Item 5.02. Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 8, 2021, the Compensation Committee
of the Board of Directors (the “Committee”) of Adial Pharmaceuticals, Inc. (the “Company”) granted the
executive officers of the Company, William B. Stilley, Chief Executive Officer, and Joseph Truluck, Chief Financial Officer, an
option to purchase 250,000 and 125,000 shares of the Company’s common stock, respectively. The shares of common stock underlying
the option awards each vest pro rata on a monthly basis over a thirty-six month period. The options are exercisable for a period
of ten years from the date of grant and have an exercise price of $3.11 per share.
In addition, on February 8, 2021, the Committee
awarded to each of Messrs. Schuyler, Anderson, Newman, Goodman and Gilliland an option to purchase 40,000 shares of the Company’s
common stock, respectively. The shares of common stock underlying the option awards each vest pro rata on a monthly basis over
a thirty-six month period. The options are exercisable for a period of ten years from the date of grant and have an exercise price
of $3.11 per share.
On February 12, 2021, the Committee awarded
the executive officers of the Company, William B. Stilley, Chief Executive Officer, and Joseph Truluck, Chief Financial Officer,
performance bonuses for 2020, of $150,000 and $50,000 in cash, respectively. In addition, on February 12, 2021, the Company (i)
amended Mr. Stilley’s employment agreement to extend the term to March 31, 2026 and to increase the “target bonus”
to 40%; and (ii) amended Mr. Truluck’s employment agreement to extend the term to March 31, 2026, to increase the “target
bonus” to 25%, to increase to seventy percent (75%) the amount of his working time required to be devoted to Company matters,
and to increase his annual salary to $260,000. The Company intends to file the amendments to the employment agreements as an exhibit
to its Annual Report on Form 10-K for the year ended December 31, 2020.
On February 12, 2021, the Committee adjusted
the annual fees payable to its directors as follows: (i) the annual Board fee for the Chairman of the Board (which position is
presently vacant) was reduced to $30,000 from $49,000; (ii) the annual Board fee for all other directors was increased from $20,000
to $24,000; (iii) the annual Board Committee fees for Chairman of the Audit Committee, Compensation Committee and Nominating and
Governance Committee were each increased $1,000 to $16,000, $11,000 and $8,000, respectively; and (iv) the annual Board Committee
fees for other members of the Audit Committee, Compensation Committee and Nominating and Governance Committee were increased by
$2,000 for members of the Audit Committee and by $1,000 for members of the Compensation Committee and Nominating and Governance
Committee to $8,000, $6,000 and $4,000, respectively.