The Company’s Board of Directors (“Board”), upon the recommendation of the Company’s Compensation Committee, approved adjustments to several officers’ compensation packages. Specifically, in connection with the Board’s expense reduction initiatives, the Board approved (i) a decrease of the annual salary of the Company’s President and Chief Executive Officer, Isaac Dietrich, to $95,000 per year from $130,000 per year; (2) a decrease of the annual salary of the Company’s Chief Operating Officer, Dan Hunt, to $90,000 per year from $130,000 per year; and (iii) a decrease of the annual salary of the Company’s Chief Technology Officer, Lance Galey, to $60,000 per year from $150,000 per year.
In addition to the salary decrease, Mr. Galey agreed to waive $51,785 in salary which he had earned but deferred payment of in connection with the Board’s approval of the grant, pursuant to the Company’s 2016 Equity Incentive Plan (“2016 Plan”), to Mr. Galey of an 600,000 unvested restricted shares of the Company’s common stock (the “Stock Award”) and unvested options to purchase up to 600,000 shares of the Company’s common stock with an exercise price of $0.51 which will expire ten years from issuance (the “Option Award”). The Stock Award will vest as follows: (i) 300,000 shares will vest on October 3, 2016 and (i) 50,000 shares will vest on the first day of each month from November 2016 through April 2017. If the Company terminates the employment of Mr. Galey prior to the full vesting of the Stock Award and Option Award, or in the event of a change of control, merger, or similar event affecting the Company, all remaining unvested options and shares will vest immediately. The Option Award will vest as follows: (i) options to purchase up to 300,000 shares of common stock will vest on October 3, 2016 and (ii) options to purchase up to 50,000 shares of common stock will vest on the first day of each month from November 2016 through April 2017. In addition to the vesting restrictions, under the 2016 Plan, no shares may be issued pursuant to the Stock Award and no options granted under the Option Award may be exercised until shareholder approval of the 2016 Plan is effective, which expected to be 40 days following October 5, 2016, or approximately November 15, 2016.