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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☑ 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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2021
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Notice of Annual Meeting of Stockholders
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Friday, June 11, 2021 12:00 p.m. EDT
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VIRTUALLY
https://agm.issuerdirect.com/isdr
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Issuer Direct Corporation
1 Glenwood Avenue, Suite 1001
Raleigh NC 27603
April 27, 2021
To Our Stockholders:
We are
pleased to invite you to attend our Annual Meeting of Stockholders
to be held on Friday, June 11, 2021, at 12:00 p.m. EDT. In light of
the continuing public health concerns regarding the COVID-19
pandemic, the annual meeting will be held in a virtual format only.
The Board of Directors has fixed the close of business on April 15,
2021 as the record date for the determination of stockholders
entitled to receive notice of, and to vote at, the Annual
Meeting.
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 11,
2021.
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, 2020. 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
William
H. Everett
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Chairman
of the Board of Directors
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Issuer Direct Corporation
1 Glenwood Ave, Suite 1001
Raleigh NC 27603
919.481.4000
Notice of Annual Meeting of Stockholders
To Be Held on June 11, 2021
To Our Stockholders:
Our
Annual Meeting of Stockholders will be held virtually on Friday,
June 11, 2021, at 12:00 p.m. EDT, (the “Annual
Meeting”) for the following purposes:
1.
To
elect six (6) directors nominated by our Board of Directors as set
forth in this proxy statement;
2.
An
advisory vote on executive compensation as disclosed in this proxy
statement
;
3.
An advisory vote on
the frequency of future advisory votes
on executive compensation;
4.
To
ratify the appointment of Cherry Bekaert LLP as our independent
registered public accounting firm for the year ending December 31,
2021; and
5.
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, 2021. 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.
To
participate in our annual meeting, including casting your vote
during the meeting, access the meeting website at
https://agm.issuerdirect.com/isdr
and entering in your stockholder information provided on your
ballot or proxy information previously mailed to you. If you attend
the meeting virtually, you may revoke your proxy prior to its
exercise and vote virtually 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 the
Annual Meeting virtually 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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Raleigh,
North Carolina
April
27, 2021
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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 VIRTUALLY, 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 VIRTUALLY, REVOKE THEIR PROXY AND VOTE THEIR
SHARES VIRTUALLY.
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Table of Contents
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Proxy Summary
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1
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2021
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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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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7
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Consideration
of Stockholder Nominees for Directors
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9
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Corporate Governance
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10
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Indemnification
of Directors and Officers
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10
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Directors’
and Officers’ Liability Insurance
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10
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Code
of Ethics
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10
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Director
Independence
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10
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Board
Committees
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11
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Audit Committee
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11
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Compensation Committee
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11
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Strategic Advisory Committee
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11
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Meetings
and Attendance
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11
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Communications
with the Board of Directors
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12
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Non-Employee
Director Compensation Agreement
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12
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2020
Non-Employee Director Compensation Table
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13
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Security Ownership of Beneficial Owners and Management
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14
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Executive Compensation
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15
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Compensation
Discussion and Analysis
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15
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Summary
Compensation Table
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15
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Brian
R. Balbirnie Employment Agreement
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15
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Steven
Knerr Employment Agreement
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16
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Philosophy
of Compensation
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16
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Components
of Compensation
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17
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Compensation
of Named Executive Officers
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18
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Risk
Considerations in our Compensation Programs
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19
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Compensation
Committee Report
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20
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PROPOSAL 2-ADVISORY VOTE ON EXECUTIVE COMPENSATION
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21
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PROPOSAL 3-ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY VOTES ON
EXECUTIVE COMPENSATION
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22
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PROPOSAL 4–RATIFICATION OF AUDITORS
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Ratification
of Selection of Independent Auditors
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23
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Audit
Committee Pre-Approval Policy
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24
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Report
of the Audit Committee
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25
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Certain Relationships and Related Party Transactions and Director
Independence
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26
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Related
Party Transactions
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26
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Director
Independence
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26
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Other Matters
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26
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Section
16(a): Beneficial Ownership Reporting
Compliance
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26
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Stockholder
Proposals and Nominations for 2022 Annual
Meeting
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26
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Additional Information
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26
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Proxy Summary
2021 ANNUAL MEETING OF STOCKHOLDERS
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WHEN
Friday,
June 11, 2021 at 12 p.m. EDT
WHERE
Virtual –
https://agm.issuerdirect.com/isdr
RECORD DATE
Close
of business on April 15, 2021
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ITEMS OF
BUSINESS
1.
To elect six (6) directors nominated by our
Board of Directors as set forth in this proxy
statement;
2.
An advisory vote on executive compensation as
disclosed in this proxy statement;
3.
An advisory vote on frequency of future advisory
votes on executive compensation;
4.
To ratify the appointment of Cherry Bekaert LLP
as our independent registered public accounting firm for the year
ending December 31, 2021; and
5.
To transact such other business as may properly
come before the 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 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 six (6)
directors
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✓
FOR each
nominee
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7
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2
Advisory vote on
executive compensation as disclosed in this proxy
statement
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✓ F
OR
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20
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3
Advisory vote on
frequency of future advisory votes on executive
compensation
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✓
F
OR
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20
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4
Ratification of the
appointment of Cherry Bekaert LLP as our independent
auditors
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✓
FOR
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25
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1
DIRECTOR NOMINEES
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Name
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Age
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Director Since
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Occupation
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Independent Director
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Standing Committee Membership
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William H. Everett
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70
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2013
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Retired, Executive Vice President and Chief Financial Officer of
Tekelec, Inc.
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✓
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AC, CC,
SAC
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J. Patrick Galleher
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48
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2014
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Managing
Partner for Boxwood Partners, LLC
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✓
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CC*,
SAC*
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Michael Nowlan
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62
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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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AC*
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Brian R. Balbirnie
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49
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2007
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Founder and Chief Executive Officer of Issuer Direct
Corporation
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Marti Beller
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54
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New
Nominee
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President,
Kobie Marketing, Inc.
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✓
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Graeme P. Rein
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New
Nominee
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Managing
Member and Chief Investment Officer of Yorkmont Capital Management,
LLC
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✓
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AC =
Audit Committee
CC =
Compensation Committee
SAC =
Strategic Advisory Committee
* =
Committee Chair
2
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, 2021,
and, therefore, are eligible to vote at the Company’s Annual
Meeting of Stockholders to be held virtually on Friday, June 11,
2021, at 12:00 p.m. EDT (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, 2021 will be
entitled to vote on the following proposals:
1.
To
elect six (6) directors nominated by our Board of Directors as set
forth in the proxy statement;
2.
An
advisory vote on executive compensation as disclosed in this proxy
statement;
3.
An
advisory vote on frequency of future advisory votes on executive
compensation;
4.
To
ratify the appointment of Cherry Bekaert LLP as our independent
registered public accounting firm for the year ending December 31,
2021;
5.
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.
►WHY IS THIS YEAR’S ANNUAL MEETING BEING HELD IN A
VIRTUAL-ONLY FORMAT?
Our
preference is to have held an in-person annual meeting of
stockholders. However, due to the continuing public health concerns
resulting from the COVID-19 pandemic, and the related protocols
that federal, state, and local governments have implemented, our
Board of Directors has determined to hold our annual meeting solely
by means of remote communication via webcast. This is often
referred to as a “virtual annual meeting.” The webcast
will allow all stockholders to join the meeting, regardless of
location. Our decision to hold the annual meeting in a virtual
format relates only to the 2021 Annual Meeting at this time,
however the Board of Directors may decide to continue this format
or introduce it as an option for subsequent meetings of the
stockholders.
►HOW CAN I PARTICIPATE IN THE ANNUAL MEETING?
You can
join the annual meeting by accessing the meeting URL at
https://agm.issuerdirect.com/isdr
and entering in your stockholder information provided on your
ballot or proxy information previously mailed to you.
Online
access will be available prior to the meeting for you to obtain
your information and to vote your shares should you not have done
so previously. We encourage you to access the meeting webcast prior
to the start time.
Rules
for the virtual meeting will be no different than if it was in
person, professional conduct is appreciated and all Q&A
sessions will be conducted at the appropriate time during the
meeting.
►HOW CAN I ASK QUESTIONS DURING THE ANNUAL
MEETING?
You can
submit questions in writing to the virtual meeting website during
the annual meeting in the Q&A tab on the virtual platform. You
must first join the meeting as described above in “How can I
participate in the annual meeting?” No questions will be
taken in any other manner the day of the meeting.
3
► 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, virtually 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 3,765,975 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 virtually present or have voted prior to the Annual
Meeting to conduct a meeting of our stockholders.
► 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, FOR the advisory vote on executive compensation
disclosed in this proxy statement, “THREE YEARS” for
a
n advisory vote on frequency of future advisory votes on
executive compensation
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, 2021.
► HOW DO I VOTE?
You
may vote using any of the following methods:
Virtually at the Annual Meeting:
You may
vote at the Annual Meeting either by virtually attending the
meeting yourself or authorizing a representative to virtually
attend the meeting on your behalf by providing them your virtual
Annual Meeting code. 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 inspector 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:
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 virtually at the
meeting.
► 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
By
mail addressed to: Issuer Direct Corporation, 1 Glenwood Ave, Suite
1001, Raleigh NC 27603 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.
5
Proposal 1–Election of Directors
ELECTION OF THE SIX DIRECTORS TO SERVE UNTIL THE NEXT ANNUAL
MEETING OR UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND
QUALIFIED
NOMINEES FOR DIRECTOR
At our
Annual Meeting, stockholders will elect six 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
four directors. In addition, we have two nominees, Marti Beller and
Graeme P. Rein, who would be new members to our Board of 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.
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 six 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 six directors have been nominated for election to the Board of
Directors at the Annual Meeting to be held on June 11,
2021.
The names of the nominees and certain information about them as of
April 27, 2021 are set forth below:
|
Nominee
|
Age
|
Position
|
Director Since
|
|
William H. Everett
|
70
|
Director, Chairman of the Board, Member of Audit Committee,
Compensation Committee & Strategic Advisory
Committee
|
2013
|
|
J. Patrick Galleher
|
48
|
Director, Chairman of Compensation Committee and Strategic Advisory
Committee
|
2014
|
|
Michael Nowlan
|
62
|
Director, Chairman of Audit Committee
|
2017
|
|
Brian R. Balbirnie
|
49
|
Director, President and Chief Executive Officer
|
2007
|
|
Marti Beller
|
54
|
New Director Nominee
|
|
|
Graeme P. Rein
|
41
|
New Director Nominee
|
|
6
|
William H.
Everett
|
|
|
|
Age
70
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.
|
|
J. Patrick
Galleher
|
|
|
|
Age
48
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.
|
|
Michael
Nowlan
|
|
|
|
Age
62
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.
|
7
|
Brian R.
Balbirnie
|
|
|
|
Age
49
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 2020
worked with over 6,000 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.
|
|
Marti
Beller
|
|
|
|
Age
54
● New Director
Nominee
|
|
Professional Background and Qualifications
Ms. Beller is an international loyalty &
digital marketing executive with twenty-five years’ of
experience helping Fortune 500 companies grow enterprise value by
driving customer engagement and brand loyalty. Since January 2019,
she has been President of Kobie Marketing, Inc., an industry leader
in customer loyalty strategy, platform development and management,
and analytics, serving companies across the travel, retail and
financial services vertical markets. From June 2015 to April 2018,
Ms. Beller was Group Head of Loyalty Products & Platforms at
Mastercard Worldwide. At Mastercard, she was accountable for
leading five globally distributed product lines with varying
go-to-market strategies based on regional market dynamics. She also
managed the integration of two significant acquisitions while at
Mastercard. In January 2011, Ms. Beller founded, PlanG, a
technology startup designed to drive customer loyalty by rewarding
customers with philanthropic donations to charities in the United
States. She served as the company’s CEO until it was sold in
July 2015. From 1994 to 2010, Ms. Beller worked for cxLoyalty, a
company which focuses on delivering travel and loyalty services
where she served in a number of capacities of increasing
responsibility, including President for ten years prior to her
departure. Ms. Beller has a B.S. from Virginia
Tech.
|
|
Graeme P.
Rein
|
|
|
|
Age
41
● New Director
Nominee
|
|
Professional Background and Qualifications
Mr. Rein
is the Managing Member and Chief
Investment Officer of Yorkmont Capital Management, LLC, an Austin,
Texas based registered investment advisor which he founded in 2012.
Prior to Yorkmont Capital, Mr. Rein worked as a research analyst at
Bares Capital Management, Inc. from 2006 to 2012 and as an audit
professional at Deloitte & Touche, LLP from 2004 to 2006. Mr.
Rein graduated from Princeton University with a Bachelor of Arts in
Economics and from the McCombs School of Business at the University
of Texas with a Masters in Professional Accounting. He holds the
Chartered Financial Analyst (CFA) designation and is also a
Certified Public Accountant (CPA) in the state of Texas. Mr. Rein
has served as a member of the Board of Directors of Where Food
Comes From, Inc. (NASDAQ: WFCF) since May 2016. Mr. Rein would
bring to the Board more than 15 years of business-related
experience, with expertise in finance, accounting, and
investments.
|
8
BOARD AND COMMITTEE MEMBERSHIP
The
table below provides committee membership of each Board member as
of April 27, 2021.
|
Board Member
|
|
Audit Committee
|
|
|
Compensation Committee
|
|
|
Strategic Advisory
Committee
|
|
|
Technology Oversight
Committee
|
|
|
Independent Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William
H. Everett *
|
|
X
|
|
|
X
|
|
|
X
|
|
|
|
|
|
J.
Patrick Galleher *
|
|
|
|
|
C
|
|
|
C
|
|
|
|
|
|
Michael
Nowlan *
|
|
C
|
|
|
|
|
|
|
|
|
|
|
|
Internal Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian R
Balbirnie
|
|
|
|
|
|
|
|
|
|
|
|
|
C=
Committee Chairman X = Committee Member * =
Independent
|
The Board of Directors recommends a vote "FOR" the election of six
(6) directors, until the next Annual Meeting or until their
successors are duly elected and qualified.
|
9
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 or may be taken at any annual or special
meeting of stockholders may also be taken without a meeting or
prior notice by written consent of the holders of the outstanding
stock that would be necessary to authorize or take such action at a
meeting.
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.
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, Galleher and Nowlan, our
current Board members, satisfy the requirement for independence set
out in Section 303A.02 of the NYSE American rules and Section
10A(m) of the Exchange Act (the “Exchange Act”)
(collectively, the “Independence Rules”). In addition,
the Board has determined that Ms. Beller and Mr. Rein, new nominees
to our Board, also satisfy the Independence Rules. None of the
directors described in the preceding sentences has a material
relationship with us (other than being a director and/or as 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.
10
BOARD COMMITTEES
Our
Board of Directors has established an Audit Committee, a
Compensation Committee and a Strategic Advisory Committee, each of
which has the composition and responsibilities described
below.
|
Audit
Committee
|
|
|
|
Members:
● Michael
Nowlan (Chairman)
● William H.
Everett
Meetings in 2020:
4
|
|
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. Mr. Nowlan is
the chairman of our 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 reporting
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, 2020, our Audit
Committee held four meetings.
|
|
Compensation
Committee
|
|
|
|
Members:
● J. Patrick
Galleher (Chairman)
● William H.
Everett
Meetings in 2020:
4
|
|
Our
Compensation Committee was implemented on October 23, 2013 and is
currently comprised of Messrs. Everett 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,
2020, our Compensation Committee held four meetings.
|
|
Strategic Advisory
Committee
|
|
|
|
Members:
● J. Patrick
Galleher (Chairman)
● William H.
Everett
Meetings in 2020:
None
|
|
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.
The Board intends to dissolve the Strategic Advisory Committee
during 2021 and instead have the entire Board assume the
S
trategic Advisory
Committee
responsibilities described
below.
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, 2020, our Strategic Advisory
Committee did not hold any meetings outside of our full Board
meetings.
|
MEETINGS AND ATTENDANCE
During
the year ended December 31, 2020, the Board of Directors held seven
meetings and the respective committees held eight 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.
11
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 Corporate
Secretary, c/o Issuer Direct Corporation,
1 Glenwood Avenue,
Suite 1001, Raleigh, NC 27603
. 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.
NON-EMPLOYEE DIRECTOR COMPENSATION ARRANGEMENT
Effective
as of March 2, 2021, our Board, upon the recommendation of our
Compensation Committee, determined to compensate our non-employee
directors as set forth below.
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 receive a
grant of restricted stock units (“RSUs”) equal to
$67,000 divided by the closing price of our common stock as
reported by NYSE American on the date of such annual meeting. The
amount of $67,000 was determined by the Board based on a survey of
the value and type of equity grants to members of board of
directors of similarly sized publicly traded companies. 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.
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 RSUs equal to
$67,000 divided by the closing price of our common stock as
reported by NYSE American 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 amount of $67,000 was
determined by the Board based on a survey of the value and type of
equity grants to members of board of directors of similarly sized
publicly trading companies. 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 above, 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.
Monthly Cash Payment
.
During 2021, 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. The cash
retainers were determined by the Board based on a survey of cash
retainers paid to members of board of directors of similarly sized
publicly traded companies.
12
2020 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
The following table shows amounts earned by each non-employee
director in fiscal 2020:
|
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)
|
$
64,020
(2)
|
-
|
-
|
-
|
-
|
$
118,020
|
|
J.
Patrick Galleher
|
$
36,000
|
$
64,020
(2)
|
-
|
-
|
-
|
-
|
$
100,020
|
|
Michael
Nowlan
|
$
36,000
|
$
64,020
(2)
|
-
|
-
|
-
|
-
|
$
100,020
|
_____________________
(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. RSUs are valued
based on the closing price of Issuer Direct’s ordinary shares
on the date of grant, which was $10.67. On June 17, 2020, each
non-employee director was granted 6,000 restricted stock units with
a vesting date of June 17, 2021.
13
Security Ownership of Beneficial Owners
and
Management
The
following table sets forth certain information as of April 27,
2021, 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, 1 Glenwood Ave, Suite 1001, Raleigh NC
27603.
|
Name of Beneficial Owner
|
Number of Shares
Owned
(1)
|
Percentage
Owned
(1)
|
|
|
|
|
|
Brian
R. Balbirnie
(2)(3)
|
612,829
(4)
|
16.27
%
|
|
Steven
Knerr
(2)
|
39,000
(5)
|
1.03
%
|
|
William
H. Everett
(3)
|
35,786
(6)
|
0.95
%
|
|
J.
Patrick Galleher
(3)
|
47,761
(6)
|
1.27
%
|
|
Michael
Nowlan
(3)
|
32,000
(7)
|
0.84
%
|
|
All
officers, directors, and management as a group (7
persons)
|
767,376
|
20.11
%
|
|
|
|
|
|
Other Beneficial
Owners
|
|
|
|
Forager Capital
Management, LLC
|
261,915
|
6.95
%
|
|
Yorkmont
Capital Partners, LP
(8)
|
235,000
|
6.20
%
|
|
Vanguard Group,
Inc.
|
191,091
|
5.07
%
|
|
Richard H.
Witmer
|
190,454
|
5.06
%
|
____________________
(1)
Applicable
percentage of ownership is based on a total of 3,815,475 shares of
common stock, which consist of 3,765,975 shares of common stock
outstanding on April 27, 2021, 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 27, 2021 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)
Includes
options issued to spouse to purchase 500 shares of common stock
that are currently exercisable or exercisable within 60 days of
April 27, 2021.
(5)
Includes
options to purchase 15,000 shares of common stock that are
currently exercisable or exercisable within 60 days of April 27,
2021.
(6)
Includes
6,000 restricted stock units which vest on June 11,
2021.
(7)
Includes 6,000
restricted stock units which vest on June 11, 2021 and options to
purchase 16,000 shares of common stock that are currently
exercisable or exercisable within 60 days of April 27,
2021.
(8)
Includes
(i) 185.000 shares of common stock held by Yorkmont Capital
Partners, LP and (ii) 50,000 shares of common stock held by Graeme
P. Rein individually. Mr. Rein, who is one of the new Board
nominees at our 2021 Annual Meeting, is the Managing Member of
Yorkmont Capital Management, LLC, which is the general partner of
Yorkmont Capital Partners, LP. Mr. Rein and Yorkmont Capital
Management, LLC are indirect beneficial owners of the reported
securities.
14
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 2021 but may decide to do so in the
future.
SUMMARY COMPENSATIONTABLE
The
following table shows amounts earned by each officer in the years
ended December 31, 2020 and 2019:
|
Name and
|
Year
|
Salary
|
Bonus
|
Stock Awards
|
Option Awards
|
Non-equity incentive plan compensation
|
Change in Pension Value and Nonqualified deferred compensation
earnings
|
All Other Compensation
|
Total
|
|
Principal Position
|
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian R.
Balbirnie
|
2020
|
200,000
|
—
|
—
|
—
|
—
|
—
|
—
|
200,000
|
|
(Chief Executive
Officer)
|
2019
|
200,000
|
—
|
—
|
—
|
—
|
—
|
—
|
200,000
|
|
Steven
Knerr
|
2020
|
165,000
|
—
|
—
|
—
|
—
|
—
|
—
|
165,000
|
|
(Chief Financial
Officer)
|
2019
|
165,000
|
—
|
66,050
|
—
|
—
|
—
|
—
|
231,050
|
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 2020 and 2021, our Board has
decided to increase Mr. Balbirnie’s target bonus potential to
the previous 45% level subject to the specific bonus percentages
further described below in the 2020 Bonus Plan section for Mr.
Balbirnie. Additionally, on March 19, 2021, our Compensation
Committee agreed to increase Mr. Balbirnie’s annual salary
from $200,000 to $210,000 effective as of March 1, 2021 in
recognition of the Company’s 2020 financial performance.
Also, for the year ended December 31, 2020, Mr. Balbirnie earned a
cash bonus of $100,000, which was paid on March 12, 2021. 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.
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.
15
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 2020 and 2021, our Board
has decided to increase Mr. Knerr’s target bonus potential to
the previous 35% level subject to the specific bonus percentages
further described below in the 2020 Bonus Plan section for Mr.
Knerr. Additionally, on March 19, 2021, our Compensation Committee
increased Mr. Knerr’s annual salary from $165,000 to $170,000
effective as of March 1, 2021 in recognition of the Company’s
2020 financial performance. Also, for the year ended December 31,
2020, Mr. Knerr earned a cash bonus of $64,167, which was paid on
March 12, 2021.
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.
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 milestones 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.
|
16
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.
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.
For the
year ended December 31, 2020, Mr. Balbirnie and Mr. Knerr earned
cash bonuses of $100,000 and $64,167, respectively, based on the
specific bonus percentages further described below in the 2020
Bonus Plan sections for Messrs. Balbirnie and Knerr. Both bonuses
were paid on March 12, 2021.
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 vested 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 2021. 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 2020.
17
COMPENSATION OF NAMED EXECUTIVE OFFICERS
Compensation of Chief Executive Officer.
During the twelve months ended
December 31, 2020, Mr. Balbirnie’s total compensation was
$200,000. Mr. Balbirnie’s total compensation was comprised of
salary payments from January 1, 2020 through December 31, 2020 of
$200,000.
2020 Bonus Plan.
On
January 20, 2020, our Board, based on recommendations from our
Compensation Committee, implemented a 2020 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 upon the
achievement of target financial numbers during the fiscal year
2020
.
|
|
►
|
Bonus targets for solely the target financial numbers would have
been 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 for the year ended 2020 of $100,000, which was paid on March
12, 2021.
2021 Bonus Plan.
March 2, 2021, the Board, based on
the recommendation of our Compensation Committee, implemented a
2021 cash bonus plan for Mr. Balbirnie based on the following
criteria:
|
►
|
Cash
bonus target is 45% of annualized base salary of
$210,000.
|
|
►
|
Cash
bonus plan
is based entirely upon the
achievement of target financial numbers during the fiscal year
2021.
|
|
►
|
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.
|
Compensation of Chief Financial Officer.
For the twelve
months ended December 31, 2020, Mr. Knerr’s total
compensation was $165,000. Mr. Knerr’s total compensation was
comprised of salary payments from January 1, 2020 through December
31, 2020 of $165,000.
2020 Bonus Plan.
On
January 20, 2020, our Board, based on
recommendations from our Compensation Committee, implemented a 2020
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 the achievement
of target financial numbers during the fiscal year
2020
.
|
|
►
|
Bonus targets for solely the target financial numbers would 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.
|
Based
on these criteria and as noted above, Mr. Knerr received a cash
bonus for the year ended December 31, 2020 of $64,167, which was
paid on March 12, 2021.
2021 Bonus Plan.
On
March 2, 2021, the Board,
based on the recommendation of our Compensation Committee,
implemented a 2021 cash bonus plan for Mr. Knerr based on the
following criteria:
|
►
|
Cash
bonus target is 35% of annualized base salary of
$170,000.
|
|
►
|
Cash
bonus plan
is based entirely upon the
achievement of target financial numbers during the fiscal year
2021
.
|
|
►
|
Bonus targets for solely the target financial numbers will be
scaled as follows:
(i) below 90% of target results in no
bonus paid; (ii) 90% of target results in 50% of bonuses paid;
(iii) 100% of target results in 100% of bonuses paid; (iv) 120% and
greater of target results in 120% of bonuses paid. The payout is a
maximum of 120% of target bonus.
|
18
Outstanding Equity Awards at Fiscal Year-End
The
following table sets forth information regarding equity awards that
have been previously awarded to each of the named executive
officers and which remained outstanding as of December 31,
2020.
|
Name
|
Number of securities underlying unexercised options (#)
exercisable
|
Number of securities underlying unexercised options (#)
unexercisable
|
Option exercise price ($)
|
Option expiration date
|
Number of Shares or Units of Stock that have not Vested
(#)
|
Market Value of Shares of Units That Have Not Vested
($)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or
Other Rights that Have Not Vested (#)
|
Equity Incentive Plan Awards: Market of Payout Value of Unearned
Shares, Units or Other Rights that Have Not Vested ($)
|
|
|
|
|
|
|
|
|
|
|
|
Brian R.
Balbirnie
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Steven
Knerr
|
5,000
|
—
|
6.80
|
11/19/2025
|
—
|
——
|
—
|
—
|
|
|
10,000
|
—
|
7.76
|
9/27/2023
|
—
|
—
|
—
|
—
|
Issuer Direct Corporation 2014 Equity Incentive Plan
On
March 31, 2014, our Board adopted the Issuer Direct Corporation
2014 Equity Incentive Plan (the “2014 Plan”), which
provides for the grant of stock options, stock appreciation rights,
restricted stock and restricted stock units to employees, directors
and consultants, to be granted from time to time as determined by
our Board or its designees. Our stockholders approved the 2014 Plan
on May 23, 2014. The 2014 Plan was amended as of June 10, 2016 and
June 17, 2020 to increase the number of shares of our common stock
authorized under the plan. As of April 27, 2021, the number of
shares available for issuance under the 2014 Plan is 236,583 as a
result of certain employees leaving the Company and the shares
becoming available for reissuance under the 2014 Plan. The 2014
Plan will expire by its terms on March 31, 2024. For description of
the 2014 Plan, see “Proposal 2: Amendment to 2014 Equity
Incentive Plan.”
Equity Compensation Plan Information
The
following table provides certain information as of December 31,
2020, with respect to our equity compensation plans under which our
equity securities are authorized for issuance:
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding
options(a)
|
Weighted- average exercise price of Outstanding
options(b)
|
Securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))(c)
|
|
|
|
|
|
|
Equity compensation
plan approved by security holders
|
60,230
(1)
|
$
11.89
|
236,483
|
|
Equity compensation
plan not approved by security holders
|
-
|
$
-
|
-
|
|
Total
|
60,230
(1)
|
$
11.89
|
236,483
|
(1)
10,313 of this number represents stock options outstanding which
were granted under the Issuer Direct Corporation 2010 Equity
Incentive Plan, which has terminated pursuant to its
terms.
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.
19
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)
William H. Everett
20
Proposal 2–Advisory Vote on Executive
Compensation
Section
14A of the Exchange Act enables our stockholders to approve, on an
advisory basis, the compensation of our named executive officers as
disclosed in this Proxy Statement in accordance with the
SEC’s rules. The proposal, commonly known as a “say on
pay” proposal, gives our stockholders the opportunity to
express their views on the Company’s executive compensation.
Because this is an advisory vote, this proposal is not binding upon
the Company, our Board of Directors or the Compensation Committee;
however, the Compensation Committee, which is responsible for
designing and administering the Company’s executive
compensation program, values the opinions expressed by stockholders
in their vote on this proposal. To the extent there is any
significant vote against the compensation of our named executive
officers as disclosed in this Proxy Statement, we will consider our
stockholders’ concerns and the Compensation Committee will
evaluate whether any actions are necessary to address these
concerns.
As
described in detail under the heading “Compensation
Discussion and Analysis,” the goals of our compensation
program are to ensure that executive compensation rewards
management for helping us achieve our financial goals (increased
sales, profitability, etc.) and aligns management’s overall
goals and objectives with those of our stockholders. To achieve
these goals, our Compensation Committee and Board of Directors aim
to:
●
provide a
competitive compensation package that enables us to attract and
retain superior management personnel;
●
relate compensation
to our overall performance, the individual officer’s
performance and our assessment of the officer’s future
potential; and
●
reward our officers
fairly for their role in our achievements.
We are
asking our stockholders to indicate their support for our named
executive officer compensation program as described in this Proxy
Statement in accordance with the compensation disclosure rules of
the SEC. This vote is not intended to address any specific item of
compensation, but rather the overall compensation of our named
executive officers and the philosophy, policies and practices
described in this Proxy Statement. Accordingly, we ask our
stockholders to vote “FOR” the following resolution at
the Annual Meeting:
“Resolved,
that the stockholders approve, on an advisory basis, the
compensation of the Company’s named executive officers as
disclosed in the Compensation Discussion and Analysis, the
accompanying compensation tables, and the related narrative
disclosure in the Company’s Proxy Statement for the Annual
Meeting.”
VOTE REQUIRED
The
affirmative vote of the holders of a majority of the shares of our
voting securities represented in person or by proxy at the Annual
Meeting entitled to vote on such proposal that vote for or against
such proposal is required to approve the advisory vote on executive
compensation. This is a non-binding advisory vote.
|
The Board of Directors recommends a vote "FOR" the advisory vote on
executive compensation disclosed in the compensation discussion and
analysis, the accompanying compensation tables, and the related
narrative disclosure.
|
21
Proposal 3–Advisory Vote on Frequency of Future Advisory
Votes on Executive Compensation
Section
14A of the Exchange Act requires that our stockholders vote at
least every six calendar years, on a non-binding, advisory basis,
to determine the frequency of the advisory vote on our overall
executive compensation programs with a choice for future votes to
be held every one, two or three years. For the reasons described
below, we recommend that our stockholders select a frequency of
three years, or a triennial vote.
The
structure and terms of our executive compensation program is
designed to balance the Company’s financial resources while
also supporting long-term value creation, and we believe a
triennial vote will allow our stockholders to better judge our
executive compensation program in relation to our long-term
performance. As described in this Proxy Statement, one of the key
objectives of the structure of our executive compensation is to
attempt to ensure that management’s interests are aligned
with our stockholders’ interests to support long-term value
creation.
We
believe that a triennial vote will provide us with the time to
thoughtfully respond to stockholders’ sentiments and
implement any necessary changes. We intend to review changes to our
compensation arrangements in an effort to maintain the consistency
and credibility of the program which is important in motivating and
retaining our executive officers. We therefore believe that a
triennial vote is an appropriate frequency to provide management
and the Board of Directors sufficient time to consider
stockholders’ input and to implement any appropriate changes
to our executive compensation program.
With
respect to the frequency of the say-on-pay vote, you may vote for:
one year, two years or three years, or abstain. Although the
advisory vote is non-binding, our Board of Directors will review
the results of the vote and take them into account in making a
determination concerning the frequency of future say-on-pay votes.
Stockholders will have the opportunity to vote on the frequency of
advisory votes on executive compensation every six
years.
|
|
The Board of Directors recommends a vote for “THREE
YEARS” when voting on the frequency of future advisory votes
on executive compensation.
|
22
Proposal 4–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, 2021. 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, 2020 and 2019, Cherry Bekaert LLP, billed
us the fees set forth below, including expenses, in connection with
services rendered by that firm to us.
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Year Ended December 31,
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2020
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2019
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Audit
fees
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$
135,000
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$
128,100
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Audit
related fees
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---
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83,100
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Tax
fees
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---
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---
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All
other fees
|
---
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---
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Total
fees
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$
135,000
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$
211,200
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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, 2020 and 2019, 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, 2020, there
were not such fees billed by Cherry Bekaert LLP. During our fiscal
year ended December 31, 2019, Cherry Bekaert LLP billed the Company
$83,100 for audit-related services related to certain assets
acquired by us during 2019.
Tax Fees.
Tax fees include fees
for professional services for tax compliance, tax advice and tax
planning for the tax years ended December 31, 2020 and 2019. During
our fiscal years ended December 31, 2020 and 2019, 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, 2020 and 2019, 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, 2021. 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. 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.
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.
23
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. 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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24
REPORT OF THE AUDIT COMMITTEE
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, 2020, 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, 2020 that were filed with the
SEC.
The Audit Committee
Michael Nowlan (Chairman)
William H. Everett
25
Certain Relationships and Related Party Transactions and Director
Independence
RELATED PARTY TRANSACTIONS
None.
DIRECTOR INDEPENDENCE
As of
April 27, 2021, we had three independent directors on our Board,
William H. Everett, 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.
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.
Section 16(a): Beneficial Ownership Reporting
Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company’s directors and executive officers and persons who
beneficially own more than ten percent of the Company’s
common stock to file with the Securities and Exchange Commission
reports showing ownership of and changes in ownership of the
Company’s common stock and other equity securities. On the
basis of information submitted by the Company’s directors and
executive officers, the Company believes that its directors and
executive officers timely filed all required Section 16(a) filings
for fiscal year 2020.
Stockholder Proposals and Nominations for 2022 Annual
Meeting
Pursuant
to our bylaws, stockholders who wish to submit proposals to be
considered or to nominate persons for election to the Board of
Directors at the 2022 Annual Meeting must be a stockholder of
record, both when they give us notice and at the 2022 Annual
Meeting, must be entitled to vote at the 2022 Annual Meeting, and
must comply with the notice provisions in our bylaws. A
stockholder’s notice must be delivered to our Corporate
Secretary at c/o
Issuer Direct
Corporation, 1 Glenwood Ave, Suite 1001, Raleigh NC 27603
not less than 75 nor more than 105 days before the anniversary date
of the immediately preceding Annual Meeting. For our 2022 Annual
Meeting, the notice must be delivered between February 26, 2022 and
March 28, 2022. However, if our 2022 Annual Meeting is not within
30 days of June 11, 2022, 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
2022 Annual Meeting or 120 days prior to such meeting. The public
announcement of an adjournment or postponement of the 2022 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.
Additional Information
A copy
of our 2020 Annual Report on Form 10-K is available to each
stockholder in connection with this Proxy Statement. The 2020
Annual Report on Form 10-K is not a part of the proxy solicitation
materials.
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
.
26
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 11, 2021 AT 12:00 PM 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
2021 annual meeting of stockholders of the Company to be held
virtually, on Friday, June 11, 2021 beginning at 12:00 PM, 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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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 six (6) 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 &
Compensation Committee
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☐
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Michael Nowlan
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Director, Chairman of Audit Committee
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☐
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J. Patrick Galleher
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Director, Chairman of Compensation Committee
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☐
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CONTROL
ID:
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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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REQUEST ID:
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Marti Beller
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Director Nominee
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☐
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Graeme P. Rein
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Director Nominee
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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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Advisory
Vote on Executive Compensation;
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☐
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☐
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☐
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Proposal 3
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1 YEARS
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2 YEARS
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3 YEARS
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ABSTAIN
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Advisory Vote on
Frequency of Future Advisory Votes on Executive
Compensation
;
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☐
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☐
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☐
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☐
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Proposal 4
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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,
2021.
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☐
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☐
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☐
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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:
________________________, 2021
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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