ACCESS NEWSWIRE INC.
10-Ks and 10-Qs
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No.
__)
Filed by the
Registrant ☑
Filed by a Party
other than the Registrant ☐
Check the
appropriate box:
☐ Preliminary
Proxy Statement
☐
Confidential, For Use of the Commission Only (As Permitted by Rule
14a-6(e)(2))
☑ Definitive
Proxy Statement
☐ Definitive
Additional Materials
☐ Soliciting
Material under Rule 14a-12
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ISSUER
DIRECT CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment of Filing
Fee (Check the appropriate box):
☑ No fee
required
☐ Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1)
Title
of each class of securities to which transaction
applies:
(2)
Aggregate number of
securities to which transaction applies:
(3)
Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
(4)
Proposed maximum
aggregate value of transaction:
(5)
Total
fee paid:
☐ Fee paid
previously with preliminary materials.
☐ Check box
if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its
filing.
(1)
Amount
Previously Paid:
(2)
Form,
Schedule or Registration Statement No.:
(3)
Filing
Party:
(4)
Date
Filed:
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2019
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Notice of Annual Meeting of Stockholders and Proxy
Statement
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Thursday,
June 13, 2019
9:00
a.m. EDT
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Issuer
Direct Corporation
500
Perimeter Park Drive, Suite D
Morrisville,
NC 27560
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Issuer Direct Corporation
500
Perimeter Park Drive, Suite D
Morrisville,
NC 27560
April 23, 2019
To Our Stockholders:
We are
pleased to invite you to attend our Annual Meeting of Stockholders
to be held on Thursday, June 13, 2019, at 9:00 a.m. EDT at the
Company's office at 500 Perimeter Park Drive, Suite D, Morrisville,
NC 27560
.
The Board of
Directors has fixed the close of business on April 15, 2019 as the
record date for the determination of stockholders entitled to
receive notice of, and to vote at, the Annual Meeting. For
directions to attend the meeting and vote in person, please visit
our proxy website at
https://www.iproxydirect.com/ISDR
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The
attached Proxy Statement describes the matters proposed by your
Board of Directors to be considered and voted upon by our
stockholders at our Annual Meeting. These items are more fully
described in the following pages, which are hereby made part of
this Notice.
The
Company’s Proxy Statement and Proxy Card accompany this
Notice.
Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting of Stockholders to be held on June 13,
2019.
Our Proxy Statement is attached. Financial and other
information concerning the Company is contained in our Annual
Report on Form 10-K for the year ended December 31, 2018. Under
rules issued by the Securities and Exchange Commission
(“SEC”), we are providing access to our proxy materials
both by sending you this full set of proxy materials, including a
Proxy Card, and by notifying you of the availability of our proxy
materials on the Internet. The Proxy Statement and our Annual
Report on Form 10-K are available on
https://www.iproxydirect.com/ISDR
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Your vote is important
. Whether you own relatively few or a
large number of shares of our stock, it is important that your
shares be represented and voted at the Annual Meeting. Please vote
your shares online or by telephone or, if you requested and
received a printed set of proxy materials by mail, by returning the
accompanying proxy card. Further instructions on how to vote your
shares can be found in our Proxy Statement.
We
appreciate your support and continued confidence.
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Sincerely,
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/s/ William H. Everett
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William H.
Everett
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Chairman of the
Board of Directors
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Issuer Direct Corporation
500
Perimeter Park Drive, Suite D
Morrisville,
NC 27560
(919)
481-4000
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Notice
of Annual Meeting of Stockholders
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To
Be Held on June 13, 2019
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To
Our Stockholders:
Our Annual Meeting
of Stockholders will be held on Thursday, June 13, 2019, at 9:00
a.m. EDT at the Company's office at 500 Perimeter Park Drive, Suite
D, Morrisville, NC 27560 (the “Annual Meeting”) for the
following purposes:
1.
To elect the five
(5) directors nominated by our Board of Directors as set forth in
the Proxy Statement;
2.
To ratify the
appointment of Cherry Bekaert LLP as our independent registered
public accounting firm for the year ending December 31,
2019;
3.
To transact such
other business as may properly come before the meeting or any
postponement or adjournment thereof.
You have the right
to receive notice of and to vote at the Annual Meeting if you were
a stockholder of record at the close of business on April 15, 2019.
Please complete, sign, date and return your proxy card to us in the
enclosed, postage-prepaid envelope at your earliest convenience,
even if you plan to attend the Annual Meeting. If you prefer, you
can authorize your proxy through the Internet or by telephone as
described in the Proxy Statement and on the enclosed proxy card. If
you attend the meeting, you may revoke your proxy prior to its
exercise and vote in person at the meeting. In the event that there
are not sufficient stockholders present for a quorum or sufficient
votes to approve a proposal at the time of the Annual Meeting, the
Annual Meeting may be adjourned from time to time in order to
permit further solicitation of proxies by the Company.
Your vote is important.
If you are
unable to attend in person and wish to have your shares voted,
please vote as soon as possible, whether online, by telephone, by
fax or by returning a proxy card sent to you in response to your
request for printed proxy materials.
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By Order of the
Board of Directors,
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/s/ William H.
Everett
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William H.
Everett
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Chairman of the
Board of Directors
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Morrisville, North
Carolina
April 23,
2019
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YOUR VOTE IS IMPORTANT IT IS IMPORTANT THAT PROXY CARDS BE RETURNED
PROMPTLY. THEREFORE, WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL
MEETING IN PERSON, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD IN THE ENCLOSED RETURN ENVELOPE OR VOTE OVER THE INTERNET
FOLLOWING THE INSTRUCTIONS ON THE PROXY AS SOON AS POSSIBLE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. STOCKHOLDERS
WHO EXECUTE A PROXY CARD OR VOTE OVER THE INTERNET MAY NEVERTHELESS
ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE THEIR SHARES IN
PERSON.
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Table
of Contents
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1
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2019
Annual Meeting of Stockholders
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1
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Annual
Meeting Agenda and Voting Recommendations
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1
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Director
Nominees
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2
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Proxy Statement
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3
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Questions and Answers
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3
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Delivery of Documents to Security Holders Sharing an
Address
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5
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PROPOSAL 1–ELECTION OF DIRECTORS
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6
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Nominees
for Director
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6
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Certain
Information Concerning Director Nominees
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6
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Board
and Committee Membership
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10
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Consideration
of Stockholder Nominees for Directors
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10
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Corporate Governance
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11
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Indemnification
of Directors and Officers
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11
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Directors’
and Officers’ Liability Insurance
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12
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Code
of Ethics
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12
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Director
Independence
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12
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Board
Committees
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12
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Audit Committee
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13
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Compensation
Committee
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14
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Strategic Advisory
Committee
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14
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Technology Oversight Committee
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15
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Meetings
and Attendance
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15
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Communications
with the Board of Directors
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15
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Non-Employee
Director Compensation Agreement
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16
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2018
Non-Employee Director Compensation Table
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16
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Security Ownership of Beneficial Owners and Management
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17
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Executive Compensation
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18
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Compensation
Discussion and Analysis
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18
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Summary
Compensation Table
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18
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Brian
R. Balbirnie Employment Agreement
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18
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Steven
Knerr Employment Agreement
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19
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Philosophy
of Compensation
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20
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Components
of Compensation
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21
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Compensation
of Named Executive Officers
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22
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Impact
of Tax Laws
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23
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Risk
Considerations in our Compensation Programs
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Compensation
Committee Report
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PROPOSAL 2–RATIFICATION OF
AUDITORS
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Ratification
of Selection of Independent Auditors
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25
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Audit
Committee Pre-Approval Policy
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26
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Report
of the Audit Committee
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27
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Certain Relationships and Related Party Transactions and Director
Independence
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28
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Related
Party Transactions
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28
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Director
Independence
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28
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Other Matters
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29
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Additional Information
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29
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Proxy Summary
2019 ANNUAL MEETING OF STOCKHOLDERS
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WHEN
Thursday, June 13, 2019 at 9 a.m. EDT
WHERE
500 Perimeter Park Drive, Suite
D
Morrisville, NC 27560
RECORD DATE
Close of business on April 15,
2019
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ITEMS OF BUSINESS
1.
Election of five (5) directors nominated by our
Board of Directors
2.
Ratification
of the appointment by the Audit Committee of Cherry Bekaert LLP as
the company’s independent registered public accounting firm
for the fiscal year ending December 31,
2019
3.
Such
other business as may properly come before the Annual Meeting or
any postponement or adjournment thereof
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PROXY VOTING
Stockholders of
record on the Record Date are entitled to vote by proxy in the
following ways:
By
calling 1 (866) 752-VOTE (8683), toll free, in the United States or
Canada
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By voting online at
https://www.iproxydirect.com/ISDR
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By returning a properly completed,
signed and dated proxy card
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By
completing the reverse side of the proxy card and faxing it
to
(202)
521-3464
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ANNUAL MEETING AGENDA AND VOTING RECOMMENDATIONS
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Proposal
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Voting
Recommendation
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Page
Reference
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1
Election of five (5)
directors
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☑
FOR
each nominee
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6
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2
Ratification of the appointment of
Cherry Bekaert LLP as our independent auditors
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☑
FOR
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26
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2019 PROXY
STATEMENT | 1
DIRECTOR NOMINEES
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Name
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Age
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Director Since
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Principal Occupation
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Independent
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AC
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CC
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SAC
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TOC
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Areas of Expertise
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Other Company Boards
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William H. Everett
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68
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2013
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Chairman of the
Board; Retired Executive Vice President and Chief Financial Officer
of Tekelec, Inc.
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▪
Executive Leadership
▪
Public Company Management
▪
Private Equity
▪
Business Strategy
▪
Finance ▪ Multi-national Technology Industry
Expertise
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▪
Hakisa SAS
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Brian R. Balbirnie
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47
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2007
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Founder and Chief
Executive Officer of Issuer Direct Corporation
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▪
Executive Leadership
▪
Public Company Management, Financial Reporting and
Operations
▪
Business Strategy
▪
M&A ▪ Technology Industry Expertise
▪
Entrepreneurial Experience
▪
Sarbanes Oxley
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J. Patrick Galleher
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46
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2014
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Managing Partner
for Boxwood Partners, LLC
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☑
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▪
Executive Leadership
▪
Investment Banking
▪
M&A
▪
Business Administration
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Eric Frank
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54
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2017
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President of Internet Technology
& Acceleration LLC
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☑
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▪
Executive Leadership
▪
Data & Analytics Industry Expertise
▪
M&A
▪
Private Equity
▪
Business Strategy
▪
Investment Banking
▪
Technology Industry Expertise
▪
Entrepreneurial Experience
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▪
Megalith
Financial Acquisition Corp.
▪
Social Market
Analytics
▪
RANE (Risk Assistance Network &
Exchange)
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Michael Nowlan
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60
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2017
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Executive
Consultant to private companies; retired Chief Executive Officer of
Primus Telecommunications Canada Inc. and, Marketwire,
Inc.
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☑
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▪
Executive Leadership
▪
Financial Management and Operations
▪
Business Strategy
▪
M&A
▪
Technology and Communications Industry
Expertise
▪
Accounting
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Number of Meetings in
2018
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6
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3
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4
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AC
– AUDIT COMMITTEE CC – COMPENSATION COMMITTEE SAC
– STRATEGIC ADVISORY COMMITTEE TOC – TECHNOLOGY
OVERSIGHT COMMITTEE
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Chairman
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Member
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Financial
Expert
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2 | ISSUER DIRECT
CORP
PROXY STATEMENT
Questions and Answers
►
WHY AM I RECEIVING
THESE PROXY MATERIALS?
You are receiving
these proxy materials because you owned shares of common stock of
our company, Issuer Direct Corporation (the “Company”),
at the close of business on April 15, 2019, and, therefore, are
eligible to vote at the Company’s Annual Meeting of
Stockholders to be held on Thursday, June 13, 2019, at 9:00 a.m.
EDT at the Company's office at 500 Perimeter Park Drive, Suite D,
Morrisville, NC 27560 (the “Annual Meeting”). Our Board
of Directors (the “Board”) is soliciting your proxy to
vote at the Annual Meeting.
►
ON WHAT MATTERS WILL I
BE VOTING?
Stockholders
of record at the close of business on April 15, 2019 will be
entitled to vote on the following proposals:
i.
To
elect the five (5) directors nominated by our Board of Directors as
set forth in the Proxy Statement;
ii.
To
ratify the appointment by the Audit Committee of the Board of
Directors of Cherry Bekaert LLP as our independent registered
public accounting firm for the fiscal year ending December 31,
2019; and
iii.
To
transact such other business as may properly come before the
meeting or any postponement or adjournment thereof.
The
Board does not know of any matters to be presented at our Annual
Meeting other than those described in this Proxy Statement.
However, if any other matters properly come before the meeting or
any adjournment thereof, it is the intention of the persons named
in the enclosed proxy to vote the shares represented by them in
accordance with their best judgment.
►
WHERE AND WHEN WILL THE
MEETING BE HELD?
The
Annual Meeting will be held at the Company's office at 500
Perimeter Park Drive, Suite D, Morrisville, NC 27560 on June 13,
2019 at 9:00 a.m., local time.
►
HOW CAN I OBTAIN
DIRECTIONS TO THE MEETING?
For directions to the location of our Annual
Meeting, please visit our proxy website at
https://www.iproxydirect.com/ISDR
.
►
WHO IS SOLICITING MY
PROXY?
Our
Board is soliciting your proxy to vote at our Annual Meeting. By
completing and returning a proxy card, you are authorizing the
proxy holder to vote your shares at our Annual Meeting as you have
instructed.
►
HOW MANY VOTES MAY I
CAST?
Each
holder of common stock is entitled to one vote, in person or by
proxy, for each share of our common stock held of record on the
record date.
►
HOW MANY VOTES CAN BE
CAST BY ALL STOCKHOLDERS?
Our common stock is
the only class of security entitled to vote at our Annual Meeting.
As of the record date, we had 3,854,568 shares of common stock
outstanding, each of which is entitled to one vote.
►
HOW MANY SHARES MUSTS
BE PRESENT TO HOLD THE MEETING?
Our
bylaws provide that thirty-three and one-third (33.3%) of the total
number of shares of common stock outstanding constitutes a quorum
and must be present to conduct a meeting of our
stockholders.
2019 PROXY
STATEMENT | 3
►
WHAT IS THE DIFFERENCE
BETWEEN HOLDING SHARES AS A STOCKHOLDER OF RECORD AND AS A
BENEFICIAL OWNER?
If
your shares are registered directly in your name with our transfer
agent, Direct Transfer LLC, you are considered, with respect to
those shares, the “stockholder of record.” Proxy
Materials have been directly sent to you by us.
If
your shares are held in a stock brokerage account or by a bank or
other nominee, you are considered the “beneficial
owner” of shares held in “street name.” Proxy
Materials have been forwarded to you by your broker, bank, or
nominee who is considered, with respect to those shares, the
stockholder of record. As the beneficial owner, you have the right
to direct your broker, bank, or nominee how to vote your shares by
following their instructions which are included with this proxy, if
applicable.
►
CAN MY SHARES BE VOTED
IF I DO NOT RETURN THE PROXY CARD AND DO NOT ATTEND THE MEETING IN
PERSON?
If
you hold shares in street name and you do not provide voting
instructions to your broker, bank, or nominee, your shares will not
be voted on any proposal for which your broker does not have
discretionary authority to vote (a “broker non-vote”).
Brokers generally have discretionary authority to vote shares held
in street name on “routine” matters but not on
“non-routine” matters. Proposals to ratify the
appointment of the independent auditor are generally considered
“routine” matters. Proposals to elect directors are
“non-routine” matters.
If
you do not vote the shares held in your name, your shares will not
be voted. However, the Company may vote your shares if you have
returned a blank or incomplete proxy card.
►
HOW DOES THE BOARD OF
DIRECTORS RECOMMEND THAT I VOTE?
Our Board of
Directors recommends that you vote FOR each of the director
nominees set forth in this proxy statement, and FOR the
ratification of the appointment of Cherry Bekaert LLP as our
independent registered public accounting firm for the fiscal year
ending December 31, 2019.
►
HOW DO I
VOTE?
You
may vote using any of the following methods:
In person at the Annual Meeting:
You
may vote in person at the Annual Meeting, either by attending the
meeting yourself or authorizing a representative to attend the
meeting on your behalf. You may also execute a proper proxy
designating that person. If you are a street holder of shares, you
must obtain a proxy from your broker, bank, or nominee naming you
as the proxy holder and present it to the inspectors of election
with your ballot when you vote at the Annual Meeting.
Other ways to vote:
You
may also vote by telephone or online as instructed in our proxy, or
by returning a proxy card or voting instruction form sent to you in
response to your request for printed proxy materials.
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MAIL:
Please mark, sign, date, and
return this proxy card promptly using the enclosed
envelope.
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FAX:
Complete the reverse portion of
this proxy card and fax to (202) 521-3464.
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INTERNET:
https://www.iproxydirect.com/ISDR
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PHONE:
1 (866) 752-VOTE
(8683)
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►
ONCE I DELIVER MY
PROXY, CAN I REVOKE OR CHANGE MY VOTE?
Yes.
You may revoke or change your proxy at any time before it is voted
by giving a written revocation notice to our corporate secretary,
by delivering a new revised proxy no later than the end of the day
prior to the Annual Meeting, or by voting in person at the
meeting.
4 | ISSUER DIRECT
CORP
►
WHO PAYS FOR SOLICITING
PROXIES?
We
are paying for all costs of soliciting proxies. Our directors,
officers, and employees may request the return of proxies by mail,
telephone, internet, telefax, telegram, or personal interview. We
are also requesting that banks, brokerage houses, and other
nominees or fiduciaries forward the soliciting material to their
principals and that they obtain authorization for the execution of
proxies. We will reimburse them for their expenses.
►
COULD OTHER MATTERS BE
CONSIDERED AND VOTED UPON AT THE MEETING?
Our
Board does not expect to bring any other matter before the Annual
Meeting and is not aware of any other matter that may be considered
at the meeting. However, if any other matter does properly come
before the meeting, the proxy holders will vote the proxies as the
Board may recommend.
►
WHAT HAPPENS IF THE
MEETING IS POSTPONED OR ADJOURNED?
Your
proxy will still be good and may be voted at the postponed or
adjourned meeting. You will still be able to change or revoke your
proxy at any time until it is voted.
►
HOW CAN I CONTACT
ISSUER DIRECT TO REQUEST MATERIALS OR INFORMATION REFERRED TO IN
THESE QUESTIONS AND ANSWERS?
By mail addressed to: Issuer Direct Corporation,
500 Perimeter Park Drive, Suite D, Morrisville, NC
27560, Attn: Chairman of the Board. By phone, call (919)
481-4000 or (866) 752-VOTE (8683), by fax, (202) 521-3464, or by
email at
proxy@iproxydirect.com
.
Delivery of Documents to Security Holders Sharing an
Address
We
will only deliver one set of materials to multiple stockholders
sharing an address, unless we have received contrary instructions
from one or more of the stockholders. Also, we will promptly
deliver a separate copy of these materials and future stockholder
communication documents to any stockholder at a shared address to
which a single copy of these materials was delivered, or deliver a
single copy
of
these materials and future stockholder communication documents
to any stockholder or stockholders sharing an address to which
multiple copies are now delivered, upon written request to us at
our address noted above. Stockholders may also address future
requests regarding delivery of proxy materials and/or annual
reports by contacting us at the address noted above.
2019 PROXY
STATEMENT | 5
Proposal 1–Election of Directors
ELECTION OF THE FIVE DIRECTORS TO SERVE UNTIL THE NEXT ANNUAL
MEETING OR UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND
QUALIFIED
NOMINEES FOR DIRECTOR
At our Annual
Meeting of Stockholders, stockholders will elect five directors,
each to serve a term of one year or until his or her successor is
elected and qualified. Our Board of Directors is currently
comprised of five directors. Our Board of Directors is not divided
into classes of directors, meaning all of our directors are voted
on every year at our Annual Meeting of Stockholders.
All of the director
nominees currently serve as members of our Board.
Unless otherwise
instructed on the proxy card, each of the persons named as proxies
on the proxy card intends to vote the shares represented thereby in
favor of the five nominees listed under “Certain Information
Concerning Director Nominees” below.
All nominees have
consented to being named in this Proxy Statement and to serve if
elected. If, however, any nominee should become unable or unwilling
to serve, the persons named as proxies on the proxy card will vote
the shares represented by the proxy for another person duly
nominated by our Board.
CERTAIN INFORMATION CONCERNING DIRECTOR NOMINEES
Certain information concerning the nominees for election as
directors is set forth below. This information was furnished to us
by the nominees. No family relationship exists between any of our
directors or executive officers.
The five directors have been nominated for election to the Board of
Directors at the Annual Meeting of Stockholders to be held on June
13, 2019.
The names of the nominees and certain information about them as of
April 23, 2019 are set forth below:
|
Nominee
|
Age
|
Position
|
Director Since
|
|
William
H. Everett
|
68
|
Director,
Chairman of the Board, Member of Audit Committee & Strategic
Advisory Committee
|
2013
|
|
Brian
R. Balbirnie
|
47
|
Director,
President and Chief Executive Officer
|
2007
|
|
J.
Patrick Galleher
|
46
|
Director,
Chairman of Compensation Committee and Strategic Advisory
Committee
|
2014
|
|
Eric
Frank
|
54
|
Director,
Chairman of Technology Oversight Committee, Member of Compensation
Committee
|
2017
|
|
Michael
Nowlan
|
60
|
Director,
Chairman of Audit Committee
|
2017
|
6 | ISSUER DIRECT
CORP
|
William
H. Everett
|
|
|
|
Age
68
Director
Since 2013
●
Chairman of the Board
●
Member of the Audit Committee
●
Member of the Strategic Advisory Committee
|
|
Professional Background and
Qualifications
Mr.
Everett joined the Board of Directors of Issuer Direct Corporation
on October 2, 2013. Mr. Everett has had more than thirty years of
management experience and currently serves as a director of Hakisa
SAS in Strasbourg France. In addition, Mr. Everett served on the
Board of NeoNova Network Services until it was acquired in July
2013. In April 2010, Mr. Everett retired as Executive Vice
President and CFO of Tekelec, a publicly traded telecom equipment
supplier. Since that time, he has served as a corporate director
and provided consulting services to public company and private
equity clients. From 2011 through 2015, he served as an Executive
in Residence and a member of the Board of Advisors at the Poole
College of Management at NC State University. He has significant
experience as both a Chief Financial Officer and a general manager
working with a variety of multi-national technology companies over
his career, including Epsilon Data Management, Chemfab Inc.,
Eastman Software and Steleus SAS. He was the Co-founder and
President of Maps a la Carte, an internet mapping and spatial data
company, which was acquired by Demand Media Inc.
Mr. Everett
received his BA in Political Science from Middlebury College and
his MBA from the University of New Hampshire. He also
practiced as Certified Public Accountant with Price Waterhouse for
seven years before joining Epsilon Data
Management.
|
|
Brian
R. Balbirnie
|
|
|
|
Age
47
Director
Since 2007
●
President and Chief Executive Officer
|
|
Professional Background and
Qualifications
Mr. Balbirnie is a
member of the Board and our President and Chief Executive Officer.
Mr. Balbirnie established Issuer Direct in 2006 with a vision of
creating a technology driven back-office compliance platform that
would reduce costs as well as increase the efficiencies of the most
complex tasks, today the company calls it Platform
id.
Mr. Balbirnie is
responsible for the strategic leadership of the company and
oversees day-to-day operations. Under Mr. Balbirnie’s
direction, the Company has grown and in 2018 worked with
approximately 4,000 customers. Mr. Balbirnie is an entrepreneur
with more than 20 years of experience in emerging industries. Prior
to Issuer Direct, Mr. Balbirnie was the founder and managing
partner of Catapult Company, a compliance and consulting practice
focused on the Sarbanes Oxley Act. During 2002 and 2003, Mr.
Balbirnie also served as the Vice President and Chief Financial
Officer of Mobile Reach International, Inc., a publicly traded
company, and as the President and Chief Technology Officer of IVUE
Corporation, a private company. Prior to and with Catapult, Mr.
Balbirnie also advised several companies on their public market
strategies, merger & acquisitions as well as their financial
reporting requirements.
|
2019 PROXY
STATEMENT | 7
|
J.
Patrick Galleher
|
|
|
|
Age
46
Director
Since 2014
●
Chairman of the Compensation Committee
●
Chairman of the Strategic Advisory Committee
|
|
Professional Background and Qualifications
Mr. Galleher joined the Board of Directors of
Issuer Direct Corporation on March 11, 2014. Mr. Galleher is
a Managing Partner
for Boxwood Partners, a merchant bank in Richmond, Virginia, where
he leads transactions for Boxwood’s M&A advisory services
and private equity group. In this capacity, he has led sell-side,
buyout and capital raising transactions. Prior to joining Boxwood,
Mr. Galleher was CEO of WILink plc (WLK: LSE), a global financial
communications business with operations in the U.S., Canada, U.K.,
Continental Europe, and Sweden. In 2006, as CEO, he successfully
led the company through a public-to-private transaction and sale to
SVIP, a NYC-based private equity group.
Mr. Galleher holds a B.S. in
Business Administration from the University of Richmond and a
degree from the London Business School as well as attending the
Centre for Creative Leadership in Belgium. He is a board member and
founder of the Virginia Chapter of Young President’s
Organization (YPO) and the Midlothian Athletic Club. He formerly
served as chairman of the board for sweetFrog and Shockoe Commerce
Group, both of which are private companies.
|
|
|
|
|
|
Eric
Frank
|
|
|
|
Age
54
Director
Since 2017
●
Chairman of the Technology Oversight Committee
●
Member of the Compensation Committee
|
|
Professional Background and
Qualifications
Mr.
Frank joined the Board of Directors of Issuer Direct Corporation on
September 28, 2017
. Since April 2018,
Mr. Frank has served as the Chief Executive Officer of Lightbox, LP
which focuses broadly on building a platform related to real estate
information and related matters. Since September 2012, Mr.
Frank has served as the President of Internet Technology &
Acceleration LLC as an executive advisor to private companies and
private equity sponsors, specifically in the B2B information space.
From September 2014 until March 2017, Mr. Frank served as Managing
Director of DMGI/DMGT PLC, overseeing their portfolio of US CRE
information companies. Mr. Frank was at Thomson Reuters,
a
leading news and information company,
from 2006 through 2012, most recently as
President, managing a $2.3 billion investment advisory division
that was a combination of the Thomson Financial and Reuters which
he led and helped shape into four operating units, (Investment
Management & Sell-Side Research, Investment Banking, Wealth
Management, and Corporate Services). Mr. Frank began his career at
Morgan Guaranty, helping create the award winning ADR.com portal,
which was later sold to Thomson Financial. He also currently serves
on the board of directors of Megalith Financial Acquisition Corp.,
which trades on the NYSE, as well as Social Market Analytics and
RANE (Risk Assistance Network & Exchange), both of which are
private companies. Mr. Frank earned a Bachelor of General Studies
from the University of Michigan.
|
|
|
|
|
8 | ISSUER DIRECT
CORP
|
Michael
Nowlan
|
|
|
|
Age
60
Director
Since 2017
●
Chairman of the Audit Committee
|
|
Professional Background and
Qualifications
Mr.
Nowlan joined the Board of Directors of Issuer Direct Corporation
on September 28, 2017. Mr. Nowlan currently provides executive
consulting services to private companies. Mr. Nowlan was Chief
Executive Officer of Primus Telecommunications Canada Inc. (and its
related US operating companies Primus Telecommunications Inc. and
Lingo Inc.) from late 2013 to 2016. Primus was a private company
whose principal business was re-selling of residential and
commercial telecommunications services within Canada and the United
States Mr. Nowlan supervised the sale of the Primus assets after it
filed for CCAA creditor protection in Canada and related
recognition under Chapter 15 of the US Bankruptcy Code in January
2016 as a result of liquidity challenges due to competitive margin
pressures and over-leverage. Mr. Nowlan led Marketwired, a leading
newswire service, from 2001 to 2013 as President and Chief
Executive Officer. Under his leadership, Marketwired executed
several successful strategic acquisitions. He transitioned the
business to a SaaS business model and set the strategy for the
company to embrace the emerging technology trends in the
communication industry. Prior to joining Marketwired in 1999 as its
Chief Financial Officer, Mr. Nowlan had wide financial management
experience including starting his career in 1982 at
PricewaterhouseCoopers where he remained until 1988. Mr. Nowlan is
a member of the Institute of Corporate Directors with the ICD.D
Certification and a CPA-CA since 1984. Mr. Nowlan has a Bachelor of
Commerce degree from Queen’s University.
|
2019 PROXY
STATEMENT | 9
BOARD AND COMMITTEE MEMBERSHIP
The table below
provides committee membership of each Board member as of April 23,
2019.
|
Board Member
|
|
Audit Committee
|
|
|
Compensation Committee
|
|
|
Strategic Advisory
Committee
|
|
|
Technology Oversight
Committee
|
|
||||
|
Independent
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
William H. Everett
*
|
|
|
X
|
|
|
|
|
|
|
X
|
|
|
|
|
||
|
J. Patrick Galleher
*
|
|
|
|
|
|
|
C
|
|
|
|
C
|
|
|
|
|
|
|
Eric Frank
*
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
C
|
|
|
Michael Nowlan
*
|
|
|
C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian R
Balbirnie
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C= Committee
Chairman X = Committee Member * = Independent
CONSIDERATION OF STOCKHOLDER NOMINEES FOR DIRECTOR
Pursuant to our
bylaws, stockholders who wish to nominate persons for election to
the Board of Directors at the 2020 Annual Meeting must be a
stockholder of record, both when they give us notice and at the
2020 Annual Meeting, must be entitled to vote at the 2020 Annual
Meeting, and must comply with the notice provisions in our bylaws.
A stockholder’s notice must be delivered to our Corporate
Secretary not less than 75 nor more than 105 days before the
anniversary date of the immediately preceding Annual Meeting. For
our 2020 Annual Meeting, the notice must be delivered between
February 29, 2020 and March 30, 2020. However, if our 2020 Annual
Meeting is not within 30 days of June 13, 2020, the notice must be
delivered no later than the close of business on the 10th day
following the earlier of the day on which the first public
announcement of the date of the 2020 Annual Meeting or 120 days
prior to such meeting. The public announcement of an adjournment or
postponement of the 2020 Annual Meeting will not trigger a new time
period (or extend any time period) for the giving of a stockholder
notice as described in this proxy statement. The
stockholder’s notice must be updated and supplemented as set
forth in our bylaws.
|
The Board of Directors recommends a vote "FOR" the election of five
(5) directors, until the next Annual Meeting or until their
successors are duly elected and qualified.
|
10 | ISSUER DIRECT
CORP
Corporate Governance
Our Directors will serve until our next Annual Meeting of
stockholders or until their resignation or removal.
Our directors are elected at the Annual Meeting of stockholders,
with vacancies filled by the Board of Directors, and serve until
their successors are elected and qualified, or their earlier
resignation or removal. Officers are appointed by the Board of
Directors and serve at the discretion of the Board of Directors or
until their earlier resignation or removal. Under the General
Corporation Law of the State of Delaware, any action which is
required to be taken or may be taken at any annual or special
meeting of stockholders may also be taken without a meeting,
without prior notice and without a vote, if consent in writing
setting forth the action so taken, shall be signed by the holders
of the outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present
and voted and shall be delivered to the corporation by delivery to
its registered office, its principle place of business, or an
officer or agent of the corporation having custody of the book in
which the proceedings of meetings are recorded.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section
145 of the General Corporation Law of the State of Delaware
provides, in general, that a corporation incorporated under the
laws of the State of Delaware, as we are, may indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other
than a derivative action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or
agent of another enterprise, against expenses (including
attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person’s conduct was
unlawful. In the case of a derivative action, a Delaware
corporation may indemnify any such person against expenses
(including attorneys’ fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such
action or suit if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification will
be made in respect of any claim, issue or matter as to which such
person will have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery of the
State of Delaware or any other court in which such action was
brought determines such person is fairly and reasonably entitled to
indemnity for such expenses.
Our
certificate of incorporation and bylaws provide that we will
indemnify our directors, officers, employees and agents to the
extent and in the manner permitted by the provisions of the General
Corporation Law of the State of Delaware, as amended from time to
time, subject to any permissible expansion or limitation of such
indemnification, as may be set forth in any stockholders’ or
directors’ resolution or by contract. Any repeal or
modification of these provisions approved by our stockholders will
be prospective only and will not adversely affect any limitation on
the liability of any of our directors or officers existing as of
the time of such repeal or modification.
We
are also permitted to apply for insurance on behalf of any
director, officer, employee or other agent for liability arising
out of his actions, whether or not the General Corporation Law of
the State of Delaware would permit indemnification.
2019 PROXY
STATEMENT | 11
DIRECTORS’ AND OFFICERS’ LIABILITY
INSURANCE
We
have directors’ and officers’ liability insurance
insuring our directors and officers against liability for acts or
omissions in their capacities as directors or
officers.
CODE OF ETHICS
We have adopted a code of ethics that applies
to our officers, directors and employees, including our principal
executive officer and principal accounting officer, which is posted
on our website at
www.issuerdirect.com
.
DIRECTOR INDEPENDENCE
The Board has
determined that Messrs. Everett, Frank, Galleher and Nowlan satisfy
the requirement for independence set out in Section 303A.02 of the
NYSE American rules and Section 10A(m) of the Exchange Act
(collectively, the “Independence Rules”), and that each
of these directors has no material relationship with us (other than
being a director and/or a stockholder). In making its independence
determinations, the Board of Directors sought to identify and
analyze all of the facts and circumstances relating to any
relationship between a director, his immediate family or affiliates
and our company and our affiliates and did not rely on categorical
standards other than those contained in the NYSE American rule
referenced above.
BOARD COMMITTEES
Our Board of
Directors has established an Audit Committee, a Compensation
Committee, a Strategic Advisory Committee and a Technology
Oversight Committee, each of which has the composition and
responsibilities described below.
12 | ISSUER DIRECT
CORP
|
Audit
Committee
|
|
|
|
Members:
●
Michael Nowlan (Chairman)
●
William H. Everett
Meetings
in 2018: 6
|
|
Our Audit Committee
was implemented on October 23, 2013 and is currently comprised of
Messrs. Everett and Nowlan, each of whom our Board has determined
to be financially literate and qualify as an independent director
under the Independence Rules.
On March 2, 2018,
Mr. Nowlan replaced Mr. Everett as the chairman of our Audit
Committee. Mr. Everett remained as a member of the Audit Committee.
Both Messrs. Nowlan and Everett qualify as a financial expert, as
defined in Item 407(d)(5)(ii) of Regulation S-K.
Responsibilities
The Audit
Committee’s duties are to recommend to our Board of Directors
the engagement of independent auditors to audit our financial
statements and to review our accounting and auditing principles.
The Audit Committee will review the scope, timing and fees for the
annual audit and the results of audit examinations performed by the
independent public accountants, including their recommendations to
improve the system of accounting and internal controls. During the
year ended December 31, 2018, our Audit Committee met six
times.
|
2019 PROXY
STATEMENT | 13
|
Compensation
Committee
|
|
|
|
Members:
●
J. Patrick Galleher (Chairman)
●
Eric Frank
Meetings in 2018:
3
|
|
Our Compensation
Committee was implemented on October 23, 2013 and is currently
comprised of Messrs. Frank and Galleher, each of whom our Board has
determined to qualify as an independent director under the
Independence Rules. Mr. Galleher is the chairman of our
Compensation Committee.
Responsibilities
The Compensation
Committee reviews and approves our salary and benefits policies,
including compensation of executive officers and directors. The
Compensation Committee also administers our stock compensation
plans and recommends and approves grants of stock compensation
under such plans. During the year ended December 31, 2018, our
Compensation Committee held three meetings
.
|
|
Strategic
Advisory Committee
|
|
|
|
Members:
●
J. Patrick Galleher (Chairman)
●
William H. Everett
|
|
Our Strategic
Advisory Committee was implemented on January 25, 2016 and is
currently comprised of Messrs. Everett and Galleher. Mr. Galleher
is the chairman of our Strategic Advisory Committee.
Responsibilities
The Strategic
Advisory Committee assists our Board of Directors and management in
evaluating areas such as joint ventures, partnerships, strategic
acquisitions and mergers and acquisitions. During the year ended
December 31, 2018, our Strategic Advisory Committee held four
meetings.
|
14 | ISSUER DIRECT
CORP
|
Technology
Oversight Committee
|
|
|
|
Member:
●
Eric Frank (Chairman)
|
|
Our Technology
Oversight Committee was implemented on August 11, 2017 and is
currently comprised of Mr. Frank, as its Chairman.
Responsibilities
The Technology
Oversight Committee’s main objectives are (i) to ensure that
our R&D function is building secure, quality and scalable
application software within the time frame, specifications and
budget contained in our plan of record and (ii) to ensure we are
taking the necessary and prudent steps to safeguard our
customers’ private and confidential information, including
financial date, from cybersecurity
attacks.
During 2018, Mr.
Frank was integrally involved in engaging a national security
consulting firm to identify, address and create policies and plans
which enable us to mitigate our cybersecurity and information
vulnerabilities on both a short-term and long-term
basis.
|
MEETINGS AND ATTENDANCE
During the year
ended December 31, 2018, the Board of Directors held eleven
meetings and the respective committees held thirteen total
meetings, and each director attended all of (i) Board meetings held
during the period for which he was a director and (ii) committee
meetings held during the period for which he was a committee
member. We do not have a policy requiring director attendance at
stockholder meetings, but members of our Board of Directors are
encouraged to attend.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
A
stockholder who wishes to communicate with our Board of Directors,
any committee of our Board of Directors, the non-management
directors or any particular director, may do so by writing to such
director or directors in care of the Secretary, c/o Issuer Direct
Corporation, 500 Perimeter Park Drive, Suite D, Morrisville,
NC 27560. Our secretary will forward such communication to the
full Board of Directors, to the appropriate committee or to any
individual director or directors to whom the communication is
addressed, unless the communication is unrelated to the duties and
responsibilities of our Board of Directors (such as spam, junk mail
and mass mailings, ordinary course disputes over fees or services,
personal employee complaints, business inquiries, new product or
service suggestions, resumes and other forms of job inquiries,
surveys, business solicitations or advertisements) or is unduly
hostile, threatening, illegal, or harassing, in which case our
secretary has the authority to discard the communication or take
appropriate legal action regarding the communication.
2019 PROXY
STATEMENT | 15
NON-EMPLOYEE DIRECTOR COMPENSATION ARRANGEMENT
Effective
as of February 28, 2019, our Board, upon the recommendation of our
Compensation Committee, determined to compensate our non-employee
directors as set forth below.
Initial Equity Grant
.
Each non-employee director appointed
to our Board and not by a vote of the stockholders at an annual
meeting is automatically granted an initial grant of 6,000
restricted stock units (the “RSUs”) on the date of his
or her appointment to our Board (with such amount pro-rated based
on the number of days between the date of such director’s
appointment and the date of our first annual meeting of
stockholders following the date of grant (or to the extent that we
have not determined the date of the next annual meeting of
stockholders on or before the date of grant, June 15 following the
date of grant)). The RSU’s will fully vest on the date of our
first annual meeting of stockholders following the date of grant or
immediately prior to the consummation of a change of control event.
If an individual is appointed as a non-employee director at an
annual meeting of stockholders, he or she will be granted an annual
equity grant, as described below, in lieu of the initial equity
grant. None of the nominees for the Board contained in this Proxy
Statement would be entitled to this initial equity
grant.
Annual Equity Grant
.
On the date of each annual meeting of
stockholders, each non-employee director who is serving on our
Board on the date of such annual meeting or who is elected by the
stockholders at such annual meeting will be automatically granted
6,000 restricted stock units (the “RSUs”). The RSUs
will fully vest on the earlier of (i) the date of the following
year’s annual meeting of stockholders (but only for a
non-employee director who ceases to be a member of our Board at
such annual meeting as a result of not standing for re-election or
not being re-elected), (ii) the date that is one year following the
date of grant, or (iii) immediately prior to the consummation of a
change of control event. Each of the nominees for the Board
contained in this Proxy Statement would be entitled to this equity
grant if elected by the stockholders.
Monthly Cash Payment
.
During
2019,
each non-employee director will receive a monthly cash
retainer of $3,000 for service on our Board and our Chairman of our
Board will receive an additional monthly cash retainer of
$1,500.
2018 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
The following table shows amounts earned by each
non-employee director in fiscal 2018:
|
Director
|
Fees Earned or
Paid in Cash
|
Stock
Awards
|
Warrant
Awards
|
Non-Equity
Incentive Plan Compensation
|
Change in Pension
Value and Non-qualified Deferred Compensation Earnings
|
All Other
Compensation
|
Total
|
|
William H.
Everett
|
$
54,000
(1)
|
$
95,440
(2)
|
$
-
|
$
-
|
$
-
|
$
-
|
$
149,440
|
|
Eric
Frank
|
$
36,000
|
$
95,440
(2)
|
$
-
|
$
-
|
$
-
|
$
-
|
$
131,440
|
|
J. Patrick
Galleher
|
$
36,000
|
$
95,440
(2)
|
$
-
|
$
-
|
$
-
|
$
-
|
$
131,440
|
|
Michael
Nowlan
|
$
36,000
|
$
95,440
(2)
|
$
-
|
$
-
|
$
-
|
$
-
|
$
131,440
|
_____________________
(1)
In
addition to the $3,000 per month paid to all members of the Board,
this amount includes an additional $1,500 per month for Mr.
Everett’s service as the Chairman of our Board
.
(2)
The
amounts shown in this column represent the grant date fair value of
the awards determined in accordance with ASC 718. Option awards are
valued using a Black-Scholes valuation model. On June 1, 2018, each
non-employee director was granted an option to purchase 8,000
shares of our common stock with an exercise price of $17.40 and a
vesting date of June 1, 2019. RSUs are valued based on the closing
price of Issuer Direct’s ordinary shares on the date of
grant, which was $17.40. On June 1, 2018, each non-employee
director was granted 2,000 restricted stock units with a vesting
date of June 1, 2019.
16 | ISSUER DIRECT
CORP
Security Ownership of Beneficial Owners
and Management
The following table
sets forth certain information as of April 23, 2019, regarding the
beneficial ownership of our common stock by (i) each person or
entity who, to our knowledge, beneficially owns more than 5% of our
common stock; (ii) each executive officer and named officer; (iii)
each director; and (iv) all of our officers and directors as a
group. Unless otherwise indicated in the footnotes to the following
table, each of the stockholders named in the table has sole voting
and investment power with respect to the shares of our common stock
beneficially owned. Except as otherwise indicated, the address of
each of the stockholders listed below is: c/o Issuer Direct
Corporation, 500 Perimeter Park Drive, Suite D, Morrisville, North
Carolina 27560.
|
Name of Beneficial
Owner
|
Number of Shares Owned
(1)
|
Percentage Owned
(1)
|
|
Brian R. Balbirnie
(2)(3)
|
624,663
(5)
|
16.20
%
|
|
Steven Knerr
(2)
|
43,750
(6)
|
1.13
%
|
|
William H. Everett
(3)
|
51,728
(7)
|
1.34
%
|
|
J. Patrick Galleher
(3)
|
46,000
(7)
|
1.19
%
|
|
Eric Frank
(3)
|
20,000
(7)
|
0.52
%
|
|
Michael Nowlan
(3)
|
20,000
(7)
|
0.52
%
|
|
James Michael
(4)
|
228,300
|
5.92
%
|
|
All
officers, directors, and management as a group (6
persons)
|
1,034,441
|
26.12
%
|
|
Other beneficial
holders:
|
|
|
|
Polar Asset Management Partners
|
326,456
|
8.47
%
|
|
Yorkmont
Capital Partners, LP
|
284,765
(8)
|
7.39
%
|
____________________
|
(1)
|
Applicable
percentage of ownership is based on a total of 3,960,818 shares of
common stock, which consist of 3,854,568 shares of common stock
outstanding on April 23, 2019, plus shares that are beneficially
owned as of that date. Beneficial ownership is determined in
accordance with rules of the Securities and Exchange Commission and
means voting or investment power with respect to securities. Shares
of our common stock issuable upon restricted stock units and the
exercise of stock options exercisable currently or within 60 days
of April 20, 2019 are deemed outstanding and to be beneficially
owned by the person holding such option for purposes of computing
such person’s percentage ownership, but are not deemed
outstanding for the purpose of computing the percentage ownership
of any other person.
|
|
(2)
|
Officer.
|
|
|
|
|
(3)
|
Director.
|
|
|
|
|
(4)
|
Management.
|
|
|
|
|
(5)
|
Includes options
issued to spouse to purchase 500 shares of common stock that are
currently exercisable or exercisable within 60 days of April 23,
2019.
|
|
|
|
|
(6)
|
I
ncludes 5,000 restricted stock units which vest
on February 28, 2020 and options to purchase 28,750 shares of
common stock that are currently exercisable or exercisable within
60 days of April 23, 2019.
|
|
|
|
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(7)
|
Includes 2,000
restricted stock units which vest on June 1, 2019 and options to
purchase 16,000 shares of common stock that are currently
exercisable or exercisable within 60 days of April 23,
2019.
|
|
|
|
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(8)
|
Includes 50,000
shares of common stock held by Graeme P. Rein. According to
Amendment No. 5 to the Schedule 13G filed by Yorkmont Capital
Partners, LP on January 11, 2019, Mr. Rein has sole voting and
disposition power with respect to all of the shares of common stock
held by Yorkmont Capital Partners, LP.
|
2019 PROXY
STATEMENT | 17
Executive Compensation
COMPENSATION DISCUSSION AND ANALYSIS
We formed a
Compensation Committee on October 23, 2013. Prior to that date, all
compensation decisions for our named executive officers were made
by our Board of Directors.
The
Compensation Committee of our Board of Directors will review at
least annually and determine (or recommend to the Board of
Directors as the case may be) the executive compensation for Mr.
Balbirnie and any other named executive officers, including
approving any grants of stock options or other equity incentive
awards in accordance with the philosophy and components described
in this Proxy Statement. To date, neither the Board of Directors
nor the Compensation Committee has retained the services of a
compensation consultant. The Compensation Committee does not intend
to retain such services for 2019 but may decide to do so in the
future.
SUMMARY COMPENSATION
TABLE
The
following table shows amounts earned by each officer in the years
ended December 31, 2018 and 2017:
|
Name and Principal
Position
|
Year
|
Salary
|
Deferred
Compensation
|
Bonus
|
Stock
Awards
|
Option/Warrant
Awards
|
All Other
Compensation
|
Total
|
|
Brian R.
Balbirnie
|
2018
|
$200,000
|
$
-
|
$18,000
|
$
-
|
$
-
|
$
-
|
$218,000
|
|
President and Chief Executive Officer
|
2017
|
$195,000
|
$
-
|
$32,000
|
$
-
|
$
-
|
$
-
|
$227,000
|
|
Steven
Knerr
|
2018
|
$165,000
|
$
-
|
$11,550
|
$
-
|
$
-
|
$
-
|
$176,550
|
|
Chief Financial Officer
|
2017
|
$160,333
|
$
-
|
$19,800
|
$
-
|
$
-
|
$
-
|
$180,133
|
We
currently have employment agreements with Brian Balbirnie and
Steven Knerr. The terms are summarized below:
BRIAN R. BALBIRNIE EMPLOYMENT AGREEMENT
On April 30, 2014,
Issuer Direct Corporation (the “Company”) entered into
an Executive Employment Agreement (the “Balbirnie
Agreement”) with Brian R. Balbirnie to serve as the
Company’s President and Chief Executive Officer. Mr.
Balbirnie had served as the Company’s most senior executive
officer since 2006 without a formal employment agreement. The
Balbirnie Agreement will continue until terminated pursuant to its
terms as described below.
On May 1, 2017, the
Company and Mr. Balbirnie agreed to amend the Balbirnie Agreement
as follows: (i) to increase Mr. Balbirnie’s annual base
salary from $185,000 to $200,000 and (ii) to decrease Mr.
Balbirnie’s eligibility to receive an annual cash bonus from
45% to 40% of his annual base salary upon the achievement of
reasonable target objectives and performance goals. However, for
fiscal years 2018 and 2019, our Board has decided to increase Mr.
Balbirnie’s bonus potential to the previous 45% level. The
revised base salary will be reviewed annually by the
Company’s Board of Directors for increase as part of its
annual compensation review. The cash bonus goals will continue to
be determined by the Board in consultation with Mr. Balbirnie on or
before the end of the first quarter of the fiscal year to which the
bonus relates. In addition, Mr. Balbirnie is eligible to receive
such additional bonus or incentive compensation as the Board may
establish from time to time in its sole discretion.
18 | ISSUER DIRECT
CORP
Pursuant to the
Balbirnie Agreement, if Mr. Balbirnie’s employment is
terminated upon his disability, by Mr. Balbirnie for good reason
(as such term is defined in Balbirnie Agreement), or by us without
cause (as such term is defined in Balbirnie Agreement), Mr.
Balbirnie will be entitled to receive, in addition to other unpaid
amounts owed to him (e.g., for base salary, accrued personal time
and business expenses): (i) to the then base salary for a period of
twelve months (in accordance with the Company’s general
payroll policy) commencing on the first payroll period following
the fifteenth day after termination of employment and (ii)
substantially similar coverage under the Company’s
then-current medical, health and vision insurance coverage for a
period of twelve months. Additionally, if Mr. Balbirnie’s
employment is terminated for disability, the vesting of any option
grants will continue to vest pursuant to the schedule and terms
previously established during the twelve-month severance period.
Subsequent to the twelve-month severance period the vesting of any
option grants will immediately cease. If Mr. Balbirnie’s
employment is terminated without cause, vesting of any option
grants will immediately cease upon termination except as described
below relating to a Corporate Transaction.
If the Company
terminates Mr. Balbirnie’s employment for cause or employment
terminates as a result of Mr. Balbirnie’s resignation or
death, Mr. Balbirnie will only be entitled to unpaid amounts owed
to him and the vesting of any option grants will immediately
cease.
Mr. Balbirnie has
no specific right to terminate the employment agreement or right to
any severance payments or other benefits solely as a result of a
Corporate Transaction (as defined in the Company’s 2014
Equity Incentive Plan). However, if within twelve months following
a corporate transaction, Mr. Balbirnie terminates his employment
for good reason or the Company terminates his employment without
cause, the severance period discussed above will be increased from
twelve to eighteen months and any then unvested options held by Mr.
Balbirnie will immediately vest and become exercisable for a period
equal to the earlier of (i) six months from termination or (ii) the
expiration of such option grant pursuant to its original
terms.
The Balbirnie
Agreement also contains certain non-competition, no solicitation,
confidentiality, and assignment of inventions requirements for Mr.
Balbirnie.
STEVEN KNERR EMPLOYMENT AGREEMENT
On November
19, 2015, the Company entered into an Executive Employment
Agreement (the “Knerr Agreement”) with Steven
Knerr to serve as the Company’s Chief Financial Officer.
Mr. Knerr had served as the Company’s Controller since August
22, 2013 and as its interim Chief Financial Officer and interim
Principal Financial Officer since May 8, 2015. The Knerr
Agreement will continue until terminated pursuant to its terms as
described below.
On May 1, 2017, the Company and Mr. Knerr agreed
to amend the Knerr Agreement as follows: (i) to increase Mr.
Knerr’s annual base salary from $151,000 to $165,000 and (ii)
to decrease Mr. Knerr’s eligibility to receive an annual cash
bonus from 35% to 30% of his annual base salary upon the
achievement of reasonable target objectives and performance
goals.
However, for fiscal years 2018 and 2019, our
Board has decided to increase Mr. Knerr’s bonus potential to
the previous 35% level.
The revised
base salary will be reviewed annually by the Company’s Board
of Directors for increase as part of its annual compensation
review. The cash bonus goals will continue to be determined by the
Board in consultation with Mr. Knerr on or before the end of the
first quarter of the fiscal year to which the bonus relates. In
addition, Mr. Knerr is eligible to receive such additional bonus or
incentive compensation as the Board may establish from time to time
in its sole discretion.
2019 PROXY
STATEMENT | 19
Also
as part of the Knerr Agreement, Mr. Knerr was granted an incentive
stock option to purchase 10,000 shares of the Company’s
common stock at an exercise price of $6.80 (the “Stock
Option”). The Stock Option shall vest over a four-year
period, at a rate of 25% of the total Stock Option on the first
anniversary of November 19, 2015 and the remaining 75% vesting
ratably at the end of each calendar quarter for the subsequent
three years after the first anniversary of November 19, 2015,
provided Mr. Knerr is employed on all such dates by the Company or
one of its affiliates. In the event of a Corporate Transaction
(as defined in the Company’s 2014 Equity Incentive Plan), any
unvested portion of the Stock Option shall be immediately
vested.
Pursuant
to the Knerr Agreement, if Mr. Knerr’s employment is
terminated upon his disability, by Mr. Knerr for good reason (as
such term is defined in Knerr Agreement), or by us without cause
(as such term is defined in Knerr Agreement), Mr. Knerr will be
entitled to receive, in addition to other unpaid amounts owed to
him (e.g., for base salary, accrued personal time and business
expenses): (i) to the then base salary for a period of six months
(in accordance with the Company’s general payroll policy)
commencing on the first payroll period following the fifteenth day
after termination of employment and (ii) substantially similar
coverage under the Company’s then-current medical, health and
vision insurance coverage for a period of six
months. Additionally, if Mr. Knerr’s employment is
terminated for disability, the vesting of any option grants will
continue to vest pursuant to the schedule and terms previously
established during the six-month severance period. Subsequent
to the six-month severance period the vesting of any option grants
will immediately cease. If Mr. Knerr’s employment is
terminated without cause, vesting of any option grants will
immediately cease upon termination except as described below
relating to a Corporate Transaction.
If
the Company terminates Mr. Knerr’s employment for cause or
employment terminates as a result of Mr. Knerr’s resignation
or death, Mr. Knerr will only be entitled to unpaid amounts owed to
him and the vesting of any option grants will immediately
cease.
Mr.
Knerr has no specific right to terminate the employment agreement
or right to any severance payments or other benefits solely as a
result of a Corporate Transaction (as defined in the
Company’s 2014 Equity Incentive Plan).
The
Knerr Agreement also contains certain non-competition, no
solicitation, confidentiality, and assignment of inventions
requirements for Mr. Knerr.
PHILOSOPHY OF COMPENSATION
The
goals of our compensation policy are to ensure that executive
compensation rewards management for helping us achieve our
financial goals (increased sales, profitability, etc.), meet our
product development milestone and align management’s
overall goals and objectives with those of our stockholders. To
achieve these goals, our Compensation Committee and Board of
Directors aim to achieve the following:
●
provide
competitive compensation packages that enable us to attract and
retain superior management personnel;
●
relate
compensation to the Company’s overall performance, the
individual officer’s performance and our assessment of the
officer’s future potential;
●
reward
our officers fairly for their role in our achievements;
and
●
align
executive’s objectives with the objectives of stockholders,
including through the grant of equity awards.
We
have determined that in order to best meet these objectives, our
executive compensation program should balance fixed and bonus
compensation, as well as cash and equity compensation, as discussed
below. Historically, there has been no pre-established policy or
target for the allocation between either cash and non-cash or
short-term and long-term incentive compensation for our executive
officers.
20 | ISSUER DIRECT
CORP
COMPONENTS OF COMPENSATION
The four principal
components of our compensation program for our named executive
officers are base salary, personal benefits (such as health and
dental insurance), cash bonuses and or equity based grants. As
noted below, cash bonuses and equity grants are not necessarily
earned or granted every year.
Base Salary.
The primary component of compensation
for our named executive officers is base salary. Base salary levels
for our named executive officers have historically been determined
based upon an evaluation of a number of factors, including the
individual officer’s level of responsibility and our overall
performance. The Compensation Committee intends to review each
named executive officer’s base salary on an annual basis and
adjust such salaries as deemed appropriate.
Cash Bonus.
Prior to 2016, we paid nominal cash
bonuses to named executive officers. For the year ended December
31, 2018, Mr. Balbirnie and Mr. Knerr earned bonuses of $18,000 and
$11,550, respectively, for achieving target objectives and
performance goals determined by the Board. These bonuses were paid
during 2019.
We intend to
consider the amount of cash bonus that each of our named executive
officers should be entitled to receive in connection with our
annual compensation review, taking into account each
executive’s total compensation package, and any more formal
data we obtain regarding the compensation levels of similarly
situated executives. We will also consider in connection with such
review whether to designate certain financial or operational
metrics or other objective or subjective criteria in determining
the final amounts of such awards.
Equity Based
Grants.
An
additional principal component of our compensation policy for named
executive officers consists of grants of stock options and other
equity awards. Prior to 2015, all equity incentive awards were made
either (i) in accordance with negotiated terms at levels deemed
necessary to attract or retain the executive at the time of such
negotiations and determined taking into account the
recipient’s overall compensation package and the goal of
aligning such
executive’s interest with that of
our stockholders, or (ii) at the discretion of the Board of
Directors without reference to any formal targets or objectives,
when deemed appropriate in connection with extraordinary efforts or
results or necessary in order to retain the executive in light of
the executive’s overall compensation
package.
On April 1, 2015, the Compensation Committee granted Mr. Knerr
10,000 restricted stock units, half of which vested on April 1,
2016 and the other half on April 1, 2017. Additionally, the
Compensation Committee granted Mr. Knerr an incentive stock option
to purchase 10,000 shares of our common stock, as further described
above under the heading "Steven Knerr Employment Agreement." On
February 28, 2019, Mr. Knerr was also granted 5,000 restricted
stock units which will vest on February 28, 2020.
Other than the grants to Mr. Knerr, the Compensation Committee has
not made any equity awards to the named executive officers since
its inception in October 2013 but may do so in 2019. Our
Compensation Committee and our Board of Directors intends to
consider during our annual compensation review whether to grant
equity incentive awards to our named executive officers, and the
terms of any such awards, including whether to set any performance
targets or other objective or subjective criteria related to the
final grant or vesting of such awards. The Compensation Committee
will also retain the flexibility to make additional grants
throughout the year if deemed necessary or appropriate in order to
retain our named executive officers or reward extraordinary efforts
or achievements
.
Neither
the Compensation Committee nor the Board of Directors has approved
any additional equity based grants for our named executive officer
during the fiscal year 2019, other than the grant noted above to
Mr. Knerr.
2019 PROXY
STATEMENT | 21
COMPENSATION OF NAMED EXECUTIVE OFFICERS
Compensation of Chief Executive Officer.
During the twelve months ended
December 31, 2018, Mr. Balbirnie’s total compensation was
$218,000. Mr. Balbirnie’s total compensation was comprised of
salary payments from January 1, 2018 through December 31, 2018 of
$200,000 and earned bonus of $18,000, which was paid on March 15,
2019.
2018 Bonus Plan.
On
April 19, 2018, the Compensation Committee of the Board implemented
a 2018 cash bonus plan for Mr. Balbirnie based on the following
criteria:
●
Cash
bonus target was 45% of annualized base salary of
$200,000.
●
Cash
bonus plan
was based (i) 80% upon the
achievement of target financial numbers during the fiscal year 2018
and (ii) 20% based upon the achievement of certain management
objectives determined by the Board
.
●
Bonus targets for solely the target financial
numbers were scaled as follows:
(i) below 90% of target
results in no bonus paid; (ii) 90% of target results in 50% of
bonuses paid; (iii) 100% of target results in 100% of bonuses paid;
(iv) 120% and greater of target results in 120% of bonuses paid.
The payout is a maximum of 120% of target bonus.
Based on these
criteria and as noted above, Mr. Balbirnie received a cash bonus of
$18,000 for the year ended December 31, 2018, which was paid on
March 15, 2019.
2019 Bonus
Plan.
On February
28, 2019, our Board, based on recommendations from our Compensation
Committee, implemented a 2019 cash bonus plan for Mr. Balbirnie
based on the following criteria:
●
Cash
bonus target was 45% of annualized base salary of
$200,000.
●
Cash
bonus plan
will be based (i) 80% upon
the achievement of target financial numbers during the fiscal year
2019 and (ii) 20% based upon the achievement of certain management
objectives during the fiscal year 2019 as determined by the
Board
.
●
Bonus targets for solely the target financial
numbers will be scaled as follows:
(i) below 90% of target
results in no bonus paid; (ii) 90% of target results in 50% of
bonuses paid; (iii) 100% of target results in 100% of bonuses paid;
(iv) 120% and greater of target results in 120% of bonuses paid.
The payout is a maximum of 120% of target bonus.
Compensation of Chief Financial Officer.
For the twelve months ended December
31, 2018, Mr. Knerr’s total compensation was $176,550. Mr.
Knerr’s total compensation was comprised of salary payments
from January 1, 2018 through December 31, 2018 totaling $165,000
and earned bonus of $11,550, which was paid on March 15,
2019.
2018 Bonus Plan.
On
April 19, 2018, the Compensation Committee of the Board implemented
a 2018 cash bonus plan for Mr. Knerr based on the following
criteria:
●
Cash
bonus target was 35% of annualized base salary of
$165,000.
●
Cash
bonus plan
was based (i) 80% upon the
achievement of target financial numbers during the fiscal year 2018
and (ii) 20% based upon the achievement of certain management
objectives determined by the Board
.
●
Bonus targets for solely the target financial
numbers were scaled as follows:
(i) below 90% of target
results in no bonus paid; (ii) 90% of target results in 50% of
bonuses paid; (iii) 100% of target results in 100% of bonuses paid;
(iv) 120% and greater of target results in 120% of bonuses paid.
The payout is a maximum of 120% of target bonus.
Based
on these criteria and as noted above, Mr. Knerr received a cash
bonus of $11,550 for the year ended December 31, 2018, which was
paid on March 15, 2019.
2019 Bonus Plan.
On
February 28, 2019, our
Board, based on recommendations from our Compensation Committee,
implemented a 2019 cash bonus plan for Mr. Knerr based on the
following criteria:
●
Cash
bonus target was 35% of annualized base salary of
$165,000.
22 | ISSUER DIRECT
CORP
●
Cash
bonus plan
will be based (i) 80% upon
the achievement of target financial numbers during the fiscal year
2019 and (ii) 20% based upon the achievement of certain management
objectives during the fiscal year 2019 as determined by the
Board
.
●
Bonus targets for solely the target financial
numbers will be scaled as follows:
(i) below 90% of target
results in no bonus paid; (ii) 90% of target results in 50% of
bonuses paid; (iii) 100% of target results in 100% of bonuses paid;
(iv) 120% and greater of target results in 120% of bonuses paid.
The payout is a maximum of 120% of target bonus.
IMPACT OF TAX LAWS
Deductibility of Executive
Compensation.
Generally, under U.S. law, a company may not
deduct compensation of more than $1,000,000 that is paid to an
individual employed by the company who, on the last day of the
taxable year, either is the company’s principal executive
officer or an individual who is among the three highest compensated
officers for the taxable year (other than the principal executive
officer or the principal financial officer). The $1,000,000
limitation on deductions does not apply to certain types of
compensation, including qualified performance-based compensation,
and only applies to compensation paid by a publicly-traded
corporation (and not compensation paid by non-corporate entities).
Because the compensation deducted in the U.S. for each individual
to whom this rule applies has historically been less than
$1,000,000 per year, we do not believe that the $1,000,000
limitation will affect us in the near future. If the deductibility
of executive compensation becomes a significant issue, our
compensation plans and policies may be modified to maximize
deductibility if our Compensation Committee and we determine that
such action is in our best interests.
RISK CONSIDERATIONS IN OUR COMPENSATION PROGRAMS
Our
Compensation Committee believes that risks arising from our
policies and practices for compensating employees are not
reasonably likely to have a material adverse effect on us and do
not encourage risk taking that is reasonably likely to have a
material adverse effect on us. Our Compensation Committee believes
that the structure of our executive compensation program mitigates
risks by avoiding any named executive officer placing undue
emphasis on any particular performance metric at the expense of
other aspects of our business.
2019 PROXY
STATEMENT | 23
|
COMPENSATION COMMITTEE REPORT
|
|
The
Compensation Committee has reviewed and discussed the Compensation
Discussion and Analysis with the members of management of the
Company and, based on such review and discussions, the Compensation
Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this Proxy
Statement.
|
|
The Compensation Committee
|
|
|
|
J. Patrick Galleher (Chairman)
|
|
Eric Frank
|
|
|
24 | ISSUER DIRECT
CORP
Proposal 2–Ratification of Auditors
RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The
Audit Committee of the Board of Directors has appointed the firm of
Cherry Bekaert LLP, independent registered public accounting firm,
to audit and report on our financial statements for the year ending
December 31, 2019. We have engaged Cherry Bekaert LLP as our
independent registered public accounting firm since June 2010. We
expect that a representative of Cherry Bekaert LLP will be present
at the Annual Meeting of Stockholders to answer questions of
stockholders and will have the opportunity, if desired, to make a
statement.
For the
years ended December 31, 2018 and 2017, Cherry Bekaert LLP billed
us the fees set forth below, including expenses, in connection with
services rendered by that firm to us.
|
|
Year Ended December 31,
|
|
|
|
2018
|
2017
|
|
Audit
fees
|
$
121,475
|
$
112,000
|
|
Audit
related fees
|
35,300
|
23,000
|
|
Tax
fees
|
---
|
---
|
|
All
other fees
|
---
|
---
|
|
Total
fees
|
$
156,775
|
$
135,000
|
Audit Fees.
Audit fees include
fees billed for the annual audit of the Company’s financial
statements and quarterly reviews for the fiscal years ended
December 31, 2018 and 2017, and for services normally provided by
Cherry Bekaert LLP in connection with routine statutory and
regulatory filings or engagements.
Audit-Related Fees.
Audit-related fees include fees billed for
assurance and related services that are reasonably related to the
performance of the annual audit or reviews of the Company’s
financial statements and are not reported under “Audit
Fees.” During our fiscal year ended December 31,
2018, Cherry Bekaert LLP billed the Company $21,000 for services
related to a consent for the use of its audit opinion in the
Company’s filing of a Registration Statement on Form S-3 that
incorporated by reference the Company’s audited financial
statements for the fiscal years ended December 31, 2017 and 2016
and also billed the Company $14,300 for other audit-related
services related to a business acquired by us during 2018. During
our fiscal year ended December 31, 2017, Cherry Bekaert LLP billed
the Company $3,000 for services related to a consent for the use of
its audit opinion in the Company’s filing of a Registration
Statement on Form S-3 that incorporated by reference the
Company’s audited financial statements for the fiscal years
ended December 31, 2016 and 2015 and also billed the Company
$20,000 for other audit-related services related to a business
acquired by us during 2017.
Tax Fees.
Tax
fees include fees for professional services for tax compliance, tax
advice and tax planning for the tax years ended December 31, 2018
and 2017. During our fiscal years ended December 31, 2018 and
2017, no such fees were billed by Cherry Bekaert
LLP.
All Other Fees.
All other fees
include fees for products and services other than those described
above. During our fiscal years ended December 31, 2018
and 2017, no such fees were billed by Cherry Bekaert
LLP.
The
Audit Committee of the Board of Directors has considered whether
the provision of services described above under "Audit-related
fees" and "Other fees" is compatible with maintaining the
independence of Cherry Bekaert LLP and has concluded that it is
compatible.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Audit Committee is directly responsible for
the appointment, compensation, retention and oversight of the
independent registered accounting firm retained to audit our
financial statements. The Audit Committee has appointed Cherry
Bekaert LLP as our independent external auditor for the year ending
December 31, 2019. Cherry Bekaert LLP has served as our
independent registered accounting firm continuously since June
2010. The Audit Committee is responsible for the audit fee
negotiations associated with the retention of Cherry Bekaert LLP.
In order to assure continuing auditor independence, the Audit
Committee periodically considers whether there should be a regular
rotation of the independent registered accounting firm. Further, in
conjunction with the rotation of the auditing firm's lead
engagement partner, the Audit Committee and its chairperson has
and
will continue to be
directly involved in the selection of Cherry Bekaert LLP 's new
lead engagement partner. The members of the Audit Committee and the
Board believe that the continued retention of Cherry Bekaert LLP to
serve as our independent external auditor is in the best interests
of the Company and its stockholders.
2019 PROXY
STATEMENT | 25
Stockholder
ratification of the selection of Cherry Bekaert LLP as our
independent registered public accounting firm is not required but
is being presented as a matter of good corporate practice.
Notwithstanding stockholder ratification of the appointment of the
independent registered public accounting firm, the Audit Committee,
in its discretion, may direct the appointment of a new independent
registered public accounting firm if the Audit Committee believes
that such a change would be in our best interests and the best
interests of our stockholders. The Audit Committee has not
determined what action it would take if the stockholders do not
ratify the appointment, but may reconsider the
appointment.
AUDIT
COMMITTEE PRE-APPROVAL POLICY
The Audit
Committee's policy is that all audit and non-audit services
provided by its independent registered public accounting firm shall
either be approved before the independent registered public
accounting firm is engaged for the particular services or shall be
rendered pursuant to pre-approval procedures established by the
Audit Committee. These services may include audit services and
permissible audit-related services, tax services and other
services. Pre-approval spending limits for audit services are
established on an annual basis, detailed as to the particular
service or category of services to be performed and implemented by
our financial officers. Pre-approval spending limits for
permissible non-audit services are established on an annual basis,
detailed as to the particular service or category of services to be
performed and implemented by our financial officers. Any audit or
non-audit service fees that may be incurred by us during a quarter
that fall outside the limits pre-approved by the Audit Committee
for a particular service or category of services must be reviewed
and approved by the Chairperson of the Audit Committee prior to the
performance of services. On an annual basis, the Audit Committee
reviews and itemizes all fees paid to its independent registered
public accounting firm in the prior quarter (including fees
approved by the Chairperson of the Audit Committee between
regularly scheduled meetings and fees approved by our financial
officers pursuant to the pre-approval policies described above) and
further reviews and itemizes all fees expected to be paid in the
upcoming quarter. The Audit Committee may revise its pre-approval
spending limits and policies at any time. None of the fees paid to
the independent registered public accounting firm were approved by
the Audit Committee after the services were rendered pursuant to
the "
de minimis
" exception
established by the SEC for the provision of non-audit
services.
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The Board of Directors recommends a vote "FOR" the ratification of
the appointment of Cherry Bekaert LLP as the independent registered
public accounting firm.
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26 | ISSUER DIRECT
CORP
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REPORT OF THE AUDIT COMMITTEE
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On
October 23, 2013, the Company established an Audit Committee of the
Board of Directors. The Audit Committee consists of two members,
Messrs. Everett and Nowlan. All the members are independent
directors under the NYSE and SEC Audit Committee structure and
membership requirements. The Audit Committee has certain duties and
powers as described in its written charter, a copy of which can be
found on the company’s website at
http://cdn.irdirect.net/IR/432/1220/Audit-Committee-Charter-Final-Exhibit-A%20(1).pdf
.
The
Audit Committee has reviewed and discussed the Company’s
audited financial statements and related footnotes for the fiscal
year ended December 31, 2018, and the independent auditor’s
report on those financial statements, with management and with our
independent auditor, Cherry Bekaert LLP (“Cherry
Bekaert”). The Audit Committee has also discussed with Cherry
Bekaert the matters required to be discussed by the statement on
Auditing Standard No. 16, “Communications with Audit
Committees” issued by the Public Company Accounting Oversight
Board. The Audit Committee has also received the written
disclosures and the letter from Cherry Bekaert required by
applicable requirements of the Public Company Accounting Oversight
Board regarding Cherry Bekaert’s communications with the
Audit Committee concerning independence, and has discussed with
Cherry Bekaert that firm’s independence.
Based
on the review and the discussions referred to in the preceding
paragraph, the Audit Committee recommended to the Board of
Directors that the Company’s audited financial statements be
included in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2018 that were filed with the
SEC.
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The Audit Committee
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Michael Nowlan (Chairman)
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William H. Everett
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2019 PROXY
STATEMENT | 27
Certain Relationships and Related Party Transactions and Director
Independence
RELATED PARTY TRANSACTIONS
None.
DIRECTOR INDEPENDENCE
As of April 23,
2019, we had four independent directors on our Board, William H.
Everett, Eric Frank, J. Patrick Galleher and Michael Nowlan. We
evaluate independence by the standards for director independence
established by applicable laws, rules, and listing standards
including, without limitation, the standards for independent
directors established by NYSE American and the SEC.
Subject to some
exceptions, these standards generally provide that a director will
not be independent if (a) the director is, or in the past three
years has been, an employee of ours; (b) a member of the
director’s immediate family is, or in the past three years
has been, an executive officer of ours; (c) the director or a
member of the director’s immediate family has received more
than $120,000 per year in direct compensation from us other than
for service as a director (or for a family member, as a
non-executive employee); (d) the director or a member of the
director’s immediate family is, or in the past three years
has been, employed in a professional capacity by our independent
public accountants, or has worked for such firm in any capacity on
our audit; (e) the director or a member of the director’s
immediate family is, or in the past three years has been, employed
as an executive officer of a company where one of our executive
officers serves on the Compensation Committee; or (f) the director
or a member of the director’s immediate family is an
executive officer of a company that makes payments to, or receives
payments from, us in an amount which, in any twelve-month period
during the past three years, exceeds the greater of $1,000,000 or
two percent of that other company’s consolidated gross
revenues.
28 | ISSUER DIRECT
CORP
Other Matters
We
know of no other matters to be submitted at the meeting. If any
other matters properly come before the meeting, it is the intention
of the persons named in the enclosed proxy card to vote the shares
they represent as the Board of Directors may
recommend.
Additional Information
We file reports and
other information with the SEC. Copies of these documents may be
obtained at the SEC’s Public Reference Room at 100 F Street,
N.E., Washington, D.C. 20549. The public may also obtain
information on the operation of the Public Reference Room by
calling the SEC at (800) SEC-0330. Our SEC filings are also
available on the SEC’s website at
http://www.sec.gov
.
2019 PROXY
STATEMENT | 29
www.issuerdirect.com
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ISSUER DIRECT CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
ANNUAL
MEETING OF STOCKHOLDERS – JUNE 13, 2019 AT 9:00 AM
EDT
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CONTROL ID:
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REQUEST ID:
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The
undersigned, a stockholder of Issuer Direct Corporation (the
“Company”), hereby revoking any proxy heretofore given,
does hereby appoint Jeffrey Quick proxy, with power of
substitution, for and in the name of the undersigned to attend the
2019 annual meeting of stockholders of the Company to be held at
500 Perimeter Park Drive, Suite D, Morrisville, NC 27560, on
Thursday, June 13, 2019 beginning at 9:00 AM, local time, or at any
adjournment or postponement thereof, and there to vote, as
designated below.
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
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FAX:
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Complete the reverse portion of this Proxy Card
and Fax to
202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/ISDR
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PHONE:
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1-866-752-VOTE(8683)
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ANNUAL MEETING OF THE STOCKHOLDERS OFISSUER DIRECT
CORPORATION
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE:
☒
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal
1
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FOR
ALL
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AGAINST
ALL
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FOR
ALL
EXCEPT
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To
elect the five (5) directors nominated by our Board of Directors as
set forth in the Proxy Statement:
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☐
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☐
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William H. Everett
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Director,
Chairman of the Board, Member of Audit Committee & Strategic
Advisory Committee
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☐
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J. Patrick Galleher
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Director,
Chairman of Compensation Committee and Strategic Advisory
Committee
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☐
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Brian R. Balbirnie
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Director,
President and Chief Executive Officer
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☐
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CONTROL ID:
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Eric Frank
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Director,
Chairman of Technology Oversight Committee, Member of Compensation
Committee
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☐
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REQUEST ID:
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Michael Nowlan
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Director,
Chairman of Audit Committee
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☐
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Proposal
2
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FOR
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AGAINST
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ABSTAIN
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To ratify the
appointment of Cherry Bekaert LLP as our independent registered
public accounting firm for the year ending December 31,
2019.
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☐
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☐
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☐
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Proposal
3
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FOR
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AGAINST
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ABSTAIN
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To
transact such other business as may properly come before the
meeting or any postponement or adjournment thereof.
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MARK
“X” HERE IF YOU PLAN TO ATTEND THE MEETING:
☐
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MARK HERE FOR ADDRESS CHANGE
☐
New Address (if applicable):
_________________________
_________________________
_________________________
IMPORTANT:
Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized
person.
Dated:
________________________, 2019
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(Print Name of
Stockholder and/or Joint Tenant)
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(Signature of
Stockholder)
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(Second Signature
if held jointly)
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TABLE OF CONTENTS