Item 1.01 Entry into a Material Definitive Agreement.
On January 12, 2022, Issuer Direct Corporation (the "Company") entered into an
Executive Employment Agreement (the "Pitoniak Agreement") with Timothy Pitoniak
to serve as the Company's Chief Financial Officer effective as of January 24,
2022 (the "Effective Date"). As of the Effective Date, Steven Knerr, the
Company's current Chief Financial Officer, will assume the role of the Company's
Vice President of Finance and Controller.
Mr. Pitoniak, age 47, most recently served as Chief Accounting Officer of
Community Brands, LLC ("Community Brands"), a leading provider of cloud-based
software to associations, nonprofits, faith-based groups, and K-12 schools, from
May 2020 to January 2022. Before joining Community Brands, Mr. Pitoniak served
as Vice President of Accounting of Fiserv, Inc. ("Fiserv"), a leading provider
of global fintech and payments solutions for banking, global commerce, merchant
acquiring, billing and payments, and point-of-sale, from May 2014 to April 2020.
Before joining Fiserv, Mr. Pitoniak served as Corporate Controller of US
Security Associates, Inc., a provider of uniformed security services, consulting
and investigations and specialized security solutions, from March 2012 to April
2014. Earlier in his career, Mr. Pitoniak held various roles within finance and
accounting for publicly traded companies. Mr. Pitoniak is a Certified Public
Accountant.
Under the Pitoniak Agreement, Mr. Pitoniak is entitled to an annual base salary
of $235,000. The base salary will be reviewed annually by the Company's Board of
Directors or Compensation Committee for increase as part of its annual
compensation review. Mr. Pitoniak is also eligible to receive an annual bonus of
45% of his annual base salary upon the achievement of reasonable target
objectives and performance goals, to be determined by the Board of Directors or
Compensation Committee in consultation with Mr. Pitoniak on or before the end of
the first quarter of the fiscal year to which the bonus relates. In addition,
Mr. Pitoniak is eligible to receive such additional bonus or incentive
compensation as the Board of Directors may establish from time to time in its
sole discretion.
Under the Company's 2014 Equity Incentive Plan, amended (the "Plan"), and as of
the Effective Date, Mr. Pitoniak will also be granted the following: (i) 20,000
restricted stock units (the "RSU Grant") pursuant to a Restricted Stock Unit
Award Agreement (the "RSU Agreement") which will be valued based on the per
share closing price of the Company's common stock as of the Effective Date and
(ii) an incentive stock option to purchase 30,000 shares of the Company's common
stock at a per share exercise price of the closing price of the Company's common
stock as of the Effective Date (the "Option Grant") pursuant to the Incentive
Stock Option Grant and Agreement (the "ISO Agreement"). Provided Mr. Pitoniak is
employed on each of the following dates by the Company or one of its affiliates,
the entire RSU Grant will vest three years from the Effective Date and the
Option Grant shall vest over a four-year period, at a rate of 7,500 shares of
common stock underlying the Option Grant on the first, second, third and fourth
anniversary of the Effective Date. In the event of a Corporate Transaction (as
defined in the Plan), any unvested portion of the RSU Grant and Option Grant
shall be immediately vested.
Pursuant to the Pitoniak Agreement, if Mr. Pitoniak's employment is terminated
upon his disability, by Mr. Pitoniak for good reason (as such term is defined in
Pitoniak Agreement), or by us without cause (as such term is defined in Pitoniak
Agreement), Mr. Pitoniak 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. Pitoniak's employment is terminated for disability, the vesting of any
equity 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 equity grants will immediately
cease.
If the Company terminates Mr. Pitoniak's employment for cause or employment
terminates as a result of Mr. Pitoniak's resignation (other than for good
reason) or death, Mr. Pitoniak will only be entitled to unpaid amounts owed to
him and the vesting of any equity grants will immediately cease.
Mr. Pitoniak 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. The Pitoniak Agreement also contains certain
noncompetition, non-solicitation, confidentiality, and assignment of inventions
requirements for Mr. Pitoniak.
Additionally, on the Effective Date, the Company and Mr. Pitoniak will enter
into the Company's standard Indemnification Agreement (the "Indemnification
Agreement") whereby the Company agrees to indemnify Mr. Pitoniak in certain
instances relating to his performance as the Company's Chief Financial Officer.
The foregoing summary of certain terms of the Pitoniak Agreement, the RSU
Agreement, the ISO Agreement and the Indemnification Agreement do not purport to
be complete and are subject to, and qualified in their entirety by, the full
text of Pitoniak Agreement, RSU Agreement, the ISO Agreement and the
Indemnification Agreement, copies of which are attached hereto as Exhibits 10.1,
10.2 and 10.3 and are hereby incorporated into this Current Report on Form 8-K
by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
All information set forth in Item 1.01 of this Current Report on Form 8-K is
hereby incorporated herein by referenced.
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Item 8.01 Other Events.
On January 19, 2022, the Company issued a press release regarding the
appointment of Mr. Pitoniak as the Company's Chief Financial Officer. A copy of
the press release is filed as Exhibit 99.1 hereto and incorporated herein by
reference in its entirety.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Executive Employment Agreement dated January 12, 2022 between Issuer
Direct Corporation and Timothy Pitoniak.
10.2 Restricted Stock Unit Award Agreement to be dated January 24, 2022
between Issuer Direct Corporation and Timothy Pitoniak.
10.3 Incentive Stock Option Grant and Agreement to be dated January 24,
2022 between Issuer Direct Corporation and Timothy Pitoniak.
10.4 Indemnification Agreement to be dated January 24, 2022 between Issuer
Direct Corporation and Timothy Pitoniak.
99.1 Press release of Issuer Direct Corporation released on January 19,
2022.
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