Stablecoin Development Corp
For the period ended Dec 31, 2024. Filed Apr 2, 2025.
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FY2024 · Filed Apr 2, 2025
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Item 11. EXECUTIVE COMPENSATION
Summary Executive Compensation Table
The following table shows information regarding the compensation earned during the fiscal years ended December 31, 2024 and December 31, 2023 by (1) our Chief Executive Officer, General Counsel and Chief Compliance Officer and (2) our interim Chief Financial Officer (collectively, the “NEOs”).
| Name and principal position(s) · Fiscal year · Salary ($) · Bonus ($) · All other compensation (1)(2) ($) · Total ($) | ||||||
|---|---|---|---|---|---|---|
| Justin M. Hall, Esq. | 2024 | $350,000 | $ | − | $15,177 | $365,177 |
| CEO, GC and Chief | 2023 | 350,000 | − | 14,146 | 364,146 | |
| Compliance Officer | ||||||
| Tommy Law | 2024 | $170,000 | $42,500 | $7,696 | $220,196 | |
| Interim Chief Financial Officer | 2023 | 170,000 | - | 7,696 | 177,696 | |
| (1) | In 2024, the amounts included: (a) individual life insurance premiums paid for by the Company for Mr. Hall and Mr. Law of $1,854 and $896, respectively; and (b) 401(k) plan matching contributions paid for by the Company for Mr. Hall and Mr. Law of $13,323 and $6,800, respectively. |
In 2023, the amounts included: (a) individual life insurance premiums paid for by the Company for Mr. Hall and Mr. Law of $1,854 and $896, respectively; and (b) 401(k) plan matching contributions paid for by the Company for Mr. Hall and Mr. Law of $12,292 and $6,800, respectively.
| (2) | In connection with the closing of the Avenova Asset Sale, we entered into the PRN Transition Services Agreement with PRN, pursuant to which we agreed to provide services to PRN with respect to specified accounting, marketing, sales, customer service, regulatory and operational support for a period of four (4) months after the closing of the Avenova Asset Sale in exchange for agreed upon service fees to be paid to us. As part of the PRN Transition Services Agreement, PRN entered into a consulting agreement with Tommy Law, our Interim Chief Financial Officer, for certain services with a one-time payment of $85,000 to be made by PRN to Mr. Law when all such services are complete. |
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2024 and 2023 Base Salaries and Target Bonus Amounts
The Compensation Committee of the Board (the “Compensation Committee”) did not recommend any increases to executive salaries or target bonus amounts for 2024 or 2023; they remained the same as 2022. For Mr. Hall, this was a 2024 base salary of $350,000 and a target bonus percentage of base salary of 50%. For Mr. Law, this was a 2024 base salary of $170,000 and a target bonus percentage of base salary of 25%.
2024 and 2023 Cash Bonuses
The Board, upon the recommendation of the Compensation Committee, determined not to award any bonuses to its NEOs, excluding Mr. Law, for fiscal year 2024 performance or fiscal year 2023 performance. Mr. Law did not receive a bonus for fiscal year 2024 performance and $42,500 for fiscal year 2023 performance.
2024 and 2023 Equity Awards
The Board, upon the recommendation of the Compensation Committee, determined not to grant any equity awards for the 2024 fiscal year or 2023 fiscal year to any of its NEOs.
Federal Income Tax Law
Federal income tax law prohibits publicly-held companies, such as the Company, from deducting compensation paid to a NEO that exceeds $1 million during the tax year. Prior to the adoption of the Tax Cuts and Jobs Act of 2017 (“Tax Act”), to the extent that compensation was based upon the attainment of performance goals set by the Compensation Committee pursuant to plans approved by the stockholders, the compensation was exempted from the $1 million deduction limit. The Tax Act repealed this exemption, and now compensation paid to NEOs in excess of $1 million is no longer deductible, even if performance-based. The Compensation Committee intends to continue to use performance metrics in compensation when it is in the best interests of the Company and its stockholders even if such compensation is not deductible for tax purposes.
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Outstanding Equity Awards at Fiscal Year End
The following table presents the outstanding equity awards held by each of our NEOs as of December 31, 2024. Stock options were granted pursuant to our 2007 Plan thereafter until its expiration in March 2017, and all awards since then have been pursuant to our 2017 Plan. The options granted under our 2007 Plan and 2017 Plan are not exercisable until they have vested.
| Option Awards · Stock Awards | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Name · Grant date · Number of securities underlying unexercised options (#) exercisable(1) · Number of securities underlying unexercised options (#) unexercisable(1) · Option exercise price ($) · Option expiration date · Number of shares or units of stock that have not vested (#) · Market value of shares or units of stock that have not vested ($) · Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) · Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) | ||||||||||
| Justin M. Hall, Esq. | 08/20/20 | 232 | – | $1,212.75 | 08/20/30 | – | $– | – | $– | |
| 05/31/18 | 155 | – | $2,695.00 | 05/31/28 | – | $– | – | $– | ||
| 01/25/17 | 18 | (3) | – | $4,410.00 | 01/25/27 | – | $– | – | $– | |
| 06/06/16 | 106 | (4) | – | $3,405.50 | 06/06/26 | – | $– | – | $– | |
| 10/01/15 | 2 | – | $8,268.75 | 10/01/25 | – | $– | – | $– | ||
| Tommy Law | 06/08/20 | 5 | - | $1,097.25 | 06/08/2030 | – | $– | – | $– | |
| 08/20/20 | 21 | - | $1,212.75 | 08/20/2030 | – | $– | – | $– | ||
| (1) | Unless otherwise noted, each option vests as to 25% of the shares underlying the option on the first anniversary of the grant date, with the remainder vesting every three months in 12 equal installments thereafter. Options expire ten (10) years from the date of grant. |
| (2) | Under the performance restricted stock units, the awards would have vested based on the achievement of three performance goals as determined by the Compensation Committee at the end of the performance period ending December 31, 2023. The Compensation Committee determined that the applicable performance goals for the performance restricted stock units held by Mr. Hall were not achieved. |
| (3) | Mr. Hall was granted 117 stock options to vest on January 31, 2018, in direct proportion to the percentage achievement of the stated 2017 corporate goals, as approved and determined by the Board. Such determination resulted in a 15% payout, or 18 shares vesting. |
| (4) | Mr. Hall was granted 106 stock options to vest on January 31, 2017, in direct proportion to the percentage achievement of the stated 2016 corporate goals, as approved and determined by the Board, which was 100%. |
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Employment-Related Agreements and Potential Payments upon Termination or Change in Control
On January 31, 2020, the Company entered into an employment agreement with Mr. Hall in connection with his appointment to serve as an executive officer. Mr. Hall’s employment agreement was subsequently amended by a first amendment on January 26, 2022, a second amendment effective on December 31, 2023, and a third amendment effective on December 31, 2024.
The principal terms of our Mr. Hall’s current employment agreement is summarized below. Mr. Law, our other NEO, is not currently party to an employment agreement with the Company.
Justin Hall
Mr. Hall’s employment agreement, as amended, provides for at-will employment and a term commencing on January 31, 2020 and ending on December 31, 2025, unless earlier terminated in accordance with the terms of the employment agreement. Mr. Hall’s employment agreement originally provided for an annual base salary of two hundred eighty-six thousand dollars ($286,000), subject to annual review and increases determined by the Compensation Committee and/or Board (such amount, the “Hall Base Salary”).
In addition, Mr. Hall shall be eligible for any bonus plan that is deemed appropriate by the Board. The bonus amount shall be determined by the Board, in its sole discretion, based upon factors, including: (i) the fulfillment, during the relevant year, of specific milestones and tasks delegated, for such year, to the executive as set by the executive and the Company’s Board, before the end of the first calendar quarter; (ii) the evaluation of the executive by the Company’s Board; (iii) the Company’s financial, product and expected progress; and (iv) other pertinent matters relating to the Company’s business and valuation. Any bonus will be payable within two-and-a-half (2 1/2) months following the end of the year for which the bonus was earned. The Compensation Committee shall have the sole discretion to pay any or all of the annual bonus in the form of equity compensation. Any such equity compensation shall be issued from the Company’s equity incentive plan, and shall be fully vested upon issuance.
In the event the Company terminates Mr. Hall for cause (as defined in the employment agreement), he shall be entitled to any earned but unpaid wages or other compensation (including reimbursements of his outstanding expenses and unused vacation) earned through the termination date.
In the event the Company terminates Mr. Hall without cause (including death, disability or for constructive termination) (each as defined in the employment agreement) that is not in connection with a change of control, provided such termination constitutes a “separation from service” as such term is defined in Section 409A of the Code and, subject to his execution of a release of claims in favor of the Company, he shall be entitled to an amount equal to the Hall Base Salary in effect on the date of separation from service plus the full target annual bonus percentage for the current fiscal year (the “Hall Severance Amount”). The Hall Severance Amount will be paid in twelve (12) equal consecutive monthly installments at the monthly equivalent of the Hall Base Salary rate in effect at the time of his termination, with such installments commencing within sixty (60) days following the executive’s separation from service. The Hall Severance Amount shall be in addition to Mr. Hall’s earned wages and other compensation (including reimbursements of his outstanding expenses and unused vacation) through the date his employment is terminated from the Company.
In the event the Company terminates Mr. Hall without cause in connection with a change of control (as defined in the employment agreement), he shall be entitled to a Change of Control Severance (the “Hall CoC Severance Amount”) in place of the Hall Severance Amount described above. The Hall CoC Severance Amount shall be: (i) an amount equal to twice the Hall Base Salary and (ii) an amount equal to the cash portion of his target Annual Bonus for the fiscal year in which the termination occurs (with it deemed that all performance goals have been met at one hundred percent (100%) of budget or plan) multiplied by one hundred fifty percent (150%). For a period of eighteen (18) months, Mr. Hall may elect coverage for, and the Company shall reimburse him for, the amount of his premium payments for group health coverage, if any, elected by the executive pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”); provided, however, that Mr. Hall shall be solely responsible for all matters relating to his continuation of coverage pursuant to COBRA, including (without limitation) his election of such coverage and his timely payment of premiums.
Moreover, all outstanding equity awards held by Mr. Hall will be subject to full accelerated vesting on the date of termination without cause, in both the standard Hall Severance Amount and the Hall CoC Severance Amount, and the exercise period shall be extended to three (3) years from the date of termination. In order to terminate Mr. Hall for cause (or for Mr. Hall to resign for constructive termination), the acting party shall give notice to the other party specifying the reason for termination and providing a period of thirty (30) days to cure the reason specified. If there is no cure within thirty (30) days or the notified party earlier refuses to effect the cure, the termination shall then be deemed effective.
Director Compensation
The compensation and benefits for service as non-employee members of our Board is determined by the Board. Directors employed by the Company, such as Mr. Hall, are not compensated for service on the Board or any committee of the Board; however, the Company reimburses all directors for any out-of-pocket expenses incurred in connection with attending meetings of the Board and committees of the Board.
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The Board, upon the recommendation of the Compensation Committee, approved the Non-Employee Director Compensation Program, effective January 1, 2024 (the “2024 Non-Employee Director Compensation Plan”). Under the 2024 Non-Employee Director Compensation Plan, each director receives his or her annual retainer compensation in cash and an annual grant of 858 restricted stock units. All cash compensation is payable quarterly on the first (1st) business day of the quarter.
Approved non-employee director compensation for 2024 was as follows:
| Board Meetings | Chair of Committees | All Other Committee Members |
|---|---|---|
| Chair of the Board: Annual cash compensation of $52,000 per year. | Chair of the Audit Committee: Annual cash compensation of $17,500 per year. | Member of the Audit Committee: Annual cash compensation of $7,500 per year. |
| Member of the Board: The annual fee consists of: (i) $40,000 in cash and (ii) 858 restricted stock units granted. The restricted stock units are granted at the Company’s Annual Meeting of Stockholders, and vest on the one year anniversary of the grant date. | Chair of the Compensation Committee: Annual cash compensation of $13,000 per year. | Member of the Compensation Committee: Annual cash compensation of $6,000 per year for each committee. |
| Chair of the N&CG Committee: Annual cash compensation of $10,000 per year. | Member of the N&CG Committee: Annual cash compensation of $5,000 per year for each committee. Non-employee directors also may be granted additional awards under our equity incentive plans at the discretion of our Board. |
The compensation received during 2024 by each non-employee director is set forth below:
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Total ($) |
|---|---|---|---|
| Paul E. Freiman, Ph.D. | $72,000 | $4,234 | $76,234 |
| Julie Garlikov | $40,000 | $4,234 | $44,234 |
| Swan Sit | $58,500 | $4,234 | $62,734 |
| Mijia (Bob) Wu, M.B.A. | $40,000 | $4,234 | $44,234 |
| Sean Zheng | $40,000 | $4,234 | $44,234 |
| Yenyou (Jeff) Zheng, Ph.D. | $72,000 | $4,234 | $76,234 |
| (1) | These amounts represent the aggregate grant date fair value of $4.94 per share for the 858 restricted stock awards granted to each director as part of his or her annual fee in fiscal year 2024. The assumptions used to determine the value of restricted stock units are described in Note 16 “Equity-Based Compensation” to the Company’s consolidated financial statements in this annual report. At December 31, 2024, each of Dr. Freiman, Ms. Garlikov, Ms. Sit, Mr. Wu, Mr. Sean Zheng and Dr. Jeff Zheng had an aggregate of 5,148 unvested restricted stock units. At December 31, 2024, the aggregate number of vested stock options for each of the non-employee directors who served in 2024 and held stock options was as follows (with no such director holding any unvested stock options at such time): Dr. Freiman, 99; Ms. Sit, 17; Mr. Wu, 47; and Dr. Jeff Zheng, 17. |
Policies and Practices for Granting Equity Awards
We do not currently grant new awards of stock options, stock appreciation rights or similar option-like equity awards. Accordingly, we have no specific policy or practice on the timing of grants of such awards in relation to the disclosure of material nonpublic information. In the event we determine to grant new awards of stock options or similar equity awards in the future, the Compensation Committee will evaluate material nonpublic information into account when determining the timing and terms of such an award and whether the registrant has timed the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
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