Item 5.02 Departure of directors or principal officers; Election of directors; Appointment of key management; Compensatory provisions of certain executives.
At March 24, 2022, Fresh Vine Wine, Inc. (the “Company”) has entered into an employment contract with Ellen Scitta under which she began working for the Company on March 30, 2022 and successful Elliot Savoy as Chief Financial Officer of the Company, as soon as the Company has filed with the Security and Exchange Commission its annual report on Form 10-K for the fiscal year ended
December 31, 2021which was filed on March 31, 2021. Mr Savoy continues to be employed by the Company as a corporate and business development officer. The Company has relied on the instruction in item 5.02(c) of Form 8-K to defer the filing of this current report to the date of the public announcement of Ms. Scipta appointment to the post of Chief Financial Officer.
Under his employment contract, which is for an indefinite period, Ms Scitta is entitled to receive an annual base salary of $255,000 and is eligible to receive an annual cash bonus starting in 2022, the target amount of which will be equal to 65% of his base salary. The Company has agreed that the actual cash bonus for 2022 will be at least $50,000. Ms Scitta is also eligible to receive additional discretionary bonuses based on his performance on behalf of the Company and/or the performance of the Company in the amounts, in the manner and at the times determined by the Board of Directors or a committee thereof. -this.
While employed by the Company, and beginning in 2023, the Company will pay annual grants to Ms Scitta (i) awards of restricted stock units equal in value to 35% of his base salary (as determined in good faith by the Board of Directors of the Corporation or a committee thereof) , which will vest to a third party each year from the first anniversary of the grant date, and (ii) stock options, exercisable at fair market value on the grant date, of a value equal to 70% of his base salary (as determined in good faith by the Board of Directors of the Company or a committee thereof. , one-third of which will vest annually commencing on the first anniversary of the date of grant and the exercise price per share for this stock option will be equal to the closing price on the date of grant. Ms Scitta may also receive annual and periodic awards of stock-based compensation, the amount of such awards granted and the terms thereof to be determined from time to time by and in the sole discretion of the Board of Directors of the Company or a committee thereof. Ms Scitta is also eligible to participate in the standard benefits that the Company generally provides to its full-time employees under its applicable plans and policies.
At the start of his employment March 30, 2022, Ms Scitta was granted (i) a restricted stock award of 100,000 shares, which is subject to transfer and forfeiture restrictions, one-third of which expired on the date of grant, and one-third of which will expire each of the periods one-year and two-year anniversary of the grant date, and (ii) a stock option grant of 200,000 shares, one-third of which vests on the grant date, and one-third of which will expire at each of the one-year and two-year anniversary periods from the date of grant. The stock option has an exercise price equal to $3.30 (the fair market value of the common shares of the Company on the date of grant).
Under his employment contract, if Ms. Scipta employment is terminated by the Company for any reason other than cause (as defined in the employment contract), or Ms Scitta resigns as an employee of the company for good reason (as defined in the employment contract), as long as she has signed and has not revoked a release agreement, she will be entitled to receive compensation starting salary in the form of a continuous base salary and bonuses over a period of six months. Moreover, if Ms. Scipta employment is terminated by the Company (or its successor) for any reason other than for cause or as a result of his death or disability, or he voluntarily terminates his employment for cause, in either event within twelve months of the occurrence of a Change of Control (as defined in the Employment Agreement) or within 90 days prior to a Change of Control, vesting of all unvested stock-based incentive awards in course will accelerate. The employment contract includes a clause allowing the Company to reduce the remuneration to which Ms Scitta would be entitled to a change of control transaction to the extent necessary to avoid paying excise tax under Section 280G of the Internal Revenue Code, unless after tax it would be preferable to receive the amount total of this payments and payment of excise duty due.
Ms. Scipta the employment contract contains the usual confidentiality and intellectual property clauses and a non-competition restriction which provides, among other things, that Ms Scitta will not engage in competitive business or solicit our employees or consultants for a period of one year after termination of employment. For this purpose, a “competitive” business means a business whose principal activity is the development, production, marketing and/or sale of varietals and brands of wine which are primarily marketed to consumers as embodying a connection with health, well-being and/or an active lifestyle in United States
and in any other country or we territory in which the Company operates during the term of Ms. Scipta employment within the Company.
From February 2021 by October 2021, Ms Scitta served as CFO of Intricon Corporation, a joint development manufacturer of advanced micro-medical technology, which is currently in agreement to be acquired by a subsidiary of Altaris Capital Partners. Previously, Ms Scitta held various financial positions at Bio-Techne, a Minneapolis, Minnesota manufacturer and retailer of life science and diagnostic products since 2015, most recently as Vice President, Finance. Before that, Ms Scitta Was with CHS Inc., a diversified global agribusiness cooperative, since 2011 as Director of Financial Planning and Analysis and most recently as Director of Corporate Strategy. Ms Scitta also held strategic and financial positions at Best Buy Co., Inc. and Target Corporation and served as a strategy consultant at Waterhouse Coopers LLC Awards. Ms Scitta holds a master’s degree in business administration from the Kelley School of Business, Indiana Universityand a Bachelor of Science in Aeronautical and Astronautical Engineering from
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 Scitta. The Indemnification Agreement clarifies and supplements the indemnification provisions already contained in the Company’s Articles of Incorporation and By-Laws and generally provides that the Company will 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 expense advancement and contribution rights.
The above 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 herein by reference. The above summary of the Indemnification Agreement is qualified in all respects as 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 financial year closed December 31, 2021and incorporated herein by reference.
Item 9.01 Financial statements and supporting documents.
Exhibit No. Description
10.1 Employment Agreement dated as of March 24, 2022 by and between Fresh
Vine Wine, Inc. and Ellen Scipta
104 Cover Page Interactive Data File (embedded within the Inline XBRL
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