Item 5.02. Departure of Directors or Certain Officers; Election of Directors;


           Appointment of Certain Officers; Compensatory Arrangements of Certain
           Officers.



On October 26, 2020, the board of directors (the "Board") of CleanSpark, Inc., a Nevada corporation (the "Company"), upon recommendation of the compensation committee of the Board (the "Compensation Committee") approved certain executive compensation changes for executives of the Company following the Company's fiscal year ended September 30, 2020. The changes described below were made in an ordinary course annual review of executive compensation by the independent directors of the Compensation Committee and take into account the lack of formal executive compensation policies and written employment agreements for executives of the Company for fiscal year 2020 and industry standards moving forward for fiscal year 2021.

Executive Summary and Background

The goals of our compensation programs are to ensure that the interests of our employees, including our named executive officers, are aligned with the interests of our stockholders and our business goals and that the total compensation paid to each of our named executive officers is fair, reasonable and competitive.

We provide our executive officers with a significant portion of their compensation through cash incentive compensation based upon the achievement of corporate objectives for the year as well as through equity compensation, including premium priced stock options, which are options with exercise prices above the fair market value of the Common Stock on the date of grant. These two elements of executive compensation are aligned with the interests of our stockholders because the amount of compensation ultimately received will vary with our corporate and operational performance and, in the case of options, will result in value for the named executive officers only if our stock price increases.

Key elements of our compensation programs include the following:

Compensation


   Element                   Purpose                            Features
 Base salary     To attract and retain              Fixed component of pay to
                 experienced and highly skilled     provide financial stability,
                 executives.                        based on responsibilities,
                                                    experience, individual
                                                    contributions and benchmarked
                                                    company data.

    Annual       To promote and reward the          Variable component of pay based
     cash        achievement of key short-term      on annual corporate quantitative

incentive strategic and business goals of and qualitative goals.

bonuses the Company as well as


                 individual performance; to
                 motivate and attract executives.

Long-term To encourage executives and Typically subject to vesting

Equity other employees to focus on based on continued service and

incentive long-term Company performance; are primarily in the form of

compensation to drive long-term stockholder stock options, premium priced


                 value; to promote retention; to    stock options and restricted
                 reward outstanding Company and     stock, the value of which
                 individual performance.            depends on the performance of
                                                    our Common Stock price, in order
                                                    to align employee interests with
                                                    those of our stockholders over
                                                    the longer-term.




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In addition to our direct compensation elements, the following features of our compensation program are designed to align our executive team with stockholder interests and with market best practices:



              What We Do                               What We Don't Do

ü Maintain a benchmarking process, × Allow hedging of equity utilizing third-party independent

           × Provide excessive perquisites
tools                                       × Provide supplemental executive
ü Target pay based on market norms          retirement plans
ü Deliver executive compensation
primarily through performance-based
compensation
ü Offer market-competitive benefits
for executives that are consistent
with the rest of our employees
ü Hold a say-on-pay vote at least once
every 3 years


During 2020, we made significant progress on our business goals. Our innovative technology enables distributed assets to function optimally in multiple applications. Our solutions meet the needs of an ongoing paradigm shift in the power, energy, and transportation industries to address the need for economic optimization and energy security, while meeting sustainability goals.



2020 results showcase the best year in the Company's history, setting the stage
for meaningful future growth. These results include the following achievements
that impacted executive compensation for the fiscal year ending September 30,
2020:

        º Revenues more than doubled compared to the prior year, while
          navigating a global pandemic
        º The Company successfully listing on Nasdaq
        º Acquisition and integration of two companies that are cash flow
          positive
        º Stock price improvement over the prior 12 months
        º Software, service and related revenues have increased to be a larger
          percentage of total revenues to resulting in gross margin increasing
          significantly since October 2019
        º Significantly improved cash balance and balance sheet

Setting Executive Compensation

The Compensation Committee is responsible for reviewing, and recommending to the Board for approval, the compensation of our executive officers, including our named executive officers. The Compensation Committee is composed entirely of non-employee directors who are "independent" as that term is defined in the applicable Nasdaq Rules. In making its recommendations regarding executive compensation, our Compensation Committee annually reviews the performance of our executives with our Chief Executive Officer, and our Chief Executive Officer makes recommendations to our Compensation Committee with respect to the appropriate base salary, annual incentive bonuses and performance measures, and grants of long-term equity incentive awards for each of our executives.

The Compensation Committee makes its determination regarding executive compensation and then makes a recommendation to the Board for approval. The Board discusses the Compensation Committee's recommendations ultimately approves the compensation of the executive officers.

In setting executive base salaries and bonuses and granting equity incentive awards, the Compensation Committee and the Board consider compensation for comparable positions in the market, the historical compensation levels of our executives, individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short- and long-term results that are in the best interests of our stockholders, and a long-term commitment to our Company. We generally target a competitive position, based on independent third-party benchmark analytics to inform the mix of compensation of base salary, bonus or long-term

Comparing Compensation to Market Benchmarks

In evaluating the total compensation of our named executive officers, our Compensation Committee, our Compensation Committee uses data from the Radford Global Technology executive compensation survey (the "Radford Survey"), to evaluate the competitive market when formulating its recommendation for the total direct compensation packages for our executive officers. The Radford Survey provides compensation market intelligence and is widely used within the technology industry.



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Due to the nature of our business, we also compete for executive talent with other companies, including public companies that are larger and more established than we are or that possess greater resources than we do, and with smaller private companies that may be able to offer greater equity compensation potential. While competitive practice is an important component of our compensation philosophy, it is not the sole determinant of executive compensation and benefit practices and programs and we do not automatically target our executive compensation at a specific percentage of the peer group average. Instead the Compensation Committee focuses on a balance of annual and long-term compensation, which is weighted toward "at risk" performance-based compensation.

Executive Employment Agreements

On October 26, 2020, the Company entered into new employment agreements (the "Employment Agreements") with Zachary Bradford, Lori Love, Amanda Kabak, Amer Tadayon and S. Matthew Schultz (the "Executives").

Zachary Bradford Employment Agreement

Mr. Bradford's Employment Agreement provides for an annual base salary of $500,000 payable according to the Company's normal payroll practices. In addition, Mr. Bradford will be entitled to receive: (i) an annual discretionary cash bonus based on the annual gross revenues of the Company and other benchmarks that may be identified at the discretion of the board of directors that is equivalent to no less than 50% of base salary, and (ii) a combination of restricted stock and stock options as incentive compensation that is at least 50% in value to base salary.

Mr. Bradford's Employment Agreement can be terminated (i) with cause by the Company after at least three-fifths (or more than 60%) of the Board determines that cause exists (ii) by Mr. Bradford for any reason upon 10 days advanced prior written notice and (iii) by the Company for any reason upon 10 days advanced prior written notice.

Furthermore, Mr. Bradford, (i) upon termination for cause and upon signing and returning an effective waiver and release of claims, shall be entitled to receive severance equal to three (3) months of base salary and other employment benefits if terminated in the first twelve (12) months of employment and six (6) months of the base salary and other employment benefits (including COBRA) thereafter, and (ii) upon termination without cause, all unvested securities shall immediately vest and become exercisable in full and, upon signing and returning an effective waiver and release of claims, shall be entitled to receive severance of equal to six (6) months of the base salary and other employment benefits if terminated in the first twelve (12) months of employment and twelve (12) months of the base salary and other employment benefits thereafter and the Company shall pay Mr. Bradford an amount equal to 100% of the bonus paid to the Employee during the prior six (6) months, with the severance and the bonus payable in equal payments over 12 months following the effective date of the termination and subject to all applicable withholdings and taxes.

As compensation for performance during the most recent fiscal year ended September 30, 2020, Mr. Bradford was issued 75,000 shares of fully-vested common stock and granted fully-vested options to purchase 25,000 shares of common stock at an exercise price of $9.00.

For fiscal year 2021, Mr. Bradford was issued 69,000 shares of restricted stock subject to vesting conditions and which shall vest only upon achievement of certain corporate milestones set by the Compensation Committee and options to purchase 30,000 shares of common stock at an exercise price of $9.00 which shall vest upon achievement of certain corporate milestones set by the Compensation Committee.

Lori Love Employment Agreement

Ms. Love's Employment Agreement provides for an annual base salary of $350,000 payable according to the Company's normal payroll practices. In addition, Ms. Love will be entitled to receive: (i) an annual discretionary cash bonus based on EBITDA improvement of the Company and other benchmarks that may be identified at the discretion of the board of directors that is equivalent to no less than 20% of base salary, and (ii) a combination of restricted stock and stock options as incentive compensation that is at least 50% in value to base salary.





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Ms. Love's Employment Agreement can be terminated (i) with cause by the Company after at least three-fifths (or more than 60%) of the Board determines that cause exists (ii) by Ms. Love for any reason upon 10 days advanced prior written notice and (iii) by the Company for any reason upon 10 days advanced prior written notice.

Furthermore, Ms. Love, (i) upon termination for cause and upon signing and returning an effective waiver and release of claims, shall be entitled to receive severance equal to three (3) months of base salary and other employment benefits if terminated in the first twelve (12) months of employment and six (6) months of the base salary and other employment benefits (including COBRA) thereafter, and (ii) upon termination without cause, all unvested securities shall immediately vest and become exercisable in full and, upon signing and returning an effective waiver and release of claims, shall be entitled to receive severance of equal to six (6) months of the base salary and other employment benefits if terminated in the first twelve (12) months of employment and twelve (12) months of the base salary and other employment benefits thereafter and the Company shall pay Ms. Love an amount equal to 100% of the bonus paid to the Employee during the prior six (6) months, with the severance and the bonus payable in equal payments over 12 months following the effective date of the termination and subject to all applicable withholdings and taxes.

As compensation for performance during the most recent fiscal year ended September 30, 2020, Ms. Love was issued 38,000 shares of fully-vested common stock and granted fully-vested options to purchase 12,500 shares of common stock at an exercise price of $9.00.

For fiscal year 2021, Ms. Love was issued 13,250 shares of restricted stock subject to vesting conditions and which shall vest only upon achievement of certain corporate milestones set by the Compensation Committee and options to purchase 10,000 shares of common stock at an exercise price of $9.00 which shall vest upon achievement of certain corporate milestones set by the Compensation . . .

Item 9.01. Financial Statements and Exhibits.






(d) Exhibits.


The following exhibits are filed as part of this report:





Exhibit
Number    Description

10.1        Employment Agreement, entered into by and between CleanSpark, Inc. and
          Zachary K. Bradford, dated October 26, 2020.

10.2        Employment Agreement, entered into by and between CleanSpark, Inc. and
          Lori Love, dated October 26, 2020.

10.3        Employment Agreement, entered into by and between CleanSpark, Inc. and
          Amanda Kabak, dated October 26, 2020.

10.4        Amended and Restated Employment Agreement, entered into by and between
          CleanSpark, Inc. and Amer Tadayon, dated October 26, 2020.

10.5        Employment Agreement, entered into by and between CleanSpark, Inc. and
          S. Matthew Schultz, dated October 26, 2020.




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