Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.
On March 24, 2022, Fresh Vine Wine, Inc. (the “Company”)
entered into an employment agreement with Ellen Scipta pursuant to which she commenced employment with the Company on March 30, 2022 and
succeeded Elliot Savoie as the Company’s Chief Financial Officer, upon the Company filing with the Securities and Exchange Commission
of its Annual Report on Form 10-K for the year ended December 31, 2021, which was filed on March 31, 2021. Mr. Savoie continues to be
employed by the Company as Head of Corporate Development and Ventures. The Company relied on the instruction to Item 5.02(c) of Form 8-K
to delay the filing of this Current Report to the date of the public announcement of Ms. Scipta’s appointment as Chief Financial
Officer.
Under her employment agreement, which is for an indefinite term, Ms.
Scipta is entitled to receive annual base salary of $255,000 and is eligible to receive an annual cash bonus commencing in 2022, the target
amount of which will be equal to 65% of her base salary. The Company has agreed that the actual cash bonus for 2022 will be at least $50,000.
Ms. Scipta is also eligible to receive additional discretionary bonuses based upon her performance on behalf of the Company and/or the
Company’s performance in such amounts, in such manner and at such times as may be determined by the board of directors or a committee
thereof.
While employed by the Company, and commencing in 2023, the Company
will make annual grants to Ms. Scipta of (i) restricted stock unit awards having a value equal to 35% of her base salary (as determined
in good faith by the Company’s board of directors or a committee thereof), which will vest one-third annually commencing on the
first anniversary of the date of grant, and (ii) stock options, exercisable at fair market value on the grant date, having a value equal
to 70% of her base salary (as determined in good faith by the Company’s board of directors or a committee thereof., which will vest
one-third annually commencing on the first anniversary of the date of grant and the per share exercise price for such Stock Option will
be equal to the closing price as of the date of grant. Ms. Scipta may also receive annual and periodic equity-based compensation awards,
with the amount of such awards granted and the terms and conditions thereof to be determined from time to time by and in the sole discretion
of the Company’s board of directors or a committee thereof. Ms. Scipta is also eligible to participate in the standard benefits
which the Company generally provides to its full-time employees under its applicable plans and policies.
Upon commencement of her employment on March 30, 2022, Ms. Scipta was granted
(i) a 100,000 share restricted stock award, which is subject to transfer and forfeiture restrictions, one-third of which lapsed on the
date of grant, and one-third of which will lapse on each of the one-year and two-year anniversary of the date of grant, and (ii) a 200,000
share stock option award, one-third of which vested on the date of grant, and one-third of which will lapse on each of the one-year and
two-year anniversary of the date of grant. The stock option has an exercise price equal to $3.30 (the fair market value of the Company’s
common stock on the date of grant).
Under her employment agreement, if Ms. Scipta’s employment is
terminated by the Company for any reason other than Cause (as defined in the employment agreement), or Ms. Scipta resigns as an employee
of the Company for Good Reason (as defined in the employment agreement), so long as she has signed and has not revoked a release agreement,
she will be entitled to receive severance in the form of continued base salary and bonus payments over a period of six months. In addition,
if Ms. Scipta’s employment is terminated by the Company (or its successor) for a reason other than for Cause or as a result of her
death or disability, or she voluntarily terminates her employment for Good Reason, in either case within twelve months following the occurrence
of a Change in Control (as defined in the employment agreement) or within 90 days prior to a Change in Control, the vesting of all outstanding
unvested equity-based incentive awards will accelerate. The employment agreement includes a provision allowing the Company to reduce the
payment to which Ms. Scipta would be entitled upon a Change-in-Control transaction to the extent needed for her to avoid paying an excise
tax under Internal Revenue Code Section 280G, unless she would be better off, on an after-tax basis, receiving the full amount of such
payments and paying the excise taxes due.
Ms. Scipta’s employment agreement contains customary confidentiality
and intellectual property covenants and a non-competition restriction that provides, among other things, that Ms. Scipta will not engage
in a competitive business or solicit our employees or consultants for a period of one year after termination of employment. For such purpose,
“competitive” business means a business primarily engaged in the development, production, marketing and/or sale of wine varietals
and brands that are primarily marketed to consumers as embodying a connection to health, wellness and/or an active lifestyle in the United
States and in any other country or U.S. territory in which the Company does business during the term of Ms. Scipta’s employment
with the Company.
From February 2021 through October 2021, Ms. Scipta served as
Chief Financial Officer of Intricon Corporation, a joint development manufacturer of advanced micro-medical technology, which is
currently under agreement to be acquired by an affiliate of Altaris Capital Partners. Previously, Ms. Scipta served in various
financial positions at Bio-Techne, a Minneapolis, Minnesota based manufacturer and retailer of life sciences and diagnostic
products, since 2015, most recently as Vice President, Finance. Prior to that, Ms. Scipta was employed by CHS Inc., a diversified
global agribusiness cooperative, since 2011, as Director of Financial Planning and Analysis and most recently as Director of
Enterprise Strategy. Ms. Scipta has also held strategy and financial positions with Best Buy Co., Inc. and Target Corporation and
was a strategy consultant with Price Waterhouse Coopers LLC. Ms. Scipta holds a Master of Business Administration from the Kelley
School of Business, Indiana University, and a Bachelor of Science degree in Aeronautical and Astronautical Engineering from Purdue
University.
In connection with her appointment as an officer of the Company, the
Company expects to enter into the Company’s standard form indemnification agreement for directors and officers with Ms. Scipta.
The indemnification agreement clarifies and supplements indemnification provisions already contained in the Company’s articles of
incorporation and bylaws and generally provides that the Company shall indemnify its directors and officers to the fullest extent permitted
by applicable law, subject to certain exceptions, against expenses, judgments, fines and other amounts actually and reasonably incurred
in connection with their service as a director or officer and also provide for rights to advancement of expenses and contribution.
The foregoing summary of the employment agreement is qualified in all
respects by the employment agreement itself, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
The foregoing summary of the indemnification agreement is qualified in all respects to the form of such agreement, a copy of which is
incorporated by reference as Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, and
incorporated by reference herein.