DEF 14A of Cipher Digital Inc., Mar 19, 2024

DEF 14A of Cipher Digital Inc.

Filed Mar 19, 2024 · FY20230000950170-24-033481

Open on EDGAR

  1. PROPOSAL NO. 1 ELECTION OF DIRECTORS

    PROPOSAL NO. 1 ELECTION OF DIRECTORS

  2. Board Size and Structure

    Board Size and Structure Our second amended and restated certificate of incorporation, as currently in effect (“Certificate of Incorporation”) provides that the number of directors shall be established from time to time by our Board of Directors. Our Board of Directors has fixed the number of directors at eight, and we currently have eight directors serving on the Board. Our Certificate of Incorporation provides that the Board be divided into three classes, designated as Class I, Class II and Class III. Each class of directors must stand for re-election no later than the third annual meeting of stockholders subsequent to their initial appointment or election to the Board, provided that the term of each director will continue until the election and qualification of his or her successor and is subject to his or her earlier death, resignation or removal. Our Board believes the classified board structure benefits our stockholders because it allows a majority of the board to remain in place from year to year, which promotes continuity and stability and encourages the board to plan for long-term goals. Further, it helps ensure that at any given time, at least approximately two-thirds of the elected directors have experience with the business and operations of the Company. Generally, vacancies or newly created directorships on the Board will be filled only by vote of a majority of the directors then in office although less than a quorum, or by a sole remaining director. A director appointed by the Board to fill a vacancy will hold office until the next election of the class for which such director was chosen, subject to the election and qualification of his or her successor and his or her earlier death, resignation, retirement, disqualification or removal.

  3. Current Directors and Terms

    Current Directors and Terms Our current directors and their respective classes and terms are set forth below.

  4. Current Directors and Terms

    | Class I Directors – Current Term Ending at 2025 Annual Meeting | Class II Directors – Current Term Ending at 2026 Annual Meeting | Class III Directors – Current Term Ending at 2024 Annual Meeting | | Robert Dykes Robert Flatley Caitlin Long | Holly Morrow Evans James Newsome Wesley Williams | Tyler Page Cary Grossman |

  5. Nominees for Director

    Nominees for Director Mr. Page and Mr. Grossman have been nominated by the Board to stand for election. As the directors assigned to Class III, Mr. Page and Mr. Grossman's current terms of service will expire at the Annual Meeting. If elected by the stockholders at the Annual Meeting, Mr. Page and Mr. Grossman will each serve for a term expiring at our annual meeting of stockholders to be held in 2027 (the “2027 Annual Meeting”) and the election and qualification of his or her successor or until his or her earlier death, resignation or removal. Each person nominated for election has agreed to serve if elected, and management has no reason to believe that any nominee will be unable to serve. If, however, prior to the Annual Meeting, the Board of Directors should learn that any nominee will be unable to serve for any reason, the proxies that otherwise would have been voted for this nominee will be voted for a substitute nominee as selected by the Board. Alternatively, the proxies, at the Board’s discretion, may be voted for that fewer number of nominees as results from the inability of any nominee to serve. The Board has no reason to believe that any of the nominees will be unable to serve.

  6. Information About Board Nominees and Continuing Directors

    Information About Board Nominees and Continuing Directors The following pages contain certain biographical information as of March 7, 2024 for each nominee for director and each director whose term as a director will continue after the Annual Meeting, including all positions he or she holds, his or her principal occupation and business experience for the past five years, and the names of other publicly-held companies of which the director or nominee currently serves as a director or has served as a director during the past five years. We believe that all of our directors and nominees display personal and professional integrity; satisfactory levels of education and/or business experience; broad-based business acumen; an appropriate level of understanding of our business and its industry and other industries relevant to our business; the ability and willingness to devote adequate time to the work of our Board of Directors and its committees, as applicable; skills and personality that complement those of our other directors that helps build a board that is effective, collegial and responsive to the needs of our Company; strategic thinking and a willingness to share ideas; a diversity of experiences, expertise and background; and the ability to represent the interests of all of our stockholders. The information presented below regarding each nominee and continuing director also sets forth specific experience, qualifications, attributes and skills that led our Board of Directors to the conclusion that such individual should serve as a director in light of our business and structure.

  7. Nominees for Election to Three-Year Terms Expiring No Later than the 2027 Annual Meeting

    Nominees for Election to Three-Year Terms Expiring No Later than the 2027 Annual Meeting

  8. Nominees for Election to Three-Year Terms Expiring No Later than the 2027 Annual Meeting

    | Class III Directors | Age | Director Since | Current Position at Cipher | | Tyler Page | 48 | 2021 | Chief Executive Officer and Director | | Cary Grossman | 70 | 2021 | Director |

  9. Nominees for Election to Three-Year Terms Expiring No Later than the 2027 Annual Meeting

    Tyler Page has served as Cipher’s Chief Executive Officer and as a member of the Board since August 2021. From 2020 to 2021, Mr. Page served as Head of Business Development for digital asset infrastructure at Bitfury Holding, where he was responsible for business development and strategic planning work of the Bitfury Group. He brings more than 20 years of experience in institutional finance and fintech, including as a member of the Management Committee and Head of Client Strategies at New York Digital Investment Group (NYDIG), from 2017 to 2019, and as Head of Institutional Sales at Stone Ridge Asset Management, from 2016 to 2019. Previously, he served as Global Head of Business Development for Fund Solutions at Guggenheim Partners in New York and London, as well as in various roles on derivatives teams at Goldman Sachs and Lehman Brothers. He began his career as an attorney at Davis Polk & Wardwell LLP. He holds a J.D. from the University of Michigan Law School and a B.A. from the University of Virginia. Cary Grossman has served as a member of our board of directors since August 2021. Mr. Grossman co-founded GWAC in 2020 and served as its President and a member of its board of directors from June 2020 through August 2021. Mr. Grossman also served as CEO, President, Chief Financial Officer and a member of the board of directors of Good Works II Acquisition Corp. during the period from February 2021 through February 2023. Mr. Grossman is a veteran corporate finance professional with a combination of executive management, investment banking and public accounting experience. In 2010, Mr. Grossman co-founded Shoreline Capital Advisors, Inc., an advisory firm focused on providing financial advisory services to middle-market companies. Prior to Shoreline Capital Advisors, from 1991 to 2002, Mr. Grossman co-founded and was the CEO of another investment banking firm, McFarland, Grossman & Company. Earlier in his career, he practiced public accounting for 15 years. Mr. Grossman also held a number of executive positions, including: President of XFit, Inc. from 2019 to 2020; Chief Financial Officer of Blaze Metals, LLC from 2007 to 2010; Executive Vice President, Chief Financial Officer and Chief Operating Officer of Gentium, S.P.A. from 2004 to 2006; Chief Executive Officer of ERP Environmental Services, Inc. and Chief Financial Officer of U.S. Liquids, Inc. from 2001 to 2003. He also co-founded Pentacon, Inc. (NYSE: JIT) and served as a board member and Executive Chairman from 1998 until 2002, and as a director of Metalico (NYSE: MEA) from 2014 until 2015 and INX Inc. (Nasdaq: INXI) from 2004 until 2011. Mr. Grossman is a Certified Public Accountant and earned a B.B.A. in Business Administration from the University of Texas. We believe that Mr. Grossman is well qualified to serve on our board of directors due to his extensive corporate finance and management experience and his overall public company experience.

  10. Class I Directors Whose Terms Expire at the 2025 Annual Meeting of Stockholders

    Class I Directors Whose Terms Expire at the 2025 Annual Meeting of Stockholders

  11. Class I Directors Whose Terms Expire at the 2025 Annual Meeting of Stockholders

    | Class I Directors | Age | Director Since | Current Position at Cipher | | Robert Dykes | 74 | 2021 | Director | | Robert Flatley | 61 | 2023 | Director | | Caitlin Long | 54 | 2021 | Director |

  12. Class I Directors Whose Terms Expire at the 2025 Annual Meeting of Stockholders

    Robert Dykes has served on our board of directors since August 2021. Prior to Cipher, Mr. Dykes served as Director of Bitfury Group Limited (UK) from 2014 until 2020 and was on the advisory board of Bitfury Top HoldCo from 2020 until 2021. From 2008 to 2013, Mr. Dykes served as the Chief Financial Officer, Executive Vice President and Principal Accounting Officer of VeriFone Systems, Inc., a company specializing in retail credit card payment systems. He has more than 30 years of operational management experience, and an established reputation in building world‑class organizations. He served as the Chief Financial Officer and Executive Vice President, Business Operations of Juniper Networks Inc., from 2005 to 2007. Mr. Dykes served as the Chief Financial Officer of Flextronics International Ltd., from 1997 to 2004. From 1988 to 1997, Mr. Dykes served as the Executive Vice President of Worldwide Operations and Chief Financial Officer of Symantec Corporation. Mr. Dykes holds a Bachelor of Commerce and Administration Degree from Victoria University in Wellington, New Zealand. We believe that Mr. Dykes is well qualified to serve on our board of directors due to his extensive corporate finance and management experience and his overall public company experience. Robert Flatley has served on our board of directors since August 2023. Since 2021, Mr. Flatley has served as a director, the Chief Executive Officer and founder of TS Imagine, which was formed following the merger of Trading Screen and Imagine Software. From 2018 to 2019, Mr. Flatley served as a director and as President, Chief Financial Officer and Chief Operating Officer at New York Digital Investment Group (NYDIG). From 2010 to 2018, he served as a director and Chief Executive Officer of CoreOne Technologies. Earlier in his career, Mr. Flatley was a Managing Director at both Deutsche Bank Securities, and at Banc of America Securities. He has hands-on experience in various capital markets roles, including trading, securities and prime finance, building SaaS business models, market structure, quantitative trading, software development, and software M&A. He founded successful companies as a technology entrepreneur using both software and data-as-a-service models, and he was a founding employee of two statistically driven trading businesses at bulge bracket financial institutions. He earned a B.B.A. in Accounting from the University of Iowa in 1985. We believe that Mr. Flatley is well qualified to serve on our board of directors due to his extensive experience in regulated financial services institutions and as a founder of four successful fintech companies. Caitlin Long has served as a member of our board of directors since August 2021. Ms. Long has extensive experience in both traditional financial services and cryptocurrencies. She is the Founder and Chief Executive Officer of Custodia Bank, Inc. (formerly Avanti Financial Group, Inc.), a chartered bank that she founded in 2020 to serve as a compliant bridge between the U.S. dollar and cryptocurrency financial systems. From 2016 to 2018, Ms. Long served as the Chairman and President of Symbiont.io, an enterprise fintech company that utilizes blockchain technology. Beginning in 2017 she helped lead the charge in her native state of Wyoming to enact more than 20 blockchain‑enabling laws during consecutive legislative sessions, and in 2018 she was appointed by two Wyoming Governors to serve on related legislative committees. She worked at investment banks in New York and Zurich from 1994 to 2016, where she held senior roles as a Managing Director at Morgan Stanley and Credit Suisse. Ms. Long earned a B.A. from the University of Wyoming and a joint J.D./ M.P.P. degree from Harvard Law School and Harvard Kennedy School of Government. We believe that Ms. Long is well qualified to serve on our board of directors due to her extensive digital asset experience, her legal and regulatory expertise, and her prior experience working with public companies.

  13. Class II Directors Whose Terms Expire at the 2026 Annual Meeting of Stockholders

    Class II Directors Whose Terms Expire at the 2026 Annual Meeting of Stockholders

  14. Class II Directors Whose Terms Expire at the 2026 Annual Meeting of Stockholders

    | Class II Directors | Age | Director Since | Current Position at Cipher | | Holly Morrow Evans | 48 | 2021 | Director | | James Newsome | 64 | 2021 | Chairman of the Board | | Wesley Williams | 47 | 2021 | Director |

  15. Class II Directors Whose Terms Expire at the 2026 Annual Meeting of Stockholders

    Holly Morrow Evans has served on our board of directors since August 2021. Since 2015, Ms. Evans has been a partner at Hakluyt and Company, where she currently serves as the firm’s Head of Risk and Deputy Managing Partner. From 2007 to 2013, she was a senior adviser for ExxonMobil. She also served as director on the National Security Council from 2005 to 2007 and as China advisor to the office of the Vice President from 2003 to 2005. Mrs. Evans holds a B.A. in Political Science from Georgetown and an M.A. in Asian Studies from Harvard University. We believe that Mrs. Evans is well qualified to serve on our board of directors due to her extensive advisory experience. James Newsome has served as a member of our board of directors since August 2021. Mr. Newsome served on the advisory board of Bitfury Top HoldCo from 2015 until 2021. Mr. Newsome served as president of the New York Mercantile Exchange from August of 2004 until it was acquired by the CME Group in 2009. He subsequently served on the board of CME Group from 2009 until 2011. Mr. Newsome has also previously served on the board of directors of the Dubai Mercantile Exchange and is a former director of the National Futures Association. From 1998 until 2004, Mr. Newsome held various senior roles at the U.S. Commodity Futures Trading Commission (“CFTC”) from Commissioner (1998 to 2000) to a Chairman of CFTC (2000 to 2004). As a Chairman of CFTC, Mr. Newsome guided the regulation of the nation’s futures markets and led the CFTC’s regulatory implementation of the Commodity Futures Modernization Act of 2000. He also served as one of four members of the President’s Working Group for Financial Markets, along with the Secretary of the Treasury and the Chairmen of the Federal Reserve and the SEC. Mr. Newsome is also presently a founding partner of Delta Strategy Group, a full‑service government affairs firm based in Washington, D.C. He earned a B.S. in Economics from the University of Florida, a Masters in Genetics from Mississippi State University and a Ph.D. in Economics from Mississippi State University. We believe that Mr. Newsome is well qualified to serve on our board of directors due to his extensive corporate finance and management experience. Wesley Williams has served on our board of directors since August 2021. Mr. Williams brings over 25 years of experience in corporate finance. Since 2021, Mr. Williams has served as the Head of Aquarian Credit Partners, the high yield credit investing arm of an insurance holding company. Beginning in 2017, he served as Portfolio Manager, Chief Operating Officer, and a member of the Board of Managers of Gallatin Loan Management, a high yield credit investment management firm. From 2013 until 2016, Mr. Williams was a founding partner of Hildene Leveraged Credit, until its sale to affiliates of Fortress Investment Group. From 2010 through 2012, he worked as a turnaround Operating Partner, Interim CFO, and Shareholder Representative for Goldman Sachs portfolio companies. From 2006 until 2008, Mr. Williams worked as a Vice President of specialty finance and leveraged credit at Marathon Asset Management, a high yield credit investment manager. From 1999 through 2005, Mr. Williams also held various roles in the Investment Banking and Merchant Banking Divisions of Goldman Sachs. He holds an AB in Sociology from Harvard College and an MBA from Harvard Business School. We believe that Mr. Williams is well qualified to serve on our board of directors due to his extensive corporate finance and overall management experience. The Board of Directors unanimously recommends a vote FOR the election of each of Tyler Page and Cary Grossman as a Class III director to hold office until the 2027 Annual Meeting and until his successor has been duly elected and qualified.

  16. Compensation Consultants

    Compensation Consultants As mentioned above, the Compensation Committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In 2023, the Compensation Committee engaged Pay Governance LLC as a consultant and advisor to provide information on competitive market pay practices for senior executives, as described in further detail under “Executive and Director Compensation, Equity Awards – Elements of Our Executive Compensation Program.” Pay Governance does not maintain any other direct or indirect business relationships with the Company or any of its affiliates, and the Compensation Committee has reviewed the independence of Pay Governance, including the factors required by Nasdaq and the SEC, and has determined that the services provided by Pay Governance did not raise any conflicts of interest.

  17. EXECUTIVE AND DIRECTOR COMPENSATION

    EXECUTIVE AND DIRECTOR COMPENSATION This section discusses the material components of the executive compensation program for our executive officers who are named in the “Summary Compensation Table” below. In 2023, our “named executive officers” and their positions were as follows: • Rodney Tyler Page, Chief Executive Officer; • Edward Farrell, Chief Financial Officer; • Patrick Kelly, Co-President and Chief Operating Officer; and • William Iwaschuk, Co-President, Chief Legal Officer and Corporate Secretary. This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt may differ materially from the currently planned programs summarized in this discussion.

  18. Summary Compensation Table

    Summary Compensation Table The following table sets forth information concerning the compensation of our named executive officers for the year ended December 31, 2023.

  19. Summary Compensation Table

    | | | | | Stock | All Other | | | | | Salary | Bonus | Awards | Compensation | | | Name and Principal Position | Year | ($)(1) | ($)(2) | ($)(3) | ($)(4) | Total ($) | | Rodney Tyler Page | 2023 | 562,500 | 2,485,000 | 2,600,000 | 9,000 | 5,656,500 | | Chief Executive Officer | 2022 | 300,000 | - | 855,000 | - | 1,155,000 | | Edward Farrell | 2023 | 362,500 | 1,242,083 | 1,300,000 | 8,389 | 2,912,972 | | Chief Financial Officer | 2022 | 200,000 | - | 1,881,000 | - | 2,081,000 | | Patrick Kelly | 2023 | 362,500 | 1,242,083 | 1,300,000 | 9,778 | 2,914,361 | | Co-President and Chief Operating Officer | 2022 | 200,000 | - | 1,881,000 | - | 2,081,000 | | William Iwaschuk | 2023 | 362,500 | 1,242,083 | 1,300,000 | 11,319 | 2,915,902 | | Co-President, Chief Legal Officer and Corporate Secretary | 2022 | 200,000 | - | 1,881,000 | - | 2,081,000 |

  20. Summary Compensation Table

    (1) Amounts reflect the actual base salaries paid to each named executive officer in respect of fiscal years 2023 and 2022, which reflect salary increases for our named executive officers that took effect on July 1, 2023 and are described in more detail below under the heading “Base Salary.” (2) Amounts reflect (i) discretionary cash bonus awards paid in six installments in 2023 and (ii) 2023 annual bonus awards granted in recognition of performance in 2023, which were paid on February 15, 2024. The aggregate amount of discretionary cash bonus awards paid to each named executive officer for 2023 was $1,000,000 to Mr. Page and $533,333 each to Messrs. Farrell, Kelly and Iwaschuk. The amount of annual bonus awards paid to each named executive officer in 2023 was $1,485,000 to Mr. Page, $708,750 to Mr. Farrell, $708,750 to Mr. Kelly, and $708,750 to Mr. Iwaschuk. (3) Amounts reflect the full grant-date fair value of restricted stock unit, or RSU, awards granted during 2023 and 2022 computed in accordance with ASC Topic 718. The RSUs granted to the named executive officers in 2023 were subject to service-based vesting conditions. For information regarding the assumptions used to calculate the value of all RSU awards made to named executive officers, see “Notes to Consolidated Financial Statements – Note 17. Share-Based Compensation” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and for the fiscal year ended December 31, 2023. Amounts reflect matching contributions made to each named executive officer’s 401(k) plan account in 2023.

  21. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2023.

  22. Outstanding Equity Awards at Fiscal Year-End

    | | Stock Awards | | | | | | | | | | | Equity Incentive | | | | | | | Plan Awards: | | | | | | Equity Incentive | Market or | | | | | | Plan Awards: | Payout Value | | | | Number of | Market Value | Number of | of Unearned | | | | Shares or | of Shares or | Unearned Shares, | Shares, Units | | | | Units of | Units of | Units or Other | or Other | | | | Stock That | Stock That | Rights That | Rights That | | | | Have Not | Have Not | Have Not | Have Not | | Name | Grant Date | Vested (#) | Vested ($)(1) | Vested (#) | Vested ($)(1) | | Rodney Tyler Page | 6/14/2023 | 1,000,000(2) | 4,130,000 | — | — | | | 9/13/2022 | 333,333(3) | 1,376,665 | — | — | | | 11/17/2021 | 1,419,237(4) | 5,861,449 | 4,257,710(5) | 17,584,342 | | Edward Farrell | 6/14/2023 | 500,000(2) | 2,065,000 | — | — | | | 9/13/2022 | 733,333(3) | 3,028,665 | — | — | | | 11/17/2021 | 468,348(4) | 1,934,277 | — | — | | Patrick Kelly | 6/14/2023 | 500,000(2) | 2,065,000 | — | — | | | 9/13/2022 | 733,333(3) | 3,028,665 | — | — | | | 11/17/2021 | 468,348(4) | 1,934,277 | — | — | | William Iwaschuk | 6/14/2023 | 500,000(2) | 2,065,000 | — | — | | | 9/13/2022 | 733,333(3) | 3,028,665 | — | — | | | 11/17/2021 | 468,348(4) | 1,934,277 | — | — |

  23. Outstanding Equity Awards at Fiscal Year-End

    (1) Amounts are calculated by multiplying the number of RSUs shown in the table by $4.13, the closing market price of our stock on December 29, 2023. (2) Represents all of the June 2023 RSUs that vest on each of June 14, 2024, June 14, 2025 and June 14, 2026. (3) Represents all of the Special Retention RSUs that vest on each of September 13, 2024 and September 13, 2025. (4) Represents RSUs that vest in equal installments on each of January 1, 2023, January 1, 2024 and January 1, 2025, subject to the named executive officer’s continuous service on each applicable vesting date. Represents all of the performance-based RSUs granted to Mr. Page, calculated based on the achievement of the following performance goals: one-third of the performance-based RSUs will vest upon the company achieving a market capitalization equal to or exceeding $5 billion, $7.5 billion and $10 billion, in each case over a 30-day lookback period and subject to Mr. Page’s continuous service through the end of the applicable 30-day period.

  24. Director Compensation

    Director Compensation The following table provides information concerning compensation awarded to, earned by and paid to each person who served as a non-employee member of our board of directors during the fiscal year ended December 31, 2023. Mr. Page is not included in the table below as he is employed as our Chief Executive Officer and receives no compensation for his service as a director. The compensation received by Mr. Page as an employee is shown in “Executive Compensation-Summary Compensation Table” above.

  25. Director Compensation

    | | Fees Earned | Stock | | | | or Paid in | Awards | | | Name | Cash ($)(1) | ($)(2) | Total ($) | | Cary Grossman | 150,000 | 145,000 | 295,000 | | Caitlin Long | 132,500 | 145,000 | 277,500 | | James Newsome | 150,000 | 145,000 | 295,000 | | Wesley (Bo) Williams | 140,000 | 145,000 | 285,000 | | Holly Morrow Evans | 137,500 | 145,000 | 282,500 | | Robert Dykes | 127,500 | 145,000 | 272,500 | | Robert Flatley | 49,239 | 70,000 | 119,239 |

  26. Director Compensation

    (1) Amounts reflect the annual cash retainers that the non-employee directors earned for their service in respect of 2023 under our non-employee director compensation policy. (2) Amounts reflect the full grant-date fair value of stock awards granted during 2023 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. For information regarding the assumptions used to calculate the value of all stock awards made to our directors see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Summary of Critical Accounting Policies—Share-based compensation.” No non-employee directors held unvested stock awards as of December 31, 2023. Effective as of November 10, 2021, our board of directors adopted a non-employee director compensation policy, pursuant to which each non-employee director is entitled to a $100,000 annual cash retainer, except for the lead independent director who is entitled to a $150,000 annual cash retainer. The chairs of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee will be entitled to an additional annual cash retainer of $20,000, $15,000, and $12,500, respectively and any non-employee director serving as a member of the Audit Committee, Compensation Committee, or Nominating and Corporate Governance Committee (other than the chairs of the respective committees) are entitled to an additional annual retainer of $10,000, $10,000 and $7,500, respectively. The cash fees are paid to non-employee directors quarterly in arrears and will be pro-rated for any quarter of partial service. In addition to such cash compensation, each non-employee director who served on our board of directors as of the effective date of the non-employee director compensation policy received a one-time initial grant of restricted stock units with a grant date value of $100,000 on November 17, 2021. Under the policy as in effect in 2022, at each annual meeting of our stockholders, non-employee directors who serve on the board as of the annual meeting and will continue to serve on the board following the annual meeting will receive an equity award of restricted stock units that has a grant date value of $100,000. If a non-employee director is elected to our board for the first time at an annual meeting after the effective date of the non-employee director compensation policy, the non-employee director will receive an equity award of restricted stock units that has a grant date value of $100,000. If a non-employee director is initially elected to the board on a date other than the annual meeting, the non-employee director will receive, on the date of such non-employee director’s initial election or appointment, an initial equity award of restricted stock units that has a grant date value of $100,000, multiplied by a fraction, the numerator of which is 365 minus the number of days from the most recent annual meeting to the non-employee director’s start date and the denominator of which is 365. The equity awards granted to non-employee directors will be fully vested on the grant date. In March 2023, our board of directors amended our non-employee director compensation policy as it relates to go-forward equity compensation for our non-employee directors. Under the amended policy, instead of the annual equity awards and the initial equity awards described above, our non-employee directors would receive the awards of fully-vested shares of common stock of the Company (“Stock Awards”) listed below. In connection with the amended policy, we also awarded a one-time Stock Award grant to the non-employee directors in the amount $40,000 of shares to increase to $140,000 the value of the equity compensation to the non-employee directors in respect of the one year period commencing on the date of the 2022 Annual Meeting. Starting at the 2023 Annual Meeting, an annual Stock Award in the aggregate amount of $140,000, to be issued in four equal installments of $35,000 starting on the date of the annual meeting, and on a quarterly basis thereafter. Our board of directors, however, will retain the discretion not to grant any given installment. • Any non-employee director who is appointed outside the annual meeting less than 90 days following an installment grant date will receive a pro-rated Stock Award as an initial award, and thereafter will be eligible for installments of the annual Stock Award. In February 2024, our board of directors, upon the recommendation from the Compensation Committee, determined that it was in the best interest of the Company and its stockholders to amend our non-employee director compensation policy to change the issuance of equity awards to our non-employee directors from quarterly installments, which applied for the year following the 2023 Annual Meeting, to a single annual installment, which will apply from and after the 2024 Annual Meeting. Under the amended policy, instead of the quarterly equity awards described above, our non-employee directors will receive Stock Awards on an annual basis. The non-employee directors received their last quarterly award installment of $35,000 on February 20, 2024.