22nd Century Group Inc. announced another management shakeup Monday, this time it's the departure of James Cornell as chairman. Board member Nora Sullivan was named to the post.
The company, based in Williamsville, N.Y., operates a tobacco-manufacturing plant in Mocksville, where it had 51 of its 69 employees at last count.
22nd Century did not give a reason for Cornell’s departure, but said he remains on the board. He was chairman since October 2014. He received $180,552 in compensation for fiscal 2018, including $105,000 in cash and other fees.
Sullivan has served on the board since May 2015. Cornell was age 62 and Sullivan age 61 as of 22nd Century’s fiscal 2019 proxy filing in March.
Sullivan is president of Sullivan Capital Partners LLC, a financial services company providing investment banking and consulting services.
The company also named Roger O’Brien as a board member, filling the vacancy in the Class II director position following the death of Joseph Dunn in December.
“Roger’s extensive experience in strategy and management consulting, and Nora’s deep experience in capital markets, private equity and matters of public company governance ... will be of tremendous value to the company as we pursue our two strategic growth objectives in tobacco harm reduction and the emerging hemp/cannabis space,” said Michael Zercher, the company’s president and chief operating officer.
The pathway that 22nd Century is on for developing innovative tobacco and cannabis products got a little bumpier Friday with the elimination of 10 jobs in Mocksville.
James Vail, 22nd Century’s communications director, said the 10 jobs are with its wholly owned NASCO Tobacco Products LLC subsidiary. NASCO operates as a contract manufacturer of traditional cigarettes and filtered cigars, which have produced the bulk of 22nd Century’s annual revenue to date.
Meanwhile, the company said Dec. 15 that it had begun searching for its third chief executive in less than five months after Clifford Fleet announced he was stepping down to become president and chief executive of the Colonial Williamsburg Foundation.
Fleet will remain on 22nd Century’s board of directors and participate on an executive committee that will choose his successor.
Fleet took over as chief executive Aug. 3. He served as Philip Morris USA’s chief executive and president from November 2013 to May 2017. Fleet signed a three-year employment contract Sept. 9 that would have automatically renewed on an annual basis. His initial base salary was $395,000.
Henry Sicignano III resigned unexpectedly as chief executive July 26 for what the company described as “personal reasons.” He had been the chief executive since March 2015 and president since January 2011.
Sicignano agreed to serve as a consultant for up to 3½ years at $200,000 a year. He signed a noncompete contract for an unspecified length of time.
22nd Century promoted chief operating officer Zercher to president. Zercher signed a three-year employment contract on Sept. 9 that renews annually at an initial base salary of $350,000.
22nd Century received authorization Dec. 17 from the Food and Drug Administration to market and sell two styles of its very-low-nicotine cigarettes.
The FDA approved 22nd Century’s Moonlight and Moonlight menthol styles, which entered the premarket tobacco-application process in December 2018. The premarket standard requires the FDA to consider products’ risks and benefits to the population as a whole, including users and non-users.
Vail said Friday that 22nd Century projects that limited distribution of the Moonlight products could begin in the second quarter.