Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Employment Agreement with David Dohrmann
On June 30, 2022, the Compensation Committee of the
GrowLife, Inc. (the “Company”) entered into an Employment Agreement with David Dohrmann to serve as the Company’s Chief
Executive Officer for a term of five (5) years (“Term”), commencing July 1, 2022 (“Dohrmann Agreement”). Effective
July 1, 2022, Mr. Dohrmann was appointed as a Member of the Board of Directors (“Board”). Mr. Dohrmann’s appointment
was previously disclosed on the Company’s Form 8-K, filed with the Commission on June 3, 2022. On December 1, 2021, Mr. David Dohrmann
was appointed as President of the Company
Mr. Dohrmann shall receive an annual salary of $250,000
(“Base Salary”) during the Term, subject to annual review by the Compensation Committee. Mr. Dohrmann shall earn an annual
bonus equal to five percent (5%) of the Company’s EBITDA for the year starting in fiscal year 2023, payable within 15 days of completion
of audit for each fiscal year end (“Annual Bonus”).
Mr. Dohrmann will be eligible to receive Stock Options, Stock Awards,
Performance Based Awards or other equity incentives under the Company’s Second Amended and Restated 2017 Stock Incentive Plan
as may be determined by the Board from time to time.
In the event that Mr. Dohrmann’s continuous
status as employee to the Company is terminated by the Company without Cause or Mr. Dohrmann terminates his employment with the Company
for Good Reason as defined in the Dohrmann 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 equity incentives and options shall immediately become vested.
Mr. Dohrmann 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. Dohrmann’s employment
at any time prior to the expiration of the Term without Cause, as defined in the Dohrmann Agreement, or if Mr. Dohrmann terminates his
employment at any time for “Good Reason” or due to a “Disability”, Mr. Dohrmann will be entitled to receive (i)
his Base Salary amount through the end of the Term (or the Renewal Term, as applicable); and (ii) his Annual Bonus amount for each year
during the remainder of the Term (or the Renewal Term, as applicable), which bonus amount shall be equal to the greater of (A) the annual
bonus amount for the immediately preceding year, or (B) the bonus amount that would have been earned for the year of termination, absent
such termination; and (iii) vested Options (if applicable) are fully and immediately available.
Other terms and conditions are included in and the
foregoing description are qualified in their entirety by reference to the full text of the Dohrmann Agreement, a copy 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.
Mr. Dohrmann’s biography is incorporated
by reference as included in the Company’s Form 10-K filed with the Commission on May 23, 2022.
Family Relationships
Mr. Dohrmann is not related to any officer or director
of the Company.
Related Party Transactions
Mr. Dohrmann is our current President, and effective
July 1, 2022 our Chief Executive Officer and Director. There are no related party transactions reportable under Item 5.02 of Form 8-K
and Item 404(a) of Regulation S-K.
- 2 -
Other Appointments:
In connection with Mr. Hegyi’s departure as
disclosed on June 3, 2022, Mr. Dohrmann will serve as interim CFO until such time as the Company identifies a qualified candidate to fill
the role of CFO.
Effective July 1, 2022, the Board appointed Mr.
Thom Kozik to serve as Chairman. Mr. Kozik has been a member of the Board since October 5, 2017. Mr. Kozik’s biography is
incorporated by reference as included in the Company’s Form 10-K filed with the Commission on May 23, 2022.