UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
 
FORM 8-K
______________
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 5, 2017 (May 1, 2017)
______________
 
Issuer Direct Corporation
(Exact name of registrant as specified in its charter)
______________
 
Delaware
1-10185
26-1331503
(State or other jurisdiction
(Commission
(I.R.S. Employer
of incorporation)
File Number)
Identification No.)
 
500 Perimeter Park, Suite D, Morrisville, North Carolina 27560
(Address of principal executive offices) (Zip Code)
 
Registrant’s telephone number, including area code (919) 481-4000
 
N/A
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
 
 ☐
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 ☐
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 ☐
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 ☐
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 
 
 
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
 
Compensatory Arrangements for Existing Officers
 
Brian R. Balbirnie First Amendment to Executive Employment Agreement
 
On May 4, 2017, Issuer Direct Corporation (the “Company”) entered into a First Amendment to Executive Employment Agreement (the “Balbirnie Amendment”) with Brian R. Balbirnie, the Company’s Chief Executive Officer and member of the Board of Directors, to amend certain cash compensation provisions of the Executive Employment Agreement the Company and Mr. Balbirnie entered into on April 30, 2014 (the “Original Balbirnie Agreement”).
 
Specifically, effective as of May 1, 2017, the Balbirnie Amendment (i) increased Mr. Balbirnie’s annual base salary from $185,000 to $200,000 and (ii) decreased 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.
 
Except for these specific amendments, the Original Balbirnie Agreement remains in full force and effect and is not altered in any way. The terms of the Original Balbirnie Agreement and the Original Balbirnie Agreement itself are disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “Commission”) on May 5, 2014.
 
The disinterested members of the Board of Directors believe these amendments more accurately reflect the current market for annual base salaries for Chief Executive Officers of similar sized companies while also maintaining the potential for Mr. Balbirnie’s overall cash compensation consistent with historical numbers.
 
The foregoing summary of certain terms of the Balbirnie Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Balbirnie Amendment, a copy of which are attached hereto as Exhibit 10.1 and is hereby incorporated into this Current Report on Form 8-K by reference.
 
Steven Knerr First Amendment to Executive Employment Agreement
 
On May 4, 2017, Issuer Direct Corporation (the “Company”) entered into a First Amendment to Executive Employment Agreement (the “Knerr Amendment”) with Steven Knerr, the Company’s Chief Financial Officer, to amend certain cash compensation provisions of the Executive Employment Agreement the Company and Mr. Knerr entered into on November 19, 2015 (the “Original Knerr Agreement”).
 
Specifically, effective as of May 1, 2017, the Knerr Amendment (i) increased Mr. Knerr’s annual base salary from $151,000 to $165,000 and (ii) decreased 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.
 
Except for these specific amendments, the Original Knerr Agreement remains in full force and effect and is not altered in any way. The terms of the Original Knerr Agreement and the Original Knerr Agreement itself are disclosed in a Current Report on Form 8-K filed with the Commission on November 19, 2015.
 
The Board of Directors believe these amendments more accurately reflect the current market for annual base salaries for Chief Financial Officers of similar sized companies while also maintaining the potential for Mr. Knerr’s overall cash compensation consistent with historical numbers.
 
The foregoing summary of certain terms of the Knerr Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Knerr Amendment, a copy of which are attached hereto as Exhibit 10.2 and is hereby incorporated into this Current Report on Form 8-K by reference.
 
 
 
Implementation of 2017 Bonus Plan
 
On May 1, 2017, the disinterested members of Board of Directors approved a 2017 bonus plan (“2017 Bonus Plan”) for Messrs. Balbirnie and Knerr. The material terms of the 2017 Bonus Plan are as follows:
 
2017 Bonus Plan target cash bonus for Mr. Balbirnie will be 40% of his annual base salary of $200,000;
 
2017 Bonus Plan target cash bonus for Mr. Knerr will be 30% of his annual base salary of $165,000;
 
Bonus plan amounts paid to Messrs. Balbirnie and Knerr will be based (i) 50% upon the achievement of target financial numbers during the fiscal year 2017 and (ii) 50% based upon the achievement of certain management objectives determined by the Board of Directors;
 
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. Bonuses are capped at 120% of target performance. For purposes of clarity, within each applicable range, bonuses will be scaled based on the actual results versus the target, e.g. if 95% of Target is achieved, the applicable bonus percentage will be 50% plus one-half of the applicable range such that 75% of the bonus will be paid and
 
Both Messrs. Balbirnie and Knerr are each eligible to receive such additional bonus or incentive compensation as the Board of Directors may establish or determine from time to time in the Board of Directors’ sole discretion.
 
Item 9.01.  Financial Statements and Exhibits.
 
(d)  Exhibits
 
First Amendment to Executive Employment Agreement dated May 4, 2017 between Issuer Direct Corporation and Brian R. Balbirnie.
 
First Amendment to Executive Employment Agreement dated May 4, 2017 between Issuer Direct Corporation and Steven Knerr.
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
 
         
Issuer Direct Corporation
 
 
  
 
 
 
 
By:  
/s/ Brian R. Balbirnie
 
 
Brian R. Balbirnie
Chief Executive Officer
 
 
 
 
 
 
Date: May 5, 2017
 
 
 
 
 
Exhibit 10.1
 
FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
 
This First Amendment to Executive Employment Agreement (the “ First Amendment ”) is entered into as of May 4, 2017 by and among Issuer Direct Corporation, a Delaware corporation (the “ Company ”) and Brian R. Balbirnie (the “ Executive ”).
 
BACKGROUND
 
A.           The Company and the Executive are parties to that certain Executive Employment Agreement dated as of April 30, 2014 (the “ Original Agreement ”); and
 
B.           The Company and the Executive desire to amend the Original Agreement as set forth in this First Amendment.
 
AGREEMENT
 
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the Company and the Executive agree as follows:
 
1.            Incorporation of Recitals; Defined Terms . The recitals set forth above are hereby incorporated by reference into this First Amendment. Capitalized terms used, and not otherwise defined herein, shall have the meanings given to such terms in the Original Agreement.
 
2.            Amendments to Original Agreement .
 
(a)           Effective as of May 1, 2017, Section 4 of the Original Agreement is deleted and replaced in its entirety with the following:
 
“4.            Salary .   For all services rendered and to be rendered hereunder, the Company agrees to pay to the Executive, and the Executive agrees to accept a salary of $200,000 per annum (“ Base Salary ”). Any such salary shall be payable in accordance with the Company’s normal payroll practice and shall be subject to such deductions or withholdings as the Company is required to make pursuant to law, or by further agreement with the Executive. The Base Salary shall be reviewed annually by the Board or the Compensation Committee of the Board during the first fiscal quarter for increase (but not decrease, except as permitted under Section 8(c)(ii) below) as part of its annual compensation review (which review shall include compensation under Sections 5 and 6 below), and any increased amount shall become the Base Salary under this Agreement.”
 
  (b)             Effective as of May 1, 2017, Section 5 of the Original Agreement is deleted and replaced in its entirety with the following:
 
 
 
1
 
 
“5.            Incentive Compensation . During the Term, the Executive shall be eligible to receive annual bonus compensation in an amount equal to forty percent (40%) of the Base Salary upon the achievement of reasonable target objectives and performance goals both of the Company and the Executive as may be determined by the Board or the Compensation Committee of the Board in consultation with the Executive. Such target objectives and performance goals are to be established on or before the end of the first quarter of the fiscal year to which the bonus relates (the “ Bonus Plan ”) and the Executive must continue to be an employee of the Company on the bonus payment date determined under the Bonus Plan in order to receive any payment under the Bonus Plan; provided, however , such bonus payment date shall be no later than fifteen days after the filing of the Company’s Form 10-K with the Securities and Exchange Commission.”
 
3 .             Miscellaneous . The Original Agreement and this First Amendment contain the entire understanding of the Company and Executive with respect to the subject matter hereof, and supersede all prior representations, agreements and understandings relating to the subject matter hereof. In the event of an inconsistency between the terms of the Original Agreement and this First Amendment with respect to the matters the subject matter hereof, this First Amendment will govern. Except as explicitly amended by this First Amendment, the Original Agreement shall remain in full force and effect and are not altered in any way.
 
 
[ SIGNATURE PAGE FOLLOWS ]
 
 
 
2
 
 
IN WITNESS WHEREOF, the Company and the Executive have caused this First Amendment to Executive Employment Agreement be executed and as of the date referenced above.
 
 
COMPANY:
 
ISSUER DIRECT CORPORATION
 
 
 
By: /s/ Andre Boisvert                     
Name: Andre Boisvert
Title: Board of Directors
 
 
EXECUTIVE:
 
By: /s/ Brian R. Balbirnie                
     Brian R. Balbirnie
 
 
 
3
 
Exhibit 10.2
 
FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
 
This First Amendment to Executive Employment Agreement (the “ First Amendment ”) is entered into as of May 4, 2017 by and among Issuer Direct Corporation, a Delaware corporation (the “ Company ”) and Steven Knerr (the “ Executive ”).
 
BACKGROUND
 
A.           The Company and the Executive are parties to that certain Executive Employment Agreement dated as of November 19, 2015 (the “ Original Agreement ”); and
 
B.           The Company and the Executive desire to amend the Original Agreement as set forth in this First Amendment.
 
AGREEMENT
 
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the Company and the Executive agree as follows:
 
1.            Incorporation of Recitals; Defined Terms . The recitals set forth above are hereby incorporated by reference into this First Amendment. Capitalized terms used, and not otherwise defined herein, shall have the meanings given to such terms in the Original Agreement.
 
2.             Amendments to Original Agreement . Effective as of May 1, 2017, Section 4 of the Original Agreement is deleted and replaced in its entirety with the following:
 
“4.            Cash Compensation .
 
(a)   Salary . For all services rendered and to be rendered hereunder, the Company agrees to pay to the Executive, and the Executive agrees to accept a salary of $165,000 per annum (“ Base Salary ”). Any such salary shall be payable in accordance with the Company’s normal payroll practice and shall be subject to such deductions or withholdings as the Company is required to make pursuant to law, or by further agreement with the Executive. The Base Salary shall be reviewed annually by the Board or Compensation Committee of the Board during the first fiscal quarter for increase (but not decrease, except as permitted under Section 8(c)(ii) below) as part of its annual compensation review (which review shall include compensation under Sections 4(b) and 6 below), and any increased amount shall become the Base Salary under this Agreement.
 
 
1
 
(b)   Bonus . During the Term, the Executive shall be eligible to receive annual bonus compensation in an amount equal to thirty percent (30%) of the Base Salary upon the achievement of reasonable target objectives and performance goals both of the Company and the Executive as may be determined by the Board or the Compensation Committee of the Board in consultation with the Executive. Such target objectives and performance goals are to be established on or before the end of the first quarter of the fiscal year to which the bonus relates (the “ Bonus Plan ”) and the Executive must continue to be an employee of the Company on the bonus payment date determined under the Bonus Plan in order to receive any payment under the Bonus Plan; provided, however , such bonus payment date shall be no later than fifteen days after the filing of the Company’s Form 10-K with the Securities and Exchange Commission.”
 
3.            Miscellaneous . The Original Agreement and this First Amendment contain the entire understanding of the Company and Executive with respect to the subject matter hereof, and supersede all prior representations, agreements and understandings relating to the subject matter hereof. In the event of an inconsistency between the terms of the Original Agreement and this First Amendment with respect to the matters the subject matter hereof, this First Amendment will govern. Except as explicitly amended by this First Amendment, the Original Agreement shall remain in full force and effect and are not altered in anyway.
 
 
[ SIGNATURE PAGE FOLLOWS ]
 
 
 
2
 
                 
IN WITNESS WHEREOF, the Company and the Executive have caused this First Amendment to Executive Employment Agreement be executed and as of the date referenced above.
 
 
COMPANY:
 
ISSUER DIRECT CORPORATION
 
 
By: /s/ Andre Boisvert                      
Name: Andre Boisvert
Title: Board of Directors
 
 
EXECUTIVE:
 
 
 
 
By: /s/ Steven Knerr                         
     Steven Knerr
 
 
 
3