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. __)
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Filed by a Party other than the Registrant ☐
 
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☐ Preliminary Proxy Statement
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☑ Definitive Proxy Statement
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ISSUER DIRECT CORPORATION
(Name of Registrant as Specified In Its Charter)
 
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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20202021 Notice of Annual Meeting of Stockholders
 
 
 
 
 
 
 
 
Wednesday,Friday, June 17, 202011, 2021 12:00 p.m. EDT
 
VIRTUALLY
https://www.issuerdirect.com/virtual-event/agm.issuerdirect.com/isdr
 
  
 
 
 
 
 
 
Issuer Direct Corporation
1 Glenwood Avenue, Suite 1001
Raleigh NC 27603
 
 
April 28, 202027, 2021
 
To Our Stockholders:
 
We are pleased to invite you to attend our Annual Meeting of Stockholders to be held on Wednesday,Friday, June 17, 2020,11, 2021, at 12:00 p.m. EDT. In light of the continuing public health concerns regarding the coronavirus (COVID-19) outbreak,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 21, 202015, 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 17, 2020.11, 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, 2019.2020. 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.
 
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.
 
  Sincerely, 
    

 
/s/ William H. Everett
William H. Everett
 
  
William H. Everett
 
  Chairman of the Board of Directors 
 

 
 
 
 
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 17, 202011, 2021
 
To Our Stockholders:
 
Our Annual Meeting of Stockholders will be held virtually on Wednesday,Friday, June 17, 2020,11, 2021, at 12:00 p.m. EDT, (the “Annual Meeting”) for the following purposes:
 
1.
To elect four (4)six (6) directors nominated buyby our Board of Directors as set forth in thethis proxy statement;
2.
A proposal to approve the Second Amendment to Issuer Direct Corporation’s 2014 Equity Incentive Plan to increase the total number of shares of common stock authorized for issuance under such plan by 200,000An 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, 2020;2021; and
4.
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 21, 2020.15, 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://www.issuerdirect.com/virtual-event/agm.issuerdirect.com/isdr and entering in your shareholderstockholder 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.
 
  By Order of the Board of Directors, 
    

 /s/ William H. Everett 
  
 
William H. Everett
 
  Chairman of the Board of Directors 
 
Raleigh, North Carolina
April 28, 202027, 2021
  
 
 
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 IN VIRTUALLY.
 
 
 
 
 
  

Table of Contents

 
Proxy Summary 1
20202021 Annual Meeting of Stockholders 1
Annual Meeting Agenda and Voting Recommendations 1
Director Nominees 2
   
Proxy Statement 3
   
Questions and Answers 3
   
Delivery of Documents to Security Holders Sharing an Address 6
   
PROPOSAL 1–ELECTION OF DIRECTORS 76
Nominees for Director 76
Certain Information Concerning Director Nominees 76
Board and Committee Membership 97
Consideration of Stockholder Nominees for Directors 9
   
Corporate Governance 10
Indemnification of Directors and Officers 10
Directors’ and Officers’ Liability Insurance 10
Code of Ethics 10
Director Independence 10
Board Committees 11
Audit Committee 11
CompensationCommittee
 11
Strategic AdvisoryCommittee
 11
Meetings and Attendance 1211
Communications with the Board of Directors 12
Non-Employee Director Compensation Agreement 12
20192020 Non-Employee Director Compensation Table 13
 
Security Ownership of Beneficial Owners and Management 14
   
Executive Compensation 15
Compensation Discussion and Analysis 15
Summary Compensation Table 15
Brian R. Balbirnie Employment Agreement 15
Steven Knerr Employment Agreement 16
Philosophy of Compensation 16
Components of Compensation 17
Compensation of Named Executive Officers 1718
Risk Considerations in our Compensation Programs 19
Compensation Committee Report 1920
   
PROPOSAL 2-AMENDMENT TO 2014 EQUITY INCENTIVE PLAN2-ADVISORY VOTE ON EXECUTIVE COMPENSATION 2021
   
PROPOSAL 3–3-ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
 22
PROPOSAL 4–RATIFICATION OF AUDITORS 2523
Ratification of Selection of Independent Auditors 2523
Audit Committee Pre-Approval Policy 2624
Report of the Audit Committee 2625
   
Certain Relationships and Related Party Transactions and Director Independence 2726
Related Party Transactions 2726
Director Independence 2726
   
Other Matters 2726


Section 16(a): Beneficial Ownership Reporting Compliance
26 
Stockholder Proposals and Nominations for 2022 Annual Meeting
26 
  
Additional Information 2726
 
 
 
 

Proxy Summary

 
2020
2021 ANNUAL MEETING OF STOCKHOLDERS
 
 
WHEN
Wednesday,Friday, June 17, 202011, 2021 at 12 p.m. EDT
 
WHERE
Virtual – https://www.issuerdirect.com/virtual-event/agm.issuerdirect.com/isdr
 
 
RECORD DATE
Close of business on April 21, 202015, 2021
 
 
 
ITEMS OF BUSINESS
 
1.
To elect four (4)six (6) directors nominated by our Board of Directors as set forth in thethis proxy statement;
2.
An advisory vote on executive compensation as disclosed in this proxy statement;
2.3.
A proposal to approve the Second Amendment to the Issuer Direct Corporation’s 2014 Equity Incentive Plan to increase the total numberAn advisory vote on frequency of shares of common stock authorized for issuance under such plan by 200,000;future advisory votes on executive compensation;
3.4.
To ratify the appointment of Cherry Bekaert LLP as our independent registered public accounting firm for the year ending December 31, 2020;2021; and
4.5.
To transact such other business as may properly come before the meeting or any postponement or adjournment thereof.
 
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
 
By voting online at https://www.iproxydirect.com/isdr
 
 
By returning a properly completed, signed and dated proxy card
 
 
 
By completing the reverse side of the proxy
card and faxing it to 202.521.3464
 
 
 
ANNUAL MEETING AGENDA AND VOTING RECOMMENDATIONS
 
ProposalVoting RecommendationPage Reference
1 Election of four (4)six (6) directors
✓FOR each nominee
7
2 Amendment to 2014 Equity Incentive PlanAdvisory vote on executive compensation as disclosed in this proxy statement
✓ FOR
20
3 Advisory vote on frequency of future advisory votes on executive compensation
✓FOR
20
4 Ratification of the appointment of Cherry Bekaert LLP as our independent auditors
✓FOR
25
 

 
DIRECTOR NOMINEES
 
NameAgeDirector SinceOccupationIndependent DirectorStanding Committee MembershipAgeDirector SinceOccupationIndependent DirectorStanding Committee Membership
         
William H. Everett692013Retired, Executive Vice President and Chief Financial Officer of Tekelec, Inc.
✓
 
AC, SAC702013Retired, Executive Vice President and Chief Financial Officer of Tekelec, Inc.✓AC, CC, SAC
J. Patrick Galleher
48 2014
Managing Partner for Boxwood Partners, LLC 
  ✓    CC*, SAC*
Michael Nowlan612017Executive Consultant to private companies; retired Chief Executive Officer of Primus Telecommunications Canada Inc. and, Marketwire, Inc.✓AC*622017Executive Consultant to private companies; retired Chief Executive Officer of Primus Telecommunications Canada Inc. and Marketwire, Inc.✓AC*
J. Patrick Galleher472014
Managing Partner for Boxwood Partners, LLC and Managing Director for Boxwood Capital Partners, LLC
 
✓CC, SAC*
     
Brian R. Balbirnie482007Founder and Chief Executive Officer of Issuer Direct Corporation  492007Founder and Chief Executive Officer of Issuer Direct Corporation  
Marti Beller54New NomineePresident, Kobie Marketing, Inc. ✓ 
Graeme P. Rein41New NomineeManaging Member and Chief Investment Officer of Yorkmont Capital Management, LLC ✓ 
 
AC = Audit Committee
CC = Compensation Committee
SAC = Strategic Advisory Committee
* = Committee Chair
 

 
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 21, 2020,15, 2021, and, therefore, are eligible to vote at the Company’s Annual Meeting of Stockholders to be held virtually on Wednesday,Friday, June 17, 2020,11, 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 21, 202015, 2021 will be entitled to vote on the following proposals:
 
1.
To elect four (4)six (6) directors nominated buyby our Board of Directors as set forth in the proxy statement;
2.
A proposal to approve the Second Amendment to Issuer Direct Corporation’s 2014 Equity Incentive Plan to increase the total number of shares of common stock authorized for issuance under such plan by 200,000;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, 2020;2021;
4.5.
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 shareholders.stockholders. However, due to the continuing public health concerns resulting from the coronavirus (COVID-19),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 shareholdersstockholders to join the meeting, regardless of location. Our decision to hold the annual meeting in a virtual format relates only to the 20202021 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 shareholders.stockholders.
 
►HOW CAN I PARTICIPATE IN THE ANNUAL MEETING?
 
You can join the annual meeting by accessing the meeting URL at https://www.issuerdirect.com/virtual-event/agm.issuerdirect.com/isdr and entering in your shareholderstockholder 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?” noNo questions will be taken in any other manner the day of the meeting.


 
► 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 3,772,7003,765,975 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 aproposal to approvethe Second Amendment to Issuer Direct Corporation’s 2014 Equity Incentive Plan to increase the total numbern advisory vote on frequency of shares of common stock authorized for issuance under such plan by 200,000future 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, 2020.2021.
 
► 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.
 

 
 
MAIL: Please mark, sign, date, and return this proxy card promptly using the enclosed envelope.
   
 
FAX: Complete the reverse portion of this proxy card and fax to (202) 521-3464.
   
 
INTERNET: https://www.iproxydirect.com/isdr
   
 
PHONE:866.752.VOTE (8683)
 
► 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.
 
 


 
Proposal 1–Election of Directors

 
ELECTION OF THE FOURSIX 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 foursix 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 fivefour 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.
All of the director nominees currently serve as members of our Board.
Mr. Eric Frank, who is currently a member of the Board of Directors as well as the Chairman of the Technology Oversight Committee and member of the Compensation Committee, will not stand for re-election at the Annual Meeting. Mr. Frank, who has served as a member of our Board for three years, has decided not to stand for re-election due to other business commitments, and not the result of any disagreement with us, our Board of Directors, or our management. The Board does not intend to replace Mr. Frank in the immediate future.
 
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 foursix 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 foursix directors have been nominated for election to the Board of Directors at the Annual Meeting to be held on June 17, 2020.11, 2021.
 
The names of the nominees and certain information about them as of April 28, 202027, 2021 are set forth below:
 
NomineeAgePositionDirector SinceAgePositionDirector Since
William H. Everett69Director, Chairman of the Board, Member of Audit Committee & Strategic Advisory Committee201370Director, Chairman of the Board, Member of Audit Committee, Compensation Committee & Strategic Advisory Committee2013
Brian R. Balbirnie48Director, President and Chief Executive Officer2007
J. Patrick Galleher47Director, Chairman of Compensation Committee and Strategic Advisory Committee201448Director, Chairman of Compensation Committee and Strategic Advisory Committee2014
Michael Nowlan61Director, Chairman of Audit Committee201762Director, Chairman of Audit Committee2017
Brian R. Balbirnie49Director, President and Chief Executive Officer2007
Marti Beller54New Director Nominee 
Graeme P. Rein41New Director Nominee 
 

 
William H. Everett  
 
Age 6970
Director Since 2013
 
● Chairman of the Board
● Member of the Audit Committee
● Member of the Strategic Advisory Committee
 
Professional Background and Qualifications Mr. Everett joined the Board of Directors of Issuer Direct Corporation on October 2, 2013. Mr. Everett has had more than thirty years of management experience and currently serves as a director of Hakisa SAS in Strasbourg France. In addition, Mr. Everett served on the Board of NeoNova Network Services until it was acquired in July 2013. In April 2010, Mr. Everett retired as Executive Vice President and CFO of Tekelec, a publicly traded telecom equipment supplier. Since that time, he has served as a corporate director and provided consulting services to public company and private equity clients. From 2011 through 2015, he served as an Executive in Residence and a member of the Board of Advisors at the Poole College of Management at NC State University. He has significant experience as both a Chief Financial Officer and a general manager working with a variety of multi-national technology companies over his career, including Epsilon Data Management, Chemfab Inc., Eastman Software and Steleus SAS. He was the Co-founder and President of Maps a la Carte, an internet mapping and spatial data company, which was acquired by Demand Media Inc. Mr. Everett received his BA in Political Science from Middlebury College and his MBA from the University of New Hampshire. He also practiced as Certified Public Accountant with Price Waterhouse for seven years before joining Epsilon Data Management.
 
 
Brian R. Balbirnie
Age 48
Director Since 2007
● President and Chief Executive Officer
Professional Background and Qualifications Mr. Balbirnie is a member of the Board and our President and Chief Executive Officer. Mr. Balbirnie established Issuer Direct in 2006 with a vision of creating a technology driven back-office compliance platform that would reduce costs as well as increase the efficiencies of the most complex tasks, today the company calls it Platform id. Mr. Balbirnie is responsible for the strategic leadership of the company and oversees day-to-day operations. Under Mr. Balbirnie’s direction, the Company has grown and in 2018 worked with approximately 4,000 customers. Mr. Balbirnie is an entrepreneur with more than 20 years of experience in emerging industries. Prior to Issuer Direct, Mr. Balbirnie was the founder and managing partner of Catapult Company, a compliance and consulting practice focused on the Sarbanes Oxley Act. During 2002 and 2003, Mr. Balbirnie also served as the Vice President and Chief Financial Officer of Mobile Reach International, Inc., a publicly traded company, and as the President and Chief Technology Officer of IVUE Corporation, a private company. Prior to and with Catapult, Mr. Balbirnie also advised several companies on their public market strategies, merger & acquisitions as well as their financial reporting requirements.
J. Patrick Galleher  
 
Age 4748
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 6162
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.
 


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
Age54
● New Director Nominee
Professional Background and QualificationsMs. 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 QualificationsMr. 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.


BOARD AND COMMITTEE MEMBERSHIP
 
The table below provides committee membership of each Board member as of April 28, 2020.27, 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   
Eric Frank * (1)
XC 
Michael Nowlan * C          
Internal Director            
Brian R Balbirnie            
 
C= Committee Chairman X = Committee Member * = Independent
 
(1)            
As noted above, Mr. Eric Frank will not stand for re-election at the Annual Meeting.
CONSIDERATION OF STOCKHOLDER NOMINEES FOR DIRECTOR
Pursuant to our bylaws, stockholders who wish to nominate persons for election to the Board of Directors at the 2021 Annual Meeting must be a stockholder of record, both when they give us notice and at the 2021 Annual Meeting, must be entitled to vote at the 2021 Annual Meeting, and must comply with the notice provisions in our bylaws. A stockholder’s notice must be delivered to our Corporate Secretary not less than 75 nor more than 105 days before the anniversary date of the immediately preceding Annual Meeting. For our 2021 Annual Meeting, the notice must be delivered between March 4, 2021 and April 3, 2021. However, if our 2021 Annual Meeting is not within 30 days of June 17, 2021, 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 2021 Annual Meeting or 120 days prior to such meeting. The public announcement of an adjournment or postponement of the 2021 Annual Meeting will not trigger a new time period (or extend any time period) for the giving of a stockholder notice as described in this proxy statement. The stockholder’s notice must be updated and supplemented as set forth in our bylaws.

The Board of Directors recommends a vote "FOR" the election of four (4)six (6) directors, until the next Annual Meeting or until their successors are duly elected and qualified.
 

 
Corporate Governance


Our Directors will serve until our next Annual Meeting of stockholders or until their resignation or removal.
 
Our directors are elected at the Annual Meeting of stockholders, with vacancies filled by the Board of Directors, and serve until their successors are elected and qualified, or their earlier resignation or removal. Officers are appointed by the Board of Directors and serve at the discretion of the Board of Directors or until their earlier resignation or removal.  Under the General Corporation Law of the State of Delaware, any action which is required to be taken or may be taken at any annual or special meeting of stockholders may also be taken without a meeting withoutor prior notice and without a vote, ifby written consent in writing setting forth the action so taken, shall be signed byof the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office, its principle place of business, or an officer or agent of the corporation having custody of the book in which the proceedings of meetings are recorded.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, Frank, 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 that eachMr. Rein, new nominees to our Board, also satisfy the Independence Rules. None of thesethe directors described in the preceding sentences has noa 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. As noted above, Mr. Eric Frank will not stand for re-election at the Annual Meeting.above.


 
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 2019:2020: 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.
On March 2, 2018, Mr. Nowlan replaced Mr. Everett asis the chairman of our Audit Committee. Mr. Everett remained as a member of the Audit Committee.
Both Messrs. Nowlan and Everett qualify as a financial expert, as defined in Item 407(d)(5)(ii) of Regulation S-K.
 
Responsibilities
 
The Audit Committee’s duties are to recommend to our Board of Directors the engagement of independent auditors to audit our financial statements and to review our accounting and auditingreporting 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, 2019,2020, our Audit Committee held four meetings.
 
 
Compensation Committee  
 
Members:
 
● J. Patrick Galleher (Chairman)
● Eric FrankWilliam H. Everett
 
Meetings in 2019:2020: 4
 
Our Compensation Committee was implemented on October 23, 2013 and is currently comprised of Messrs. FrankEverett 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. As noted above, Mr. Eric Frank will not stand for re-election at the Annual Meeting and will be replaced by Mr. Everett, on 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, 2019,2020, our Compensation Committee held four meetings.
 
 
Strategic Advisory Committee  
 
Members:
 
● J. Patrick Galleher (Chairman)
● William H. Everett
 
Meetings in 2019: 6
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 Strategic 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, 2019,2020, our Strategic Advisory Committee held sixdid not hold any meetings outside of our full Board meetings.
 


The Board of Directors has also established a Technology Oversight Committee, which currently consists solely of Eric Frank. As a result of Mr. Frank not standing for re-election at the Annual Meeting, the Board of Directors intends to dissolve the Technology Oversight Committee and the entire Board of Directors will address any issues which would otherwise be delegated to the Technology Oversight Committee.
 
MEETINGS AND ATTENDANCE
 
During the year ended December 31, 2019,2020, the Board of Directors held eightseven meetings and the respective committees held fourteeneight total meetings, and each director attended all of (i) Board meetings held during the period for which he was a director and (ii) committee meetings held during the period for which he was a committee member. We do not have a policy requiring director attendance at stockholder meetings, but members of our Board of Directors are encouraged to attend.
 

COMMUNICATIONS WITH THE BOARD OF DIRECTORS
 
A stockholder who wishes to communicate with our Board of Directors, any committee of our Board of Directors, the non-management directors or any particular director, may do so by writing to such director or directors in care of the 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 January 20, 2020,March 2, 2021, our Board, upon the recommendation of our Compensation Committee, determined to compensate our non-employee directors as set forth below.
Initial Equity Grant. Each non-employee director appointed to our Board and not by a vote of the stockholders at an annual meeting is automatically granted an initial grant of 6,000 restricted stock units (the “RSUs”) on the date of his or her appointment to our Board (with such amount pro-rated based on the number of days between the date of such director’s appointment and the date of our first annual meeting of stockholders following the date of grant (or to the extent that we have not determined the date of the next annual meeting of stockholders on or before the date of grant, June 15 following the date of grant)). The RSU’s will fully vest on the date of our first annual meeting of stockholders following the date of grant or immediately prior to the consummation of a change of control event. If an individual is appointed as a non-employee director at an annual meeting of stockholders, he or she will be granted an annual equity grant, as described below, in lieu of the initial equity grant. None of the nominees for the Board contained in this Proxy Statement would be entitled to this initial equity grant.
 
Annual Equity Grant. On the date of each annual meeting of stockholders, each non-employee director who is serving on our Board on the date of such annual meeting or who is elected by the stockholders at such annual meeting will be automatically granted 6,000receive a grant of restricted stock units (the “RSUs”(“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 2020,2021, 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.
 

 
20192020 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
 
The following table shows amounts earned by each non-employee director in fiscal 2019:2020:
 
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)
 $67,620(2)
  - 
  - 
  - 
  - 
 $121,620 
Eric Frank (3)
 $36,000 
  67,620(2)
  - 
  - 
  - 
  - 
 $103,620 
J. Patrick Galleher
 $36,000 
 $67,620(2)
  - 
  - 
  - 
  - 
 $103,620 
Michael Nowlan
 $36,000 
 $67,620(2)
  - 
  - 
  - 
  - 
 $103,620 
 
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 $11.27.$10.67. On June 13, 2019,17, 2020, each non-employee director was granted 6,000 restricted stock units with a vesting date of June 13, 2020.
(3)
As noted above, Mr. Frank will not stand for re-election at the Annual Meeting.17, 2021.
 

 
Security Ownership of Beneficial Owners and Management

 
The following table sets forth certain information as of April 28, 2020,27, 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)
 
 
Number of Shares Owned (1)
 
 
Percentage Owned (1)
 
 
 
 
 
 
 
 
 
 
Brian R. Balbirnie(2)(3)
  620,329(6)
  16.44%
  612,829(4)
  16.27%
Steven Knerr(2)
  45,000(7)
  1.18%
  39,000(5)
  1.03%
William H. Everett(3)
  51,228(8)
  1.35%
  35,786(6)
  0.95%
Eric Frank(3) (4)
  26,000(8)
  0.69%
J. Patrick Galleher(3)
  53,000(8)
  1.40%
  47,761(6)
  1.27%
Michael Nowlan(3)
  26,000(8)
  0.69%
  32,000(7)
  0.84%
James Michael(5)
  230,550(9)
  6.11%
All officers, directors, and management as a group (7 persons)
  1,052,107 
  27.03%
  767,376 
  20.11%
    
    
    
    
Other Beneficial Owners
    
    
    
    
Polar Asset Management Partners
  327,397 
  8.68%
Yorkmont Capital Partners, LP
  250,000 
  6.63%
Forager Capital Management, LLC
  230,543 
  6.11%
  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 
  5.05%
  190,454 
  5.06%
____________________
 
(1)
Applicable percentage of ownership is based on a total of 3,892,4503,815,475 shares of common stock, which consist of 3,772,7003,765,975 shares of common stock outstanding on April 28, 2020,27, 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 28, 202027, 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)
As noted above, Mr. Frank will not stand for re-election at the Annual Meeting.
(5)
Management.
(6)
Includes options issued to spouse to purchase 500 shares of common stock that are currently exercisable or exercisable within 60 days of April 28, 2020.27, 2021.
 
(7)(5)
Includes options to purchase 30,00015,000 shares of common stock that are currently exercisable or exercisable within 60 days of April 28, 2020.27, 2021.
 
(8)(6)
Includes 6,000 restricted stock units which vest on June 13, 202011, 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 28, 2020.27, 2021.
 
(9)(8)
Includes options to purchase 1,250(i) 185.000 shares of common stock thatheld 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 currently exercisable or exercisable within 60 daysindirect beneficial owners of April 28, 2020.the reported securities.
 


 
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 20202021 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, 20192020 and 2018:2019:
 
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
 
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. Balbirnie2019
  200,000 
  — 
  200,000 
2020
  200,000 
  — 
  200,000 
(Chief Executive Officer)2018
  200,000 
  18,000 
  — 
  218,000 
2019
  200,000 
  — 
  200,000 
Steven Knerr2019
  165,000 
  — 
  66,050 
  — 
  231,050 
2020
  165,000 
  — 
  165,000 
(Chief Financial Officer)2018
  165,000 
  11,550 
  — 
  176,550 
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 20192020 and 2020,2021, our Board has decided to increase Mr. Balbirnie’s target bonus potential to the previous 45% level.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.

 
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 20192020 and 2020,2021, our Board has decided to increase Mr. Knerr’s target bonus potential to the previous 35% level.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 milestonemilestones and align management’s overall goals and objectives with those of our stockholders. To achieve these goals, our Compensation Committee and Board of Directors aim to achieve the following:
 
►provide competitive compensation packages that enable us to attract and retain superior management personnel;
 
►relate compensation to the Company’s overall performance, the individual officer’s performance and our assessment of the officer’s future potential;
 
►reward our officers fairly for their role in our achievements; and
 
►align executive’s objectives with the objectives of stockholders, including through the grant of equity awards.
 

 
We have determined that in order to best meet these objectives, our executive compensation program should balance fixed and bonus compensation, as well as cash and equity compensation, as discussed below. Historically, there has been no pre-established policy or target for the allocation between either cash and non-cash or short-term and long-term incentive compensation for our executive officers.
 
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, 2019,2020, Mr. Balbirnie and Mr. Knerr did not earn any bonuses.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 2020.2021. 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 2019, other than the grant noted above to Mr. Knerr.2020.


 
COMPENSATION OF NAMED EXECUTIVE OFFICERS
 
Compensation of Chief Executive Officer. During the twelve months ended December 31, 2019,2020, Mr. Balbirnie’s total compensation was $200,000. Mr. Balbirnie’s total compensation was comprised of salary payments from January 1, 20192020 through December 31, 20192020 of $200,000.
 
20192020 Bonus Plan. On February 28, 2019,January 20, 2020, our Board, based on recommendations from our Compensation Committee, implemented a 20192020 cash bonus plan for Mr. Balbirnie based on the following criteria:
 
►Cash bonus target was 45% of annualized base salary of $200,000.
 
►
Cash bonus plan was based (i) 80% upon the achievement of target financial numbers during the fiscal year 2019 and (ii) 20% based upon the achievement of certain management objectives during the fiscal year 2019 as determined by the Board2020.
 
►
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 did not receivereceived a cash bonus for the year ended 2019.2020 of $100,000, which was paid on March 12, 2021.
 
20202021 Bonus Plan. On January 20, 2020, the Compensation Committee ofMarch 2, 2021, the Board, based on recommendations from the recommendation of our Compensation Committee, implemented a 20202021 cash bonus plan for Mr. Balbirnie based on the following criteria:
 
►Cash bonus target is 45% of annualized base salary of $200,000.$210,000.
 
►
Cash bonus plan is based entirely upon the achievement of target financial numbers during the fiscal year 2020.2021.
 
►
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, 2019,2020, Mr. Knerr’s total compensation was $231,050.$165,000. Mr. Knerr’s total compensation was comprised of salary payments from January 1, 20192020 through December 31, 20192020 of $165,000, as well as, $66,050 for the grant-date fair value of 5,000 restricted stock units, which vested on February 28, 2020.$165,000.
 
20192020 Bonus Plan. On February 28, 2019,January 20, 2020, our Board, based on recommendations from our Compensation Committee, implemented a 20192020 cash bonus plan for Mr. Knerr based on the following criteria:
 
►Cash bonus target was 35% of annualized base salary of $165,000.
 
►
Cash bonus plan was based (i) 80% upon the achievement of target financial numbers during the fiscal year 2019 and (ii) 20% based upon the achievement of certain management objectives during the fiscal year 2019 as determined by the Board2020.
 
►
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 did not received a cash bonus for the year ended December 31, 2019.2020 of $64,167, which was paid on March 12, 2021.
 
20202021 Bonus Plan. On January 20, 2020, March 2, 2021, the Board, based on the recommendation of our Compensation Committee, of the Board implemented a 20202021 cash bonus plan for Mr. Knerr based on the following criteria:
 
►Cash bonus target is 35% of annualized base salary of $165,000.$170,000.
 
►
Cash bonus plan is based entirely upon the achievement of target financial numbers during the fiscal year 20202021.
 
►
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.
 

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, 2019.2020.
 
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 ($)
 
 
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
  10,000 
  — 
  6.80 
 
11/19/2025
 
  — 
  —— 
  — 
  — 
  5,000 
  — 
  6.80 
 
11/19/2025
 
  — 
  —— 
  — 
  — 
  20,000 
  — 
  7.76 
 
9/27/2023
 
  — 
  — 
  10,000 
  — 
  7.76 
 
9/27/2023
 
  — 
  — 
  — 
  5,000 
  58,450 
  — 
  — 
 


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 28, 2020,27, 2021, the number of shares available for issuance under the 2014 Plan are 38,583 as compared to 23,500 as of December 31, 2019is 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, 2019,2020, 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)
 
 
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
  127,563(1)
 $12.63 
  23,500 
  60,230(1)
 $11.89 
  236,483 
Equity compensation plan not approved by security holders
  -     
 $- 
  - 
  - 
 $- 
  - 
Total
  127,563(1)
 $12.63 
  23,500 
  60,230(1)
 $11.89 
  236,483 
 
(1) 20,31310,313 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.
 

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

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.

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.
 

 
Proposal 2–Amendment to 2014 Equity Incentive Plan


APPROVAL TO ADOPT THE SECOND AMENDMENT TO THE ISSUER DIRECT CORPORATION’S 2014 EQUITY INCENTIVE PLAN TO INCREASE THE TOTAL NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE UNDER SUCH PLAN BY 200,000
General
The Board has approved an amendment to the Issuer Direct Corporation 2014 Equity Incentive Plan, as amended (the “2014 Plan”), to increase the number of shares of common stock available for issuance thereunder by 200,000 shares. The proposed amendment is attached hereto as Exhibit A.
The amendment to the 2014 Plan is intended to ensure that we can continue to provide an incentive to our employees, directors and consultants by enabling them to share in our future growth. If approved by the stockholders, all of the additional shares will be available for grant as incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or as nonqualified stock options, restricted stock awards, stock appreciation rights, or other kinds of equity based compensation available under the 2014 Plan. If the stockholders do not approve the amendment, no shares will be added to the number of shares available for issuance under the 2014 Plan.
Background
The 2014 Plan was adopted on March 31, 2014, and approved by the stockholders of the Company at an annual meeting of the Company’s stockholders on May 23, 2014 and subsequently amended on June 10, 2016 by a vote of the Company’s stockholders to increase the number of shares reserved under the plan from 200,000 to 400,000. The purposes of the 2014 Plan are to create incentives which are designed to motivate eligible employees, directors, and consultants to put forth maximum effort toward the success and growth of the Company, and to enable the Company to attract and retain experienced individuals who by their position, ability and diligence are able to make important contributions to the Company’s success.
The Plan currently authorizes for issuance a maximum of only 400,000 shares. As of April 28, 2020, we had 38,583 shares available for issuance under future awards under the 2014 Plan. We use equity-based incentive compensation as a component of our pay-for-performance philosophy. Our Board believes we must increase the number of shares available for issuance under the 2014 in light of our compensation strategy.
The increase represents approximately 5% of the total number of outstanding shares of common stock as of April 28, 2020. After giving effect to such increase, the 152,480 shares of common stock subject to outstanding equity awards and the 238,583 shares available for issuance pursuant to future awards will represent an aggregate of 391,063 shares, or approximately 9% of our 3,772,700 total issued and outstanding shares of common stock plus the 391,063 shares subject to outstanding equity awards and available for future award issuances.
Summary of the Key Terms of the 2014 Plan
The following is a brief description of the 2014 Plan. A copy of the 2014 Plan is attached as Annex A to our 2014 Proxy Statement filed with the Securities and Exchange Commission on April 2, 2016, and the following description is qualified in its entirety by reference to the 2014 Plan.
Purpose. The purpose of the 2014 Plan is to enable the Company and its subsidiaries and affiliates to remain competitive and innovative in our ability to attract, motivate, reward, and retain the services of key employees, key contractors, and outside directors. The 2014 Plan provides for the granting of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, performance awards and other awards which may be granted singly, in combination, or in tandem, and which may be paid in cash, shares of common stock, or a combination of cash and shares of common stock. The 2014 Plan is expected to provide flexibility to our compensation methods in order to adapt the compensation of employees, contractors, and outside directors to a changing business environment, after giving due consideration to competitive conditions and the impact of U.S. tax laws.
Effective Date and Expiration. The 2014 Plan became effective on March 31, 2014, subject to and conditioned upon stockholder approval of the 2014 Plan, and will terminate on March 31, 2024. No award may be made under the 2014 Plan after its expiration date, but awards made prior thereto may extend beyond that date.


Authorization. Subject to certain adjustments, the maximum number of shares of our common stock that may be delivered pursuant to awards under the 2014 Plan is currently 400,000 shares (after giving effect to all amendments), 100% of which may be delivered pursuant to incentive stock options. If the amendment is approved, the maximum number of shares which may be delivered will increase to 600,000; provided, however, 361,417 shares will have already been issued under the 2014 Plan such that only an additional 238,583 shares may be issued in the future. Subject to certain adjustments, the maximum number of the shares of common stock with respect to which stock options, restricted stock, or restricted stock units may be granted to any officer of the Company subject to Section 16 of the Securities Exchange Act of 1934 or a “covered employee” as defined in Section 162(m)(3) of the Code during any calendar year is 50,000 shares. In addition, to the extent Section 162(m) of the Code applies to awards granted under the 2014 Plan and we intend to comply with Section 162(m) of the Code, no participant may receive in any calendar year performance-based awards with an aggregate value of more than $5,000,000 (based on the fair market value of shares of the common stock at the time of the grant of the performance-based award).
Assuming this proposal is approved, the board of directors expects that the amended number of shares reserved under the 2014 Plan should satisfy the Company’s needs to attract, motivate, reward, and retain the services of key employees, key contractors, and outside directors for the next three to four years absent a significant corporate event, including the hiring or loss of a key management employee.
Shares to be issued may be made available from authorized but unissued shares of common stock.  During the term of the 2014 Plan, we will at all times reserve and keep enough shares available to satisfy the requirements of the 2014 Plan. If an award under the 2014 Plan is cancelled, forfeited, or expires, in whole or in part, the shares subject to such forfeited, expired, or cancelled award may again be awarded under the 2014 Plan. In the event that previously acquired shares are delivered to us in full or partial payment of the option price for the exercise of a stock option granted under the 2014 Plan, the number of shares available for future awards under the 2014 Plan shall be reduced only by the net number of shares issued upon the exercise of the stock option or settlement of an award. Awards that may be satisfied either by the issuance of common stock or by cash or other consideration shall be counted against the maximum number of shares that may be issued under the 2014 Plan only during the period that the award is outstanding or to the extent the award is ultimately satisfied by the issuance of shares. Only shares forfeited back to the Company; shares cancelled on account of termination, expiration, or lapse of an award; shares surrendered in payment of the option price of an option; or shares withheld for payment of applicable employment taxes and/or withholding obligations resulting from the exercise of a stock option shall again be available for grant of incentive stock options under the 2014 Plan, but shall not increase the maximum number of shares described above as the maximum number of shares that may be delivered pursuant to incentive stock options.
Administration. The 2014 Plan may be administered by the board of directors or a committee of the board of directors consisting of two or more members. The compensation committee or Board of Directors will determine the persons to whom awards are to be made; determine the type, size, and terms of awards; interpret the 2014 Plan; establish and revise rules and regulations relating to the 2014 Plan; and make any other determinations that it believes necessary for the administration of the 2014 Plan.
Eligibility. Employees (including any employee who is also a director or an officer), contractors, and outside directors of the Company whose judgment, initiative and efforts contributed to or may be expected to contribute to the successful performance of the Company are eligible to participate in the 2014 Plan. As of April 28, 2020, there were approximately 85 employees, directors, and contractors who would be eligible for awards under the 2014 Plan.
Stock Options. For persons subject to U.S. income tax, the compensation committee or Board of Directors may grant either incentive stock options (“ISOs”) qualifying under Section 422 of the Code or nonqualified stock options, provided that only employees of the Company and its subsidiaries (excluding subsidiaries that are not corporations) are eligible to receive ISOs. Stock options may not be granted with an option price less than 100% of the fair market value of a share of common stock on the date the stock option is granted. If an ISO is granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of stock of the Company (or any parent or subsidiary), the option price shall be at least 110% of the fair market value of a share of common stock on the date of grant. The compensation committee or Board of Directors will determine the terms of each stock option at the time of grant, including without limitation, the methods by or forms in which shares will be delivered to participants. The maximum term of each option, the times at which each option will be exercisable, and provisions requiring forfeiture of unexercised options at or following termination of employment or service generally are fixed by the compensation committee or Board of Directors, except that the compensation committee or Board of Directors may not grant stock options with a term exceeding ten years.
Restricted Stock and Restricted Stock Units. The compensation committee or Board of Directors is authorized to grant restricted stock and restricted stock units. Restricted stock consists of shares of common stock that may not be sold, transferred, pledged, hypothecated, encumbered, or otherwise disposed of, and that may be forfeited in the event of certain terminations of employment or service, prior to the end of a restricted period as specified by the compensation committee or Board of Directors. Restricted stock units are the right to receive shares of common stock at a future date in accordance with the terms of such grant upon the attainment of certain conditions specified by the compensation committee or Board of Directors, which include substantial risk of forfeiture and restrictions on their sale or other transfer by the participant. The compensation committee or Board of Directors determines the eligible participants to whom, and the time or times at which, grants of restricted stock or restricted stock units will be made, the number of shares or units to be granted, the price to be paid, if any, the time or times within which the shares covered by such grants will be subject to forfeiture, the time or times at which the restrictions will terminate, and all other terms and conditions of the grants. Restrictions or conditions could include, but are not limited to, the attainment of performance goals (as described below), continuous service with us, the passage of time, or other restrictions and conditions. The value of the restricted stock units may be paid in shares, cash, or a combination of both, as determined by the compensation committee or Board of Directors.



Performance Awards. The compensation committee or Board of Directors may grant performance awards payable in shares of common stock or other consideration at the end of a specified performance period. Payment will be contingent upon achieving pre-established performance goals (as discussed below) by the end of the performance period. The compensation committee or Board of Directors will determine the length of the performance period, the maximum payment value of an award, and the minimum performance goals required before payment will be made, so long as such provisions are not inconsistent with the terms of the 2014 Plan, and to the extent an award is subject to Section 409A of the Code, are in compliance with the applicable requirements of Section 409A of the Code and any applicable regulations or guidance.
Other Awards. The compensation committee or Board of Directors may grant other forms of awards payable in cash or shares if the compensation committee or Board of Directors determines that such other form of award is consistent with the purpose and restrictions of the 2014 Plan. The terms and conditions of such other form of award shall be specified by the grant. Such other awards may be granted for no cash consideration, for such minimum consideration as may be required by applicable law, or for such other consideration as may be specified by the grant.
Vesting, Forfeiture, Assignment. The compensation committee or Board of Directors, in its sole discretion, may determine that an award will be immediately vested in whole or in part, or that all or any portion may not be vested until a date, or dates, subsequent to its date of grant, or until the occurrence of one or more specified events, subject in any case to the terms of the 2014 Plan. If the compensation committee or Board of Directors imposes conditions upon vesting, then subsequent to the date of grant, the compensation committee or Board of Directors may, in its sole discretion, accelerate the date on which all or any portion of the award may be vested.
The compensation committee or Board of Directors may impose on any award at the time of grant or thereafter, such additional terms and conditions as the compensation committee or Board of Directors determines, including, without limitation, terms requiring forfeiture of awards in the event of a participant’s termination of service. The compensation committee or Board of Directors will specify the circumstances on which performance awards may be forfeited in the event of a termination of service by a participant prior to the end of a performance period or settlement of awards. Except as otherwise determined by the compensation committee or Board of Directors, restricted stock will be forfeited upon a participant’s termination of service during the applicable restriction period.  Awards granted under the 2014 Plan generally are not assignable or transferable except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order.
Amendment or Discontinuance of the 2014 Plan. The board of directors may at any time and from time to time, without the consent of the participants, alter, amend, revise, suspend, or discontinue the 2014 Plan in whole or in part, except, that no amendment for which stockholder approval is required either: (i) by any securities exchange or inter-dealer quotation system on which the common stock is listed or traded, or (ii) in order for the 2014 Plan and incentives awarded under the 2014 Plan to continue to comply with Sections 162(m), 421, and 422 of the Code, including any successors to such Sections, or other applicable law, shall be effective unless such amendment is approved by the requisite vote of our stockholders entitled to vote thereon. Any amendments made shall, to the extent deemed necessary or advisable by the compensation committee or Board of Directors, be applicable to any outstanding awards theretofore granted under the 2014 Plan, notwithstanding any contrary provisions contained in any award agreement. In the event of any such amendment to the 2014 Plan, the holder of any award outstanding under the 2014 Plan shall, upon request of the compensation committee or Board of Directors and as a condition to the exercisability thereof, execute a conforming amendment in the form prescribed by the compensation committee or Board of Directors to any award agreement relating thereto. Notwithstanding anything contained in the 2014 Plan to the contrary, unless required by law, no action regarding amendment or discontinuance shall adversely affect any rights of participants or obligations of the Company to participants with respect to any awards granted under the 2014 Plan without the consent of the affected participant.
U.S. Federal Income Tax Consequences
The following is a brief summary of certain U.S. federal income tax consequences relating to the transactions described under the 2014 Plan as set forth below. This summary does not purport to address all aspects of U.S. federal income taxation and does not describe state, local, or foreign tax consequences. This discussion is based upon provisions of the Code and the treasury regulations issued thereunder, and judicial and administrative interpretations under the Code and treasury regulations, all as in effect as of the date hereof, and all of which are subject to change (possibly on a retroactive basis) or different interpretation.
Law Affecting Deferred Compensation. In 2004, Section 409A was added to the Code to regulate all types of deferred compensation. If the requirements of Section 409A of the Code are not satisfied, deferred compensation and earnings thereon will be subject to tax as it vests, plus an interest charge at the underpayment rate plus 1% and a 20% penalty tax. Certain performance awards, stock options, restricted stock units, and certain types of restricted stock are subject to Section 409A of the Code.



Incentive Stock Options. A participant will not recognize income at the time an ISO is granted. When a participant exercises an ISO, a participant also generally will not be required to recognize income (either as ordinary income or capital gain). However, to the extent that the fair market value (determined as of the date of grant) of the shares with respect to which the participant’s ISOs are exercisable for the first time during any year exceeds $100,000, the ISOs for the shares over $100,000 will be treated as nonqualified stock options, and not ISOs, for federal tax purposes, and the participant will recognize income as if the ISOs were nonqualified stock options. In addition to the foregoing, if the fair market value of the shares received upon exercise of an ISO exceeds the exercise price, then the excess may be deemed a tax preference adjustment for purposes of the federal alternative minimum tax calculation. The federal alternative minimum tax may produce significant tax repercussions depending upon the participant’s particular tax status.
The tax treatment of any shares acquired by exercise of an ISO will depend upon whether the participant disposes of his or her shares prior to two years after the date the ISO was granted or one year after the shares were transferred to the participant (referred to as the “Holding Period”). If a participant disposes of shares acquired by exercise of an ISO after the expiration of the Holding Period, any amount received in excess of the participant’s tax basis for such shares will be treated as short-term or long-term capital gain, depending upon how long the participant has held the shares. If the amount received is less than the participant’s tax basis for such shares, the loss will be treated as short-term or long-term capital loss, depending upon how long the participant has held the shares.
If the participant disposes of shares acquired by exercise of an ISO prior to the expiration of the Holding Period, the disposition will be considered a “disqualifying disposition.” If the amount received for the shares is greater than the fair market value of the shares on the exercise date, then the difference between the ISO’s exercise price and the fair market value of the shares at the time of exercise will be treated as ordinary income for the tax year in which the “disqualifying disposition” occurs. The participant’s basis in the shares will be increased by an amount equal to the amount treated as ordinary income due to such “disqualifying disposition.” In addition, the amount received in such “disqualifying disposition” over the participant’s increased basis in the shares will be treated as capital gain. However, if the price received for shares acquired by exercise of an ISO is less than the fair market value of the shares on the exercise date and the disposition is a transaction in which the participant sustains a loss which otherwise would be recognizable under the Code, then the amount of ordinary income that the participant will recognize is the excess, if any, of the amount realized on the “disqualifying disposition” over the basis of the shares.
Nonqualified Stock Options. A participant generally will not recognize income at the time a nonqualified stock option is granted. When a participant exercises a nonqualified stock option, the difference between the option price and any higher market value of the shares of common stock on the date of exercise will be treated as compensation taxable as ordinary income to the participant. The participant’s tax basis for the shares acquired under a nonqualified stock option will be equal to the option price paid for such shares, plus any amounts included in the participant’s income as compensation. When a participant disposes of shares acquired by exercise of a nonqualified stock option, any amount received in excess of the participant’s tax basis for such shares will be treated as short-term or long-term capital gain, depending upon how long the participant has held the shares. If the amount received is less than the participant’s tax basis for such shares, the loss will be treated as short-term or long-term capital loss, depending upon how long the participant has held the shares.
Special Rule if Option Price is Paid for in Shares. If a participant pays the option price of a nonqualified stock option with previously-owned shares of our common stock and the transaction is not a disqualifying disposition of shares previously acquired under an ISO, the shares received equal to the number of shares surrendered are treated as having been received in a tax-free exchange. The participant’s tax basis and holding period for these shares received will be equal to the participant’s tax basis and holding period for the shares surrendered. The shares received in excess of the number of shares surrendered will be treated as compensation taxable as ordinary income to the participant to the extent of such shares’ fair market value. The participant’s tax basis in such shares will be equal to their fair market value on the date of exercise, and the participant’s holding period for such shares will begin on the date of exercise.
If the use of previously acquired shares to pay the exercise price of a nonqualified stock option constitutes a disqualifying disposition of shares previously acquired under an ISO, the participant will have ordinary income as a result of the disqualifying disposition in an amount equal to the excess of the fair market value of the shares surrendered, determined at the time such shares were originally acquired on exercise of the ISO, over the aggregate option price paid for such shares. As discussed above, a disqualifying disposition of shares previously acquired under an ISO occurs when the participant disposes of such shares before the end of the Holding Period. The other tax results from paying the exercise price with previously-owned shares are as described above, except that the participant’s tax basis in the shares that are treated as having been received in a tax-free exchange will be increased by the amount of ordinary income recognized by the participant as a result of the disqualifying disposition.
Restricted Stock. A participant who receives a grant of restricted stock generally will recognize as ordinary income the excess, if any, of the fair market value of the shares granted as restricted stock at such time as the shares are no longer subject to forfeiture or restrictions, over the amount paid, if any, by the participant for such shares. However, a participant who receives restricted stock may make an election under Section 83(b) of the Code within 30 days of the date of transfer of the shares to recognize ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the restrictions on such shares) over the purchase price, if any, of such shares. If a participant does not make an election under Section 83(b) of the Code, then the participant will recognize as ordinary income any dividends received with respect to such shares. At the time of the sale of such shares, any gain or loss realized by the participant will be treated as either short-term or long-term capital gain (or loss) depending on the holding period. For purposes of determining any gain or loss realized, the participant’s tax basis will be the amount previously taxable as ordinary income, plus the purchase price paid by the participant, if any, for such shares.



Other Awards. In the case of an award of restricted stock units, performance awards, dividend equivalent rights, or other stock or cash awards, the recipient will generally recognize ordinary income in an amount equal to any cash received and the fair market value of any shares received on the date of payment or delivery, provided that the award is exempt from or complies with Section 409A of the Code. In that taxable year, we will receive a U.S. federal income tax deduction in an amount equal to the ordinary income which the participant has recognized.
U.S. Federal Tax Withholding. Any ordinary income realized by a participant upon the exercise of an award under the 2014 Plan is subject to withholding of U.S. federal, state, and local income tax and to withholding of the participant’s share of tax under the Federal Insurance Contribution Act and the Federal Unemployment Tax Act. To satisfy federal income tax withholding requirements, we will have the right to require that, as a condition to delivery of any certificate for shares of common stock or the registration of the shares in the participant’s name, the participant remit to us an amount sufficient to satisfy the withholding requirements. Alternatively, we may withhold a portion of the shares (valued at fair market value) that otherwise would be issued to the participant to satisfy all or part of the withholding tax obligations or may, if we consent in writing, accept delivery of shares with an aggregate fair market value that equals or exceeds the required tax withholding payment. Withholding does not represent an increase in the participant’s total income tax obligation, since it is fully credited toward his or her tax liability for the year. Additionally, withholding does not affect the participant’s tax basis in the shares. Compensation income realized and tax withheld will be reflected on Forms W-2 supplied by us to employees by January 31 of the succeeding year. Deferred compensation that is subject to Section 409A of the Code will be subject to certain federal income tax withholding and reporting requirements.
Tax Consequences to the Company. To the extent that a participant recognizes ordinary income in the circumstances described above, we will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess parachute payment” within the meaning of Section 280G of the Code, and is not disallowed by the $1,000,000 limitation on certain executive compensation under Section 162(m) of the Code.
Million Dollar Deduction Limit and Other Tax Matters. We may not deduct compensation of more than $1,000,000 that is paid to an individual who, on the last day of the taxable year, is either our principal executive officer or an individual who is among the three highest compensated officers for the taxable year (other than the principal executive officer or the principal financial officer). The limitation on deductions does not apply to certain types of compensation, including qualified performance-based compensation, and only applies to compensation paid by a publicly-traded corporation (and not compensation paid by non-corporate entities). To the extent that we determine that Section 162(m) of the Code will apply to any awards granted pursuant to the 2014, we intend that such awards will be constructed so as to constitute qualified performance-based compensation and, as such, will be exempt from the $1,000,000 limitation on deductible compensation.
If an individual’s rights under the 2014 Plan are accelerated as a result of a change in control and the individual is a “disqualified individual” under Section 280G of the Code, the value of any such accelerated rights received by such individual may be included in determining whether or not such individual has received an “excess parachute payment” under Section 280G of the Code, which could result in (i) the imposition of a 20% federal excise tax (in addition to federal income tax) payable by the individual on the value of such accelerated rights; and (ii) the loss by us of a compensation deduction.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVALTO ADOPT THE SECOND AMENDMENT TO THE ISSUER DIRECT CORPORATION’S 2014 EQUITY INCENTIVE PLAN TO INCREASE THE TOTAL NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE UNDER SUCH PLAN BY 200,000


Proposal 3–4–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, 2020.2021. 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, 20192020 and 2018,2019, Cherry Bekaert LLP, billed us the fees set forth below, including expenses, in connection with services rendered by that firm to us.
 
 
 
Year Ended December 31,
 
 
 
2019
 
 
2018
 
Audit fees
 $128,100 
 $121,475 
Audit related fees
  83,100 
  35,300 
Tax fees
  --- 
  --- 
All other fees
  --- 
  --- 
Total fees
 $211,200 
 $156,775 
 
 
 
Year Ended December 31,
 
 
 
2020
 
 
2019
 
Audit fees
 $135,000 
 $128,100 
Audit related fees
  --- 
  83,100 
Tax fees
  --- 
  --- 
All other fees
  --- 
  --- 
Total fees
 $135,000 
 $211,200 
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, 20192020 and 2018,2019, 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. During our fiscal year ended December 31, 2018, Cherry Bekaert LLP billed the Company $21,000 for services related to a consent for the use of its audit opinion in the Company’s filing of a Registration Statement on Form S-3 that incorporated by reference the Company’s audited financial statements for the fiscal years ended December 31, 2017 and 2016 and also billed the Company $14,300 for other audit-related services related to a business acquired by us during 2018.
 
Tax Fees. Tax fees include fees for professional services for tax compliance, tax advice and tax planning for the tax years ended December 31, 20192020 and 2018.2019. During our fiscal years ended December 31, 2019and 2018,2020 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, 20192020 and 2018,2019, 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, 2020.2021. 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. Further, in conjunction with the rotation of the auditing firm's lead engagement partner, the Audit Committee and its Chairperson has and will continue to be directly involved in the selection of Cherry Bekaert LLP's new lead engagement partner, who was selected in 2020. 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.
  

 
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 proceduresestablishedprocedures 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.
 
The Board of Directors recommends a vote "FOR" the ratification of the appointment of Cherry Bekaert LLP as the independent registered public accounting firm.
 

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, 2019,2020, 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, 20192020 that were filed with the SEC.
 
The Audit Committee
 
Michael Nowlan (Chairman)
William H. Everett
 
 

 
Certain Relationships and Related Party Transactions and Director Independence

 
RELATED PARTY TRANSACTIONS
 
None.
 
DIRECTOR INDEPENDENCE
 
As of April 28, 2020,27, 2021, we had fourthree independent directors on our Board, William H. Everett, Eric Frank, J. Patrick Galleher and Michael Nowlan. We evaluate independence by the standards for director independence established by applicable laws, rules, and listing standards including, without limitation, the standards for independent directors established by NYSE American and the SEC. As noted above, Mr. Frank will not be standing for re-election at this Annual Meeting.
 
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 20192020 Annual Report on Form 10-K is available to each stockholder in connection with this Proxy Statement. The 20192020 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.
 


 
 

 
 
 
 
 
 
 
 
 
 
 
www.issuerdirect.com
 
 
 
 
EXHIBIT A
 
SECOND AMENDMENT TO
ISSUER DIRECT CORPORATION
2014 EQUITY INCENTIVE PLANTHIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
 
This Second Amendment (the “Second Amendment”) toANNUAL MEETING OF STOCKHOLDERS –
JUNE 11, 2021 AT 12:00 PM EDT
CONTROL ID:
REQUEST ID:
The undersigned, a stockholder of Issuer Direct Corporation 2014 Equity Incentive Plan, as amended from time to time (the “Plan”“Company”), is made effective ashereby revoking any proxy heretofore given, does hereby appoint Jeffrey Quick proxy, with power of June 17, 2020 (the “Amendment Effective Date”), by Issuer Direct Corporation, a Delaware corporation (“Issuer Direct”), as set forth below.
BACKGROUND
WHEREAS, Issuer Direct establishedsubstitution, for and in the Plan, originally effective as of March 31, 2014, under which Issuer Direct is authorized to grant equity-based incentive awards to certain employees and service providers of Issuer Direct and its subsidiaries;
WHEREAS, Section 21(a)name of the Plan provides that Issuer Direct’s boardundersigned to attend the 2021 annual meeting of directors (the “Board”) may amend the Plan subject to, in certain circumstances, the approvalstockholders of the holders ofCompany to be held virtually, on Friday, June 11, 2021 beginning at least a majority of Issuer Direct’s shares of common stock;12:00 PM, local time, or at any adjournment or postponement thereof, and there to vote, as designated below.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
VOTING INSTRUCTIONS
If you vote by phone, fax or internet, please DO NOT mail your proxy card.
WHEREAS, on June 10, 2016,
MAIL:Please mark, sign, date, and return this Proxy Card promptly using the stockholders of Issuer Direct voted to increaseenclosed envelope.
FAX:
Complete the number of shares of common stock authorized for grant under the Plan by 200,000 shares;
WHEREAS, the Board now desires to amend the Plan in the manner contemplated hereby and has obtained the approval by Issuer Direct’s shareholders at Issuer Direct’s 2020 Annual Meeting as of the Amendment Effective Date to increase the number of shares of common stock authorized for grant by an additional 200,000 shares; and
WHEREAS, capitalized terms used but not defined herein shall have the same meaning as set forth in the Plan.
NOW, THEREFORE, the Plan shall be amended as of the Amendment Effective Date as set forth below:
1. The first paragraph of Section 4 of the Plan is hereby deleted and replaced in its entirety with the following:
“The stock subject to options granted under the Plan or grants of Restricted Shares or Restricted Stock Units shall be shares of authorized but unissued or reacquired Common Stock. Subject to adjustment as provided in Section 16 below, the maximum number of shares of Common Stock of the Corporation (“Shares”) which may be issued and sold under the Plan is 600,000 Shares.”
.
2. Except as set forth above, the Plan shall continue to read in its current state.
IN WITNESS WHEREOF, Issuer Direct has caused the executionreverse portion of this Second Amendment by its duly authorized officer, effective as of the Amendment Effective Date.Proxy Card and Fax to202.521.3464.

INTERNET:https://www.iproxydirect.com/isdr
PHONE:866.752.VOTE(8683)
 ISSUER DIRECT CORPORATION 
    
By:  
Brian R. Balbirnie
Chief Executive Officer

 
 
ISSUER DIRECT CORPORATION
THIS
ANNUAL MEETING OF THE STOCKHOLDERS OFISSUER DIRECT CORPORATIONPLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: ☒
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS – JUNE 17, 2020 AT 12:00 PM EDT
CONTROL ID:
REQUEST ID:
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 2020 annual meeting of stockholders of the Company to be held virtually, on Wednesday, June 17, 2020 beginning at 12:00 PM, local time, or at any adjournment or postponement thereof, and there to vote, as designated below.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
VOTING INSTRUCTIONS
If you vote by phone, fax or internet, please DO NOT mail your proxy card.
MAIL:Please mark, sign, date, and return this Proxy Card promptly using the enclosed envelope.
FAX:
Complete the reverse portion of this Proxy Card and Fax to202.521.3464.
INTERNET:https://www.iproxydirect.com/isdr
PHONE:866.752.VOTE(8683)
 
    
Proposal 1FOR ALL
AGAINST
ALL
FOR ALL
EXCEPT
To elect the six (6) directors nominated by our Board of Directors as set forth in the Proxy Statement:☐☐
William H. EverettDirector, Chairman of the Board, Member of Audit Committee & Compensation Committee☐
Michael NowlanDirector, Chairman of Audit Committee☐
J. Patrick Galleher
Director, Chairman of Compensation Committee
☐
CONTROL ID:
Brian R. Balbirnie
Director, President and Chief Executive Officer
☐
  REQUEST ID:
Marti BellerDirector Nominee☐
Graeme P. ReinDirector Nominee☐

Proposal 2FORAGAINSTABSTAIN
Advisory Vote on Executive Compensation;☐☐☐
Proposal 31 YEARS
2 YEARS
3 YEARS
 ABSTAIN
Advisory Vote on Frequency of Future Advisory Votes on Executive Compensation;
☐☐☐
 ☐
Proposal 4FORAGAINSTABSTAIN
To ratify the appointment of Cherry Bekaert LLP as our independent registered public accounting firm for the year ending December 31, 2021.☐☐☐
MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING: ☐
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.
 

ANNUAL MEETING OF THE STOCKHOLDERS OFISSUER DIRECT CORPORATIONPLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: ☒
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Proposal 1FOR ALL
AGAINST
ALL
FOR ALL
EXCEPT
To elect the four (4) directors nominated by our Board of Directors as set forth in the Proxy Statement:☐☐
William H. EverettDirector, Chairman of the Board, Member of Audit Committee & Strategic Advisory Committee☐
Michael NowlanDirector, Chairman of Audit Committee☐
Brian R. BalbirnieDirector, President and Chief Executive Officer☐CONTROL ID:
J. Patrick GalleherDirector, Chairman of Compensation Committee and Strategic Advisory Committee☐REQUEST ID:
Proposal 2FORAGAINSTABSTAIN
Amendment to 2014 Equity Incentive Plan;☐☐☐
Proposal 3FORAGAINSTABSTAIN
To ratify the appointment of Cherry Bekaert LLP as our independent registered public accounting firm for the year ending December 31, 2020.☐☐☐
MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING: ☐
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: ________________________, 2020Dated: ________________________, 2021
 
 
 (Print Name of Stockholder and/or Joint Tenant)
 
(Signature of Stockholder)
 
(Second Signature if held jointly)