Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 13, 2009, Orange 21 Inc. (the "Company") temporarily reduced compensation for its U.S. employees, including its named executive officers, by ten percent (10%) for approximately the next three months (the "Reduction"). Pursuant to the Reduction, the annual base salaries of the Company's salaried employees were reduced by ten percent (10%) and the Company's hourly employees were put on reduced work schedules that resulted in their compensation being reduced by ten percent (10%).

Additionally, the Company's wholly-owned subsidiary in Italy, LEM, S.r.l.
("LEM"), implemented a government-subsidized leave program (the "Program")
pursuant to which certain employees' work schedules will be reduced by twenty to fifty percent (20-50%) for approximately thirteen weeks. Under the Program, the Italian government will subsidize a certain portion of these employees' salaries to minimize the effect of the Program on the employees. The Program is expected to result in a savings of approximately twenty percent (20%) of LEM's payroll-related costs over the thirteen-week period.

The Reduction and Program are aimed at reducing expenses during the current global economic downturn and will take effect immediately.

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