NET ELEMENT, INC. : Unregistered Sale of Equity Securities, Change in Directors or Principal Officers, Submission of Matters to a Vote of Security Holders (form 8-K)

December 03, 2020 at 05:12 pm EST

Item 3.02 Unregistered Sales of Equity Securities.

The disclosure provided in Part B of Item 5.02 of this Report is hereby incorporated by reference into this Item 3.02.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

A. On December 1, 2020, the stockholders of Net Element, Inc. (the "Company") approved at the 2020 annual meeting of stockholders of the Company (the "Annual Meeting") an amendment to its 2013 Equity Incentive Plan, as amended (the "Plan"), to increase the number of shares of the Common Stock available for issuance thereunder by 210,500 shares of Common Stock (the "Plan Amendment"). After such approval, the Company entered into the Plan Amendment, dated on December 1, 2020. The form of the Plan Amendment was previously filed as Appendix "A" to the Company's definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on October 13, 2020.

B. On December 1, 2020, the stockholders of the Company approved the previously disclosed on Form 8-K, filed on September 3, 2020, equity awards outside of the Plan: (i) 119,361 restricted shares of the Company common stock, vesting immediately on the grant date, to Oleg Firer, the Chief Executive Officer of the Company; (ii) 12,287 restricted shares of the Company common stock, vesting immediately on the grant date, to Steven Wolberg, the Chief Legal Officer of the Company; and (iii) 4,824 restricted shares of the Company common stock, vesting immediately on the grant date, to Jefferey Ginsberg, the Chief Financial Officer of the Company. Such awards of restricted shares common stock of the Company were subject to and contingent upon the Company shareholders' approval for purposes of compliance with the Nasdaq Rule 5635(c). Upon such approval, such restricted shares of the Company common stock were issued to each of Mr. Firer, Mr. Wolberg and Mr. Ginsberg under an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon Section 4(a)(2) of the Securities Act.

Item 5.07 Submission of Matters to a Vote of Security Holders.

The Company held its Annual Meeting on December 1, 2020. The matters voted upon at the Annual Meeting and the results of such voting are set forth below.

Proposal 1: To elect four directors of the Company, three of whom shall be independent directors as defined by applicable rules, to serve for a one-year term expiring in 2021.





Name of Director       For         Withheld       Broker Non-Vote
Oleg Firer           1,393,772       54,556           2,069,269
John Roland          1,333,772       40,556           2,069,269
Jon Najarian         1,155,387       218,941          2,069,269
Todd Raarup          1,333,727       40,601           2,069,269

All director nominees were duly elected.


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Proposal 2: To approve an amendment to the Company's 2013 Equity Incentive Plan, as amended (the "Plan"), to increase the number of shares of Common Stock authorized for issuance under the Plan by 210,500 shares of Common Stock resulting (if such increase is authorized by the shareholders) in the aggregate 1,160,500 shares authorized for issuance under the Plan, which represents in the aggregate approximately 23.95% of our issued and outstanding Common Stock.





    For          Against      Abstain       Broker Non-Vote
  1,032,247       329,638       12,443          2,069,269




Proposal 2 was approved.

Proposal 3: To approve the issuance by the Company of 119,361 restricted shares of Common Stock to the Company's Chief Executive Officer, Oleg Firer as a performance bonus, as required by and in accordance with NASDAQ Listing Rule 5635.





    For          Against      Abstain       Broker Non-Vote
  1,008,075       357,469        8,784          2,069,269




Proposal 3 was approved.

Proposal 4: To approve the issuance by the Company of 12,287 restricted shares of Common Stock to the Company's Chief Legal Officer, Steven Wolberg as a performance bonus, as required by and in accordance with NASDAQ Listing Rule 5635.





    For          Against      Abstain       Broker Non-Vote
  1,004,996       359,442        9,890          2,069,269




Proposal 4 was approved.

Proposal 5: To approve the issuance by the Company of 4,824 restricted shares of Common Stock to the Company's Chief Financial Officer, Jeffrey Ginsberg as a performance bonus, as required by and in accordance with NASDAQ Listing Rule 5635.





    For          Against      Abstain       Broker Non-Vote
  1,007,012       353,509       13,807          2,069,269




Proposal 5 was approved.

Proposal 6: To approve the issuance by the Company of 3,909 restricted shares of Common Stock to the Company's Chief Technology Officer, Andrey Krotov as a performance bonus, as required by and in accordance with NASDAQ Listing Rule 5635.





    For          Against      Abstain       Broker Non-Vote
  1,002,833       357,974       13,521          2,069,269




Proposal 6 was approved.

Proposal 7: To approve the issuance by the Company of 13,107 restricted shares of Common Stock to President of Unified Payments, the Company's subsidiary, Vlad Sadovskiy as a performance bonus, as required by and in accordance with NASDAQ Listing Rule 5635.





    For          Against      Abstain       Broker Non-Vote
  1,004,306       359,079       10,943          2,069,269




Proposal 7 was approved.



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Proposal 8: To approve the issuance by the Company of 8,730 restricted shares of Common Stock to the Company's in-house counsel in Russia, Asaph Panarin as a performance bonus, as required by and in accordance with NASDAQ Listing Rule 5635.





    For          Against      Abstain       Broker Non-Vote
  1,010,163       353,362       10,803          2,069,269




Proposal 8 was approved.

Proposal 9: To ratify the selection of Daszkal Bolton LLP as the Company's independent registered public accounting firm for the year ending December 31, 2020.





    For          Against      Abstain
  2,964,698       462,016       16,883




Proposal 9 was approved.

Proposal 10: To approve, on an advisory (nonbinding) basis, the compensation of the Company's named executive officers.





    For          Against      Abstain       Broker Non-Vote
  1,035,034       329,308        9,986          2,069,269




Proposal 10 was approved.

Proposal 11: To approve, on an advisory (nonbinding) basis, the frequency of advisory votes on the compensation of the Company's named executive officers.





 Three Years       Two Years      One Year      Abstain       Broker Non-Vote
    926,303           52,153        355,585       40,287          2,069,269

Proposal 11 was approved with three years as the frequency of advisory votes on the compensation of the Company's named executive officers.

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Net Element

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NET ELEMENT, INC. : Unregistered Sale of Equity Securities, Change in Directors or Principal Officers, Submission of Matters to a Vote of Security Holders (form 8-K)

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