UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report:
(Date of earliest event reported)
October 15, 2018
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GROWLIFE, INC.
(Exact name of registrant as specified in charter)
Delaware
(State or other Jurisdiction of Incorporation or
Organization)
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000-50385
(Commission
File Number)
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90-0821083
(IRS
Employer Identification No.)
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5400 Carillon Point
Kirkland, WA 98033
(Address
of Principal Executive Offices and zip code)
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(866) 781-5559
(Registrant’s telephone number, including area
code)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule
425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[ ] Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
[ ]
Item 5.02 Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Employment Agreement with Marco Hegyi
On
October 15, 2018, the Board of Directors of GrowLife, Inc. (the
“Company”) entered into an Employment Agreement with
Marco Hegyi pursuant to which the Company engaged Mr. Hegyi as its
Chief Executive Officer through October 15, 2021. Mr. Hegyi’s
previous Employment Agreement was set to expire on October 21,
2018.
Mr.
Hegyi’s annual compensation is $275,000. Mr. Hegyi is also
entitled to receive an annual bonus equal to four percent (4%) of
the Company’s EBITDA for that year. The annual bonus shall be
paid no later than 31 days following the end of each calendar
year.
Mr.
Hegyi received a Warrant to purchase up to 16,000,000 shares of
common stock of the Company at an exercise price of $0.012 per
share which vest immediately. In addition, Mr. Hegyi received two
Warrants to purchase up to 16,000,000 shares of common stock of the
Company at an exercise price of $0.012 per share which vest on
October 15, 2019 and 2020, respectively. The Warrants are
exercisable for 5 years.
Mr.
Hegyi will be 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. In addition, the Company
will purchase and maintain during the Term an insurance policy on
Mr. Hegyi’s life in the amount of $2,000,000 payable to Mr.
Hegyi’s named heirs or estate as the
beneficiary.
If the Company terminates Mr. Hegyi’s employment at any time
prior to the expiration of the Term without Cause, as defined in
the Employment Agreement, or if Mr. Hegyi terminates his employment
at any time for “Good Reason” or due to a
“Disability”, Mr. Hegyi will be entitled to receive (i)
his Base Salary amount through the end of the Term; and (ii) his
Annual Bonus amount for each year during the remainder of the
Term.
2
Employment Agreement with Mark Scott
On
October 15, 2018, the Compensation Committee of the Company entered
into an Employment Agreement with Mark Scott pursuant to which the
Company engaged Mr. Scott as its Chief Financial Officer through
October 15, 2021. Mr. Scott’s previous Agreement was
cancelled.
Mr.
Scott’s annual compensation is $165,000. Mr. Scott is also
entitled to receive an annual bonus equal to two percent (2%) of
the Company’s EBITDA for that year. The annual bonus shall be
paid no later than 31 days following the end of each calendar
year.
The
Company’s Board of Directors granted Mr. Scott an option to
purchase twenty million shares of the Company’s Common Stock
under the Company’s 2017 Stock Incentive Plan at an exercise
price of $0.012 per share. The Shares vest quarterly over three
years. All options will have a five-year life and allow for a
cashless exercise. The stock option grant is subject to the terms
and conditions of the Company’s Stock Incentive Plan,
including vesting requirements. In the event that Mr. Scott’s
continuous status as employee to the Company is terminated by the
Company without Cause or Mr. Scott terminates his employment with
the Company for Good Reason as defined in the Scott Agreement, in
either case upon or within twelve months after a Change in Control
as defined in the Company’s Stock Incentive, then 100% of the
total number of Shares shall immediately become
vested.
Mr.
Scott 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. In addition, the Company is required
purchase and maintain an insurance policy on Mr. Scott’s life
in the amount of $2,000,000 payable to Mr. Scott’s named
heirs or estate as the beneficiary. Finally, Mr. Scott is entitled
to twenty days of vacation annually and also has certain insurance
and travel employment benefits.
If the Company terminates Mr. Scott’s employment at any time
prior to the expiration of the Term without Cause, as defined in
the Employment Agreement, or if Mr. Scott terminates his employment
at any time for “Good Reason” or due to a
“Disability”, Mr. Scott will be entitled to receive (i)
his Base Salary amount for ninety days; and (ii) his Annual Bonus
amount for each year during the remainder of the
Term.
3
Employment Agreement with Joseph Barnes
On
October 15, 2018, the Compensation Committee of the Company entered
into an Employment Agreement with Joseph Barnes pursuant to which
the Company engaged Mr. Barnes as President of the GrowLife
Hydroponics Company through October 15, 2021. Mr. Barnes’s
previous Agreement was cancelled.
Mr.
Barnes’s annual compensation is $165,000. Mr. Barnes is also
entitled to receive an annual bonus equal to two percent (2%) of
the Company’s EBITDA for that year. The annual bonus shall be
paid no later than 31 days following the end of each calendar
year.
The
Company’s Board of Directors granted Mr. Barnes an option to
purchase eighteen million shares of the Company’s Common
Stock under the Company’s 2017 Stock Incentive Plan at an
exercise price of $0.012 per share. The Shares vest quarterly over
three years. All options will have a five-year life and allow for a
cashless exercise. The stock option grant is subject to the terms
and conditions of the Company’s Stock Incentive Plan,
including vesting requirements. In the event that Mr.
Barnes’s continuous status as employee to the Company is
terminated by the Company without Cause or Mr. Barnes terminates
his employment with the Company for Good Reason as defined in the
Barnes Agreement, in either case upon or within twelve months after
a Change in Control as defined in the Company’s Stock
Incentive, then 100% of the total number of Shares shall
immediately become vested.
Mr.
Barnes 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. In addition, the Company is required
purchase and maintain an insurance policy on Mr. Barnes’s
life in the amount of $2,000,000 payable to Mr. Barnes’s
named heirs or estate as the beneficiary. Finally, Mr. Barnes is
entitled to twenty days of vacation annually and also has certain
insurance and travel employment benefits.
If the Company terminates Mr. Barnes’s employment at any time
prior to the expiration of the Term without Cause, as defined in
the Employment Agreement, or if Mr. Barnes terminates his
employment at any time for “Good Reason” or due to a
“Disability”, Mr. Barnes will be entitled to receive
(i) his Base Salary amount for ninety days; and (ii) his Annual
Bonus amount for each year during the remainder of the
Term.
Other
terms and conditions are included in and the foregoing descriptions
are qualified in their entirety by reference to the full text of
the agreements, copies of which are attached to this Current Report
on Form 8-K as Exhibit 5.1-5.3 and incorporated by reference into
this Item 5.02.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibits
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Description
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Marco Hegyi
Employment Agreement dated October 15, 2018.
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Mark Scott
Employment Agreement dated October 15, 2018.
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Joseph Barnes
Employment Agreement dated October 15, 2018.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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GROWLIFE, INC.
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Date: October
17, 2018
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By:/s/
Marco Hegyi
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Marco
Hegyi
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Chief Executive
Officer
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5