Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On April 1, 2021, the Board of Directors of Charlies Holdings, Inc. (the
"Company") entered into an Employment Agreement (the "Agreement") with Henry
Sicignano III, MBA, pursuant to which the Company appointed Mr. Sicignano to
serve as President of the Company. A copy of the press release announcing Mr.
Sicignano's appointment is attached to this Current Report on Form 8-K as
Exhibit 99.1.
Prior to joining the Company, Mr. Sicignano, age 53, held multiple positions,
including Chief Executive Officer of 22nd Century Group, Inc. (NYSE American:
XXII), a plant-based biotechnology company that is focused on tobacco harm
reduction, very low nicotine content tobacco, and hemp/cannabis research from
March 2015 through July 2019. He also served as President and as a member of the
Board of Directors with 22nd Century from January 2011 through July 2019. In
addition, from December 2014 to August 2018, Mr. Sicignano served on the Board
of Directors of Anandia Laboratories, Inc., a cannabis-focused science company
that was sold to Aurora Cannabis (NYSE: ACB). Mr. Sicignano holds a B.A. Degree
in Government from Harvard College and an M.B.A. Degree from Harvard University.
Pursuant to the Agreement, Mr. Sicignano will serve as President for an initial
period of two years, renewable on an annual basis unless earlier terminated by
the Company or Mr. Sicignano. Mr. Sicignano's initial base salary will be
$200,000 (the "Base Salary"), until December 31, 2021, at which such time the
Base Salary will be increased on an annual basis, in an amount to be determined
by the Company. In addition, Mr. Sicignano is also entitled to an annual cash
bonus based upon satisfactory achievement of personal performance objectives and
business performance objectives as may be determined by the Company, and other
customary benefits offered to similarly situated employees of the Company.
In addition, Mr. Sicignano will receive a one-time a restricted stock award of
150.0 million restricted shares of the Company (the "RSA"). The RSA will be no
longer subject to forfeiture as follows, subject to acceleration upon certain
events: (i) 75.0 million shares will no longer be subject to forfeiture on April
1, 2022, and (ii) 75.0 million shares will no longer be subject to forfeiture on
April 1, 2023. Further, the Agreement provides that the "unvested" RSA will no
longer be subject to forfeiture, as well as certain severance payments, upon the
occurrence of various events, including, but not limited to termination of Mr.
Sicignano's employment without Good Reason (as such term is defined in the
Agreement) and, in certain circumstances, upon a Change of Control (as such term
is defined in the Agreement).
The preceding description of the Agreement does not purport to be complete and,
instead, is qualified in its entirety by reference to the full text of the
Agreement, a copy of which is attached to this Current Report on Form 8-K as
Exhibit 10.1 and is incorporated by reference herein.
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