Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment
of Certain Officers; Compensatory Arrangements of Certain Officers.
Employment Agreement with Michael Fasci
On January 1, 2021, the Compensation Committee of the GrowLife, Inc. (the “Company”)
entered into an Employment Agreement with Michael Fasci to serve as the Company’s Chief Financial Officer through December 31, 2023.
Mr. Fasci formerly served as Chairman of the Board.
Mr. Fasci’s shall receive an annual salary of $165,000 and may earn an annual bonus equal
to two percent (2%) of the Company’s EBITDA for that year. Mr. Fasci was also granted an option to purchase 500,000 shares of the
Company’s Common Stock under the Company’s 2018 Stock Incentive Plan at an exercise price of $0.12 per share (“Option”).
The Option vests quarterly over three years, has a five-year life and allows for a cashless exercise. The stock option grant is subject
to the terms and conditions of the Company’s Stock Incentive Plan, including vesting requirements.
In the event that Mr. Fasci’s continuous status as employee to the Company is terminated
by the Company without Cause or Mr. Fasci terminates his employment with the Company for Good Reason as defined in the Fasci Agreement,
in either case upon or within twelve months after a Change in Control as defined in the Company’s Stock Incentive Plan, then 100%
of the total number of Shares shall immediately become vested.
Mr. Fasci is entitled to participate in all group employment benefits that are offered by the
Company to the Company’s senior executives and management employees from time to time, subject to the terms and conditions of such
benefit plans, including any eligibility requirements.
If the Company terminates Mr. Fasci’s employment at any time prior to the expiration
of the Term without Cause, as defined in the Employment Agreement, or if Mr. Fasci terminates his employment at any time for “Good
Reason” or due to a “Disability”, Mr. Fasci will be entitled to receive (i) his Base Salary amount for ninety days;
and (ii) his Annual Bonus amount for each year during the remainder of the Term.
Other terms and conditions are included in and the foregoing description are qualified in their
entirety by reference to the full text of the agreements, copies of which are attached to this Current Report on Form 8-K as Exhibit 10.1
and incorporated by reference into this Item 5.02.
Resignation of Ms. Katherine McLain
On January 5, 2021, Katherine McLain resigned as a Director of GrowLife, Inc. (“the Company”).
The resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies,
or practices.
As the result of Ms. McLain’s resignation, Mr. Thom Kozik, current board member and member
of the Compensation Committee was appointed to serve as Chairman of the Compensation Committee.
Appointment of Michael Fasci
On January 5, 2021, Michael E. Fasci, our Chief Financial Officer was appointed as a member
of the Company’s Board of Directors to serve until the next annual meeting of shareholders and has accepted such appointment. Mr.
Fasci was also appointed as a member of the Company’s Compensation Committee.
Michael E. Fasci, 62, is a 30-year veteran in the finance sector having
served as an officer and director of many public and private companies. From 2015 to 2020, Mr. Fasci owns and operated Process Engineering
Services, Inc., an engineering consulting company as well as worked as a restructuring officer for several financially challenged companies.
Mr. Fasci is a seasoned operator across various industries and has served in both CEO and CFO capacities for both growth and turnaround
situations. Mr. Fasci began his career as a field engineer and then manager of various remediation filtration and environmental monitoring
projects globally before focusing his efforts on the daily operations, accounting and financial reporting and SEC compliance of the numerous
companies he has served. Mr. Fasci resides in East Taunton, Massachusetts and studied Electrical Engineering at Northeastern University.
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Family Relationships
Mr. Fasci is not related to any officer or director of the Company.
Related Party Transactions
Mr. Fasci is our current Chief Financial Officer. There are no related party transactions reportable
under Item 5.02 of Form 8-K and Item 404(a) of Regulation S-K.