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): August 30, 2022


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 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
On August 30, 2022, Great Elm Group, Inc. (the “Company”) appointed Nichole Milz, age 48, as Chief Operating Officer, effective September 6, 2022.

Mrs. Milz joins the Company with over 20 years of experience in the asset management industry.  Most recently, Mrs. Milz spent 16 years at Magnetar Capital LLC where she worked in various senior Operations, Finance and Strategy roles.  At Magnetar, she served as Deputy Chief Operating Officer and ESG Officer of the Magnetar Energy and Infrastructure Group as well as a member of the Energy & Infrastructure management committee.  Mrs. Milz also served as Treasurer of Star Peak Energy Transition Corp and Star Peak Corp II, two alternative energy-focused Special Purpose Acquisition Corporations.

Prior to Magnetar, Mrs. Milz spent four years at Citadel Investment Group as head of Capital Structure Analysis, a team supporting the Global Credit group in modeling and fundamental credit analysis.  She began her career at Ernst & Young where she was an Audit manager in the Entrepreneurial Services group, a Firm Educator, and a nominee and participant in the firm’s National Accounting Research Program.

Mrs. Milz received her Master of Professional Accountancy and Bachelor of Business Administration with honors from the McCombs School of Business at The University of Texas at Austin in 1997.

On August 30, 2022, the Company’s subsidiary, Great Elm Capital Management, Inc., entered into an employment letter with Mrs. Milz under which Mrs. Milz will receive an annual salary of $275,000 and will be eligible to participate in a discretionary bonus plan with a targeted bonus level for fiscal year 2023 of a minimum of $225,000. Upon appointment, Mrs. Milz will also receive 48,544 restricted shares of the Company’s common stock that will vest in equal one-third amounts on the first, second, and third year anniversaries of the grant date, as long as Mrs. Milz continues to be employed on those dates. The employment letter is attached as exhibit 10.1.

In connection with Mrs. Milz' appointment, Adam Kleinman, formerly the Company’s President and Chief Operating Officer, will continue serving as the Company’s President, effective September 6, 2022.

Item 8.01
Other Events.
 
On September 6, 2022, the Company issued the press release attached as Exhibit 99.1 to this report announcing Mrs. Milz' appointment as Chief Operating Officer.
 
Item 9.01
Financial Statements and Exhibits.

(d)
Exhibits.

Exhibit
Number
Description
Employment Letter, dated August 30, 2022, between Great Elm Capital Management, Inc. and Nichole Milz
Press release, dated September 6, 2022.
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:  September 6, 2022
/s/ Brent J. Pearson
 
By:  Brent J. Pearson
 
Title:  Chief Financial Officer


Exhibit 10.1

Great Elm Capital Management, Inc.
800 South St., Suite 230
Waltham, MA 02453

August 30th, 2022
Nichole Milz
VIA EMAIL


Dear Nichole,
We are excited about the opportunity to have you join Great Elm Capital Management, Inc. (“Great Elm”).  As you are aware, Great Elm 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.
Based on our recent meetings and the interest you expressed in joining our team, this letter is to confirm our offer to you of the position of Chief Operating Officer of Great Elm Group (the “Employment Letter”). The terms of your offer are as follows:

1.
Effective Date of Hire. Your start date will be September 6th, 2022 (the “Effective Date of Hire”). You are not expected and will not be permitted, to provide any services to Great Elm until your employment commences.  In addition, you are expected to uphold any continued obligations that you have to your current employer, including, but not limited to confidentiality and non-solicit agreements.  In this regard, you are expected not to bring any confidential materials or work product whether hard copy or electronic from a former employer to Great Elm.  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 any third party.


2.
Title. Your title will be Chief Operating Officer for Great Elm Group.  In this position, you will report to Jason Reese, Executive Chairman of the Board of Directors, and the Board of Directors of Great Elm Group (the “Board”), along with Peter Reed, Chief Executive Officer.


3.
Compensation. You will receive an annual salary of $275,000 (“Base Salary”). You will be paid on a monthly payroll cycle (the 15th of each respective month). Your position is considered exempt under the administrative exemption classification.


4.
Discretionary Bonus Plan. Additionally, you will be eligible to participate in Great Elm’s Discretionary Bonus Plan.  The Plan year is July 1st through June 30th and such bonuses are paid on an annual basis on or around September 15 (“Discretionary Bonus Plan”). Your targeted bonus level under the Discretionary Bonus Plan for the fiscal year 2023, ending June 30, 2023 will be a minimum of $225,000 . Payment of the bonus will be an amount to be determined in cash and equity, both subject to applicable tax withholdings.



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 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.
Signing Compensation. Provided you begin employment on September 6th, 2022, we will recommend to the compensation committee of the Board of Directors (the “Compensation Committee”) of Great Elm Group that you be awarded 48,544 restricted shares (“Restricted Shares”) of common stock of Great Elm Group, Inc. (“GEG”).  The terms of the Restricted Shares will be set forth in a separate award agreement (the “Award Agreement”), including, but not limited to, the Restricted Shares will vest in equal one-third amounts on the first, second, and third year anniversaries of the grant date for such Restricted Shares, as long as you continue to be employed by Great Elm on those dates. If there is a conflict or ambiguity between the Award Agreement and this Agreement, the Award Agreement will control.


6.
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. 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 reasonable evidence of your dishonesty or fraud.


7.
“At Will” Employment.  The employment relationship between you and Great Elm is “at will.”  This means that, except as set forth in the Notice Period provision included in your Terms of Employment, either you or Great Elm 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 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.
Location. This position will be based in the Palm Beach Gardens, FL office, located at 3801 PGA Blvd., Suite 603, Palm Beach Gardens, FL 33410, with opportunity to work remotely.  It is expected that in your position you will travel to company offices as needed.  Great Elm shall, pursuant to the company’s expense reimbursement policies, promptly pay or reimburse you for all reasonable, out-of-pocket expenses incurred by you in furtherance of your duties under this Employment Letter including but not limited to travel as needed to perform your job duties; provided that you submit reasonable proof of such expenses (such proof shall include reasonable documentation and substantiation, including, without limitation, the business purpose for which such expenses were incurred and all receipts related thereto), with properly completed forms as prescribed from time to time by Great Elm, no later than sixty (60) days after such expenses have been incurred (and in any event prior to reimbursement therefor).
 

 		9.
Paid Time Off. Executives with Great Elm do not accrue paid time off.  Professional time off may be taken as needed and we expect our professionals to act responsibly with regards to time off (vacation, sick, personal).


10.
Employee Health & Welfare Benefits. You will be eligible to participate in the employee health and welfare benefit programs and 401(k) plan of Great Elm as of your date of hire.  Should you choose to remain on your current personal medical plan, the Company will subsidize 100% of plan premiums, through December 31, 2022, as it would any similarly situated executive electing medical benefits.   You will be able to participate in Open Enrollment for a medical plan to begin January 1, 2023.  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.

Milz, N. Employment Letter
08.30.2022
Page 2
Great Elm Capital Management, Inc.

11.
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.


12.
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.

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 Tuesday August 30th, 2022 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,
       
Adam Kleinman
Olivia Pine
President
Vice President, Human Resources
 
 
   
Agreed and Accepted
 
   
 
  

 
Nichole Milz
 Date


Milz, N. Employment Letter
08.30.2022
Page 3
Great Elm Capital Management, Inc.
Exhibit 99.1


GREAT ELM GROUP HIRES EXPERIENCED OPERATIONS PROFESSIONAL NICHOLE MILZ  AS CHIEF OPERATING OFFICER

WALTHAM, Mass., September 6, 2022 (GLOBE NEWSWIRE) – Great Elm Group, Inc. (“we,” “us,” “our,” the “Company” or “GEG”) (NASDAQ: GEG), a diversified investment management company, today announced Nichole Milz has joined the Company as Chief Operating Officer, responsible for managing the operations of the Company and its portfolio companies.  Mrs. Milz’ responsibilities include developing and overseeing an institutional quality operations department at Great Elm to support the growth of its investment management business.

“On behalf of the board and the Great Elm team, we are pleased to welcome Nichole to our group, “said Jason Reese, Executive Chairman of GEG.  “We believe her veteran experience managing the operations of well-known asset managers will help us in our mission to grow and diversify our business across multiple asset classes.”

Mrs. Milz joins Great Elm Group with over 20 years of experience in the asset management industry.  Most recently, Mrs. Milz spent 16 years at Magnetar Capital where she worked in various senior operations, finance and strategy roles.  At Magnetar, she served as Deputy Chief Operating Officer and ESG Officer of the Energy and Infrastructure Group as well as a member of the Energy & Infrastructure management committee.  Mrs. Milz also served as Treasurer of Star Peak Energy Transition Corp. and Star Peak Corp. II, two alternative energy-focused Special Purpose Acquisition Corporations. Prior to Magnetar, Mrs. Milz spent four years at Citadel as Head of Capital Structure Analysis, a team supporting the Global Credit group in financial modeling and fundamental credit analysis.  She began her career in Assurance & Advisory Business Services at Ernst & Young.  Mrs. Milz received a Master of Professional Accountancy and Bachelor of Business Administration with honors from the McCombs School of Business at The University of Texas at Austin in 1997.

Mrs. Milz stated, “I am very excited to take on this role and join the entrepreneurial team at Great Elm as we work together to strategically grow and diversify our core business.”
 
About Great Elm Group, Inc.
 
Great Elm Group, Inc. (NASDAQ: GEG) is a publicly-traded holding company that is building a business across two operating verticals: Investment Management and Operating Companies. 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 revenue, Adjusted EBITDA, 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 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.
 
Investor Relations Contact:
Michael Kim / Garrett Edson
investorrelations@greatelmcap.com
 
1