John Schultz
About John E. Schultz Jr.
Independent director of Applied Energetics (AERG), age 71, serving since November 11, 2018. Schultz is a Wall Street veteran who founded risk analytics firm CSG Spectra, Inc. in 1984 and Oak Tree Asset Management Ltd. in 2000; he previously consulted to Applied Energetics and was part of the 2018 recapitalization/proxy team that reconstituted the board and management. He holds a degree from California State University, Long Beach. Tenure on the AERG board: ~7 years as of August 2025.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| CSG Spectra, Inc. | Founder; risk analytics | Founded 1984 | Built risk analytics franchise; Wall Street networks |
| Oak Tree Asset Management Ltd. | Founder; actively trades in managed LLCs | Founded 2000 | Focused on “outside-the-box” investments and early-stage PE deals |
| Applied Energetics, Inc. | Consultant (prior to board service) | Pre-2018 (unspecified) | Intimate knowledge of AERG history/financials; governance transparency push |
| Applied Energetics, Inc. | Recapitalization/proxy team member | 2018 | Helped establish new board/management; recapitalized to pursue tech/IP portfolio |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| CSG Spectra, Inc. | Founder | Since 1984 | Risk analytics focus |
| Oak Tree Asset Management Ltd. | Founder | Since 2000 | Active trading; managed LLCs; early-stage investments |
Board Governance
- Independence: Board believes Schultz qualifies as an Independent Director under OTCQB standards. AERG, as a smaller reporting company on OTCQB, is not required to have independent directors but identifies Adamczyk, Schultz, Alber, Andrews as independent.
- Committee structure: No standing committees; all committee functions (audit, compensation, nominating) are handled by the full board pending potential future committee implementation.
- Attendance: The board held 13 formal meetings in FY2024; all nominees then serving attended all formal meetings except Dr. Quarles missed the meeting on Nov 24, 2024. Schultz attended all formal meetings.
- Meeting cadence: At least one formal telephonic meeting per month plus frequent informal calls.
- Board classification/term: In 2025, Schultz nominated for a one-year term (Class III); record date July 21, 2025. In 2024, he was nominated for a one-year term (Class I).
- Advisory votes: Board recommends Say-on-Pay frequency “every three years” and submitted a new 2025 Equity Incentive Plan for shareholder approval.
Fixed Compensation
| Year | Role | Annual Cash Retainer ($) | Stock Awards ($) | Option Awards ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | Director | 90,000 | — | — | 90,000 |
| 2023 | Director | 90,000 | — | — | 90,000 |
- Effective May 29, 2025, annual board compensation for Schultz was set at $90,000 (Adamczyk increased to $275,000). No committee chair/membership fees or meeting fees are disclosed.
Performance Compensation
| Award Type | Grant/Status | Quantity (#) | Exercise/Strike ($) | Expiration | Vesting |
|---|---|---|---|---|---|
| Stock Options (Director) | Held as of 12/31/2024 | 2,500,000 | 0.07 | 11/12/2028 | Included in “exercisable within 60 days” beneficial count (vested) |
- 2025 Equity Incentive Plan: Provides for ISOs/NQSOs, RSUs/DSUs, SARs, performance share awards, cash awards; default change-in-control treatment is “double trigger” (vesting accelerates if termination without cause/for good reason within 18 months after a change-in-control). Repricing requires shareholder approval; options/SARs priced ≥ fair market value at grant.
Other Directorships & Interlocks
- No other public company directorships or disclosed interlocks for Schultz in AERG’s 2024–2025 proxy biographies.
Expertise & Qualifications
- Equity investment expertise; long-standing relationship with Applied Energetics (since public inception in 2004); deep knowledge of company background, history, and financials. Governance and transparency focus from 2018 recapitalization/proxy effort. Education: California State University, Long Beach.
Equity Ownership
| Metric | Value |
|---|---|
| Total beneficial ownership (incl. options exercisable within 60 days) | 4,320,000 shares |
| Ownership as % of shares outstanding | 2.0% of 218,952,389 outstanding (as of 7/28/2025) |
| Components (direct/indirect) | 500,000 shares via Oak Tree Asset Management Ltd. (controlled by Schultz); 720,000 shares in Mary Schultz’s IRA; 500,000 shares in Schultz’s IRA; 2,500,000 shares underlying options |
| Shares pledged as collateral | Not disclosed |
| Ownership guidelines, hedging/pledging policies | Not disclosed in proxy |
Section 16 Compliance (Insider Filings)
- 2023: AERG disclosed that an ownership change for Schultz on Form 4 was filed after its deadline (alongside an initial Form 3 for CFO); the company believes others were timely.
- 2024: AERG disclosed late Form 4s for Donaghey and Quarles; no late filing noted for Schultz in 2024.
Governance Assessment
-
Positives:
- Independent director with significant capital markets and investing experience; attended all formal board meetings in 2024, indicating engagement.
- Meaningful “skin in the game” via 2.5M vested options at $0.07 strike and 2.0% beneficial ownership, aligning interests with shareholders.
- Board is moving toward formalizing equity programs (2025 Plan) with shareholder-friendly provisions (FMV pricing, double-trigger CoC vesting, shareholder approval for repricing).
-
Risk indicators / red flags:
- No standing audit/compensation/nominating committees; full board handles all committee functions, which can impair oversight quality and independence safeguards as the company scales.
- Prior consultancy with AERG and significant beneficial holdings through personal/spousal/controlled entities could raise perceived conflict concerns, although no related-party transactions for Schultz are disclosed.
- A late Form 4 filing in 2023 is a minor compliance blemish for Schultz; consistency in timely filings is critical for investor confidence.
-
Signals to monitor:
- Committee formation timeline and assignments (especially audit and compensation), and whether Schultz serves on or chairs any committees once constituted.
- Any changes in director compensation mix (e.g., new RSUs/PSUs), ownership guidelines adoption, or hedging/pledging policies to strengthen alignment.
- Future related-party disclosures and Section 16 timeliness for all insiders.
Appendix Tables
Director Compensation (Schultz)
| Year | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 90,000 | — | — | — | 90,000 |
| 2023 | 90,000 | — | — | — | 90,000 |
Note: Effective May 29, 2025, Schultz’s annual board compensation was set at $90,000 (Adamczyk: $275,000).
Beneficial Ownership Breakdown (as of 7/28/2025)
| Item | Shares | Notes |
|---|---|---|
| Total beneficial ownership | 4,320,000 | Includes options exercisable within 60 days |
| % of outstanding | 2.0% | 218,952,389 shares outstanding |
| Oak Tree Asset Management Ltd. (controlled by Schultz) | 500,000 | Indirect holding |
| Mary Schultz IRA | 720,000 | Spousal indirect holding |
| John Schultz IRA | 500,000 | Indirect holding |
| Options underlying (exercisable) | 2,500,000 | At $0.07 strike; expires 11/12/2028 |
Board Meetings and Attendance (FY2024)
| Metric | Value |
|---|---|
| Formal board meetings held | 13 (12 regular; 1 special) |
| Schultz attendance | Attended all formal meetings |
Board Structure
| Item | Status |
|---|---|
| Committees | None; full board covers functions |
| Independence | Schultz qualifies per OTCQB standards |
| 2025 board class/term | Schultz: One year (Class III) |
| 2024 board class/term | Schultz: One year (Class I) |
Equity Plan Highlights (2025 Plan)
| Provision | Summary |
|---|---|
| Award types | ISOs, NQSOs, SARs, Restricted Awards, Performance Shares, Cash, Other Equity |
| Pricing/term | ≥ FMV; term ≤ 10 years; shareholder approval for repricing |
| CoC treatment | Double trigger acceleration; Committee determines performance payout at CoC |