QS Energy Inc
For the period ended Dec 31, 2023. Filed Apr 9, 2024.
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FY2023 · Filed Apr 9, 2024
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Item 11. Executive Compensation
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
The following table sets forth certain information regarding the compensation earned during the last three fiscal years by the Named Executive Officers:
Summary Compensation Table
| Long-Term Compensation Awards | |||||||
|---|---|---|---|---|---|---|---|
| Name and Principal Position | Fiscal Year | Annual Compensation Salary ($) | Stock Awards ($) | Securities Underlying Options (#) | Full Value of Options ($) | All Other Compensation ($) | Total ($) |
| Cecil Bond Kyte (1) | 2023 | – | – | – | – | – | – |
| Chief Executive Officer | 2022 | – | – | – | – | – | – |
| 2021 | – | – | – | – | – | – | |
| Don Dickson (2) | 2023 | – | – | – | – | – | – |
| Former Chief Executive Officer | 2022 | – | – | – | – | – | – |
| 2021 | – | – | 300,000 | 9,000 | – | 9,000 | |
| Michael McMullen (3) | 2023 | – | – | – | – | – | – |
| Former Chief Financial Officer | 2022 | – | – | – | – | – | – |
| 2021 | 46,200 | – | – | – | – | 46,200 | |
| (1) | Mr. Kyte was appointed Chief Executive Officer (“CEO”) effective April 15, 2021. |
| (2) | Mr. Dickson will not receive any cash compensation for his role as interim CEO; rather, his compensation will be in the form of options that will be granted (“Grant”) to Mr. Dickson to purchase 100,000 shares of restricted common stock of the Company (the “Options”), each month of his employment as interim CEO during the Term. The Options will vest on the 30th day following the date of Grant, provided that Mr. Dickson remains in his role as interim CEO on the vesting date. All of the Options shall be priced as of the closing market price of the Company’s common stock as reported by the OTCBB (Pink Sheets) on the date of Grant. The Options issued to Mr. Dickson in exchange for serving as the Company’s interim CEO shall expire ten (10) years from the date of Grant. Mr. Dickson resigned as interim CEO, effective April 15, 2021. |
| (3) | Mr. McMullen was appointed Chief Financial Officer (“CFO”) effective April 1, 2017. Mr. McMullen’s annual base salary under his employment agreement as CFO is $158,400, for a two-year term. Effective March 31, 2019, the Company amended Mr. McMullen’s employment agreement. As amended, the contract was extended by 90 days with no other change in terms. Effective July 1, 2019 through November 15, 2019, Mr. McMullen was employed on a month-to-month basis with no other changes in terms. Effective November 15, 2019, Mr. McMullen’s employment agreement was amended extending the term of the agreement to February 15, 2020 with no other changes in terms. |
| Mr. McMullen’s Employment Agreement was amended and restated effective February 15, 2020. As amended, Mr. McMullen’s employment agreement was extended on a month-to-month basis with no other terms modified. Mr. McMullen resigned as CFO, effective April 15, 2021. |
OPTION GRANTS IN LAST FISCAL YEAR
During the year ended December 31, 2023, the Company granted no options to Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
No options were exercised by any of the Named Executive Officers during the 2023 fiscal year. The following table sets forth the number of shares of our common stock subject to exercisable and unexercisable stock options which the Named Executive Officers held at the end of the 2023 fiscal year.
| Shares Acquired on Exercise · Value Realized · Number of Securities Underlying Unexercised Options at Fiscal Year-End (#) · Value of Unexercised In-the-Money Options ($)(1) | ||||||
|---|---|---|---|---|---|---|
| Name | (#) | ($) | Exercisable | Unexercisable | Exercisable | Unexercisable |
| Don Dickson | – | – | 3,877,694 | – | – | – |
| Michael McMullen | – | – | 800,000 | – | – | – |
| (1) | Market value of our common stock at fiscal year-end minus the exercise price. The closing price of our common stock on December 29, 2023 the last trading day of the year was $0.06 per share. |
EMPLOYMENT AGREEMENTS
Employment Agreement with Don Dickson
Mr. Dickson’s acceptance of the appointment as interim CEO of the Company for a term of 90 days became effective April 15, 2020 under terms as follows:
Compensation will be in the form of options that will be granted (“Grant”) to Mr. Dickson to purchase 100,000 shares of restricted common stock of the Company (the “Options”), each month of his employment as interim CEO during the Term. The Options will vest on the 30th day following the date of Grant, provided that Mr. Dickson remains in his role as interim CEO on the vesting date. All of the Options shall be priced as of the closing market price of the Company’s common stock as reported by the OTCBB (Pink Sheets) on the date of Grant. The Options issued to Mr. Dickson in exchange for serving as the Company’s interim CEO shall expire ten (10) years from the date of Grant. Mr. Dickson resigned as the Company’s CEO effective April 15, 2021.
Employment Agreement with Michael McMullen
Mr. McMullen’s employment agreement (“McMullen Employment Agreement”) with the Company became effective April 1, 2017, pursuant to which he is serving as the Company’s Chief Financial Officer. The term (“Term”) of the McMullen Employment Agreement is two years. Annual base salary under the McMullen Employment Agreement for the full Term is $158,400. The Company will also issue options (“Options”) to Mr. McMullen to purchase 250,000 shares of restricted shares of common stock of the Company at a per share exercise price equal to the stock price listed on the OTCBB market at market close on April 3, 2017. The 125,000 of the Options vested on April 1, 2017, and 125,000 Options vested on April 1, 2018. The Options shall expire 10 years from the date of grant of the Options.
Effective March 31, 2019, the Company amended the McMullen Employment Agreement. As amended, the contract was extended by 90 days with no other change in terms. Effective July 1, 2019 through November 15, 2019, Mr. McMullen was employed on a month-to-month basis with no other changes in terms. Effective November 15, 2019, the McMullen Employment Agreement was amended extending the term of the agreement to February 15, 2020 with no other changes in terms.
Mr. McMullen’s Employment Agreement was amended and restated effective February 15, 2020. Mr. McMullen’s Employment Agreement had been scheduled to terminate February 15, 2019. As amended, his employment agreement was extended on a month-to-month basis. As of July 16, 2020, the Company deferred Mr. McMullen’s salary. As of December 31, 2020 deferred salary due to Mr. McMullen had accrued to $72,600. Deferred salaries were reported in operating expenses and related party payable. Mr. McMullen resigned as the Company’s CFO, effective April 15, 2021.
DIRECTORS COMPENSATION
Board compensation for calendar year 2023, payable to members of the Board under the Company’s May 6, 2014, Board compensation policy, as amended January 1, 2015, was suspended.
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