[prirun]

I would never reward a thief with additional stock, especially as it may diminish your ownership share.

I would hire an accountant to advise you on how to setup checks and balances to ensure that his theft does not continue. You cannot trust everyone in a company to do the right thing. That's why procedures with checks and balances are necessary, especially for money. If he won't agree to this or won't follow the check-and-balance procedures, you should figure out a way to buy him out and force him to sell his shares to you, with the threat that you will pursue legal action if he doesn't agree. I think you would have the upper hand in this situation, because it would be the company against him personally, so you could use company funds for legal fees while he would have to use personal funds.

Not a lawyer, so consult one before you take action.