General (R) Paul E. Funk II
Red Cat HoldingsAbout General (R) Paul E. Funk II
General (R) Paul E. Funk II, age 62, was appointed as an independent director of Red Cat Holdings (RCAT) on March 12, 2024, and serves on multiple board committees, including chairing Nominating & Governance . A 42-year U.S. Army officer, he held command at every level with six combat deployments; his most recent leadership roles included Commander, U.S. Army TRADOC (2019–2022) and Commander, III Corps & Operation Inherent Resolve (2017–2019); he holds a B.A. from Montana State University, an M.S. from Central Michigan University, and completed a Senior Service College Fellowship at UT Austin . The Board has determined he is independent under Nasdaq rules, including independence for Audit, Compensation, and Nominating & Governance committees .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| U.S. Army Training and Doctrine Command (TRADOC) | Commander | Jun 2019 – Nov 2022 | Led ~60,000 personnel and >$4B budget; Chancellor of Army University (32 schools; 900,000+ soldiers/service members annually) |
| U.S. Army III Corps & Operation Inherent Resolve | Commander | Mar 2017 – Jun 2019 | Commanded ~100,000 soldiers across five installations; led coalition of 72+ nations vs. ISIS; awarded Defense Distinguished Service Medal |
| U.S. Army | Assistant Deputy Chief of Staff | Sep 2015 – Dec 2017 | Responsible for current/future operations, planning, training; integration of policy, doctrine, training |
External Roles
| Organization | Role | Tenure/Status | Notes |
|---|---|---|---|
| Katie’s Way Mental Health | President, Advisory Board | Current | Advisory leadership in mental health |
| Tokyo Electron Ltd., USA | Advisor to Chairman | Current | Advisor to U.S. operations of a global semiconductor equipment company |
| ColdQuanta, Inc. dba Infleqtion | Board of Advisors | Current | Multi-platform quantum technology company (advisory role) |
| First Tee | Board of Advisors | Current | Youth development non-profit (advisory role) |
| Rheinmetall | Board of Advisors | Current | Global defense systems supplier (advisory role) |
Board Governance
- Independence: Board determined Funk is independent; also independent for Audit, Compensation, and Nominating & Governance committees .
- Committee assignments:
- Audit Committee: Member (Chair: Christopher Moe)
- Compensation Committee: Member (Chair: Nicholas Liuzza)
- Nominating & Governance Committee: Chair (members: Joseph Freedman, Christopher Moe)
- Lead Independent Director: Joseph Freedman; leads executive sessions of independent directors .
- Attendance/Engagement:
- Board met once in Transition Year Ended 2024; directors attended at least 75% of Board/committee meetings they were eligible to attend .
- 2024 Annual Meeting attendance: four directors attended (individual attendance not specified) .
- Committee activity in Transition Year Ended 2024:
- Audit: 1 meeting; 2 written consents
- Compensation: 1 meeting; 7 written consents
- Nominating & Governance: 1 meeting; 2 written consents
Fixed Compensation
- Non-Employee Director Compensation Plan (updated May 2024): Annual $125,000 split into $50,000 cash (monthly) + $75,000 equity (restricted common stock); Committee chair cash fees: Audit $20,000; Compensation $10,000; Nominating & Governance $10,000; Lead Director $25,000 .
| Metric | Fiscal Year Ended Apr 30, 2024 | Transition Period Ended Dec 31, 2024 |
|---|---|---|
| Cash Fees ($) | $2,500 | $41,250 |
| Stock Awards ($) | $0 | $187,543 |
| Option Awards ($) | $0 | $0 |
| All Other Compensation ($) | $0 | $0 |
| Total ($) | $2,500 | $228,793 |
- Tax gross-ups: Company pays taxes on equity awards for some directors; all other compensation includes tax gross-ups related to grants/vesting (Funk had $0 in Transition Period) .
Performance Compensation
- Equity awards (time-based RSUs; no performance metrics disclosed for directors):
| Grant Date | Award Type | Shares Granted | Grant Date Fair Value ($) | Vesting | Notes |
|---|---|---|---|---|---|
| May 6, 2024 | RSUs | 157,599 | $187,543 | Fully vests May 6, 2026; unvested at 12/31/2024 | Time-based; no director performance metrics disclosed |
No director performance metrics (e.g., revenue/EBITDA/TSR) tied to director equity awards were disclosed .
Other Directorships & Interlocks
| Entity | Relationship Type | Industry Overlap With RCAT | Potential Interlock/Conflict Notes |
|---|---|---|---|
| Rheinmetall | Advisory Board | Defense systems | Advisory ties in defense ecosystem could create perceived conflicts if RCAT engages as supplier/customer; no specific related-party transactions disclosed involving Funk |
| Tokyo Electron USA | Advisor to Chairman | Semiconductor equipment | Not a direct RCAT market; advisory role noted |
| Infleqtion (ColdQuanta) | Advisory Board | Quantum technology | No disclosed overlap with RCAT operations |
| First Tee | Advisory Board | Non-profit | No conflict |
- Related-party transactions context: RCAT sold Rotor Riot and Fat Shark to Unusual Machines (UMAC) with a direct family relationship to a member of RCAT management; later exited UMAC securities (sale July 22, 2024). Not tied to Funk but relevant to overall governance risk monitoring .
Expertise & Qualifications
- Four decades in training management, resourcing, equipping across Army echelons; led organizations with 60,000+ personnel and budgets >$4B .
- Coalition combat leadership (72+ nations) and top-tier defense honors (Defense Distinguished Service Medal) .
- Academic credentials: B.A. (Montana State), M.S. (Central Michigan), Senior Service College Fellowship (UT Austin) .
- Current strategic advisory positions across defense, semiconductor, quantum, and non-profit sectors .
Equity Ownership
| Item | Value |
|---|---|
| Beneficial Ownership (Shares) | Not reported; less than 1% of outstanding |
| Ownership % of Shares Outstanding | <1% |
| Vested vs. Unvested | 157,599 RSUs unvested (vest 5/6/2026) |
| Options (Exercisable/Unexercisable) | None reported for Funk |
| Shares Pledged | Prohibited by insider trading policy (hedging and pledging restrictions) |
| Hedging Policy | Prohibits hedging/short sales by directors/officers/employees |
| Ownership Guidelines | Not disclosed for directors |
Insider Filings
| Period | Late Forms Reported for Funk | Notes |
|---|---|---|
| Fiscal Year Ended Apr 30, 2024 | 1 late Form 3; 1 late Form 4 (one transaction) | |
| Since May 1, 2024 (Transition Year Ended 2024) | 1 late Form 3; 1 late Form 4 (one transaction) |
Governance Assessment
- Strengths:
- Independent director with chair role on Nominating & Governance; independent on Audit and Compensation, supporting board effectiveness and oversight .
- Deep leadership and budget stewardship experience (TRADOC, III Corps) that is additive to RCAT’s defense-oriented operations .
- Use of independent compensation consultant (FW Cook) with no conflicts identified for Board/management compensation, supporting pay governance quality .
- Risks/Red Flags:
- Company pays tax gross-ups on equity awards for certain directors, a shareholder-unfriendly practice; while Funk had $0 in Transition Period, policy presence is a broader governance concern .
- Late Section 16 filings (Form 3 and Form 4) signal administrative control issues and may affect investor confidence in compliance rigor .
- Advisory ties to defense suppliers (e.g., Rheinmetall) introduce potential perceived conflicts if RCAT becomes counterparty; no specific related-party exposures involving Funk disclosed, but ongoing monitoring is prudent .
- Company-level related-party transaction (UMAC sale with family relationship to management) not tied to Funk but indicates broader governance oversight sensitivity for RCAT investors .
Overall, Funk’s independence, committee leadership, and defense-sector command expertise are positives for board oversight. Key investor watchpoints are RCAT’s tax gross-up practice, timely insider reporting, and vigilance around external advisory ties in overlapping defense ecosystems .