Below is why you should vote NO on item 2. NP joked in the CC yesterday that the BOD wasn’t asking for 25 million shares for NP, but what he didn’t say is that 5.5 million of those 25 million are for him. That’s over 20%!
Bottom Line: If you vote yes to the compensation package, you are approving the distribution of 9.3 million of the 25 million shares to members of the BOD, to include NP. NP attempted to claim that the compensation packed is needed to bring in new talent, but that’s not the full truth as over 1/3rd of the shares are already allocated to current BOD members.
If this passes at the end for his month, these are the shares that will be granted for the BOD: : NP - 5.5 million; Kelly - 1.75 million; Mulholland - 400k; Ray - 850k; Colachis - 320k; 3 outside directors - 168k each. These grants were approved by the compensation committee on June 15th and 25th, per the prospectus, but still need investor approval.
Under the table in the prospectus is the description of the different types of stock that is being distributed. The plan allows them to grant options or shares. Below is a summary of the grants/options that was written by another investor:
1. Options. They have a strike price. In this case, the management options are at $3.12 and the BOD options are at $6.15 (these are the share prices on June 15 and June 25, respectively). Options are "fair" to shareholders, as it basically puts us all in the same shoes. They only have value if the share price increases. 3.8 million of the 9.3 million in "early awards" are in the form of options (2 million to NP).
2. Restricted Stock Units: This is just giving them stock, so is much more valuable (they don't have to pay a strike price for it, they just get the shares). These vest over three years, which is the only restriction. They can make a lot of money on these if the stock stays at the same price, or even if it goes down. There are 1.1 million shares of these (500k for NP). This is a gift. I haven't verified this, but I'll be the vesting accelerates if NP gets fired.
3. Performance stock grants. Similar to the Restricted Stock units, these are shares of stock. They are highly valuable even if the stock drops in price. (NP has 3 million of them, so they would be worth $3 million even if the stock falls to $1 per share.) Silver lining on these is that they only vest if "certain performance conditions set forth in the award are met." HOWEVER, they don't tell us what the performance conditions are.
I voted no and other shareholders have as well. The prospectus has this information in it. NP obviously didn’t discuss the details yesterday as the details outline how he’s attempting to grant himself and other BOD members more stock despite no approvals and no revenues. This compensation package was approved around the time the SP was running to $10 and it looks like NP wasn’t trying to take full advantage.
IMO, come back when you have an approval and revenues before garnering more BOD members 9 million shares. If the shares weren’t already allocated, I might consider it, but NP deceived us by saying the 25 million shares are meant to recruit taken.
Bottom Line: If you vote yes to the compensation package, you are approving the distribution of 9.3 million of the 25 million shares to members of the BOD, to include NP. NP attempted to claim that the compensation packed is needed to bring in new talent, but that’s not the full truth as over 1/3rd of the shares are already allocated to current BOD members.
If this passes at the end for his month, these are the shares that will be granted for the BOD: : NP - 5.5 million; Kelly - 1.75 million; Mulholland - 400k; Ray - 850k; Colachis - 320k; 3 outside directors - 168k each. These grants were approved by the compensation committee on June 15th and 25th, per the prospectus, but still need investor approval.
Under the table in the prospectus is the description of the different types of stock that is being distributed. The plan allows them to grant options or shares. Below is a summary of the grants/options that was written by another investor:
1. Options. They have a strike price. In this case, the management options are at $3.12 and the BOD options are at $6.15 (these are the share prices on June 15 and June 25, respectively). Options are "fair" to shareholders, as it basically puts us all in the same shoes. They only have value if the share price increases. 3.8 million of the 9.3 million in "early awards" are in the form of options (2 million to NP).
2. Restricted Stock Units: This is just giving them stock, so is much more valuable (they don't have to pay a strike price for it, they just get the shares). These vest over three years, which is the only restriction. They can make a lot of money on these if the stock stays at the same price, or even if it goes down. There are 1.1 million shares of these (500k for NP). This is a gift. I haven't verified this, but I'll be the vesting accelerates if NP gets fired.
3. Performance stock grants. Similar to the Restricted Stock units, these are shares of stock. They are highly valuable even if the stock drops in price. (NP has 3 million of them, so they would be worth $3 million even if the stock falls to $1 per share.) Silver lining on these is that they only vest if "certain performance conditions set forth in the award are met." HOWEVER, they don't tell us what the performance conditions are.
I voted no and other shareholders have as well. The prospectus has this information in it. NP obviously didn’t discuss the details yesterday as the details outline how he’s attempting to grant himself and other BOD members more stock despite no approvals and no revenues. This compensation package was approved around the time the SP was running to $10 and it looks like NP wasn’t trying to take full advantage.
IMO, come back when you have an approval and revenues before garnering more BOD members 9 million shares. If the shares weren’t already allocated, I might consider it, but NP deceived us by saying the 25 million shares are meant to recruit taken.
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