Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Appointment of Dave Smith as Chief
Operating Officer
On October 22, 2018, the Company issued
a press release announcing that it had appointed Dave Smith to the newly created position of Chief Operating Officer, effective
September 24, 2018. A copy of that press release is filed as
Exhibit 99.1
to this report and is incorporated herein by reference.
Dave Smith
, 63, over an almost 40-year
career, has held various executive management positions in marketing, sales, operations, and business development. Prior to joining
SanSal Wellness, he was President of Inter-Continental Cigar Corporation, distributor of Al Capone Cigarillos, the #1 premium cigarillo
in the U.S., from 2011 to 2018.
From 2008 to 2011, Mr. Smith was President
of JDS Consumer Solutions, a Florida-based consumer and customer sales and marketing solutions provider. From 2006 to 2008, he
was Chief Operating Officer of Pantheon Chemical, an Arizona-based “
green
” chemical company. From 2002 to2006,
he was Senior Vice President and subsequently, Chief Operating Officer of FB Foods Inc., a Florida-based manufacturer of children’s
refrigerated meals.
From 1989 to 2001, Mr. Smith held various
senior positions with fruit beverage giant Tropicana Products, including Director Business Development-Asia Pacific from 1998 to
2001 (Hong Kong), Commercial Director from 1994 to 1996 (Taiwan), Director Channel Development-Grocery in 1993 (Florida), Director-National
Accounts in 1992 (Florida), Southern Division Manager in 1991 (Florida) and Region Manager from 1989 to 1990 (Alabama).
Mr. Smith has also held key positions with
other Fortune 500 companies, including Director-Sales and Marketing of The Seagram Company Ltd. from 1996 to1998 and various management
positions with The Gillette Company Safety Razor Division from 1981 to1989. He is a veteran of the U.S. Navy (Seabees) and graduate
of the University of Alabama at Birmingham.
In connection with his joining the Company
as Chief Operating Officer, the Company entered into a three-year employment agreement with Dave Smith in August 2018, effective
September 24, 2018. The employment agreement provides for a base salary of $225,000, the ability to be granted an annual
bonus of up to $125,000 based on performance criteria set by the board of directors and a grant of 750,000 options under the Company’s
2017 Stock Incentive Plan, 375,000 of which vested on the grant date and the 375,000 balance of which will vest on the six-month
anniversary of the grant date. The options are exercisable, to the extent vested, at any time during the ten (10) year period commencing
on the date of grant, at an exercise price of $0.36 per share and are otherwise subject to the terms of the 2017 Stock Incentive
Plan. The employment agreement also contains customary confidentiality, non-competition and change in control provisions.
The above summary of the Company’s
employment agreement with Mr. Smith is qualified in its entirety by reference to the copy of the employment agreements filed as
Exhibit 10.1
to this report and incorporated herein by reference.
Option Grants to Other Executive
Officers
In August 2018, the Company granted 2,000,000
options under the its 2017 Stock Incentive Plan to each of Alexander M. Salgado and Erduis Sanabria, SanSal Wellness’ Chief
Executive Officer and Executive Vice President, respectively. The options vest in three equal installments on the date of grant,
on the six-month anniversary of the date of grant and on the first anniversary on the date of grant. The options are exercisable,
to the extent vested, at any time during the ten (10) year period commencing on the date of grant, at an exercise price of $0.36
per share and are otherwise subject to the terms of the 2017 Stock Incentive Plan.
Contemporaneously with the grants to Messrs.
Salgado and Sanabria, the Company granted to each of Rianna Meyer, its Vice President of Operations and Derek Thomas, its Vice
President of Business Development, 200,000 options under the Company’s 2017 Stock Incentive Plan. The options vest in three
equal installments on the first, second and third anniversaries of the date of grant. The options are exercisable, to the extent
vested, at any time during the ten (10) year period commencing on the date of grant, at an exercise price of $0.36 per share and
are otherwise subject to the terms of the 2017 Stock Incentive Plan.