Current Report Filing (8-k)
November 25 2020 - 05:02PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): November 19, 2020
DOCUMENT
SECURITY SYSTEMS, INC.
(Exact
name of registrant as specified in its charter)
New
York
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001-32146
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16-1229730
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(State
or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification No.)
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200
Canal View Boulevard
Suite
104
Rochester,
NY
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14623
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (585) 325-3610
Not
Applicable
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Ticker
symbol(s)
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Name
of each exchange on which registered
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Common
Stock, $0.02 par value per share
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DSS
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The
NYSE American LLC
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
On
November 19, 2020, Document Security Systems, Inc. (“DSS” or the “Company”), DSS Cyber Security Pte. Ltd.
(“DCS”) and Mr. Heng Fai Chan, the Chief Executive Officer (the “CEO”) of DCS and the Chairman of the
Board of Directors of the Company, entered into an amendment (the “2020 Amendment”) to Mr. Chan’s employment
agreement (the “2019 Employment Agreement”) dated September 23, 2019, effective January 1, 2020, pursuant to which
(i) the term of the 2019 Employment Agreement was extended to December 31, 2022 and (ii) Mr. Chan’s salary and bonus were
adjusted and redefined for the period from January 1, 2020 till December 31, 2022. Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the 2020 Amendment attached hereto as Exhibit 10.1.
In
accordance with the 2020 Amendment, Mr. Heng Fai Chan shall receive $61,799.49 payable in cash for his services provided as a
director of the Company for the period from July 15, 2019 till December 31, 2019. Pursuant to the 2020 Amendment, Mr. Chan’s
monthly base salary (“Base Salary”) has been reduced to $1 commencing January 1, 2020 and Mr. Chan shall be eligible
to receive certain performance bonuses based upon the annual market capitalization growth of the Company (the “Growth Bonus”)
and the annual net asset value change of the Company (the “NAV Bonus”). The Growth Bonus will be equal to 5% of the
year over year increase in DSS’s market capitalization, with the measurement of DSS’s market capitalization determined
by (a) the total number of outstanding shares of DSS common stock at fiscal year end multiplied by (b) the 10-day volume weighted
average price (“VWAP”) of DSS common stock on the principal trading market prior to such year end. The NAV Bonus will
be equal to 5% of the year over year increase of DSS’s net asset value (“NAV”), with the measurement of DSS’s
fiscal year end NAV (equal to DSS’s total assets minus total liabilities) calculated in accordance with generally accepted
accounting principles.
In
addition, Mr. Heng Fai Chan will have the option to have his Base Salary and/or Performance Bonus, if any, paid in either cash
or in DSS common stock under the Company’s Employee, Director and Consultant Equity Incentive Plan, in accordance with the
notice requirements and procedures set forth in the 2020 Amendment. Under the 2020 Amendment, if Mr. Chan chooses to convert part
or all of his Base Salary and/or Performance Bonus into DSS common stock, the conversion rate used will be the 10-day VWAP of
the DSS common stock immediately before the date that Mr. Chan requests in writing to elect the stock payment option.
In
March 2020, the Compensation Committee of the Company unanimously
approved the terms and form of the 2020 Amendment, which were subsequently approved by the full Board of Directors of
the Company on June 29, 2020. The above summary of the material terms of the 2020 Amendment is qualified by reference to the
text of the Agreement which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to
be signed on its behalf by the undersigned hereunto duly authorized.
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DOCUMENT
SECURITY SYSTEMS, INC.
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Dated:
November 25, 2020
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By:
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/s/
Frank
D. Heuszel
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Name:
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Frank
D. Heuszel
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Title:
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Chief
Executive Officer
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