Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers;
Compensatory Arrangements of Certain Officers.
(c) On July 28, 2022, the board of directors (the “Board”)
of Soluna Holdings, Inc., a Nevada corporation (“the Company”) appointed Philip F. Patman, Jr., to assume the role of Chief
Financial Officer, Secretary and Treasurer of the Company, effective as of August 16, 2022.
Mr.
Patman, 54, most recently has been Vice President and Head of Renewable Fuels M&A and Strategy at Ameresco, Inc., a cleantech technology
integrator with a comprehensive portfolio of energy efficiency and renewable energy supply solutions, and has been employed by Ameresco
since August 2021. Prior to that, Mr. Patman was with Huron Consulting Group, Inc., a global consultancy firm providing management consulting
services to small- and mid-cap businesses primarily in the oil, gas, and diversified energy sectors, from May 2020 through June 2021,
most recently serving as Managing Director. From April 2017 through March 2019, Mr. Patman was the Chief Financial Officer of VAALCO
Energy, Inc. (NYSE:EGY), an oil operator that owns and operates shallow water offshore platforms in Gabon, West Africa. From 2012 to
March 2017, he served PTT Exploration and Production Public Company, Ltd. (“PTTEP”), one of the largest publicly traded companies
in the Kingdom of Thailand, as Senior Vice President, Business Development, for The Americas region (2012-16) and later as Senior External
Advisor (2016-17); he had primary responsibility for leading PTTEP’s mergers and acquisitions activities in the US, Canada and
Brazil. Cumulatively, Mr. Patman has more than 25 years of experience in finance operations, capital formation, and M&A / corporate
development for companies engaged in global energy and infrastructure markets, including the above-described companies as well as AES
Corporation, Franklin Templeton Investments, Globeleq Limited, Marathon Oil Corporation, and Enron Corp.
Mr.
Patman received a Bachelor of Arts degree in 1990 from the University of Texas at Austin through its Plan II Honors Program, and a J.D.
from the University of Houston Law Center in 1993. He is currently a licensed attorney in the state of Texas.
In
connection with Mr. Patman’s appointment as the Company’s Chief Financial Officer, Secretary and Treasurer, the Company and
Mr. Patman entered into an employment agreement (the “Agreement”), dated July 29, 2022, providing for his employment, effective
as of August 15, 2022, and continuing for a two-year term, which shall continue thereafter on an “at-will” basis (the “Employment
Term”). Pursuant to the Agreement, the Company has agreed to pay Mr. Patman an annual salary of $350,000 (the “Base Salary”),
payable in accordance with the Company’s customary payroll practices. The Agreement further provides that Mr. Patman is eligible
for the following cash bonuses, as determined and based upon annual criteria set by the Board or the compensation committee of the Board
(the “Compensation Committee”): (a) commencing August 15, 2022 and through December 31, 2022, Mr. Patman is eligible to receive
a cash bonus in an amount up to 50% of his Base Salary paid to Mr. Patman during such period; and (b) commencing upon the 2023 calendar
year and during the Employment Term, Mr. Patman is eligible to receive an annual cash bonus equal to an amount up to 50% of the then-current
Base Salary, with each bonus payable in accordance with the Company’s standard payment practices.
In addition, pursuant to
the Agreement, the Company has agreed to grant to Mr. Patman, within sixty (60) calendar days following August 15, 2022, subject to certain
conditions, a one-time award of a number of restricted stock units (“RSUs”) equal to $175,000, divided by the thirty (30)-day
trailing volume weighted average price as of August 15, 2022. Further pursuant to the Agreement, the Company has agreed to grant to Mr.
Patman, commencing in calendar year 2023 and subject to such approvals specified by the Compensation Committee, an annual equity award
consisting of a number of RSUs in an amount equal to $125,000. Mr. Patman is also entitled to other benefits normally available to other
similarly situated employees of the Company.
Under
the Agreement, the Employment Term is terminable by the Company upon 30 days’ prior written notice or by Mr. Patman upon 60 days’
prior written notice. As described in the Agreement, Mr. Patman is entitled to severance, in certain circumstances up to a total of six
(6) months of base salary plus a pro-rata portion of his annual cash bonus.
Except
as set forth above, there are no other arrangements or understandings between Mr. Patman and any other persons pursuant to which he was
named as Chief Financial Officer of the Company and Mr. Patman has no direct or indirect material interest in any transaction required
to be disclosed pursuant to Item 404(a) of Regulation S-K. There are no family relationships between Mr. Patman and any director or executive
officer of the Company. Upon a change of control of the Company, as defined in the Agreement, Mr. Patman’s unvested equity awards
become fully vested.
The
foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text
of the Agreement which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
