6) million from the same period in the prior fiscal year.

 

 

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Management Commentary

 

Jason Reese, Chief Executive Officer of the Company, stated, “In the third quarter of fiscal 2023, we completed the transformation of Great Elm Group to a simplified business focused on alternative asset management. During the quarter, we developed actionable plans to scale our existing businesses and cultivated a pipeline of potential investments, including opportunities to acquire the management rights to new, long-duration permanent capital vehicles. We remain committed in our efforts to grow a scalable and diversified portfolio of long-duration and permanent capital vehicles across credit, real estate, specialty finance and other alternative strategies.”

 

Discussion of Financial Results for the Fiscal Quarter ended March 31, 2023

 

During the three months ended March 31, 2023, GEG reported total revenue of $1.9 million, a 92% increase compared to $1.0 million during the same period in the prior year. The increase primarily related to the May 2022 acquisition of the Monomoy REIT management agreement.

 

During the three months ended March 31, 2023, GEG recorded a net loss from continuing operations of $0.5 million, compared to a net loss from continuing operations of $6.5 million during the same period in the prior year. The change was driven by $2.0 million in net realized and unrealized gain on investments in the third quarter of fiscal 2023 compared to a net realized and unrealized loss on investments of $3.5 million in the prior-year quarter. The gain was partially offset by higher investment management expenses from the prior-year period.

 

During the three months ended March 31, 2023, GEG recorded Adjusted EBITDA of ($1.2) million, compared to Adjusted EBITDA of ($1.6) million from the same period in the prior year.

 

Sale of DME Business

 

On January 3, 2023, GEG sold its DME business to QHM Holdings, Inc., a wholly-owned subsidiary of Quipt, a U.S.-based leader in the home medical equipment industry, focused on end-to-end respiratory care. After payment of all obligations in connection with the transaction, GEG received approximately $26 million in net cash proceeds and 346,028 shares of Quipt common stock.

 

Sale of Interest in Forest

 

On January 17, 2023, GEG put its remaining 19% ownership interest in Forest to J.P. Morgan Broker-Dealer Holdings Inc. (“JPM”) for cash proceeds of approximately $27 million. This transaction followed its December 30, 2022 sale of 61% of the direct and indirect common equity in Forest to JPM for approximately $18 million in cash. GEG raised approximately $45 million in aggregate from the combined sales of its ownership interest in Forest in the second and third quarters of fiscal 2023.

 

The sale of the DME Business, together with the Forest transaction, added significant cash to GEG’s balance sheet to fund strategic growth initiatives and enables it to focus on scaling its alternative asset management platform.

 

 

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Fiscal 2023 Third Quarter Conference Call & Webcast Information

 

When:

Friday, May 5, 2023, 9:00 a.m. Eastern Time (ET)

 

 

Call:

All interested parties are invited to participate in the conference call by dialing +1 (888) 440-4537; international callers should dial +1 (646) 960-0669. Participants should enter the Conference ID 2595129 when asked.

 

 

Webcast:

The conference call will be webcast simultaneously and can be accessed at the following link: https://events.q4inc.com/attendee/141685606. For a copy of the slide presentation accompanying the conference call, please visit: https://www.greatelmgroup.com/events-and-presentations.

 

About Great Elm Group, Inc.

 

Great Elm Group, Inc. (NASDAQ: GEG) is a publicly-traded, alternative asset manager focused on growing a scalable and diversified portfolio of long-duration and permanent capital vehicles across credit, real estate, specialty finance, and other alternative strategies. Great Elm Group, Inc. and its subsidiaries currently manage Great Elm Capital Corp., a publicly-traded business development company, and Monomoy Properties REIT, LLC, an industrial-focused real estate investment trust, in addition to other investments. Great Elm Group, Inc.’s website can be found at www.greatelmgroup.com.

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

 

Statements in this press release that are “forward-looking” statements, including statements regarding expected growth, profitability, acquisition opportunities and outlook involve risks and uncertainties that may individually or collectively impact the matters described herein. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made and represent Great Elm’s assumptions and expectations in light of currently available information. These statements involve risks, variables and uncertainties, and Great Elm’s actual performance results may differ from those projected, and any such differences may be material. For information on certain factors that could cause actual events or results to differ materially from Great Elm’s expectations, please see Great Elm’s filings with the Securities and Exchange Commission (“SEC”), including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Additional information relating to Great Elm’s financial position and results of operations is also contained in Great Elm’s annual and quarterly reports filed with the SEC and available for download at its website www.greatelmgroup.com or at the SEC website www.sec.gov.

 

Non-GAAP Financial Measures

 

The SEC has adopted rules to regulate the use in filings with the SEC, and in public disclosures, of financial measures that are not in accordance with US GAAP, such as adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted EBITDA is derived from methodologies other than in accordance with US GAAP. Great Elm believes that Adjusted EBITDA is an important measure for investors to use in evaluating Great Elm’s businesses. In addition, Great Elm’s management reviews Adjusted EBITDA as they evaluate acquisition opportunities.

 

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it either in isolation from, or as a substitute for, analyzing Great Elm’s results as reported under US GAAP. Non-GAAP financial measures reported by Great Elm may not be comparable to similarly titled amounts reported by other companies.

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Included in the financial tables below is a reconciliation of Adjusted EBITDA to the most directly comparable US GAAP financial measure, net income.

 

 

Media & Investor Contact:

Investor Relations

geginvestorrelations@greatelmcap.com

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Great Elm Group, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

Dollar amounts in thousands (except per share data)

ASSETS

 

March 31, 2023

 

 

June 30, 2022

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

84,118

 

 

$

22,281

 

Receivables from managed funds

 

 

2,421

 

 

 

2,445

 

Investments, at fair value (cost $41,079 and $68,766, respectively)

 

 

35,104

 

 

 

48,042

 

Prepaid and other current assets

 

 

946

 

 

 

665

 

Assets of Consolidated Fund:

 

 

 

 

 

 

Investments, at fair value (cost $2,432)

 

 

-

 

 

 

1,797

 

Prepaid expenses

 

 

-

 

 

 

746

 

Real estate under development

 

 

1,683

 

 

 

 -

 

Current assets held for sale

 

 

-

 

 

 

8,464

 

Total current assets

 

 

124,272

 

 

 

84,440

 

Identifiable intangible assets, net

 

 

12,391

 

 

 

13,250

 

Right of use assets

 

 

582

 

 

 

733

 

Other assets

 

 

137

 

 

 

103

 

Non-current assets held for sale

 

 

-

 

 

 

69,561

 

Total assets

 

$

137,382

 

 

$

168,087

 

LIABILITIES, NON-CONTROLLING INTEREST AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

307

 

 

$

8

 

Accrued expenses and other liabilities

 

 

4,122

 

 

 

3,845

 

Current portion of related party payables

 

 

855

 

 

 

486

 

Current portion of lease liabilities

 

 

347

 

 

 

341

 

Liabilities of Consolidated Fund - accrued expenses and other

 

 

-

 

 

 

11

 

Current liabilities held for sale

 

 

-

 

 

 

15,003

 

Total current liabilities

 

 

5,631

 

 

 

19,694

 

Lease liabilities, net of current portion

 

 

245

 

 

 

472

 

Long term debt (face value $26,945)

 

 

25,737

 

 

 

25,532

 

Related party payables

 

 

445

 

 

 

1,120

 

Related party notes payable, net of current portion

 

 

-

 

 

 

6,270

 

Convertible notes (face value $36,987 and $36,085, including $15,019 and $15,133 held by related parties, respectively)

 

 

36,176

 

 

 

35,187

 

Redeemable preferred stock of subsidiaries (held by related parties, face value $35,010)

 

 

-

 

 

 

34,099

 

Other liabilities

 

 

691

 

 

 

908

 

Non-current liabilities held for sale

 

 

-

 

 

 

2,551

 

Total liabilities

 

 

68,925

 

 

 

125,833

 

 

 

 

 

 

 

 

Contingently redeemable non-controlling interest

 

 

-

 

 

 

2,225

 

Stockholders' equity

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 authorized and zero outstanding

 

 

-

 

 

 

-

 

Common stock, $0.001 par value; 350,000,000 shares authorized and 30,598,911 shares issued and 29,146,053 outstanding at March 31, 2023; and 28,932,444 shares issued and 28,507,490 outstanding at June 30, 2022

 

 

29

 

 

 

29

 

Additional paid-in-capital

 

 

3,314,737

 

 

 

3,312,763

 

Accumulated deficit

 

 

(3,246,309

)

 

 

(3,279,296

)

Total Great Elm Group, Inc. stockholders' equity

 

 

68,457

 

 

 

33,496

 

Non-controlling interest

 

 

-

 

 

 

6,533

 

Total stockholders' equity

 

 

68,457

 

 

 

40,029

 

Total liabilities, non-controlling interest and stockholders' equity

 

$

137,382

 

 

$

168,087

 

 

5


img217308796_1.jpg 

Great Elm Group, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

Amounts in thousands (except per share data)

 

 

 

For the three months ended March 31,

 

 

For the nine months ended

March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

$

1,898

 

 

$

988

 

 

$

5,637

 

 

$

2,992

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Investment management expenses

 

 

2,593

 

 

 

1,592

 

 

 

6,893

 

 

 

4,748

 

Depreciation and amortization

 

 

281

 

 

 

89

 

 

 

870

 

 

 

307

 

Selling, general and administrative

 

 

1,893

 

 

 

1,582

 

 

 

5,441

 

 

 

4,620

 

Expenses of Consolidated Fund

 

 

-

 

 

 

42

 

 

 

46

 

 

 

139

 

Total operating costs and expenses

 

 

4,767

 

 

 

3,305

 

 

 

13,250

 

 

 

9,814

 

Operating loss

 

 

  (2,869)

 

 

 

(2,317)

 

 

 

(7,613)

 

 

 

(6,822

)

Dividends and interest income

 

 

1,520

 

 

 

642

 

 

 

4,432

 

 

 

1,939

 

Net realized and unrealized gain (loss) on investments

 

 

1,989

 

 

 

(3,220)

 

 

 

17,434

 

 

 

(5,055

)

Net realized and unrealized loss on investments of Consolidated Fund

 

 

-

 

 

 

(284)

 

 

 

(16)

 

 

 

(279

)

Gain on sale of controlling interest in subsidiary

 

 

-

 

 

 

-

 

 

 

10,524

 

 

 

-

 

Interest expense

 

 

(1,095)

 

 

 

(1,286)

 

 

 

(5,024)

 

 

 

(3,872

)

(Loss) income before income taxes from continuing operations

 

 

 (455)

 

 

 

(6,465)

 

 

 

19,737

 

 

 

(14,089

)

Income tax (expense) benefit

 

 

-

 

 

 

(2)

 

 

 

(2)

 

 

 

83

 

Net (loss) income from continuing operations

 

 

(455)

 

 

 

(6,467)

 

 

 

19,735

 

 

 

(14,006

)

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

Net income from discontinued operations

 

 

12,203

 

 

 

332

 

 

 

13,202

 

 

 

3,818

 

Net income (loss)

 

$

11,748

 

 

$

(6,135)

 

 

$

32,937

 

 

$

(10,188

)

Less: net income (loss) attributable to non-controlling interest, continuing operations

 

 

-

 

 

 

1,146

 

 

 

(1,554)

 

 

 

913

 

Less: net (loss) income attributable to non-controlling interest, discontinued operations

 

 

-

 

 

 

      (1,372)

 

 

 

1,504

 

 

 

(754

)

Net income (loss) attributable to Great Elm Group, Inc.

 

$

11,748

 

 

$

(5,909)

 

 

$

32,987

 

 

$

 (10,347

)

Basic income (loss) per share from:

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.02)

 

 

$

(0.28)

 

 

$

0.74

 

 

$

(0.55

)

Discontinued operations

 

 

0.42

 

 

 

0.06

 

 

 

0.41

 

 

 

0.17

 

Basic net income (loss) per share

 

$

0.40

 

 

$

(0.22)

 

 

$

1.15

 

 

$

(0.38

)

Diluted income (loss) per share from:

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.02)

 

 

$

(0.28)

 

 

$

0.56

 

 

$

(0.55

)

Discontinued operations

 

 

0.42

 

 

 

0.06

 

 

 

0.29

 

 

 

0.17

 

Diluted net income (loss) per share

 

$

0.40

 

 

$

(0.22)

 

 

$

0.85

 

 

$

(0.38

)

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

28,997

 

 

 

26,842

 

 

 

28,779

 

 

 

26,963

 

Diluted

 

 

28,997

 

 

 

26,842

 

 

 

40,673

 

 

 

26,963

 

 

 

 

 

 

 

 

 

 

6


img217308796_1.jpg 

Great Elm Group, Inc.

Reconciliation from EBITDA to Adjusted EBITDA - Quarterly

Dollar amounts in thousands

 

 

 

For the three months ended March 31,

 

 

For the nine months ended March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income (loss) from continuing operations – GAAP

 

$ (455)

 

 

$ (6,467)

 

 

$ 19,735

 

 

$ (14,006)

 

Interest Expense

 

 

1,095

 

 

 

1,286

 

 

 

5,024

 

 

 

3,872

 

Dividend income on investments

 

 

(941)

 

 

 

(642)

 

 

 

(3,672)

 

 

 

(1,939)

 

Income tax expense (benefit)

 

-

 

 

2

 

 

2

 

 

(83)

 

Depreciation and amortization

 

281

 

 

89

 

 

870

 

 

307

 

Non-cash compensation

 

 

660

 

 

 

578

 

 

 

2,246

 

 

 

2,572

 

(Gain) loss on investments, excluding investment in Forest

 

 

(1,964)

 

 

 

3,504

 

 

 

6,980

 

 

 

5,334

 

Gains related to sale of Forest

 

 

(25)

 

 

 

-

 

 

 

(34,922)

 

 

 

-

 

Transaction and integration related costs(1)

 

 

-

 

 

 

92

 

 

 

471

 

 

 

311

 

Change in contingent consideration

 

 

120

 

 

 

-

 

 

 

180

 

 

 

-

 

Adjusted EBITDA

 

 

$ (1,229)

 

 

 

$ (1,558)

 

 

 

  $ (3,086)

 

 

 

$ (3,632)

 

 

(1) Transaction and integration related costs include costs to sell, acquire and integrate acquired businesses.

 

 

7


EX-99 6 geg-ex99_2.htm EX-99.2 EX-99

Exhibit 99.2

img218232317_0.jpg 

GREAT ELM GROUP, INC. APPOINTS JASON REESE AS CEO

 

WALTHAM, MA, May 5, 2023 – Great Elm Group, Inc. (“we,” “us,” “our,” the “Company,” or “GEG”) (NASDAQ: GEG), an alternative asset manager, announced today that Peter Reed has resigned as Chief Executive Officer effective immediately following the filing of the Company’s Form 10-Q for the quarter ended March 31, 2023. The Board of Directors has unanimously appointed Jason Reese to the additional role of CEO effective upon Mr. Reed’s resignation. Jason Reese assumes the CEO position at GEG as a successful entrepreneur and financial services executive with over 30 years of experience founding and growing multiple financial services and real estate companies.

 

Mr. Reese served as the Executive Chairman of our Board of Directors since February 2020 and will now serve as Chairman of the Board and CEO. Mr. Reese is the Co-Founder, Chairman and Chief Executive Officer of Imperial Capital Asset Management, LLC (“ICAM”) and the Co-Founder of Imperial Capital, LLC (“Imperial Capital”), both founded in 1997. ICAM is a registered investment advisor that has managed various investment vehicles including hedge funds, investment partnerships, a private REIT and a private equity fund. Imperial Capital is a registered broker-dealer. During his time at Imperial Capital, Mr. Reese formed Monomoy Properties REIT, LLC in 2014, focusing on the Industrial Outdoor Storage sector, and continues to serve on the Board of Directors. Mr. Reese is also a founding member of City Ventures, LLC, a California-based private home builder, and has served on the Board of Directors since its inception in 2009. Mr. Reese graduated with honors from Yale University with a B.S. in Electrical Engineering. Through his position at ICAM and various affiliates, Mr. Reese is the largest beneficial owner of GEG stock.

 

“On behalf of the Board, I am thrilled to have Jason expand his role with GEG to CEO,” said Matt Drapkin, GEG Board Vice Chairman. “The Company has worked diligently over the last year to reposition its focus solely on alternative asset management with Jason as the Executive Chairman of the Board. The appointment of Jason as CEO is the natural culmination of our repositioning efforts.”

 

Jason Reese stated, “I want to take the opportunity to thank Pete Reed for his service and contributions to Great Elm. Pete steps down with our full support, and we look forward to working with Pete as a consultant to the Company to ensure a smooth transition. I am fortunate that the Board asked me to assume the role of CEO, and I gratefully accept their appointment. It is now my job as CEO to prove to our shareholders that we can achieve our plans to grow our existing businesses and expand our investment management platform.”

 


img218232317_0.jpg 

 

About Great Elm Group, Inc.

 

Great Elm Group, Inc. (NASDAQ: GEG) is a publicly-traded, alternative asset manager focused on growing a scalable and diversified portfolio of long-duration and permanent capital vehicles across credit, real estate, specialty finance, and other alternative strategies. Great Elm Group, Inc. and its subsidiaries currently manage Great Elm Capital Corp., a publicly-traded business development company, and Monomoy Properties REIT, LLC, an industrial-focused real estate investment trust, in addition to other investments. Great Elm Group, Inc.’s website can be found at www.greatelmgroup.com.

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

 

Statements in this press release that are “forward-looking” statements, including statements regarding expected growth, profitability, acquisition opportunities and outlook involve risks and uncertainties that may individually or collectively impact the matters described herein. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made and represent Great Elm’s assumptions and expectations in light of currently available information. These statements involve risks, variables and uncertainties, and Great Elm’s actual performance results may differ from those projected, and any such differences may be material. For information on certain factors that could cause actual events or results to differ materially from Great Elm’s expectations, please see Great Elm’s filings with the Securities and Exchange Commission (“SEC”), including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Additional information relating to Great Elm’s financial position and results of operations is also contained in Great Elm’s annual and quarterly reports filed with the SEC and available for download at its website www.greatelmgroup.com or at the SEC website www.sec.gov.

 

Media & Investor Contact:

Investor Relations

geginvestorrelations@greatelmcap.com