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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 New CEO
and CFO
On
June 3, 2020, 22nd Century Group, Inc. (the “Company”) announced the appointment of James A. Mish as its Chief Executive
Officer, effective June 22, 2020, and the appointment of John Franzino as its Chief Financial Officer, effective immediately. A
copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
Mr.
Mish, age 56, has served as Chief Executive Officer of Noramco, a global leader in the production of controlled substances for
the pharmaceutical industry, from 2016, and Purisys, a synthetic cannabinoid API, ingredients and solutions provider to pharmaceutical
and consumer products companies from 2019. Prior to that, he served as President of Ashland Specialty Ingredients - Consumer Specialties,
a major division of Ashland Corporation, a premier global specialty materials company serving customers in a wide range of consumer
and industrial markets, from 2013 to 2016.
Mr.
Franzino, age 63, has been in the position of Vice President of Administration with the Company since April 30, 2020 and previously
served as Chief Financial Officer of West Point Association of Graduates from 2017. Additionally, he has extensive strategic financial
leadership experience serving as Vice President of Finance and Controller of Bard College from 2012 to 2016 and as Chief Financial
Officer of Santa Fe Natural Tobacco Company, a subsidiary of Reynolds American, Inc., from 2001 to 2011. Mr. Franzino is a Certified
Public Accountant (CPA) and holds a Master of Business Administration degree from Farleigh Dickinson University and an Advanced
Professional Certificate in Finance from New York University.
There
are no family relationships between Mr. Mish and Mr. Franzino and any director, executive officer or person nominated or chosen
by the Company to become a director or executive officer. Additionally, there have been no transactions involving Mr. Mish or Mr.
Franzino that would require disclosure under Item 404(a) of Regulation S-K.
Each
of Mr. Mish and Mr. Franzino entered into an employment agreement with the Company for a term of three years.
Pursuant
to the employment agreement with James A. Mish, Mr. Mish will earn an initial base salary of $450,000 and shall be eligible for
future cash bonuses and awards of performance units as a percentage of base salary based on the achievement of performance targets
to be established by the Company. As a one-time inducement, the Company agreed to an award of 150,000 restricted stock units (“RSUs”),
vesting on the one-year anniversary of the date of grant, subject to continued service. Pursuant to the employment agreement with
John Franzino, Mr. Franzino will earn an initial base salary $250,000 and shall be eligible for future cash bonuses and equity
awards.
If
Mr. Mish’s employment is terminated by the Company without Cause or by such executive for Good Reason (as such terms are
defined in the employment agreement), then he will be entitled to a severance benefit in the form of (i) a continuation of his
then-base salary for a period ending on the earlier of 12 months or the remaining term of the employment agreement (plus continuing
health care coverage during such period) and (ii) the payment of a pro-rated bonus award. If Mr. Franzino’s employment is
terminated by the Company without Cause or by such executive for Good Reason (as such terms are defined in the employment agreement),
then he will be entitled to a severance benefit in the form of (i) a continuation of his then-base salary for a period of 12 months
and (ii) the payment of any earned but unpaid bonus award.
The
description of the employment agreements above are qualified by reference to the forms of employment agreements, which are attached
hereto as Exhibits 10.1 and 10.2, respectively.
Resignation of CFO
On
May 29, 2020, Andrea S. Jentsch resigned as the Company’s Chief Financial Officer. Mr. Jentsch’s resignation is not
the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.