I.D. Systems, Inc.

123 Tice Boulevard
Woodcliff Lake, New Jersey 07677

 

NOTICE OF 20142016 ANNUAL MEETING OF STOCKHOLDERS

To Be Held On June 20, 2014

To the Stockholders of I.D. Systems, Inc.:

Notice is hereby given that the 20142016 Annual Meeting of Stockholders (the “Annual Meeting”“Annual Meeting”) of I.D. Systems, Inc. (the “Company,“Company,” “we,“we,” “our”“our” or “us”“us”) will be held at the offices of Lowenstein SandlerOlshan Frome Wolosky LLP, located at 12511325 Avenue of the Americas, New York, New York 10020,10019, on Friday,Tuesday, June 20, 2014,14, 2016, at 11:10:00 a.m., Eastern Time, and thereafter as it may be postponed or adjourned from time to time, for the following purposes, each of which is described more fully in the Proxy Statement accompanying this Notice of Annual Meeting:

The meeting will begin promptly at 11:10:00 a.m., Eastern Time. Only holders of record of shares of our common stock at the close of business on May 19, 2014,April 18, 2016, the date fixed by our Board of Directors as the record date for the Annual Meeting, will be entitled to notice of, and to vote at, the meeting and any postponements or adjournments of the meeting.

For a period of at least 10 days prior to the Annual Meeting, a complete list of stockholders entitled to vote at the meeting will be available and open to the examination of any stockholder for any purpose relating to the Annual Meeting during normal business hours at our principal executive offices located at 123 Tice Boulevard, Woodcliff Lake, New Jersey 07677.

Whether you expect to attend the Annual Meeting or not, please vote, sign, date and return in the self-addressed envelope provided the enclosed proxy card as promptly as possible. If you attend the Annual Meeting, you may vote your shares in person, even though you have previously signed and returned your proxy.

By order of the Board of Directors,

/s/ Ned Mavrommatis

Ned Mavrommatis
Corporate Secretary

Dated: May 28, 2014
April 25, 2016

Woodcliff Lake, New Jersey

Important Notice of Internet Availability of Proxy Materials for the 20142016 Annual Meeting of Stockholders to be held on June 20, 2014.14, 2016. The Notice, this Proxy Statement, and our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as amended,2015, are available through the Internet athttp://www.astproxyportal.com/ast/10255.ir.id-systems.com/phoenix.zhtml?c=100495&p=proxy. Under Securities and Exchange Commission rules, we are providing access to our proxy materials both by sending you this full set of proxy materials, and by notifying you of the availability of our proxy materials on the Internet.

I.D. SYSTEMS, INC.
123 TICE BOULEVARD
WOODCLIFF LAKE, NEW JERSEY 07677

PROXY STATEMENT

Annual Meeting of Stockholders
June 20, 2014

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”“Board”) of I.D. Systems, Inc., a Delaware corporation (the “Company,“Company,” “we,“we,” “our”“our” or “us”“us”), for use at our 20142016 Annual Meeting of Stockholders (the “Annual Meeting”“Annual Meeting”) to be held at the offices of Lowenstein SandlerOlshan Frome Wolosky LLP, located at 12511325 Avenue of the Americas, New York, New York 10020,10019, on Friday,Tuesday, June 20, 2014,14, 2016, at 11:10:00 a.m., Eastern Time, and any adjournments or postponements thereof.

The Board is sending the proxy materials relating to the Annual Meeting, which include this Proxy Statement, our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as amended,2015 and proxy card, to its stockholders beginning on or about May 28, 2014.April 25, 2016. The information included in this Proxy Statement relates to the proposals to be voted on at the Annual Meeting, the voting process, the compensation of our most highly paid executive officers and our directors, and certain other required information.

Important Notice of Internet Availability of Proxy Materials for the 20142016 Annual Meeting of Stockholders to be held on June 20, 2014

The Notice, this Proxy Statement, and our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as amended,2015 are available through the Internet athttp://www.astproxyportal.com/ast/10255.ir.id-systems.com/phoenix.zhtml?c=100495&p=proxy. Under Securities and Exchange Commission rules, we are providing access to our proxy materials both by sending you this full set of proxy materials, and by notifying you of the availability of our proxy materials on the Internet.

Record Date and Outstanding Shares

The Board has fixed the close of business on May 19, 2014,April 18, 2016, as the record date (the “Record Date”“Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements of the meeting. Only stockholders of record at the close of business on the Record Date will be entitled to vote at the Annual Meeting or any and all adjournments or postponements thereof.

As of the Record Date, we had issued and outstanding 12,287,48313,824,547 shares of common stock. Our common stock comprises all of our issued and outstanding voting stock.

At least ten (10) days before the Annual Meeting, we will make a complete list of the stockholders entitled to vote at the meeting open to the examination of any of our stockholders for any purpose germane to the Annual Meeting. The list will be available for inspection during ordinary business hours at our offices at 123 Tice Boulevard, Woodcliff Lake, New Jersey 07677, and will be made available to stockholders present at the Annual Meeting.

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Purposes of the Annual Meeting

The purposes of the Annual Meeting are (i) to elect five (5) directors to our Board, each to serve until our 20152017 annual meeting of stockholders and until their respective successors are duly elected and qualified; (ii) to ratify the appointment of EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2014;2016; (iii) to approve, on an advisory basis, the Company’s executive compensation; and (iv) to transact such other business as may properly come before the Annual Meeting or at any adjournment or postponement thereof. In addition to the foregoing, there will be a report on the progress of our company and an opportunity for questions of general interest to the stockholders.

Unless we receive specific instructions to the contrary or unless such proxy is revoked, shares represented by each properly executed proxy will be voted: (i) “FOR” the election of each of our nominees as a director;

(ii) “FOR” the ratification of the appointment of EisnerAmper LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2014;2016; (iii) “FOR” the approval, on an advisory basis, of our executive compensation; and (iv) with respect to any other matters that may properly come before the Annual Meeting, at the discretion of the proxy holders. We do not presently anticipate that any other business will be presented for action at the Annual Meeting.

Voting at the Annual Meeting

Quorum Requirements

The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the total outstanding shares of our common stock is necessary to constitute a quorum for the transaction of business at the meeting. Abstentions and broker “non-votes” (as hereinafter defined) are counted as present and entitled to vote for purposes of determining whether a quorum is present. A broker “non-vote” on a matter occurs when a broker, bank or your representative may not vote on a particular matter because it does not have discretionary voting authority and has not received instructions from the beneficial owner.

Shareholders of Record and Beneficial Owners

Each share of our common stock outstanding on the Record Date will be entitled to one vote on each matter submitted to a vote of our stockholders. Cumulative voting by stockholders is not permitted. The shares to be voted include shares of our common stock that are (i) held of record directly in a stockholder’s name and (ii) held for stockholders in “street name” through a broker, bank or other nominee. If your shares are registered directly in your name with the Company’s stock transfer agent, American Stock Transfer & Trust Company, LLC, you are considered the “shareholder of record” with respect to those shares. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of those shares.

If you hold your shares of our common stock through a broker, bank or other representative, generally the broker, bank or representative may only vote the common stock that it holds for you in accordance with your instructions. However, under the rules that govern brokers who have record ownership of shares that are held in street name for their clients who are the beneficial owners of the shares, brokers have the discretion to vote such shares on routine matters. Therefore, if the broker, bank or representative has not timely received your instructions, it may vote on certain matters for which it has discretionary voting authority. The ratification of the appointment of an independent registered public accounting firm is considered a routine matter. Thus, if you do not otherwise instruct your broker, the broker may turn in a proxy card voting your shares “FOR” ratification of the independent registered public accounting firm. The Company believes that all of the other proposals to be voted upon at the meeting will be considered “non-routine.” Thus, a broker or other nominee cannot vote without instructions on these non-routine matters, and, consequently, if your shares are held in street name, you must provide your broker or nominee with instructions on how to vote your shares in order for your shares to be voted on those proposals.

Holders of our common stock will not have any rights of appraisal or similar dissenters’ rights with respect to any matter to be acted upon at the Annual Meeting.

Vote Required

For the election of directors, a plurality of the votes cast is required. Since the number of candidates is equal to the number of vacancies, receipt of any votes in favor of any candidate will ensure that that candidate is elected. If no voting direction is indicated on a proxy card that is signed and returned, the shares will be considered votes FOR the election of all director nominees set forth in this Proxy Statement. In accordance with Delaware law, stockholders entitled to vote for the election of directors may withhold authority to vote for all nominees for directors or may withhold authority to vote for certain nominees for directors. Abstentions and broker “non-votes”non-votes are not considered for the purpose of the election of directors.

The ratification of the selection of EisnerAmper LLP as the Company’s independent registered public accounting firm and the advisory (non-binding) proposal to approve the Company’s executive compensation each requires the affirmative vote of a majority of the votes cast. Abstentions and broker non-votes will have no effect on the outcome on these matters.

Your vote will not be disclosed either within the Company or to third parties, except: (i) as may be necessary to meet applicable legal requirements or to assert or defend claims for or against the Company; (ii) to allow for the tabulation of votes and certification of the vote; and (iii) to facilitate a successful proxy solicitation.

Effect of Advisory Votes

The approval, on an advisory basis, of our executive compensation, also known as a “say on pay” vote, is an advisory vote mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. This means that while we ask stockholders to approve our executive compensation, it is not an action that requires stockholder approval, and stockholders are not voting to approve or disapprove the Board’s recommendation with respect to this proposal. This advisory vote is non-binding on the Board, although the Board welcomes the input of our stockholders on the Company’s compensation policies and compensation program and will take the advisory vote into account in making determinations concerning executive compensation.

At our 2011 annual meeting of stockholders held on June 21, 2011, we conducted a stockholder advisory vote on the frequency of future stockholder votes on the Company’s executive compensation (every one, two or three years), also known as a “say on frequency” vote. The Board considered the results of this “say on frequency” advisory vote and, since the most affirmative votes of all the votes cast on the “say on frequency” matter expressed a preference for having the “say on pay” vote every year, determined that an advisory vote on executive compensation would be conducted on an annual basis until the next vote on the frequency of such votes. Notwithstanding the outcome of stockholder “say on frequency” votes, however, the Board may in the future decide to conduct advisory votes on a less frequent basis if appropriate and may vary its practice based on factors such as discussions with stockholders and the adoption of material changes to compensation programs.

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Voting of Proxies

Shareholders of Record

As a shareholder of record, these proxy materials will be furnished directly to you by the Company, by mail. As the stockholder of record, you have the right to grant your voting proxy directly to the Company or to vote in person at the meeting.

Beneficial Owners

As a beneficial owner, you have the right to direct your broker, trustee or nominee as to how to vote your shares. Please refer to the voting instruction card provided by your broker, trustee or nominee. You are also invited to attend the Annual Meeting. However, because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the meeting. Note that it may take some time to obtain a legal proxy from your broker, trustee or nominee, so, if you plan to request a legal proxy, you should do so well in advance of the meeting.

Voting Without Attending the Meeting

Whether you hold shares directly as the shareholder of record or through a broker, trustee or other nominee as the beneficial owner, you may direct how your shares are voted without attending the Annual Meeting. There are threetwo ways to vote by proxy without attending the meeting:

	●	By Internet — Stockholders of record may submit proxies over the Internet by following the instructions on the proxy card or voting instruction card.
	●	By Mail — Stockholders of record may submit proxies by completing, signing and dating their proxy card or voting instruction card and mailing it in the accompanying pre-addressed envelope.

Revocation of Proxies

Stockholders can revoke a proxy prior to the completion of voting at the Annual Meeting through any of the following methods:

Please note, however, that if a stockholder’s shares are held of record by a broker, bank or other nominee and that stockholder wishes to vote at the Annual Meeting, the stockholder must bring to the Annual Meeting a letter or “legal proxy” from the broker, bank or other nominee confirming the stockholder’s beneficial ownership of the shares.

Solicitation

The cost of preparing, assembling, printing and mailing the proxy material and of reimbursing brokers, nominees and fiduciaries for the out-of-pocket and clerical expenses of transmitting copies of the proxy material to the beneficial owners of shares held of record by such persons will be borne by the Company. Certain officers and employees of the Company, without additional compensation, may use their personal efforts, by telephone or otherwise, to obtain proxies.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

The Board has nominated Kenneth Brakebill, Michael Brodsky, Kenneth S. Ehrman, Ron Konezny and Tony Trousset for electionre-election as directors of the Company. If electedre-elected to the Board, each nominee will hold office until our Annual Meeting of Stockholders to be held in 20152017 and until his respective successor has been duly elected and qualified, or until his earlier death, resignation or removal. Each of Messrs. Ehrman, Brakebill, Brodsky, Ehrman, Konezny and Trousset has consented to being named as a nominee and, if elected,re-elected, to serve as a director. The Nominating Committee and the Board believe that each of these nominees possesses the attributes we seek in directors generally as well as the individual experiences, qualifications and skills included in their individual biographies below.

If any nominee is unable to serve, which the Board has no reason to expect, the persons named in the proxy intend to vote for the balance of those nominees named above and, if they deem it advisable, for a substitute nominee.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE“FOR” “FOR” THE ELECTION OF ALL OF THE DIRECTOR NOMINEES LISTED ABOVE.

Information About Our Directors, Director Nominees and Executive Officers

The table below sets forth the names and ages of the directors, nominees for director and executive officers of the Company as of May 19, 2014,April 18, 2016, as well as the position(s) and office(s) with the Company held by those individuals. A summary of the background and experience of each of those individuals is set forth after the table.

Name		Age		Position(s)
Name		Age		Position(s)
DIRECTORS(1):
Lawrence S. Burstein		71		Director
Harold D. Copperman		67		Director
Robert J. Farrell		50		Director
Michael P. Monaco		66		Director
DIRECTORS AND DIRECTOR NOMINEES:
Kenneth S. Ehrman		4446		President and InterimChairman of the Board, Chief Executive Officer, President and Director Nominee
Kenneth Brakebill		4446		Director Nominee
Michael Brodsky		4648		Director Nominee
Ron Konezny		4648		Director Nominee
Tony Trousset		4547		Director Nominee
EXECUTIVE OFFICERS WHO ARE NOT DIRECTOR NOMINEES: DIRECTORS:
Michael L. Ehrman		4143		Chief Technology Officer
Brett Kilpatrick(2)Norman L. Ellis		5559		Executive Vice President of Worldwide SalesChief Operating Officer
Ned Mavrommatis		4345		Chief Financial Officer, Treasurer and Corporate Secretary

Director Nominees

Kenneth S. Ehrman. Mr. Ehrman is one of our founders and has served as our President since our inception in 1993 and as our InterimChairman of the Board and Chief Executive Officer and a director of the Company since March,June 2014. Mr. Ehrman also previously served as our Interim Chief Executive Officer from March 2014 to June 2014, as our Chief Operating Officer from June 2000 to March 2010 and as a director of the Company from 1993 until 2013. Since September, 2012, Mr. Ehrman has served as a member of the board of directors of Financial Services, Inc., a privately held provider of data processing solutions for banking. He graduated from Stanford University in 1991 with a Bachelor of Science in Industrial Engineering. Upon his graduation, and until our inception, Mr. Ehrman worked as a production manager with Echelon Corporation. Mr. Ehrman is the brother of Michael L. Ehrman, our Chief Technology Officer.

Mr. Ehrman has a strong technical and engineering background. Mr. Ehrman’s qualifications to serve on the Board include his management experience, his engineering expertise and a long history and familiarity with the Company. In addition, Mr. Ehrman’s role as the President and Chief Executive Officer of the Company and former roles as Interim Chief Executive Officer and the former Chief Operating Officer of the Company provides the Board with invaluable insight into the management and daily operations of the Company. Mr. Ehrman also is an inventor on several of the Company’s patents.

Kenneth Brakebill. Mr. Brakebill has served as a director of the Company since June 2014. Mr. Brakebill is a retired intellectual property and trial lawyer. Following a one-year appellate clerkship out of law school, in 1998 Mr. Brakebill joined Morrison & Foerster, a global law firm of which he became a partner in 2005. At Morrison & Foerster, Mr. Brakebill primarily represented technology companies, both in the hardware and software sectors, in bet-the-company type intellectual property cases involving disputes over patents, copyrights and contracts concerning use of technology. He retired from the firm in 2010. Mr. Brakebill also has served as a director of several not-for-profit organizations. Mr. Brakebill received a Bachelor of Arts degree with Honors from Stanford University in 1991 and attended Harvard Law School and the University of California, Hastings, from which he received his law degree in 1997.

Mr. Brakebill has extensive experience representing technology companies in litigation concerning intellectual property rights and rightful use of technology, and accordingly, has insights in the area of intellectual property rights in technology. Mr. Brakebill participated on successful trial teams that represented Novell, Inc., then a publicly held software company, in a widely-followed case concerning ownership of the copyrights in the UNIX operating system; and Altera Corporation, a publicly traded global semiconductor company, in cases concerning the designs of Altera’s reprogrammable logic device technology and its software tools. Through these representations, Mr. Brakebill gained significant experience working with senior executives of companies on issues relating to litigation-impacted product lines and strategic direction. We believe that Mr. Brakebill’s legal and technology background and experience as a director of not-for-profit companies, give him the qualifications and skills to enable him to serve as an effective contributing member of the Board.

Michael Brodsky. Mr. Brodsky has served as Executive Chairman of Selectica, Inc., a publicly traded cloud-based contract management and configuration software solutions provider (“Selectica”), since December, 2013, as Chief Executive Officer of Selectica from August, 2013 until December, 2013, and as a director of Selecticathe Company since October, 2010.June 2014. Mr. Brodsky also has served asis the Managing Partner of Vajra Asset Management, LLC, an investment management firm, since January 2013 and as a partner of Spring Valley Partners, LLC, a consulting services firm which is currently inactive, since July, 2013. From October, 2010 until March, 2012, Mr. Brodsky is also presently Executive Chairman of Determine, Inc. (formerly known as Selectica, Inc.), a publicly traded leader in contract management, procurement and sourcing software, where he has been on the Board of Directors since October of 2010 and served as the Co-ChiefChief Executive Officer from August 2013 until December 2013. He is also Chairman of Federated Sports & Gamingthe Board of Trans World Corporation, a publicly traded company that owns and operates casinos and hotels in the Czech Republic and Germany, since September 2013. Mr. Brodsky is also a member of the board of Spark Networks, Inc., since November 2015. He is also a poker entertainment company (“Federated”). Inmember of the board of Genesis Land Development Corporation, a residential land developer and home-builder in Calgary, Canada since June 2012, Pinnacle Entertainment,2012. He was also a member of the board of directors of JPS Industries, Inc., a publicly held owner, operatortraded manufacturer of urethane film, sheet and developertubing, and other highly engineered components from February 2015 until July 2015. From April 2008 to June 2010, he was also a member of casinos and related hospitality and entertainment facilities, acquired the assetsBoard of Federated. Mr. Brodsky servedDirectors as well as the ChairmanPresident, CEO and Chief Executive Officer and as a directorChairman of Youbet.com, Inc., a formerly publicly traded provider of an online horse racing and betting site, (“Youbet”), from April, 2008 to June, 2010, when Youbetwhich was acquired by Churchill Downs Incorporated, a publicly traded provider of racetracks, casinos, off-track betting and online wagering services (“Churchill Downs”). Mr. Brodsky served as a member of the board of directors of Churchill Downs followingcompany. Following the acquisition of Youbet.com, he served on the Board of Directors of Churchill Downs until June 2012. From June 2005 untilto August 2011, Mr. Brodsky served aswas the managing partner of New World Opportunity Partners, LLC, an investment firm. Mr. Brodsky has served as a director of Genesis Land Development Corporation, a residential land developer and home builder in Calgary, Canada with shares

listed on the Toronto Stock Exchange, since June, 2012, as a director of Trans World Corporation, a publicly traded company that owns and operates casinos in the Czech Republic, since September, 2013, and as a director of AltiGen Communications, Inc., a provider of Microsoft-based communications solutions, with shares listed on the OTCQX over-the-counter market, since February, 2013. Mr. Brodsky received a Bachelor of Arts degree from Syracuse University, a law degree from Northwestern University School of Law and a Masters in Business Administration from the JL Kellogg Graduate School of Management School of Business at Northwestern University.

Mr. Brodsky possesses extensive business, operating and executive expertise. Among other things, Mr. Brodsky has served as the Chief Executive Officer of several companies, and possesses skills in executive management and leadership. We believe Mr. Brodsky’s management and leadership skills and experience as a member of the board of directors of various companies will enable him to be an effective contributing member of the Board.

Ron KoneznyKonezny. Mr. Konezny has served as a director of the Company since June 2014. Mr. Konezny has served as the President and Chief Executive Officer and a director of Digi International Inc., a publicly held provider of machine-to-machine (“M2M”) networking hardware and solutions, since December 2014. Mr. Konezny served as Vice President, Global Transportation and Logistics of PeopleNet Communications Corporation (“PeopleNet”), an onboard computing and carrier fleet communications provider and division of Trimble Navigation Limited, a publicly held provider of technology solutions for field and mobile worker productivity (“Trimble”), sincefrom September 2013 until December 2014, and as Chief Executive Officer of PeopleNet since 2007.Communications Corporation (“PeopleNet”), an onboard computing and carrier fleet communications provider, from 2007 until December 2014. Mr. Konezny served as General Manager of Trimble'sTrimble’s Global Transportation and Logistics division from August 2011, when Trimble acquired PeopleNet, to September 2013. Mr. Konezny has served in several positions with PeopleNet since he co-founded it in 1994, including Chief Operating Officer and Chief Financial Officer from 2001 to 2007 and Chief Technology Officer from 1996 to 2007. Mr. Konezny has previously served on the Boardsboards of Directorsdirectors of the National Private Truck Council Institute and the Truckload Carriers Association. Mr. Konezny received a Bachelor of Arts degree from Northwestern University.

Mr. Konezny possesses extensive business, operating and executive expertise. Through his executive positions with PeopleNet, Mr. Konezny has acquired skills in executive management and leadership. Specifically, in his positions as Chief Executive Officer, Chief Operating Officer and Chief Financial Officer of PeopleNet, Mr. Konezny led PeopleNet’s growth, profitability, and solution innovation. He also led PeopleNet'sPeopleNet’s technology team and platform vision, which resulted in the first internet-based solution in the market, patented OTAP (over-the-air-programming), email messaging, handheld integration, Vehicle Management engine data interface, eDriver Logs, Automated Fuel Tax, and Automated Workflow. We believe Mr. Konezny’s management and leadership skills and technological background will enable him to be an effective contributing member of the Board.

Tony Trousset. TonyMr. Trousset has served as a director of the Company since June 2014. Mr. Trousset has served as the Managing Member of Atlas Technology Group LLC, a privately held company which provides independent mergers and acquisitions and corporate finance advice to technology companies and technology-focused private equity firms (“Atlas Technology”), since he founded Atlas Technology in November 2009. From 2005 until 2008, Mr. Trousset served as Global Head of Software Investment Banking and Co-Head of the West Coast Technology Investment Banking Group at Lehman Brothers Holdings, Inc., a then global financial services firm. From 2001 until 2005, Mr. Trousset served as Global Head of Software Investment Banking at UBS AG, a global financial services firm. During 2005, Mr. Trousset served as Vice President and Head of Corporate Development at SAS Institute, Inc., a privately held provider of business analytics software and services. Mr. Trousset has served as a member of the Board of Directors of the San Francisco Symphony since 2008. Mr. Trousset received a Bachelor of Arts degree from Stanford University in Political Science and Master of Arts degree from Stanford University in Education.

Mr. Trousset has worked in the technology industry for over 18 years as an investment banker, venture capitalist and corporate executive. He has significant experience with mergers and acquisitions in the technology sector. We believe that Trousset’s background and business acumen, give him the qualifications and skills to enable him to serve as an effective contributing member of the Board.

Executive Officers

Kenneth S. Ehrman.Ehrman. See narrative description under the caption “Director Nominees,”“Directors and Director Nominees” above.

Michael L. Ehrman. Mr. Ehrman serves as our Chief Technology Officer, a position he has held since March 2010. Mr. Ehrman previously served as our Executive Vice President of Engineering from August 1999 until March 2010. Prior to that, he served as our Executive Vice President of Software Development since joining us in 1995. Mr. Ehrman graduated from Stanford University in 1994 with a Master of Science in Engineering - Economics Systems as well as a Bachelor of Science in Computer Systems Engineering. Upon his graduation in 1994, Mr. Ehrman was employed as a consultant for Andersen Consulting in New York. Mr. Ehrman is the brother of Kenneth S. Ehrman, our Chairman of the Board, Chief Executive Officer and President and a member of our Board.

Brett Kilpatrick.Norman L. Ellis. Mr. KilpatrickEllis has served as our ExecutiveChief Operating Offer since joining us in July 2014. Prior to joining us, from November 2013 until June 2014, Mr. Ellis served as Vice President Sales, Services and Marketing for Omnitracs, Inc. (“Omnitracs”), a provider of Worldwide Sales since March, 2012integrated wireless systems, applications and on May 13, 2014, resigned from such position, effective asservices for transportation and logistics companies and a division of June 6, 2014.Qualcomm Incorporated, a publicly-traded company engaged in the development and commercialization of wireless technologies (“Qualcomm”). From October, 20102008 until March 2012,November 2013, Mr. KilpatrickEllis served as ourVice President Sales, Services and Marketing for Qualcomm. Mr. Ellis has held several other positions with Qualcomm, including Vice President and General Manager from 2004 to 2008, Vice President-Homeland Security Solutions from 2002 to 2003, Vice President-New Markets from 2000 to 2001 and Director Product Development from 1998 to 1999. He also served as Senior Vice President of Sales and in such capacity, was responsibleMarketing for the salesService Transport Inc., a commercial motor carrier of our Vehicle Management Systems. Priorbulk liquids, from 1993 to joining the Company,1998. Mr. Kilpatrick was the Managing Partner and Chief Executive Officer of AnalytiCare, LLC, a start-up company that provides business intelligence, analytics, and data licensing in a Software as a Service (SaaS) offering to the healthcare market. Prior to that, he served as the Chief Executive Officer of Panoratio Worldwide from 2005 to 2008. Mr. Kilpatrick has also served as the Vice President of Worldwide Sales at Determine, Inc. (acquired by Selectica), and the Chief Executive Officer of Alterian, Inc. Mr. KilpatrickEllis also has held executive and managementvarious positions with several public companies over the courseOvernite Transportation Inc. (currently known as UPS Ground Freight, Inc.), a provider of his career, including AvantGo, Oracle, Accenture, IONA Technologiestransportation services, and Versant.with Mason and Dixon Lines, a provider of trucking and logistic solutions. Mr. Kilpatrick earnedEllis received a Bachelor of Science DegreeArts degree in BiologyBusiness Administration from Purdue University.Emory and Henry College.

Ned Mavrommatis. Mr. Mavrommatis has served as our Chief Financial Officer since joining us in August 1999, as our Treasurer since June 2001, and as our Corporate Secretary since November 2003. Prior to joining us, Mr. Mavrommatis was a Senior Manager at the accounting firm of Eisner LLP (currently known as EisnerAmper LLP). Mr. Mavrommatis received a Master of Business Administration in finance from New York University’s Leonard Stern School of Business and a Bachelor of Business Administration in accounting from Bernard M. Baruch College, The City University of New York. Mr. Mavrommatis is also a Certified Public Accountant.

Bankruptcies

Other than as set forth below, during the past ten years, a petition under the Federal bankruptcy laws or any state insolvency law has not been filed by or against, or a receiver, fiscal agent or similar officer has not been appointed by a court for the business or property of any of our directors, executive officers or nominees for election as director at the Annual Meeting, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing. Mr. Brodsky served as the Co-Chief Executive Officer of Federated Sports & Gaming Inc. (“Federated”) from October 2010 until his resignation from Federated, effective March 1, 2012. On February 28, 2012, Federated Sports filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland. Mr. Brodsky served as the Co-Chief Executive Officer of Federated Heartland, Inc. (“Federated Heartland”) from October 2010 until his resignation from Federated Heartland, effective March 1, 2012. On February 28, 2012, Federated Heartland filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland.

CORPORATE GOVERNANCE AND BOARD MATTERS

General

Our Board is responsible for the management and direction of our Company and for establishing broad corporate policies. Members of the Board are kept informed of our business through various documents and reports provided by the Chief Executive Officer or in the absence of the Chief Executive Officer, the Interim Chief Executive Officer and other corporate officers, and by participating in Board and committee meetings. Each director has access to all of our books, records and reports, and members of management are available at all times to answer their questions.

Currently, there are fourfive members onof the Board, with one vacancy due to Mr. Jagid’s resignation from the Board in March 2014.Board. The Board is not classified or staggered, and all directors hold office until the next annual meeting of stockholders or until their respective successors are elected and qualified.

Director Independence

Our Board has determined that each of Lawrence S. Burstein, Harold D. Copperman, Robert J. FarrellMessrs. Brakebill, Brodsky, Konezny and Michael P. MonacoTrousset satisfies the current “independent director” standards established by rules of The NASDAQ Stock Market LLC (“Nasdaq”)the Nasdaq Rules and, as to the members of the Audit Committee of our Board, the additional independence requirements under applicable rules and regulations of the SEC. Thus, a majority of the Board is comprised of independent directors as required by the Nasdaq rules. The Audit Committee of the Board is composed of Messrs. Burstein, CoppermanBrodsky, Konezny and Monaco,Trousset, each of whom is an independent director in accordance with Nasdaq Rule 5605(c)(2). The Compensation Committee of the Board is composed of Messrs. Copperman, FarrellBrakebill, Konezny and Monaco,Trousset, each of whom is an independent director in accordance with Nasdaq Rule 5605(d)(2). The Nominating Committee of the Board is composed of Messrs. Burstein, CoppermanBrakebill, Brodsky and Monaco,Trousset, each of whom is independent in accordance with Nasdaq Rule 5605(e)(1)(B).

Our Board also has determined that each of Kenneth Brakebill, Michael Brodsky, Ron Konezny and Tony Trousset, a nominee for election as a director at our Annual Meeting, satisfies the current “independent director” standards established by the Nasdaq rules.

Board Leadership Structure

During our fiscal year ended December 31, 2013, our

Our current leadership structure wasis comprised of a combined Chairman of the Board and Chief Executive Officer, an independent lead director and active independent directors. During our fiscal year ended December 31, 2013, Jeffrey M. Jagid servedCurrently, Kenneth S. Ehrman serves as our Chairman of the Board and Chief Executive Officer and Harold D. Copperman servedMichael Brodsky serves as the independent lead director. Effective as of March 2, 2014, Mr. Jagid resigned from his position as Chief Executive Officer of the Company and ceased to serve as Chairman of the Board. Effective as of March 21, 2014, Mr. Jagid resigned from the Board. Following Mr. Jagid's resignation from his position as Chief Executive Officer, the Board appointed Kenneth S. Ehrman as Interim Chief Executive Officer. Since Mr. Jagid’s resignation from the Board, our leadership structure has been comprised of an independent lead director and active independent directors.

The Board believes that athis leadership structure which included a combined Chairman of the Board and Chief Executive Officer, an independent lead director, and active independent directors wasis the most effective for the Company during the fiscal year ended December 31, 2013.at this time. Because the Chief Executive Officer wasis closest to the many facets of our business, the Board believes that the Chief Executive Officer wasis in the best position to lead most effectively and to serve in the critical role of Chairman of the Board. As the Chief Executive Officer wasIn addition, as he is directly involved in managing the Company, having a Chairman who also servedserves as Chief Executive Officer facilitatedfacilitates timely communication with the Board on critical business matters. Further, we believe that this combined leadership structure is appropriate for our Company because our Chairman and Chief Executive Officer (i) conveys a singular, cohesive message to our stockholders, employees, industry partners and the investment community and (ii) eliminates any ambiguity as to who is accountable for the Company’s performance. The lead director, among other things, workedworks with the Chairman to set and approve agendas and schedules for Board meetings, servedserves as a liaison between the Chairman and the non-employee directors, and presidedpresides at any meetings of the Board at which the Chairman wasis not present, including executive sessions of the independent directors. TheOur directors and management team engage frequently and directly in the flow of information and ideas and we believe our combined leadership structure facilitates the quality, quantity and timeliness of the information flow and communication. While the Board currently believes that this leadership structures helped providethere is a well-functioning and effective balance between strong Company leadership, an independent lead director and oversight by active, independent directors, during the fiscal year ended December 31, 2013.

Since Mr. Jagid’s resignation from the Board, our leadership structure has been comprised of an independent lead director and active independent directors. The Board has reviewed our current leadership structure in light of the current composition of the Board. The lead director sets and approves agendas and schedules for Board meetings, and presides at the meetings of the Board. The Board believes this Board leadership structure is an appropriate structure for us and our stockholders at this time. This structure allows the Interim Chief Executive Officerit continues to focus his energy on strategy and management of the company and the Board to focus on oversight of strategic planning and risk management of the company.

If the nominees for election as a director at the Annual Meeting are elected to serve as directors of the Company, then, immediately following the Annual Meeting, the Board will be composed of one management director and four active independent directors. We expect that following the Annual Meeting, the directors who then hold office will evaluate the composition of the Board andto determine what leadership structure would be theis most appropriate for our company and our stockholders. We also expect that following the Annual Meeting, the directors who then hold office will designate the directors who will serve on each of the Audit Committee, the Compensation Committee and the Nominating Committee of the Board.

9

Risk Oversight

The Board has the ultimate oversight responsibility for the risk management process and regularly reviews issues that present particular risk to us, including those involving competition, customer demands, economic conditions, planning, strategy, finance, sales and marketing, products, information technology, facilities and operations, supply chain, legal and environmental matters and insurance. The Board further relies on the Audit Committee for oversight of certain areas of risk management. In particular, the Audit Committee focuses on financial and enterprise risk exposures, including internal controls, and discusses with management and the Company’s independent registered public accounting firm our policies with respect to risk assessment and risk management, including risks related to fraud, liquidity, credit operations and regulatory compliance, and advises the internal audit function as to overall risk assessment of the Company.

While the Board oversees risk management, Company management is charged with managing risk. Management communicates routinely with the Board, committees of the Board and individual directors on significant risks that have been identified and how they are being managed. Directors are free to, and indeed frequently do, communicate directly with senior management.

The Company believes that its leadership structure, discussed above, supports the risk oversight function of the Board. IndependentWhile the Company has a combined Chairman and Chief Executive Officer, independent directors chair the various Board committees involved with risk oversight, there is frequent and open communication among management and directors, and all directors are actively involved in the risk oversight function. The Board believes that this approach provides appropriate checks and balances against undue risk-taking.

Board and Committee Meetings

The Board held 1912 meetings during our fiscal year ended December 31, 2013. All of such meetings were2015. Each director attended either in person or telephonically, by allover 75% of the membersaggregate number of meetings of the Board.Board and the meetings held by committees of the Board during 2015. Actions were also taken by the unanimous written consent of the members of the Board on three4 occasions during the fiscal year ended December 31, 2013.2015.

We have adopted a policy of encouraging, but not requiring, members of the Board to attend our annual meetings of stockholders. Messrs. Burstein, CoppermanBrodsky and MonacoKenneth Ehrman attended our 20132015 annual meeting of stockholders held on June 20, 201323, 2015 in person, and Mr. FarrellMessrs. Brakebill, Konezny and Trousset attended the meeting by telephone.

Committees of the Board

The standing committees of the Board include the Audit Committee, the Compensation Committee and the Nominating Committee.

Audit Committee

The Audit Committee, which is a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”“Exchange Act”), is composed of Messrs. Burstein, CoppermanBrodsky, Konezny and Monaco,Trousset, each of whom is independent under Nasdaq Rule 5605(c)(2) and Rule 10A-3 under the Exchange Act.

The Board has determined that it has at least one “audit committee financial expert” serving on the Audit Committee. Mr. MonacoBrodsky serves as the audit committee financial expert. Mr. MonacoBrodsky also serves as the Chairman of the Audit Committee.

The Audit Committee held five4 meetings during the fiscal year ended December 31, 2013. All of such meetings were attended, either in person or telephonically, by all of the members of the Audit Committee. The Audit Committee acted by unanimous written consent on two occasions during the fiscal year ended December 31, 2013.2015.

The Board has adopted a written charter for the Audit Committee, a copy of which is publicly available on our website atwww.id-systems.com. www.id-systems.com. The Audit Committee’s charter sets forth the responsibilities, authority and specific duties of the Audit Committee and is reviewed and reassessed annually. The information on our website is not a part of this Proxy Statement. The charter specifies, among other things, the structure and membership requirements of the Audit Committee, as well as the relationship of the Audit Committee to our independent registered public accounting firm and management.

In accordance with its written charter, the Audit Committee assists the Board in monitoring (i) the integrity of our financial reporting process including our internal controls regarding financial reporting, (ii) our compliance with legal and regulatory requirements and (ii) the independence and performance of our internal and external auditors, and serves as an avenue of communication among the independent registered public accounting firm, management and the Board.

The report of the Audit Committee appears on page 1718 of this Proxy Statement.

Compensation Committee

The Compensation Committee is composed of Messrs. Copperman, FarrellBrakebill, Konezny and Monaco,Trousset, each of whom is independent within the meaning of Nasdaq Rule 5605(a)(2). Mr. CoppermanKonezny serves as the Chairman of the Compensation Committee.

The Compensation Committee held five meetings1 meeting during the fiscal year ended December 31, 2013. All of such meetings were attended, either in person or telephonically, by all of the members of the Compensation Committee.2015. The Compensation Committee acted by unanimous written consent on one occasion3 occasions during the fiscal year ended December 31, 2013. There were several informal discussions among the Compensation Committee during 2013.2015.

The Compensation Committee setsrecommends to the Board for its approval our executive officers’ annual compensation and long-term incentives and option and other equity grants, reviews management’s performance, development and compensation, determines option and other equity grants and administers our incentive plans. The Board has adopted a written charter for the Compensation Committee, a copy of which is publicly available on our website atwww.id-systems.com. www.id-systems.com. The Compensation Committee’s charter sets forth the responsibilities, authority and specific duties of the Compensation Committee and is reviewed and reassessed annually. The charter specifies that the Compensation Committee has overall responsibility for evaluating and approvingrecommending to the Board for approval our director and officer compensation plans, policies and programs and for producing an annual report on executive compensation for inclusion in our annual report on Form 10-K or annual proxy statement, in accordance with applicable rules and regulations. The charter also specifies that the Compensation Committee may form and delegate authority to subcommittees of the Compensation Committee when appropriate; however, the Compensation Committee may not delegate authority to any other persons. As discussed below under “Compensation Discussion and Analysis,” for compensation decisions, the Compensation Committee considers recommendations relating to compensation for executive officers (other than our Chairman and Chief Executive Officer, if any) of our Chairman and Chief Executive Officer and includes him in its discussions with respect to such compensation, and considers compensation information provided by compensation consultants, if any, retained by the Compensation Committee for such purpose.

The Compensation Committee Process.Process. Compensation Committee meetings typically involve a preliminary discussion with our Chairman and Chief Executive Officer prior to the Compensation Committee deliberating without any members of management present. For compensation decisions, including decisions regarding the grant of equity compensation relating to executive officers (other than our Chairman and Chief Executive Officer), the Compensation Committee considers the recommendations of our Chairman and

Chief Executive Officer and includes him in its discussions. The Compensation Committee may form and delegate authority to subcommittees of the Compensation Committee when appropriate.

Compensation Consultant.  In November, 2011, the Compensation Committee engaged CRI as its independentConsultants. The Company did not engage a compensation consultant to assist the Compensation Committee in determining executive and non-employee director compensation for 2012. CRI conducted a competitive market analysis of our executive compensation and non-employee director compensation within comparable organizations, which included, among other things, a review and update of our peer group of companies identified for us by CRI in 2009. With respect to compensation paid with respect to 2013, the Compensation Committee considered the compensation information provided by CRI in 2012.2015.

The report of the Compensation Committee appears on page 1819 of this Proxy Statement.

Nominating Committee

The Nominating Committee is composed of Messrs. Burstein, CoppermanBrakebill, Brodsky and Monaco,Trousset, each of whom is independent within the meaning of Nasdaq Rule 5605(a)(2). Mr. BursteinBrakebill serves as the Chairman of the Nominating Committee.

The Nominating Committee held one meeting2 meetings during the fiscal year ended December 31, 2013. Such meeting was attended, either in person or telephonically, by all of the members of the Nominating Committee. The Nominating Committee did not take any actions by unanimous written consent during the fiscal year ended December 31, 2013.2015.

The Board has adopted a written charter for the Nominating Committee, which is publicly available on our website atwww.id-systems.com. www.id-systems.com. The Nominating Committee’s charter authorizes the committee to develop certain procedures and guidelines addressing certain nominating matters, such as procedures for considering nominations made by stockholders, minimum qualifications for nominees and identification and evaluation of candidates for the Board, and the Nominating Committee has adopted procedures addressing the foregoing.

Procedures for Considering Nominations Made by Stockholders. The Nominating Committee has adopted guidelines regarding procedures for nominations to be submitted by stockholders and other third parties, other than candidates who have previously served on the Board or who are recommended by the Board. These guidelines provide that a nomination must be delivered to our Corporate Secretary at our principal executive offices not later than the close of business on the 90^th90th day nor earlier than the close of business on the 120^th120th day prior to the first anniversary of the preceding year’s annual meeting;provided,,however,, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice to be timely must be so delivered not earlier than the close of business on the 120^th120th day prior to such annual meeting and not later than the close of business on the later of the 90^th90th day prior to such annual meeting or the close of business on the 10^th10th day following the day on which public announcement of the date of such meeting is first made by the Company. The public announcement of an adjournment or postponement of an annual meeting will not commence a new time period (or extend any time period) for the giving of a notice as described above. The guidelines require a nomination notice to set forth as to each person whom the proponent proposes to nominate for election as a director: (i) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), and (ii) information that will enable the Nominating Committee to determine whether the candidate or candidates satisfy the criteria established pursuant to the charter for director candidates. The Nominating Committee’s policy is to consider all persons proposed to be nominated for election as a director in accordance with these procedures.

Qualifications. The Nominating Committee has adopted guidelines describing the minimum qualifications for nominees and the qualities or skills that are necessary for directors to possess. Each nominee:

We believe that each member of our Board should possess the qualities of character, judgment, business acumen, diligence, lack of conflicts of interest, familiarity with our business and industry, ability to work collegially and ability to act in the best interests of all stockholders. While we do not have a formal diversity policy, we seek to have directors representing a range of experiences, qualifications, skills and backgrounds.

Identification and Evaluation of Candidates for the Board. Candidates to serve on the Board will be identified from all available sources, including recommendations made by stockholders of the Company. The Nominating Committee has a policy that there will be no differences in the manner in which the Nominating Committee evaluates nominees recommended by stockholders and nominees recommended by the Committee or management, except that no specific process shall be mandated with respect to the nomination of any individuals who have previously served on the Board. The evaluation process for individuals other than existing members of the Board will include:

The Nominating Committee approved each of Kenneth Brakebill, Michael Brodsky, Kenneth S. Ehrman, Ron Konezny and Tony Trousset, as a nominee for election as a director at the Annual Meeting. Messrs. Brakebill, Brodsky, Ehrman and Trousset were recommended for such nomination by Kenneth S. Ehrman, our President and Interim Chief Executive Officer and beneficial holder of approximately 5.80% of the outstanding shares of common stock of the Company, as of May 19, 2014, as reflected in the table under “Security Ownership of Certain Beneficial Owners and Management” beginning on page 33. Mr. Ehrman submitted a list of nominees for consideration by the Nominating Committee on April 15, 2014. The Board received from stockholders holding a significant number of the outstanding shares of our common stock, various communications in favor of Mr. Ehrman’s nominees.

Our Nominating Committee retained the services of Lancor, an executive search firm, to identify potential nominees for election as a director at the Annual Meeting. Based on certain capabilities and competencies that the Nominating Committee seeks in potential nominees, Mr. Konezny was identified by Lancor as a potential director nominee.

In connection with its evaluation of potential nominees for election at the Annual Meeting, the Nominating Committee conducted in person or telephonic interviews with each of the individuals nominated for election at the Annual Meeting. The Nominating Committee also engaged FTI Consulting, a business advisory firm, to conduct background searches on each of the individuals. We did not pay any fees to any

third parties other than Lancor and FTI Consulting to identify or evaluate, or assist in identifying or evaluating, potential nominees for election at the Annual Meeting.

Stock Ownership Guidelines.Guidelines. On April 29, 2009, the Board adopted stock ownership guidelines to further align the interests of our non-employee directors with the interests of our stockholders and to promote our commitment to sound corporate governance. Pursuant to these guidelines, each outside director is required to hold shares of our common stock with a value equal to three times the amount paid in cash to such director for services as a director (including for in-person and telephonic meetings of the Board and meetings of committees of the Board) during the fiscal year ended December 31, 2008 or, if all such meetings were not attended by such director during such year, the amount that would have been paid in cash to such director for services as a director had such director attended all such meetings. The ownership guideline value for each outside director initially was calculated with respect to the fiscal year ended December 31, 2008, was re-calculated with respect to the fiscal year ended December 31, 2012 and will be re-calculated with respect to each third fiscal year thereafter. Outside directors are required to achieve the applicable level of ownership within three (3) years of the later of the date the guidelines were adopted and the date the person first became an outside director. Under the stock ownership guidelines, the value of the shares of common stock held by each outside director will be determined on April 1^st1st of each year based on the average for the twenty (20) consecutive trading days preceding and including such date of the reported last sale prices per share on the Nasdaq Global Market or other principal national securities exchange or inter-dealer quotation system on which our common stock is listed or admitted to trading. During the fiscal year ended December 31, 2015, each of our non-employee directors elected to be paid in restricted shares of common stock in lieu of cash in consideration for his services as a director of the Company. As of April 1, 2014,2016, each non-employee director had achieved his applicable level of ownership in accordance with the stock ownership guidelines.

Third Party Recommendations. In connection with the Annual Meeting, the Nominating Committee did not receive by January 6, 2014, the 120^th calendar day before the date our proxy statement was released to security holders in connection with our 2013 Annual Meeting of Stockholders, any nominations from any stockholder or group of stockholders which owned more than 5% of our common stock for at least one year. As discussed above, Mr. Ehrman submitted a list of nominees for consideration by the Nominating Committee on April 15, 2014.

Compensation of Directors

General

All directors are entitled to reimbursement for travel and lodging and other reasonable out-of-pocket expenses incurred by them in connection with their attendance at Board and/or Board committee meetings or other activities on our behalf.

Employee Directors

Directors who are current officers or employees of the Company or any subsidiary of the Company do not receive any additional compensation for their service as members of either the Board or any committees of the Board.

Non-Employee Directors

In March 2012, based on the recommendation of CRI,Compensation Resources, Inc. (“CRI”), a compensation consultant engaged by the Compensation Committee in 2011, and other information provided by CRI, including compensation and survey data of a comparison group of companies that CRI considered as our peer group, as discussed above under “Executive Compensation — Compensation Discussion and Analysis — Peer Group,” we adopted a non-employee director compensation program pursuant to which non-employee directors are entitled to receive annual compensation having economic value of approximately $70,000, which includes a cash retainer of $20,000, and restricted stock grants with an economic value of approximately $50,000. In August 2014, the Compensation Committee determined that the cash retainer may instead be paid, at each director’s election, in cash or in restricted shares of our common stock. Each of the non-employee directors elected to be paid his retainer for 2015 in restricted shares of our common stock. With respect to restricted stock awards, the number of shares issuable was calculated based on the average of the reported closing price per share of the stock on the NasdaqNASDAQ Global Market for the twenty (20) consecutive trading days beginning afterprior to and the Company’s announcementtwenty (20) consecutive trading days following and including the date of its annualour earnings release for the prior year. fiscal quarter ended June 30, 2015.

In addition, each of the lead director and the chairperson of each of the committees of the Board is entitled to a supplemental retainer, which may be paid, at each director’s election, in cash retainer.or in restricted shares of our common stock. Specifically, the lead director receives an additional $15,000 per year of service; the chairperson of the Audit Committee receives an additional $15,000 per year of service; the chairperson of the Compensation

Committee receives an additional $10,000 per year of service; and the chairperson of the Nominating Committee receives an additional $8,000 per year of service. In addition, if during the year, any director attends, in person or by telephone, more than eight meetings of the Board and/or any committee thereof, in the aggregate, such director will be entitled to receive for each additional meeting attended in person or by telephone a cash payment of $1,000 or $500, respectively.$500; however, the directors maintain discretion to waive, and have on occasion agreed to waive, those additional meeting fees. Each of the non-employee directors elected to be paid his supplemental retainer for 2015 in restricted shares of our common stock.

Our non-employee directors are entitled to participate in the Company’s 2009 Non-Employee Director Equity Compensation Plan (the “2009 Plan”), which was adopted by the Board in April 2009, and approved by our stockholders in June 2009. In June 2011, our stockholders also approved an amendment to the 2009 Plan, which increased the number of shares available for issuance under the 2009 Plan from 300,000 to 600,000. As of May 19, 2014,April 18, 2016, a total of 219,43998,908 shares of our common stock remain reserved and available for issuance under the 2009 Plan, as amended. Non-employee directors are eligible to be awarded non-qualified stock options and shares of restricted stock under the 2009 Plan. A recipient of restricted stock under the 2009 Plan is entitled to vote such shares and would be entitled to dividends, if any, paid on such shares, but is not entitled to dispose of such shares until they have vested in accordance with the terms of the applicable award.

Our non-employee directors are also entitled to participate in the Company’s 2015 Equity Compensation Plan (the “2015 Plan”), which was adopted by the Board in May 2015 and approved by our stockholders in June 2015. As of April 18, 2016, a total of 750,385 shares of our common stock remain reserved and available for issuance under the 2015 Plan. Non-employee directors are eligible to be awarded non-qualified stock options, shares of restricted stock, stock appreciation rights and other awards under the 2015 Plan. A recipient of restricted stock under the 2015 Plan is entitled to vote such shares and would be entitled to dividends, if any, paid on such shares, but is not entitled to dispose of such shares until they have vested in accordance with the terms of the applicable award.

During the fiscal year ended December 31, 2013,2015, each of our non-employee directors (Messrs. Burstein, Copperman, FarrellKenneth Brakebill, Michael Brodsky, Ron Konezny and Monaco)Tony Trousset was awarded 8,49916,519, 21,179, 16,943 and 14,825 restricted shares of common stock, and Mr. Farrell was awardedrespectively, in consideration for his services as a stock option to purchase 45,000 sharesdirector of common stock.the Company. All of these awards were made pursuant to the 20092015 Plan. Each of the restricted stock awards granted to Messrs. Burstein, CoppermanBrakebill, Brodsky, Konezny and MonacoTrousset was granted on April 4, 2013September 1, 2015 and vested in equal incrementsvest as to 100% of 25%such shares on a quarterly basis over the one-year period following the datefirst anniversary of grant. The restricted stock award granted to Mr. Farrell was granted on June 20, 2013 and vested in equal increments of 25% on each of July 14, 2013, October 14, 2013, January 14, 2014 and April 14, 2014. The stock option vests in equal increments of 25% on an annual basis over the four-year period following the date of grant which was June 20, 2013.provided that such non-employee director is then serving as a director of the Company.

Our non-employee directors are not entitled to retirement, benefit or other perquisite programs.

The following table provides certain information with respect to the compensation paid to our non-employee directors during the fiscal year ended December 31, 2013.2015.

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($)(1)(2)(3)				Option Awards ($)(4)(5)				Total ($)
Lawrence S. Burstein		$	28,000			$	48,529				—			$	76,529
Harold D. Copperman		$	45,000			$	48,529				—			$	93,529
Robert J. Farrell		$	20,000			$	42,070			$	79,290			$	141,360
Michael P. Monaco		$	35,000			$	48,529				—			$	83,529

15

Process for Sending Communications to the Board of Directors

The Board has established a procedure that enables stockholders to communicate in writing with members of the Board. Any such communication should be addressed and sent to our Corporate Secretary at c/o I.D. Systems, Inc., 123 Tice Boulevard, Woodcliff Lake, New Jersey 07677. Any such communication must state, in a conspicuous manner, that it contains a stockholder communication and that it is intended for distribution to the entire Board or to one or more members of the Board, as applicable. All such stockholder communications will be forwarded to the director or directors to whom the communications are addressed. Under the procedures established by the Board, upon the Corporate Secretary’s receipt of such a communication, our Corporate Secretary will send a copy of such communication to each member of the Board or to the applicable director(s), identifying it as a communication received from a stockholder. Absent unusual circumstances, at the next regularly scheduled meeting of the Board held more than two days after such communication has been distributed, the Board will consider the substance of any such communication.

Code of Ethics

We have a code of ethics (the “Code of Ethics”) that applies to our Chief Executive Officer, Chief Financial Officer and Controller and other persons who perform similar functions. A copy of our Code of Ethics can be found on our website atwww.id-systems.com. www.id-systems.com. The Code of Ethics also is available in print, free of charge, to any stockholder who requests a copy by writing to the Company at the following address: I.D. Systems, Inc., 123 Tice Boulevard, Woodcliff Lake, New Jersey 07677, Attention: Corporate Secretary. Our Code of Ethics is intended to be a codification of the business and ethical principles that guide the Company, and to deter wrongdoing, to promote honest and ethical conduct, to avoid conflicts of interest, and to foster full, fair, accurate, timely and understandable disclosures, compliance with applicable governmental laws, rules and regulations, the prompt internal reporting of violations and accountability for adherence to this code. We will post any amendment to the Code of Ethics, as well as any waivers that are required to be disclosed by the rules of the SEC or The NASDAQ Stock Market LLC, on our website.

16

Certain Relationships and Related Transactions

Our policy prohibits conflicts between the interests of our employees, officers and directors and our company. A conflict of interest exists when an employee, officer, or director’s personal interest interferes or may interfere with the interests of the Company. When it is deemed to be in the best interests of our company and our stockholders, the Audit Committee may grant waivers to employees, officers and directors who have disclosed an actual or potential conflict of interest, which waivers are subject to approval by our Board. This policy is included in our Code of Business Conduct and Ethics for Employees, Officers and Directors.

In accordance with its charter, the Audit Committee is responsible for annually reviewing any transactions or series of similar transactions to which we are or were a party and in which any director, executive officer or beneficial holder of more than 5% of any class of our voting securities, or members of any such person’s immediate family, have had or will have a direct or indirect material interest. SinceOur Audit Committee’s procedures for reviewing related party transactions are not in writing. Except as described below, since January 1, 2013,2015, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which the Company is or was a party in which the amount involved exceeds $120,000 and in which any director, nominee for director at the Annual Meeting, executive officer or beneficial holder of more than 5% of any class of our voting securities, or members of any such person’s immediate family, have had or will have a direct or indirect material interest. As of May 19, 2014,April 18, 2016, our common stock is the Company’s only class of voting securities.

REPORT OF THE AUDIT COMMITTEE

The Report of the Audit Committee does not constitute soliciting material, and shall not be deemed to be filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Proxy Statement and irrespective of any general incorporation language in those filings, except to the extent that the Company specifically incorporates the Report of the Audit Committee by reference therein.

The Audit Committee of the Board of Directors is currently comprised solely of independent directors meeting the requirements of applicable rules of the SEC and of The NASDAQ Stock Market LLC. All members of the Audit Committee were appointed by the Board of Directors.Board. The Audit Committee operates pursuant to a written charter adopted by the Board of Directors.Board. The Audit Committee reviews and assesses the adequacy of its charter on an annual basis. As more fully described in the charter, the purpose of the Audit Committee is to provide general oversight of the Company’s financial reporting, integrity of financial statements, internal controls and internal audit functions.

Management is responsible for the preparation, presentation and integrity of the Company’s financial statements, accounting and financial reporting principles, and internal controls and procedures designed to ensure compliance with applicable accounting standards, laws and regulations. The Company’s independent registered public accounting firm, EisnerAmper LLP, is responsible for performing an independent audit of the Company’s financial statements in accordance with standards of the Public Accounting Oversight Board (United States) (“PCAOB”PCAOB”) and expressing an opinion in its report on those financial statements.

The Audit Committee reviewed the Company’s audited financial statements for the year ended December 31, 2013,2015, and met with both management and EisnerAmper LLP to discuss those financial statements and EisnerAmper LLP’s related opinion.

The Audit Committee has discussed with EisnerAmper LLP the matters required to be discussed by Statement on Auditing Standards No. 16,Communications with Audit Committees.

The Audit Committee has received and reviewed the written disclosures and the letter from EisnerAmper LLP required by applicable requirements of the PCAOB regarding EisnerAmper LLP’s communications with the Audit Committee concerning independence, and has discussed with EisnerAmper LLP its independence.

Based on its review and the meetings, discussions and reports described above, and subject to the limitations of its role and responsibilities referred to above and in its charter, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements of the Company for the fiscal year ended December 31, 2013,2015, be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 to be filed2015 for filing with the SEC.

Members of the Audit Committee:

Michael P. Monaco,Brodsky, Chairman
Lawrence S. Burstein
Harold D. Copperman

EXECUTIVE COMPENSATION

Report of the

Compensation Committee

The Compensation Committee has reviewed and discussed with management the following Compensation Discussion and Analysis. Based on such review and discussion, the Compensation Committee has recommended to the Board of Directors that the following Compensation Discussion and Analysis be included in this Proxy Statement.

Members of the Compensation Committee:

Harold D. Copperman,

Ron Konezny, Chairman
Robert J. Farrell
Michael P. Monaco

Kenneth Brakebill

Tony Trousset

Compensation Discussion and Analysis

Introduction

This discussion presents the principles underlying our executive officer compensation program. Our goal in this discussion is to provide the reasons why we award compensation as we do and to place in perspective the data presented in the tables that follow this discussion. The focus is primarily on compensation of our executive officers for the fiscal year ended December 31, 2013,2015, but some historical and forward-looking information is also provided to put such year’s compensation information in context. The information presented herein relates to the (i) the individual serving as the Company’s Chief Executive Officer during the fiscal year ended December 31, 2013, (ii) the individual serving as the Company’s Chief Financial Officer during the fiscal year ended December 31, 2013,following individuals who are considered “named executive officers,” under applicable rules and (iii) eachregulations of the Company’s three most highly compensated executive officers other than the Chief Executive Officer and the Chief Financial Officer who were serving as executive officers of the Company as of December 31, 2013,SEC, each of whom is sometimes referred to in this Proxy Statement as a “Named Executive Officer.Officer:” (i) Kenneth S. Ehrman, who served as the Company’s Chief Executive Officer during the fiscal year ended December 31, 2015, (ii) Ned Mavrommatis, who served as the Company’s Chief Financial Officer during the fiscal year ended December 31, 2015, (iii) Michael L. Ehrman, who served as the Company’s Chief Technology Officer during the fiscal year ended December 31, 2015, and (iv) Norman L. Ellis, who served as the Company’s Chief Operating Officer during the fiscal year ended December 31, 2015.

Compensation Philosophy and Objectives

We attempt to apply a consistent philosophy to compensation for all employees, including senior management. This philosophy is based on the premises that our success is dependent upon the efforts of each employee and that a cooperative, team-oriented environment is an essential part of our culture. We believe in the importance of rewarding our employees for our successes, which is why we emphasize pay-for-performance incentive compensation. Particular emphasis is placed on broad employee equity participation through the use of stock options and restricted stock awards, as well as on annual cash bonuses linked to achievement of our corporate performance goals. We considered the results of the “say on pay” proposal with respect to executive compensation presented to the stockholders at our 20132015 annual meeting held on June 20, 2013,23, 2015, and in light of the support the proposal received, we continue to emphasize pay-for-performance incentive compensation, as explained in detail in this Compensation Discussion and Analysis.

Our compensation programs for our Named Executive Officers are designed to achieve a variety of goals, including:

Cash Incentive Bonus Programs

The primary objective of our annual cash incentive bonus program is to motivate and reward our employees, including our Named Executive Officers, for meeting our short-term objectives using a pay-for-performance program with objectively determinable performance goals. Each of our Named Executive Officers (other than Brett Kilpatrick) iswas eligible to receive a cash incentive bonus under the 2013our Executive Incentive Plan (“EIP”EIP”), and Brett Kilpatrick, our Executive Vice President of Worldwide Sales, is eligible to receive a cash incentive bonus under another cash incentive bonus arrangement, each of for the fiscal year ended December 31, 2015, which is discussed below.

Executive Incentive Plan

The objectives of the EIP, which was adopted by the Board upon recommendation of the Compensation Committee, are to align the interests of all employees with the Company’s annual performance goals. The EIP focuses on rewarding executives for the achievement of annual financial objectives with competitive financial incentives, and provides a systemic plan for establishing definitive performance goals. On February 4, 2015, upon recommendation by the Compensation Committee, the Board established the parameters under the EIP for 2015. For 2013,2015, the Company’s performance goals arewere based on (i) revenue growth and (ii) “operating profit,” which for these purposes is defined as operating income (loss) from operations, excluding depreciation and amortization and stock-based compensation expense. Executives were eligible to be awarded cash bonus compensation based on the Company’s annual and quarterly results in these areas.with respect to revenue growth and operating profit.

The Company accrues funds for the EIP over the course of the applicable plan year. The EIP may be modified or terminated by the Compensation Committee at any time, but incentive awards that have been earned by the participating Named Executive Officers through the date of termination of the EIP will be payable. In addition, target awards and weightings may be modified by the Compensation Committee during the plan year based upon a shift in focus or changing industry standards, or any other factors that the Compensation Committee deems appropriate, but no such modifications were made in respect of 2013.appropriate. The Compensation Committee has the authority to administer the EIP and has the final decision on any discrepancies in interpretation of the EIP.

Awards under the EIP are calculated as a percentage of an executive’s base salary and, as noted above, are based upon revenue growth and operating profit. In January 2015, the target award under the EIP, which is calculated as a percentage of base salary, for Kenneth S. Ehrman was set at 100% of his base salary and for each of Ned Mavrommatis, Michael L. Ehrman and Norman L. Ellis was set at 67% of his base salary. The target award (expressed as a percentage of base salary) for each Named Executive Officer for whom a target award was established is as follows:

21

Named Executive Officer		Target Award Percentage
Jeffrey M. Jagid(1)Kenneth S. Ehrman			80100	%
Ned Mavrommatis			6067	%
Kenneth S. Ehrman(1)			60	%
Michael L. Ehrman			5067	%

2013 Revenue Targets

The maximum aggregate amount of the Quarterly Bonuses and the Annual Bonus (each, as defined below), for each executive is 300% of the target award for such executive.

2015 Quarterly Bonuses. FiftyForty-five percent of the executive’s bonus under the EIP for 20132015 was based on quarterly revenue targets (such portion, the “Revenue Bonus”). For 2013, for each of the Named Executive Officers entitled to participate in the EIP, the Company’s revenues (the “Revenues”) were required to equal or exceed $46,874,492 (the “Target Amount”) and the Company’s operating profit for 2013 was required to exceed $1, in order for the executives to receive their full Revenue Bonus. If Revenues were equal to at least 100% of the Target Amount, the executive would be entitled to receive 100% of his Revenue Bonus. In the event that the Revenues exceed the Target Amount, the executives would be paid based on the actual percentage of the Target Amount achieved; provided, that in the event Revenues exceed 105% of the Target Amount, for each 1% over 105% and up to 110%, the executive would be entitled to receive an additional 4% of the Revenue Bonus and for each 1% over 110%, the executive would be entitled to receive an additional 2% of the Revenue Bonus. The maximum amount of the Revenue Bonus, together with Operating Profit Bonus, discussed below, for each executive is 200% of the target award for such executive.

Any Revenue Bonuses are payable to the executives after completion of the Company’s audited financial statements for the applicable year. Participants are not entitled to receive an award unless they are employed

by the Company at the time the award is payable by the Company. Based on 2013 revenues of the Company, none of Jeffrey M. Jagid, Ned Mavrommatis, Kenneth S. Ehrman or Michael L. Ehrman received Revenue Bonuses under the EIP for 2013.

2013 Operating Profit Targets.  Fifty percent of the executive’s bonus under the EIP for 2013 was based on operating profit targets (such portion, the “Operating Profit Bonus”“Quarterly Bonus”). For these purposes, “operating profit” is defined as operating income (loss) from operations, excluding depreciation and amortization and stock-based compensation, expense and was calculated after all bonus expenses.expenses (the “Operating Profit”). For 2013,2015, for each of the Named Executive Officers entitled to participate in the EIP, the Company’s operating profitquarterly revenues (the “Quarterly Revenues”) were required to equal or exceed dollar amounts ranging from $12.1 million to $13.5 million and the Company’s quarterly Operating Profit (the “Quarterly Operating Profit”) was required to equal or exceed $1,017,317 (the “dollar amounts ranging from $(1.1) million to $(0.6) million (each, the “Quarterly Target Operating Profit”Amount”) in order for the executives to receive 100%their Quarterly Bonus. For each of their Operating Profit Bonus,the first three quarters of the fiscal year, if the Quarterly Revenues were equal to at least 92.5% of the respective Quarterly Target Amount and the executives would not receive any portion of their Operating Profit Bonus if the TargetQuarterly Operating Profit was not achieved. Inequal to at least 110% of the event thatrespective Quarterly Target Amount, the Company’s operating profit for 2013 exceeds the Target Operating Profit, the executivesexecutive would be paid based on the actual percentage of the Target Operating Profit achieved. The maximum amount of the Operating Profit Bonus, together with the Revenue Bonus, for each executive is 200%entitled to receive 15% of the target award for such executive. If either the Quarterly Revenues for any quarter did not equal or exceed 92.5% of the respective Quarterly Target Amount for such quarter or the Quarterly Operating Profit for any quarter did not equal or exceed 110% of the respective Quarterly Target Amount for such quarter, the executive would not be entitled to receive any bonus for such quarter. In the event that both the Quarterly Revenues and the Quarterly Operating Profit for any quarter exceeded the Quarterly Target Amount for such quarter, the executives would not be entitled to receive any additional bonus; however, the cumulative Quarterly Revenues and Quarterly Operating Profits for all four quarters would be considered for calculating the Annual Revenues (as defined below) for purposes of determining the Annual Bonus.

Any Quarterly Bonuses for any fiscal quarter are payable to the executives after completion of the Company’s financial statements for such quarter. Participants are not entitled to receive an award unless they are employed by the Company at the time the award is payable by the Company. Based on the Quarterly Revenues and the Quarterly Operating Profit for each of the quarters during the fiscal year ended December 31, 2015, none of Kenneth S. Ehrman, Ned Mavrommatis, Norman L. Ellis and Michael L. Ehrman received Quarterly Bonuses under the EIP for 2015.

2015 Annual Bonus. Fifty-five percent of the executive’s bonus under the EIP for 2015 was based on annual revenue and operating profit targets (such portion, the “Annual Bonus”). For 2015, for each of the Named Executive Officers entitled to participate in the EIP, the Company’s annual revenues (the “Annual Revenues”) were required to equal or exceed $51.9 million and the Company’s annual operating profit (the “Annual Operating Profit”) was required to equal or exceed $(3.1) million (each, the “Annual Target Amount”) in order for the executives to receive their Annual Bonus. If the Annual Revenues were equal to 92.5% of the Annual Target Amount and the Annual Operating Profit was equal to 110% of the Annual Target Amount, the executive would be entitled to receive 55% of the target award for such executive. If either the Annual Revenues did not equal or exceed 92.5% of the respective Annual Target Amount or the Annual Operating Profit did not equal or exceed 110% of the respective Annual Target Amount, the executive would not be entitled to receive any Annual Bonus.

Any Annual Bonuses are payable to the executives after completion of the Company’s audited financial statements for the applicable year. Participants are not entitled to receive an award unless they are employed by the Company at the time the award is payable by the Company. Based on the Company’s actual operating profitAnnual Revenues and the Annual Operating Profit for 2013,the fiscal year ended December 31, 2015, none of Jeffrey M. Jagid, Ned Mavrommatis, Kenneth S. Ehrman, orNed Mavrommatis, Norman L. Ellis and Michael L. Ehrman received Operating Profit Bonusesan Annual Bonus under the EIP for 2013.

Brett Kilpatrick’s Cash Incentive Bonus Arrangement

Our cash incentive bonus arrangement with Brett Kilpatrick, our Executive Vice President of Worldwide Sales, is intended to reward Mr. Kilpatrick for the achievement of quarterly and annual financial objectives with competitive financial incentives, and provide a systemic plan for establishing definitive performance goals for him. For 2013, the Company’s performance goals for Mr. Kilpatrick were based on the Company’s revenue growth, and Mr. Kilpatrick was eligible for awards of cash bonus compensation based on the Company’s quarterly and annual results. For 2013, Mr. Kilpatrick was eligible to receive cash bonus compensation of up to $200,000 if certain revenue growth goals were met (the “Kilpatrick Revenue Bonus”), as discussed below.2015.

Fifty percent of the Kilpatrick Revenue Bonus for 2013 was based on quarterly revenue targets (the “Quarterly Revenue Bonus”) and fifty percent of the Kilpatrick Revenue Bonus for 2013 was based on annual revenue targets (the “Annual Revenue Bonus”). For each quarter during 2013, the Company’s revenues were required to equal or exceed amounts ranging from $10,623,636 to $13,215,663 (the “Revenue Quarterly Target Amounts”) in order for Mr. Kilpatrick to receive the full amount of the Quarterly Revenue Bonus for such quarter, or $25,000. For 2013, the Company’s revenues were required to equal or exceed $48,727,500 (the “Annual Revenue Target Amount”) in order for Mr. Kilpatrick to receive the full Annual Revenue Bonus, or $100,000. After the end of each quarter during 2013 and after the end of 2013, if the Company’s quarterly revenues were equal to at least 100% of the applicable Revenue Quarterly Target Amount (the “Quarterly Revenue Minimum Amount”) and if the Company’s annual revenues were equal to at least 100% of the Annual Revenue Target Amount (the “Annual Revenue Minimum Amount”), respectively, Mr. Kilpatrick would be entitled to receive 100% of the Quarterly Revenue Bonus for such quarter and would be entitled to receive 100% of the Annual Revenue Bonus for 2013, respectively.

Mr. Kilpatrick would not be entitled to receive an award unless he is employed by the Company at the time the award is payable by the Company. Based on the Company’s revenues for 2013, Mr. Kilpatrick did not receive any Kilpatrick Revenue Bonuses for 2013.Equity Compensation

Long-Term Incentive Plan.

We believe that stock options and restricted stock awards are an important long-term incentive for our executive officers and employees and that our stock option and restricted stock award program has been effective in aligning officer and employee interests with those of our stockholders. We review our equity compensation plans annually. Employees are eligible for annual stock option and restricted stock award grants based on targeted levels.grants. These options and grants are intended to produce value for each executive officer if (i) our stockholders derive significant sustained value and (ii) the executive officer remains employed with us.

Historically, the Company did not have any program, plan or obligation under which it was required to grant equity compensation to any executive officer on specified dates or upon the achievement of certain performance goals. The authority to make equity grants to executive officers rests with the Compensation Committee, although, as noted, the Compensation Committee does consider the recommendations of our Chairman and Chief Executive Officer in setting the compensation of our other executive officers. For each year beginning with the year ended December 31, 2009 until the year ended December 31, 2013, the Compensation Committee has adopted a long-term incentive plan for our Named Executive Officers, pursuant to which our Named Executive Officers may bewere entitled to earn equity grants upon the achievement of certain price targets relating to the Company’s common stock.

For Awards granted to executives under these long-term incentive plans generally were broken out into the three categories, performance shares (or performance cash awards), restricted shares of common stock and stock options. The Compensation Committee has determined not to adopt a long-term incentive plan for the year ended December 31, 2013,2015.

In June 2015, the Compensation Committee adopted a Long-Term Incentive Plan (the “2013 LTIP”) for the Named Executive Officers. Under the 2013 LTIP, the Named Executive Officers will be entitled to earn equity grants and/or cash bonuses upon the achievementgranted restricted shares of certain price targets relating to the Company’s common stock.

The dollar value of the awards grantedstock to each of the Named Executive Officers is set forthKenneth S. Ehrman, Ned Mavrommatis, Michael L. Ehrman and Norman L. Ellis in the table below.

Named Executive Officer		Dollar Value of 2013 LTIP Award(1)
Jeffrey M. Jagid(2)		$	275,000
Ned Mavrommatis		$	165,000
Kenneth S. Ehrman(2)		$	165,000
Michael L. Ehrman		$	137,500
Brett Kilpatrick(3)		$	137,500

For all Named Executive Officers, the grant value is then divided among performance cash awards, stock options and restricted stock awards. The total 2013 LTIP award granted to each executive is broken out into the following three categories:

Since performance cash awards are payable only upon the achievement of certain targets relating to the pricehis continued services as an officer of the Company’sCompany. The number of restricted shares of our common stock at the end of the applicable measurement period, as discussed below, the Compensation Committee decided to increase the dollar amount of the performance cash award calculated for each Named Executive Officer based on the break down above by 10% (the “10% Additional Performance Cash Amount”). The actual amount of each component awarded to each Named Executive Officer in 2013 is set forth in the table below.

Named Executive Officer		Total 2013 LTIP Value(1)				Cash Award Based on Performance ($)(2)				Restricted Shares (#)				Stock Options (#)
Jeffrey M. Jagid(3)		$	275,000			$	75,625				11,651				68,069
Ned Mavrommatis		$	165,000			$	45,375				6,991				40,842
Kenneth S. Ehrman(3)		$	165,000			$	45,375				6,991				40,842
Michael L. Ehrman		$	137,500			$	37,813				5,826				34,035
Brett Kilpatrick(4)		$	137,500			$	37,813				5,826				34,035

With respect to the restricted share awards, the number of shares issuable is calculated based on the average of the reported closing price per share of the stock on the Nasdaq Global Market for forty (40) trading days that begins twenty (20) trading days before the Company’s annual earnings announcement for 2013 and ends twenty (20) trading days following such announcement. With respect to stock option awards, the number of shares underlying the options granted to each executive is determined by dividing the LTIP grant value of the options by the value of a stock option on the date of grant (which was April 4, 2013). The exercise price of the stock options is the closing price per share of the stock on the Nasdaq Global Market on the date of grant.

Stock options and restricted stock awards vest over time, whereby 25% of the stock options will vest annually over a four-year period from the date of grant and 100% of the restricted stock awards will vest three years from the date of grant. Awards of performance cash, on the other hand, only vest upon the achievement of certain targets relating to the price of the Company’s common stock at the end of a three-year measurement period. The amount of cash will be calculated based on the average of the reported closing price per share of the stock on the Nasdaq Global Market for thirty (30) trading days that begins fifteen (15) trading days before the Company’s annual earnings announcement for 2015 and ends fifteen (15) trading days following such announcement.

The final determination of the performance cash award will be based on the achievement of the following price targets at the end of the three-year period:

Stock Price Per Share		Percentage of Performance-Based Cash Award Earned
Below $8.33		No cash is earned.
$8.33		50% of cash is earned.
$9.00		100% of cash is earned.
$11.00 or Above		150% of cash is earned.

The actual percentage of the performance-based cash award that is earned will be based on the actual stock price that is achieved on a straight-line basis between $8.33 and $9.00 and $9.00 and $11.00.

The amount of performance cash and the number of stock options and restricted shares granted to and held by our Named Executive Officers are set forth in the “Summary Compensation Table” and the “Grants of Plan-Based Awards” table below.

Severance and Change-in-Control Benefits.Benefits. Except for the severance and change-in-control benefits described below under the captions “Severance Arrangements” and “Potential Payments Upon Termination or Change in Control,” we do not provide to any of our executive officers any severance or change in control benefits in the event of termination or retirement, whether following a change in control or otherwise.

Benefits. The executive officers participate in all of our employee benefit plans, such as medical and 401(k) plan, on the same basis as our other employees, except that we pay 100% of the premiums for health and dental insurance of our executive officers and 75% of the premiums for health and dental insurance of our other employees.

Perquisites. Our Chief Executive Officer and certain of our other Named Executive Officers receive an allowance for automobile and related expenses, which amounts are reflected under column titled “All Other Compensation” in the Summary“Summary Compensation Table.Table” below. Our use of perquisites as an element of compensation is very limited. We do not view perquisites as a significant element of our comprehensive compensation structure.

Peer Group

In making decisions regarding the compensation of our executive officers, the Compensation Committee generally considers compensation and survey data for similarly situated executives at a comparison group of companies it considers our peer group. These comparison data are primarily used to gauge the reasonableness and competitiveness of executive compensation decisions. The Compensation Committee utilized as a reference for determining competitive total compensation packages for our Named Executive Officers for 2013,2015, our peer group of companies that were identified by CRI, the compensation consultant retained by the Compensation Committee in 2012, buttogether with a group of companies identified as our peer group by the Hay Group (the “Hay Group”), the compensation consultant retained by the Compensation Committee in 2014; however, the Compensation Committee determined not to place a significant amount of reliance on the information provided by the Hay Group since although the companies identified by the Hay Group as part of the peer group were in the same M2M industry as the Company, such companies had significantly greater revenues and market capitalizations than the Company. While the Compensation Committee refers to information with respect to its peer group for purposes of determining compensation of the executive officers, it does not benchmark compensation for the Named Executive Officers against the peer group. ThisThe peer group of companies was determined by CRI was based on revenue, organizational profile and geographic location.location and the peer group of companies determined by the Hay Group was based primarily on industry.

We believe that the compensation practices of our industry, in general, and of our select peer group, in particular, provide useful information to help us establish compensation practices that allow us to attract, retain, and motivate a highly talented executive team. We review the levels of cash, equity, and total compensation for comparable executives in our peer group relative to the elements of compensation paid to our executives. In considering how these data relate to our existing compensation structure, we take into account our size, performance, and geographic location as compared to these peer companies, as well as what we know about the comparable scope of responsibilities of our executives versus those of comparable executives at such peer group companies.

Our

The following companies were identified as members of our peer group as identified by CRI consistedin 2012:

The following companies were identified as members of our peer group by the following companies:Hay Group in 2014:

Regulatory Considerations

We account for the equity compensation expense for our employees under the rules of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 (“ASC 718”718”), which requires us to estimate and record an expense for each award of equity compensation over the service period of the award. Accounting rules also require us to record cash compensation as an expense at the time the obligation is accrued.

Employment Agreements

The Company has not entered into employment agreements with any of its executive officers. All executive officers serve at the discretion of the Board, with no fixed term of employment.

Severance Agreements

On September 22, 2009, the Company entered into severance agreements with each of Jeffrey M. Jagid,Kenneth S. Ehrman, the Company’s Chief Executive Officer Kenneth S.Ehrman, the Company’sand President, Ned Mavrommatis, the Company’s Chief Financial Officer, Treasurer and Corporate Secretary, and Michael L. Ehrman, the Company’s Chief Technology Officer, and on March 27, 2014, the Company entered into a severance agreement with Brett Kilpatrick, the Company’s Executive Vice President of Worldwide Sales (such agreements, collectively, the “Severance Agreements,” and each, a “Severance Agreement ”). Jeffrey M. Jagid,Officer. Kenneth S. Ehrman, Ned Mavrommatis and Michael L. Ehrman and Brett Kilpatrick are sometimes collectively referred to in this section as the “Executives”“Executives” and each, an “Executive.“Executive.” The Severance Agreements were previously approved by the Compensation Committee of the Board and presented to the full Board.

Except as described below, each of the Severance Agreements is substantially identical in form. The Severance Agreements provide each Executive with certain severance and change in control benefits upon the occurrence of a “Trigger Event” (as defined in the Severance Agreements). Under the Severance Agreements,

a Trigger Event will have occurred if (i) the Company terminates the Executive without Cause or (ii) the Executive resigns for Good Reason within six months following a Change in Control Event (provided, however, that the termination of the Executive’s employment due to his death or Disability will in no event be considered a Trigger Event).

Within 45 days after the occurrence of a Trigger Event (or such shorter period as may be required under the terms of a general release agreement (“Release”Release”) to be entered into by the Executive in order to obtain benefits under the Severance Agreement, a form of which is attached to the Severance Agreement), the Executive must execute and deliver the Release to the Company. Upon the earlier of the expiration of any applicable revocation period required for the Release to be effective with respect to age discrimination claims and the date on which it is otherwise permitted to be effective and irrevocable under applicable law, the Executive will be entitled to the following: (i) a cash payment at the rate of the Executive’s annual base salary as in effect immediately prior to the Trigger Event for a period of 18 months in the case of Jeffrey M. Jagid, 15 months in the case of Kenneth S. Ehrman, and 12 months in the case of the other Executives (such period, as applicable, the “Severance Period”“Severance Period”), made as a series of payments that are payable in accordance with the Company’s standard payroll practices; (ii) a waiver of any remaining portion of the Executive’s healthcare continuation payments under COBRA for the Severance Period, provided that the Executive timely elects COBRA coverage and continues to make contributions for such coverage equal to his contribution amount in effect immediately preceding the date of his termination of employment; (iii) partial accelerated vesting of the Executive’s previously granted stock options and restricted stock awards, such that (to the extent not already then vested) a portion of these awards shall vest and/or become exercisable, in each case on a pro-rated basis that takes into account the number of months elapsed since the date of grant as compared to the scheduled vesting date (provided that the terms of the Company’s 2007 Equity Compensation Plan and 2015 Plan will continue to govern acceleration of vesting in the event of a “Change of Control” as defined therein); and (iv) an award of “Performance Shares” under the Restricted Stock Unit Award Agreement previously entered into between the Company and the Executive, in an amount and to the extent of the sum of the “Interim Shares” determined (and defined) in accordance with Exhibit A to that agreement.

As a condition to the Company’s obligations under the Severance Agreements, each Executive is required to execute and deliver to the Company a restrictive covenants agreement, a form of which is attached to the Severance Agreements, containing covenants regarding confidentiality, assignment of inventions, non-competition and non-solicitation. These restrictive covenants will remain in effect during the Severance Period.

On March 21, 2014, the Company and Mr. Jagid entered into a Separation and General Release Agreement pursuant to which, in exchange for a general release of claims and certain restrictive covenants, the Company agreed to pay Mr. Jagid 18 months’ base salary, one-third of which was paid to Mr. Jagid on March 31, 2014, and the remainder of which will be paid over 18 months in accordance with the Company’s normal payroll practices. In addition, the vesting of Mr. Jagid’s unvested stock options and restricted stock awards were accelerated, and Mr. Jagid will have 15 months to exercise his stock options. Mr. Jagid is not entitled to receive any Interim Shares under the Severance Agreement in respect of any Performance Share awards previously granted to him.

Compensation Tables

The following table, which should be read in conjunction with the explanations provided above, sets forth summary compensation information for the year ended December 31, 20132015 for (i) the individual serving as the Company’s Chief Executive Officer during the fiscal year ended December 31, 2013, (ii) the individual serving as the Company’s Chief Financial Officer during the fiscal year ended December 31, 2013, and (iii) each of the Company’s three most highly compensated executive officers other than the Chief Executive Officer and the Chief Financial Officer who were serving as executive officers of the Company as of December 31, 2013. These persons are sometimes referred to elsewhere in this Proxy Statement as our “Named Executive Officers.”Officers.

Summary Compensation Table

Name and Principal Position		Year				Salary ($)				Stock Awards ($)(1)(2)				Option Awards ($)(1)				Non-equity Incentive Plan Compensation ($)(3)				All Other Compensation ($)(4)				Total ($)
Jeffrey M. Jagid, Chairman and Chief Executive Officer(5)			2013				325,000				66,527				137,500				—				42,716				571,743
			2012				325,000				70,082				125,000				222,300				45,985				788,367
			2011				312,000				60,820				50,671				214,656				45,127				683,274
Ned Mavrommatis, Chief Financial Officer, Treasurer and Corporate Secretary			2013				267,000				39,919				82,500				—				33,573				422,992
			2012				267,000				42,047				75,000				136,971				44,236				565,254
			2011				255,000				36,491				30,403				131,580				36,127				489,601
Kenneth S. Ehrman, President(5)			2013				267,000				39,919				82,500				—				45,986				435,405
			2012				267,000				42,047				75,000				136,971				47,839				568,857
			2011				255,000				36,491				30,403				131,580				36,127				489,601
Michael L. Ehrman, Chief Technology Officer			2013				267,000				33,266				68,750				—				34,348				403,364
			2012				250,000				35,041				62,500				106,875				37,562				491,978
			2011				240,000				30,412				25,335				103,200				32,527				431,474
Brett Kilpatrick, Executive Vice President of Worldwide Sales(6)			2013				250,000				33,266				68,750				—				—				352,016
			2012				250,000				35,041				62,500				113,891				—				461,432
			2011				243,750				—				—				95,368				—				339,118

Grants of Plan-Based Awards

The following table provides certain information with respect to restricted stock awards and options granted to our Named Executive Officers during the fiscal year ended December 31, 2013.2015.

		Grant Date				Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1)												Estimated Future Payouts Under Equity Incentive Plan Awards (#)												All Other Stock Awards: Number of Shares of Stock or Units (#)(2)				All Other Option Awards: Number of Securities Underlying Options (#)(3)				Exercise or Base Price of Option Awards ($/Sh)				Grant Date Fair Value of Stock and Option Awards ($)(4)				Grant		Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1)												Estimated Future Payouts Under Equity Incentive Plan Awards (#)												All Other Stock Awards: Number of Shares of Stock or Units				All Other Option Awards: Number of Securities Underlying Options				Exercise or Base Price of Option Awards				Grant Date Fair Value of Stock and Option Awards
Name						Threshold				Target				Maximum				Threshold				Target				Maximum																				Date		Threshold				Target				Maximum				Threshold				Target				maximum				(#)(2)				(#)				($/Sh)				($)(3)
Jeffrey M. Jagid(5)			3/19/2013				260,000				260,000				520,000				—				—				—				—				—				—				—
			4/04/2013				37,812				75,625				113,438				—				—				—				—				—				—				—
			4/04/2013				—				—				—				—				—				—				11,651				—				—				66,527
			4/04/2013				—				—				—				—				—				—				—				68,069				5.71				137,500
Kenneth S. Ehrman																																														2/4/2015			54,075				360,500				1,081,500				—				—				—				—				—				—				—
																																														6/11/2015			—				—				—				—				—				—				60,000				—				—				418,800
Ned Mavrommatis			3/19/2013				160,000				160,200				320,400				—				—				—				—				—				—				—			2/4/2015			28,467				189,778				569,332				—				—				—				—				—				—				—
			4/04/2013				22,688				45,375				68,063				—				—				—				—				—				—				—
			4/04/2013				—				—				—				—				—				—				6,991				—				—				39,919
			4/04/2013				—				—				—				—				—				—				—				40,842				5.71				82,500
Kenneth S. Ehrman(5)			3/19/2013				160,000				160,200				320,400				—				—				—				—				—				—				—
			4/04/2013				22,688				45,375				68,063				—				—				—				—				—				—				—
			4/04/2013				—				—				—				—				—				—				6,991				—				—				39,919
			4/04/2013				—				—				—				—				—				—				—				40,842				5.71				82,500
																																														6/11/2015			—				—				—				—				—				—				30,000				—				—				209,400
Norman L. Ellis																																														2/4/2015			30,602				204,015				612,045				—				—				—				—				—				—				—
																																														6/11/2015			—				—				—				—				—				—				30,000				—				—				209,400
Michael L. Ehrman			3/19/2013				133,500				133,500				267,000				—				—				—				—				—				—				—			2/4/2015			28,467				189,778				569,332				—				—				—				—				—				—				—
			4/04/2013				18,906				37,813				56,720				—				—				—				—				—				—				—
			4/04/2013				—				—				—				—				—				—				5,826				—				—				33,266
			4/04/2013				—				—				—				—				—				—				—				34,035				5.71				68,750
Brett Kilpatrick(6)			3/19/2013				25,000				200,000				400,000				—				—				—				—				—				—				—
			4/04/2013				18,906				37,813				56,720				—				—				—				—				—				—				—
			4/04/2013				—				—				—				—				—				—				5,826				—				—				33,266
			4/04/2013				—				—				—				—				—				—				—				34,035				5.71				68,750
																																														6/11/2015			—				—				—				—				—				—				30,000				—				—				209,400

Stock Option Exercises and Vesting of Restricted Stock Awards

The following table provides certain information with respect to options that were exercised and shares of restricted stock that vested for each of our Named Executive Officers during the fiscal year ended December 31, 2013.2015.

Option Exercises and Stock Vested

		Option Awards								Stock Awards								Option Awards								Stock Awards
Name		Number of Shares Acquired on Exercise (#)				Value Realized on Exercise ($)				Number of Shares Acquired on Vesting (#)				Value Realized on Vesting ($)(1)				Number of  Share Acquired on Exercise (#)				Value Realized in Exercise ($)(1)				Number of Shares Acquired on Vesting (#)				Value Realized in Vesting ($)(2)
Jeffrey M. Jagid(2)			—				—				39,474			$	207,238
Kenneth S. Ehrman																			—				—				31,374			$	165,840
Ned Mavrommatis			—				—				21,930			$	115,132				75,131				289,701				26,374			$	134,490
Kenneth S. Ehrman(2)			—				—				21,930			$	115,132
Norman L. Ellis																			—				—				—				—
Michael L. Ehrman			—				—				21,930			$	115,132				—				—				25,312			$	127,831
Brett Kilpatrick(3)			—				—				6,250			$	38,625

There were no stock option exercises by any of our Named Executive Officers during the fiscal year ended December 31, 2013.

Outstanding Equity Awards at Fiscal Year End

The following table provides certain information concerning outstanding equity awards held by each of our Named Executive Officers at December 31, 2013.2015.

Outstanding Equity Awards at Fiscal Year-End

		Option Awards																Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable				Number of Securities Underlying Unexercised Options (#) Unexercisable				Option Exercise Price ($)				Option Expiration Date				Number of Shares or Units of Stock That Have Not Vested (#)(1)				Market Value of Shares or Units of Stock That Have Not Vested ($)(2)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3)				Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2)
Jeffrey M. Jagid(7)			80,000				—				6.65				2/6/2014	(4)			13,367				77,395				5,312				30,756
			60,000				—				11.35				3/3/2015	(4)			10,624				61,513				—				—
			20,000				—				7.41				2/27/2018	(4)			11,651				67,459				—				—
			54,878				—				3.54				6/29/2019	(5)			—				—				—				—
			80,357				—				2.84				2/5/2020	(5)			—				—				—				—
			—				28,435				4.55				3/30/2021	(5)			—				—				—				—
			—				67,568				5.93				3/29/2022	(5)			—				—				—				—
			—				68,069				5.71				4/4/2023	(6)			—				—				—				—
Ned Mavrommatis			55,000				—				6.65				2/6/2014	(4)			8,020				46,436				3,187				18,453
			49,000				—				11.35				3/3/2015	(4)			6,374				36,905				—				—
			16,000				—				7.41				2/27/2018	(4)			6,991				40,478				—				—
			30,488				—				3.54				6/29/2019	(5)			—				—				—				—
			44,643				—				2.84				2/5/2020	(5)			—				—				—				—
			—				17,061				4.55				3/30/2021	(5)			—				—				—				—
			—				40,541				5.93				3/29/2022	(5)			—				—				—				—
			—				40,842				5.71				4/4/2023	(6)			—				—				—				—
Kenneth S. Ehrman(7)			70,000				—				6.65				2/6/2014	(4)			8,020				46,436				3,187				18,453
			51,000				—				11.35				3/3/2015	(4)			6,374				36,905				—				—
			16,000				—				7.41				2/27/2018	(4)			6,991				40,478				—				—
			30,488				—				3.54				6/29/2019	(5)			—				—				—				—
			44,643				—				2.84				2/5/2020	(5)			—				—				—				—
			—				17,061				4.55				3/30/2021	(5)			—				—				—				—
			—				40,541				5.93				3/29/2022	(5)			—				—				—				—
			—				40,842				5.71				4/4/2023	(6)			—				—				—				—
Michael L. Ehrman			55,000				—				6.65				2/6/2014	(4)			6,684				38,700				2,656				15,378
			57,000				—				11.35				3/3/2015	(4)			5,312				30,759				—				—
			16,000				—				7.41				2/27/2018	(4)			5,826				33,732				—				—
			30,488				—				3.54				6/29/2019	(5)			—				—				—				—
			44,643				—				2.84				2/5/2020	(5)			—				—				—				—
			—				14,217				4.55				3/30/2021	(5)			—				—				—				—
			—				33,784				5.93				3/29/2022	(5)			—				—				—				—
			—				34,035				5.71				4/4/2023	(6)			—				—				—				—
Brett Kilpatrick(8)			26,250				8,750				1.97				10/1/2020	(6)			6,250				36,187				25,000				144,750
			—				33,784				5.93				3/29/2022	(5)			5,312				30,759				2,656				15,378
			—				34,035				5.71				4/4/2023	(6)			5,826				33,732				—				—