UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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Securities Exchange Act of 1934

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¨ Soliciting Material Pursuant to §240.14a-12

IDI,Cogint, Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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IDI,LOGO

COGINT, INC.

2650 North Military Trail, Suite 300

Boca Raton, Florida 33431

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be held on June 1, 201613, 2017

To our Stockholders:

The Annual Meeting of Stockholders of IDI,Cogint, Inc. (the “Company”) will be held on Wednesday,Tuesday, June 1, 201613, 2017 at 3:10:00 p.m.a.m., Eastern Time, at 2650 North Military Trail, Suite 300, Boca Raton, Florida 33431 to consider and vote on the following proposals:

 

 (1)The election of nine (9) directors to serve for a one year term until the 20172018 Annual Meeting of Stockholders or until a successor is duly elected and qualified;

 

 (2)An amendment to the IDI, Inc. 2015 Stock Incentive Plan (the “2015 Plan”) to increase the number of shares available for issuance under the 2015 Plan and the ratification of awards made under the 2015 Plan, which awards are subject to stockholder approval of the amendment;

(3)An award of restricted stock units to our Executive Chairman, which award is subject to stockholder approval;

(4)An award of restricted stock units to our Vice Chairman, which award is subject to stockholder approval;

(5)Anon-binding advisory vote on executive officer compensation (“Say on Pay”); and

 

 (6)(3)The transaction of such other business as may properly come before the meeting or any adjournment or postponement of the meeting.

The Board of Directors has fixed the close of business on April 13, 201618, 2017 as the record date for the determination of stockholders entitled to notice of and to vote at the annual meeting.

The enclosed proxy statement contains information pertaining to the matters to be voted on at the annual meeting. A copy of the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 20152016 is being mailed with this proxy statement.

By order of the Board of Directors,

LOGO

Michael Brauser

Executive Chairman

Boca Raton, Florida

April 29, 201628, 2017

IMPORTANT NOTICE

REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 1, 201613, 2017

The accompanying proxy statement and the 20152016 Annual Report on Form10-K are available on the

Company’s website on the Investor Relations page athttp://www.ididata.comwww.cogint.com.

YOU ARE REQUESTED, REGARDLESS OF THE NUMBER OF SHARES OWNED, TO SIGN AND

DATE THE ENCLOSED PROXY AND TO MAIL IT PROMPTLY, OR TO USE THE INTERNET

VOTING SYSTEM SET FORTH IN THE PROXY.


IDI,COGINT, INC.

2650 North Military Trail, Suite 300

Boca Raton, Florida 33431

PROXY STATEMENT

Annual Meeting of Stockholders

To be held on June 1, 201613, 2017

General

We are providing these proxy materials in connection with the solicitation by the Board of Directors of IDI,Cogint, Inc. (the “Board”) of proxies to be voted at our 20162017 Annual Meeting of Stockholders (the “Meeting”) and at any and all postponements or adjournments thereof. The Meeting will be held on Wednesday,Tuesday, June 1, 2016,13, 2017, at 3:10:00 p.m.a.m., Eastern Time, at 2650 North Military Trail, Suite 300, Boca Raton, Florida 33431. For directions to the Meeting, please contact the Corporate Secretary at (561)757-4000. This proxy statement and the enclosed form of proxy are first being sent to stockholders on or about April 29, 2016.28, 2017. In this proxy statement, IDI,Cogint, Inc. is referred to as “IDI,“cogint,” the “Company,” “we,” “our,” or “us.”

Purpose of the Annual Meeting

At the Meeting, our stockholders will consider and vote upon the following matters:

 

 (1)The election of nine (9) directors to serve for a one year term until the 20172018 Annual Meeting of Stockholders or until a successor is duly elected and qualified;

 

 (2)An amendment to the IDI, Inc. 2015 Stock Incentive Plan (the “2015 Plan”) to increase the number of shares available for issuance under the 2015 Plan and the ratification of awards made under the 2015 Plan, which awards are subject to stockholder approval;

(3)An award of restricted stock units (“RSUs”) to our Executive Chairman, which award is subject to stockholder approval;

(4)An award of RSUs to our Vice Chairman, which award is subject to stockholder approval;

(5)Anon-binding advisory vote on executive officer compensation (“Say on Pay”); and

 

 (6)(3)The transaction of such other business as may properly come before the Meeting or any adjournment or postponement of the Meeting.

Outstanding Securities and Voting Rights

Only holders of record of the Company’s common stock at the close of business on April 13, 2016,18, 2017, the record date, are entitled to notice of, and to vote at, the Meeting. On that date, we had 46,924,18354,740,998 shares of common stock outstanding. Each share of common stock is entitled to one vote at the Meeting.

The holders of a majority of the issued and outstanding shares of common stock present at the Meeting, either in person or by proxy, and entitled to vote, constitute a quorum for the transaction of business. Abstentions and brokernon-votes will be included in determining the presence of a quorum at the Meeting. A brokernon-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner. Under New York Stock Exchange rules, a broker does not have the discretion to vote on any of the proposals to be presented at the Meeting. As a result, any broker who is a member of the New York Stock Exchange will not have the discretion to vote on the proposals, if such broker has not received instructions from the beneficial owner of the shares represented.

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Directors are elected by a plurality of votes cast, the equity award proposals (Proposals 2, 3, and 4) are approved by a majority of votes cast and the Say on Pay proposal is approved by a majority of votes present in person or by proxy at the Meeting and entitled to vote. A brokernon-vote will have no effect on the proposals. Abstentions will have no effect on ProposalsProposal 1 2, 3, and 4, and will have the same effect as a vote against Proposal 5.2.

In connection with the Company’s acquisition of Fluent, LLC (“Fluent”) in December 2015 (the “Fluent Acquisition”), the Company entered into a Stockholders’ Agreement (the “Stockholders’ Agreement”), with the selling stockholders of Fluent (“Sellers”) and Frost Gamma Investment Trust (“Frost Gamma”), Marlin Capital

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Investments, LLC (“Marlin Capital”), and certain other stockholders of the Company, solely in their respective capacities as stockholders, pursuant to which the parties agreed to vote in a certain manner on specified matters, including the agreement to vote in favor of each party’s duly approved nominees for the Company’s Board and in favor of the amendment to the 2015 Plan to increase the number of shares available for issuance thereunder.Board. In the aggregate, stockholders representing approximately 29,815,05235,306,430 shares of the Company’s common stock or 64%64.2% have entered into the Stockholders’ Agreement.

Proxy Voting

Shares for which proxy cards are properly executed and returned will be voted at the Meeting in accordance with the directions given or, in the absence of directions, will be voted“FOR” “FOR” Proposal 1 — election of the nine nominees for director named herein,hereinand“FOR” Proposal 2 — approval of the increase in the number of shares available for issuance under the 2015 Plan,“FOR” Proposal 3 — approval of an award of RSUs to our Executive Chairman,“FOR” Proposal 4 — approval of an award of RSUs to our Vice Chairman and for“FOR” Proposal 5 — approval of Say on Pay. If other matters are properly presented, the person named in the proxies in the accompanying proxy card will vote in accordance with their discretion with respect to such matters.

Voting by Stockholders of Record.

If you are a stockholder of record (your shares are registered directly in your name with our transfer agent), you may vote by proxy, via the Internet, or by mail by following the instructions provided on the proxy card. Stockholders of record who attend the Meeting may vote in person by obtaining a ballot from the inspector of elections. Please be prepared to present photo identification for admittance to the Meeting.

Voting by Beneficial Owners.

If you are a beneficial owner of shares (your shares are held in the name of a brokerage firm, bank, or other nominee), you may vote by following the instructions provided in the voting instruction form, or other materials provided to you by the brokerage firm, bank, or other nominee that holds your shares. To vote in person at the Meeting, you must obtain a legal proxy from the brokerage firm, bank, or other nominee that holds your shares, and present such legal proxy from the brokerage firm, bank, or other nominee that holds your shares for admittance to the Meeting. Also, be prepared to present photo identification for admittance to the Meeting.

Changing Your Vote.

You may revoke your proxy and change your vote at any time before the final vote at the Meeting. You may vote again on a later date via the Internet (only your latest Internet proxy submitted prior to the meeting will be counted), by signing and returning a new proxy card with a later date, or by attending the Meeting and voting in person. Your attendance at the Meetingwillnot automatically revoke your proxy unless you vote again at the Meeting or specifically request in writing that your prior proxy be revoked.

All votes will be tabulated by an Inspector of Elections appointed for the Meeting, who will separately tabulate affirmative and negative votes, abstentions and brokernon-votes. Joshua Weingard has been appointed by the Board as Inspector of Elections for the Meeting. A list of the stockholders entitled to vote at the Meeting will be available at the Company’s executive office, located at 2650 North Military Trail, Suite 300, Boca Raton, Florida 33431, for a period of ten (10) days before the Meeting and will be available for examination by any stockholder.

 

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Proposal 1

ELECTION OF DIRECTORS

We are electing nine (9) directors at the Meeting. Each director will hold office until our next annual meeting or until a successor is elected and qualified to serve on the Board. The Board has nominated the nine individuals listed below (each a “Nominee” and together the “Nominees”) based on the recommendation of the Board’s Corporate Governance and Nominating Committee (the “Nominating Committee”). Each of the Nominees currently serves as a director, however Dr. Frost and Messrs. Swayman, Schulke and Mathis are being nominated for election at an annual meeting for the first time. Furthermore, Messrs. Schulke and Mathis have been nominated pursuant to the Stockholders’ Agreement, which allows Sellers to nominate two nominees to the Board, as further discussed in the section of this proxy statement titled “Nominees for Director and Other Stockholder Proposals.” Each Nominee is a current director who has been nominated forre-election at the Meeting, and each Nominee has consented to be named in this proxy statement and has agreed to serve as a director if elected. If any Nominee should become unavailable for election, the proxy may be voted for a substitute nominee selected by the persons named in the proxy or the size of the Board may be reduced accordingly. The Board is not aware of any existing circumstances likely to render any Nominee unavailable. Under our bylawsBylaws, Nominees are elected by a plurality of votes cast.

The following table sets forth certain information concerning our directors/Nominees:

 

Name

  

Position

  Director Since 

Michael Brauser

  Executive Chairman   2015 

Dr. Phillip Frost

  Vice Chairman   2015 

Derek Dubner

  Director, and Chief Executive Officer and Interim President   2015 

Ryan Schulke

  Director and CEO of Fluent, LLC   2015 

Peter Benz

  Director   2015 

Robert Fried

  Director   2009 

Donald Mathis

  Director   2015 

Steven Rubin

  Director   2009 

Robert Swayman

  Director   2015 

Biographical Information About Our Nominees

Mr. Michael Brauser, 60,61, has served as a director of the Company and our Executive Chairman since June 2015. Since 2003, Mr. Brauser has been the manager of, and an investor with, Marlin Capital Partners, LLC, a private investment company. From 1999 to 2002, he served as president and chief executive officer of Naviant, Inc. (eDirect, Inc.), an internet marketing company. He also was a founder of Seisint, Inc. (eData.com, Inc.). Mr. Brauser served asco-chairman of the board of directors of InterCLICK (now a part of Yahoo Inc.), from August 2007 to December 2011. Mr. Brauser also served asco-chairman of the board of directors of ChromaDex Corp., an innovative natural products company, from October 2011 to February 2015. The Nominating Committee believes that Mr. Brauser’s experience as a director on various public company boards of directors and as a manager of an investment company brings extensive business and management expertise to the Board.

Dr. Phillip Frost, 79,80, has served as Vice Chairman of the Board of the Company since December 2015. Since March 2007, Dr. Frost has served as chairman of the board and chief executive officer of OPKO Health, Inc. (“OPKO”), a multi-national biopharmaceutical and diagnostics company. Dr. Frost has served as chairman of the board of directors of Ladenburg Thalmann Financial Services Inc. (“Ladenburg Thalmann”), an investment banking, asset management, and securities brokerage firm, since July 2006. He also served as a member of the board of directors of Ladenburg Thalmann from May 2001 until July 2002 and again from March 2004 until June 2006. Since October 2008, Dr. Frost has served as a director of Castle Brands Inc., a developer and marketer of premium brand spirits,spirits. Dr. Frost also serves as a director of Cocrystal Pharma, Inc., a publicly traded biotechnology company developing new treatments for viral diseases, and Sevion Therapeutics, Inc., a clinical stage company which discovers and develops next-generation biologics for the treatment of cancer and immunological diseases. He also serves as chairman of Temple Emanu-El, as a member of the Florida Council of

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100 and as a trustee for each of

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the University of Miami, the Miami Jewish Home for the Aged and the Mount Sinai Medical Center. From 1972 to 1990, Dr. Frost was the chairman of the Department of Dermatology at Mt. Sinai Medical Center of Greater Miami, Miami Beach, Florida. Dr. Frost served as a director of Teva Pharmaceutical Industries Ltd., a pharmaceutical company, from January 2006 until February 2015, and also served as chairman of the board of directors of Teva from March 2010 until December 2014 and served as vice chairman of the board of directors from January 2006 when Teva acquired IVAX Corporation (“IVAX”) until March 2010. Dr. Frost was chairman of the board of directors of Key Pharmaceuticals, Inc. from 1972 until its acquisition by Schering Plough Corporation in 1986 and served as chairman of the board of directors and chief executive officer of IVAX from 1987 to January 2006. Dr. Frost previously served as a director of Northrop Grumman Corp., Continucare Corp. (until its merger with Metropolitan Health Networks, Inc.), PROLOR Biotech, Inc. (until it was acquired by OPKO Health, Inc.)OPKO) and TransEnterix, Inc., and as governor andco-vice-chairman of the American Stock Exchange (now NYSE MKT). The Nominating Committee believes that Dr. Frost’s pertinent experience, qualifications, attributes, and skills include financial literacy and expertise, executive-level managerial experience, and the knowledge and experience he has attained through his service as a director and officer of publicly-traded corporations.

Mr. Derek Dubner, 44,45, has served as a member of the Board since March 2015, and presently serves as the Chief Executive Officer and as a member of the Board,Interim President, as well as Chief Executive Officer of Interactive Data, a Company subsidiary. Mr. Dubner served as ourCo-Chief Executive Officer from March 2015 until March 2016, when he was appointed our Chief Executive Officer. Mr. Dubner has over 1517 years of experience in the data fusion industry. Mr. Dubner has served as the Chief Executive Officer of Company subsidiary The Best One, Inc. (“TBO”), and its subsidiary, Interactive Data, since October 2014. Prior to TBO, Mr. Dubner served as General Counsel of TransUnion Risk and Alternative Data Solutions, Inc. from December 2013 to June 2014. Mr. Dubner served as General Counsel and Secretary of TLO, LLC from inception in 2009 through December 2013. The Nominating Committee believes Mr. Dubner’s experience as Chief Executive Officer of IDIthe Company provides valuable business, industry, and management advice to the Board.

Mr. Ryan Schulke, 32,34, has served as a director of the Company since December 2015 and has served as the CEOChief Executive Officer of Company subsidiary Fluent, LLC since the Fluent Acquisition in December 2015. Mr. Schulke was aco-founder of Fluent, Inc. in 2010 and has served as Chairman and Chief Executive Officer of Fluent since its inception. Before merging with IDI,the Company, Fluent was privately held andheld. Fluent is a leader in people-based digital marketing and customer acquisition. Prior to founding Fluent, Mr. Schulke served as Media Director of Clash Media, a global digital advertising network. The Nominating Committee believes Mr. Schulke’s experience as CEOChief Executive Officer of Fluent, the Company’s largest subsidiary, provides valuable business, industry, and management advice to the Board.

Mr. Peter Benz, 55,56, has served as a director of the Company since March 2015. Mr. Benz is the Chief Executive Officer of Viking Asset Management, LLC, an asset and investment management company which he founded in 2001. Since January 2012,June 2016, Mr. Benz has served as a director of Lilis Energy Inc., an onshore oil and natural gas exploration and production company. From January 2012 until its merger with Lilis Energy Inc. in June 2016, Mr. Benz served as a director of Brushy Resources, Inc. (formerly known as Starboard Resources, Inc.), an onshore oil and natural gas exploration and production company, and became its Chairman on November 24, 2015. Mr. Benz has also served as a director of Usell.com, a technology based online market place, since October 2014 and as a director and Chairman of the Board of Optex Systems, Inc., a manufacturer of optical systems for the defense industry since November 2014. The Nominating Committee believes Mr. Benz’s knowledge and experience in developing companies and capital markets strengthen the Board’s collective qualifications, skills, and experience.

Mr. Robert Fried, 56,57, has served as a director of the Company since October 2009. From August 2011 through May 2015, Mr. Fried served as Chairman of the Board and wasCo-Chairman of the Board from October 2009 through August 2011. Mr. Fried served as the President and Chief Executive Officer and a member of the Board of the Company while it was a “special purpose acquisition company,” Ideation Acquisition Corp.

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(“Ideation”), from November 2007 to October 2009. Mr. Fried is the founder and Chief Executive Officer of Spiritclips, LLC,Feeln, a subscription streaming video service acquired by Hallmark Cards, Inc., in 2012. Mr. Fried also operates several Hallmark Cards’ digital businesses includinge-cards and personalized digital cards. Mr. Fried is an Academy Award winning motion picture producer whose credits include Rudy, Collateral,

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Boondock Saints, So I Married an Axe Murderer, Godzilla, and numerous others. From December 1994 until June 1996, Mr. Fried was President and Chief Executive Officer of Savoy Pictures, a unit of Savoy Pictures Entertainment, Inc. Savoy Pictures Entertainment was sold to Silver King Communications, which is now a part of InterActive Corp, in 1996. From 1983 to 1990, Mr. Fried held several executive positions including Executive Vice President in charge of Production for Columbia Pictures, Director of Film Finance and Special Projects for Columbia Pictures and Director of Business Development at Twentieth Century Fox. Mr. Fried is on the board of directorshas served as a director of Nasdaq listed ChromaDex Corp. since July 2015 and President and Chief Strategy Officer since March 2017. Mr. Fried also served as a member of the Nominating and Corporate Governance Committee of ChromaDex Corp. from July 2015 to March 2017. The Nominating Committee believes Mr. Fried’s experience as an executive of several companies provides valuable business, leadership and management advice to the Board in many critical areas.

Mr. Donald Mathis, 50,51, has served as director of the Company since December 2015. Mr. Mathis co-founded Kinetic Social in 2011is currently the Chairman and serves as its Chairman. Kinetic Social, a privately held company acquired by Blue Chip Venture Company, is a social data and technology SaaS and managed services company. Mr. Mathis served as Kinetic’s Chief Executive Officer from 2011 through April 2016.of Echelon AI (“Echelon”), aNY-based privately held Artificial Intelligencestart-up focused on business process automation, predictive data analytics and nextgen digital and cyber security. Mr. Mathis joined Echelon in April 2017. He is also recentlyan Operating Partner with Periscope Equity, a Chicago-based growth private equity fund, which he joined in January 2017. In addition, Mr. Mathis has served as a Senior Adviser and Director since April 2016 of the Board of Directors of RapidRPA, LLC,initiative for Digital Counterterrorism (iDCT), a privately held companypublic-private consortium andnon-governmental organization focused on Robotic Process Automation.countering violent extremism and terrorist recruitment in the digital domain. Mr. Mathis has served since 2013 on the Board of AdvisorsAdvisers of Omniangle Technologies, a privately held company involved in business intelligence and information security. Previously, Mr. Mathis served as the Chief Executive Officer of privately held Kinetic Social from October 2011 through April 2016. Mr. Mathis was aco-founder of Kinetic Social, a SaaS and managed service social data and technology company acquired by Blue Chip Venture Company. From 2007 to 2011, Mr. Mathis served as Executive Chairman and Director onof Online Intelligence, a privately held digital security firm specializing in brand protection and traffic integrity services to brand advertisers and owners of premium content.services. Mr. Mathis was on the audit and compensation committees of Online Intelligence until its acquisition by FAS Labs, Inc. in May 2010, and remained Executive Chairman until November 2011. Mr. Mathis has an MBA from the Harvard Business School and served asis a Commander in the U.S. Navy (currently inactive reserve). The Nominating Committee believes Mr. Mathis’ knowledge and experience as Chairman and CEO of an artificial intelligence company with a privately heldspecialty in predictive data analytics, his experience running a social data and technology SaaS and managed services company, as well as his experience in business intelligence, general management, financial management and information security, and his military service, strengthen the Board’s collective qualifications, skills, and experience.

Mr. Steven Rubin, 55,56, has served as a director of the Company since October 2009. Mr. Rubin served as the Secretary of Ideation from June 2007 to October 2009. Mr. Rubin has served as the Executive Vice President of OPKO since May 2007 and a director of OPKO since February 2007, a director of Cocrystal Pharma, Inc., a pharmaceutical company since January 2014 and is a member of The Frost Group, LLC, a private investment firm. In addition to OPKO,2007. Mr. Rubin currently serves on the Boardsboard of Directorsdirectors of ChromaDex Corp., an innovator of proprietary health, wellness and nutritional ingredients that creates science-based solutions for dietary supplement, food and beverage, skin care, sports nutrition, and pharmaceutical products, since March 2017, VBI Vaccines, Inc., formerly SciVac Therapeutics, Inc., a commercial-stage biopharmaceutical which develops, produces and markets biological products for human healthcare in Israel, since October 2012, Kidville, Inc., which operates large, upscale facilities, catering to newborns throughfive-year-old children and their families and offers a wide range of developmental classes for newborns to five-year-olds, since August 2008,Non-Invasive Monitoring Systems, Inc., a medical device company, Neovasc,since 2008, Cocrystal Pharma, Inc., formerly Biozone Pharmaceuticals, Inc., a developer of vascular devices, Kidville, Inc., which operates upscale learning and play facilitiespublicly traded biotechnology company developing new treatments for children, Tiger X Medical, Inc. (formerly known as Cardo Medical, Inc.), formerly a medical device company,viral diseases, since January 2014, Sevion Therapeutic,Therapeutics, Inc., a clinical stage company buildingwhich discovers and developing therapeuticsdevelops next-generation biologics for the treatment of cancer and immunological diseases, andsince May 2014, Castle Brands, Inc., a developer and marketer of premium spirits.brand spirits, since January 2009, and Neovasc, Inc., a company

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developing and marketing medical specialty vascular devices, since 2008. Mr. Rubin previously served on the board of directorsas a director of Dreams, Inc., a vertically integrated sports licensing and products company, Ideation,from 2006 to 2012, Safestitch Medical, Inc. from September 2007 until its merger with TransEnterix, Inc. (formerly SafeStitchin September 2013, Tiger X Medical, Inc.), a medical device company from September 2008 until its merger with BioCardia, Inc. in October 2016, and PROLOR Biotech, Inc., a development stage biopharmaceutical company prior tofrom February 2008 until its merger with OPKO.acquisition by OPKO in August 2013. Mr. Rubin previously served as the Senior Vice President, General Counsel and Secretary of IVAX Corporation from August 2001 until September 2006. Mr. Rubin served as the Secretary of Ideation from June 2007 to October 2009. The Nominating Committee believes Mr. Rubin’s legal experience, managerial experience, and the knowledge and insight he has attained through his service as a director and officer of several publicly-traded corporations provides valuable business leadership, and management advice to the Board.

Mr. Robert Swayman, 61,62, has served as a director of the Company since June 2015. From 1998 to 2014, Mr. Swayman served as President and Chief Executive Officer of National Alarm Systems, Inc., a company he founded in 1998, prior to its sale in January 2014. From January 2014 through February 2015, Mr. Swayman served as General Manager of ASG Security, which acquired National Alarm Systems. Mr. Swayman served as a director of Vapor Corp., a U.S.-based distributor and retailer of vaporizers,e-liquids and electronic cigarettes, from March 4, 2015 to April 17, 2015, and as an employee of Vapor Corp. since April 17, 2015 providing financial and business advice. Mr. Swayman is a Certified Public Accountant and holds a B.S. degree in accounting from the State University of New York at Buffalo. The Nominating Committee believes

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Mr. Swayman’s experience as President and Chief Executive Officer of National Alarm Systems, Inc., from 1998 to 2014, as well as his experience as a Certified Public Accountant provides valuable business, leadership, and management advice to the Board.

Vote Required and Board Recommendation

Nominees are elected by a plurality of votes cast at the Meeting.

The Board unanimously recommends a vote“FOR” “FOR” each Nominee for director.

Director Compensation

Prior to June 16, 2015, our When anon-employee Board members were paid an annual fee of $10,000, paid in quarterly installments with the first payment made in arrears, and were awarded the equivalent of $10,000 in RSUs, which vested immediately on our annual meeting of stockholders. In addition, the Chairman of the Compensation Committee received an additional $5,000 cash per year and our Audit Committee Chairman received an additional $20,000 cash per year. Directors were also eligible to receive additional equity grants based on contributions to the Board. In June 2015, the Board decided to eliminate the cash component of Board consideration to conserve cash and to grant 25,000 RSUs when a non-employee director joins the Board, suchnon-employee director is granted 25,000 restricted stock units (“RSUs”), which RSUs would vest in three equal annual installments beginning on the first anniversary of the grant date. Additionally, each Audit Committee member is granted an additional 5,000 RSUs, all of which vest on the one year anniversary of the grant date, and the Chairman of the Audit Committee is granted an additional 5,000 RSUs, which vest on theone-year anniversary of the grant date. Additional equity awards may be granted to directors at the direction of the Compensation Committee based on an individual director’s contributions to the Company.

The following table sets forth information regarding No director received RSUs during 2016. As of December 31, 2016, the compensationaggregate number of our non-employee directorsshares of common stock subject to stock awards held by each director who was not a named executive officer for the year ended December 31, 2015.2016 is as follows: Dr. Frost — 3,000,000; Mr. Schulke — 550,000; Mr. Benz — 21,666; Mr. Fried — 53,333; Mr. Mathis — 30,000; Mr. Rubin — 150,000; and Mr. Swayman — 21,666. As of December 31, 2016, the aggregate number of shares of common stock subject to option awards held by each director who was not a named executive officer for the year ended December 31, 2016 is as follows: Dr. Frost — 0; Mr. Schulke — 0; Mr. Benz — 0; Mr. Fried — 32,000; Mr. Mathis — 0; Mr. Rubin — 32,000; and Mr. Swayman — 0.

Additionally, on April 13, 2017, thenon-employee directors received the following RSU grants in connection with their service on the Board: Dr. Frost — 50,000; Mr. Benz — 15,000; Mr. Fried — 15,000; Mr. Mathis — 15,000; Mr. Rubin — 20,000; and Mr. Swayman — 15,000. These RSUs vest in three approximately equal installments on June 1, 2017, 2018 and 2019, subject to accelerated vesting under certain conditions.

Name

  Fees Earned
or Paid in
Cash
   Stock Awards (1)   All Other
Compensation
   Total 

Current Directors

        

Dr. Phillip Frost (2)

  $—      $25,350,000     —      $25,350,000  

Peter Benz

  $—      $383,450     —      $383,450  

Robert Fried

  $2,500    $1,136,100     —      $1,138,600  

Donald Mathis (2)

  $—      $253,500     —      $253,500  

Steven Rubin

  $3,750    $2,140,000     —      $2,143,750  

Robert Swayman

  $—      $336,050     —      $336,050  

Former Directors

        

Daniel Brauser(3)

  $—      $810,750     —      $810,750  

Chi-Chuan (Frank) Chen(4)

  $2,500    $25,500     —      $28,000  

Yunan (Jeffery) Ren (4)

  $7,500    $61,200     —      $68,700  

Also on April 13, 2017, Board committee members received the following RSU grants: Mr. Benz — 5,000 in connection with his service as Audit Committee Chairman and 5,000 in connection with his service as an

(1)This column reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. In determining the grant date fair value for RSUs, the Company used the closing price of the Company’s common stock on the grant date. The current directors received the following RSUs during 2015: Dr. Frost — 3,000,000 (all of which are subject to stockholder approval at this Meeting); Mr. Benz — 35,000 (of which 5,000 are subject to stockholder approval at this Meeting); Mr. Fried — 170,000 (of which 20,000 are subject to stockholder approval at this Meeting); Mr. Mathis — 30,000 (all of which are subject to stockholder approval at this Meeting); Mr. Rubin — 285,000 (of which 100,000 are subject to stockholder approval at this Meeting); and Mr. Swayman — 35,000 (of which 5,000 are subject to stockholder approval at this Meeting). The former directors received the following RSUs during 2015: Mr. D. Brauser — 110,000; Mr. Chen — 5,000 and Mr. Ren — 12,000.
(2)Dr. Frost and Messrs. Schulke and Mathis were appointed to the Board on December 8, 2015. Dr. Frost was appointed Vice-Chairman.

 

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(3)Mr. Daniel Brauser was appointed on March 21, 2015, and served until his resignation on December 8, 2015.
(4)Messrs. Chen and Ren did not stand for re-election at the Annual Meeting held on June 2, 2015.

Audit Committee member; Mr. Rubin — 5,000 in connection with his service as Compensation Committee Chairman; Mr. Swayman — 5,000 in connection with his service as an Audit Committee member; and Mr. Mathis — 5,000 in connection with his service as an Audit Committee member. These RSUs vest on January 1, 2018, subject to accelerated vesting under certain conditions.

Board Meetings; Annual Meeting Attendance; Independence

The Board oversees our business and affairs and monitors the performance of management. The Board met regularly during the year ended December 31, 20152016 and continues to meet regularly to review matters affecting our companyCompany and to act on matters requiring Board approval. The Board also holds special meetings whenever circumstances require and may act by unanimous written consent. During 2015,2016, the Board held tenthree meetings and took action by unanimous written consent on seveneight occasions. All of our directors attended at least 75% of our meetings held in person or by proxy. The Board encourages, but does not require, its directors to attend the Company’s annual meeting. Messrs. Rubin and Daniel BrauserAll directors attended the 2015 Annual Meeting of Stockholders, as well as Michael Brauser, who was a director-nominee at the 20152016 Annual Meeting of Stockholders.

UnderAs required by the NYSE MKT relevantlisting standards an independent director means a person other than an executive officer or employee of the company, and no director qualifies as independent unless the issuer’s board of directors affirmatively determines that the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. NYSE MKT requires thatNASDAQ, a majority of the members of the Board must qualify as “independent,” as affirmatively determined by the Board. Our board of directors determines director independence based on an analysis of a listed company be independent.such listing standards and all relevant securities and other laws and regulations regarding the definition of “independent.”

As a result of the Board’s review of the relationships of each of the Nominees for election to the Board, the Board has affirmatively determined that a majority of its current directors and Nominees, Messrs. Benz, Fried, Mathis, Rubin, and Swayman, are “independent” directors within the meaning of the NASDAQ listing standards of NYSE MKT and applicable law.

Code of Ethics

The Company has adopted a Code of Ethics, which is applicable to the Company’s directors, officers, and employees, including the Company’s principal executive officer and principal financial officer. The Code of Ethics is published on the Company’s website atwww.ididata.comwww.cogint.com on the Investor Relations page. We will disclose on our website amendments to or waivers from our Code of Ethics in accordance with all applicable laws and regulations.

Board Leadership Structure

The Company is led by Michael Brauser, who has served as a director of the Company and our Executive Chairman since June 2015. The Executive Chairman is the individual selected by the Board to manage our Company on a day to day basis, andbasis. A number of factors support the leadership structure chosen by the Board, including, among others, that his direct involvement in our business operations makes him best positioned to lead productive Board strategic planning sessions and determine the time allocated to each agenda item in discussions of our Company’s short- and long-term objectives. Although we have no formal policy on the separation of our lead executive and chairman of the board, we believe that our current leadership structure is suitable for us. Five of our directors satisfy NYSE MKTNASDAQ independence requirements. Our Board also includes two management directors other than Mr. Brauser. The Company does not have a member of our Board who is formally identified as the lead independent director, however Dr. Phillip Frost serves as our Vice Chairman. Also, independent directors head each of our Board’s three standing committees — the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee, and each of the committees is comprised solely of independent directors.

Board Oversight of Enterprise Risk

The Board’s role in the risk oversight process includes receiving regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal and regulatory, and

 

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strategic and reputational risks. In connection with its reviews of the operations of the Company’s business and its corporate functions, the Board considers and addresses the primary risks associated with these operations and functions. Our full Board regularly engages in discussions of the most significant risks that the Company is facing and how these risks are being managed.

In addition, each of the Board’s committees, and particularly the Audit Committee, plays a role in overseeing risk management issues that fall within such committee’s areas of responsibility. Senior management reports on at least a quarterly basis to the Audit Committee on the most significant risks facing the Company from a financial reporting perspective and highlights any new risks that may have arisen since the Audit Committee last met. The Audit Committee also meets regularly in executive session with the Company’s independent registered public accounting firm and reports any findings or issues to the full Board. In performing its functions, the Audit Committee and each standing committee of the Board has full access to management, as well as the ability to engage advisors. The Board receives regular reports from each of its standing committees regarding each committee’s particularized areas of focus.

Committees

The standing committees of the Board are the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee.

Audit Committee

From January 1, 2015 through June 2, 2015, the date of the 2015 Annual Meeting (the “2015 Annual Meeting”), Frank Chen and Yunan (Jeffrey) Ren (Chairman) served as members of our Audit Committee. Mr. Ren served as our Audit Committee financial expert. Messrs. Chen and Ren were not re-nominated to serve as a director at the 2015 Annual Meeting. Following the 2015 Annual Meeting, theThe members of the Audit Committee have beenare Peter Benz (Chairman) and, Robert Swayman bothand Donald Mathis, all of whom are independent directors as determined by the NYSE MKT Rules. Upon his appointment to the Board effective December 8, 2015, Donald Mathis was appointed to the Company’s Audit Committee. Mr. Mathis meets the independence requirements of NYSE MKT.NASDAQ listing standards. The Board has determined that Mr. Benz is an audit committee financial expert as defined in Item 407(d)(5)(ii) of RegulationS-K.

Until Mr. Mathis’ appointment to the Audit Committee in December 2015, IDI maintained an Audit Committee of two members pursuant to the exemption provided under Section 803(B)(2)(c) of the NYSE MKT Company Guide, which provides that an issuer that satisfies the definition of Smaller Reporting Company in Regulation S-K, Item 10(f)(1), is only required to maintain an Audit Committee of at least two members. The Board of IDI has adopted a written charter for the Audit Committee which the Audit Committee reviews and reassesses for adequacy on an annual basis. A copy of the Audit Committee’s charter is located on IDI’sour website atwww.ididata.comwww.cogint.com.

The Audit Committee held 13six meetings during 20152016 and took no action by written consent.

Compensation Committee

The members of the Compensation Committee are Steven Rubin Chairman,(Chairman), Robert Fried, Peter Benz and Donald Mathis, all of whom are independent directors as determined by the NYSE MKT Rules.NASDAQ listing standards. The Compensation Committee is responsible for reviewing and approving compensation of the Company’s executive officers and for advising the Board with respect to compensation forof the Board’s non-employee directors.members of the Board or any committee thereof. The Board has affirmatively determined that each of Messers. Rubin, Fried, Benz and MatthisMathis are independent pursuant to 805(c)(1)Rule 5605 of the NYSE MKT Company Guide.NASDAQ listing standards. A copy of the Compensation Committee’s charter is located on IDI’sour website atwww.ididata.comwww.cogint.com.

The Compensation Committee held 11six meetings during 20152016 and took no action by written consent one time.consent.

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Compensation Committee Interlocks and Insider Participation

The members of our Compensation Committee during the year ended December 31, 20152016 were Steven Rubin Chairman,(Chairman), Robert Fried, Peter Benz and Donald Mathis. Donald Mathis was appointed to the Board and as a member of the Compensation Committee on December 8, 2015. From November 2007 to October 2009, Mr. Fried served as President and Chief Executive Officer of Ideation. From June 2007 to October 2009, Mr. Rubin served as Secretary of Ideation. No member of the Compensation Committee is a current or former officer or employee of ours or any of our subsidiaries. None of the members of our Compensation Committee had any relationship required to be disclosed under this caption under the rules of the SEC.Securities and Exchange Commission (the “SEC”).

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Corporate Governance and Nominating Committee

The members of the Corporate Governance and Nominating Committee are Robert Fried, Steven Rubin and Peter Benz. The Nominating Committee is responsible for identifying individuals qualified to become members of the Board or any committee thereof; recommending nominees for election as directors at each annual stockholder meeting; recommending candidates to fill any vacancies on the Board or any committee thereof; and overseeing the evaluation of the Board. A copy of the Nominating Committee’s charter is located on IDI’sour website atwww.ididata.comwww.cogint.com.

The Nominating Committee held threeno meetings during 20152016 and took no action by written consent.consent one time.

Communications with our Board of Directors

Any stockholder who wishes to send a communication to our Board should address the communication either to the Board or to the individual director in care of Joshua Weingard, Corporate Counsel of IDICogint, Inc. at 2650 North Military Trail, Suite 300, Boca Raton, Florida 33431. Mr. Weingard will forward the communication either to all of the directors, if the communication is addressed to the Board, or to the individual director, if the communication is addressed to a specific director.

Nominees for Director and Other Stockholder Proposals

The Nominating Committee will consider all qualified director candidates identified by various sources, including members of the Board, management and stockholders. Candidates for directors recommended by stockholders will be given the same consideration as those identified from other sources. The Nominating Committee is responsible for reviewing each candidate’s biographical information and assessing each candidate’s independence, skills, qualifications, and expertise based on a number of factors. While we do not have a formal policy on diversity, when considering the selection of director nominees, the Nominating Committee considers individuals with diverse backgrounds, viewpoints, accomplishments, cultural backgrounds, and professional expertise, among other factors.

Only persons who are nominated in accordance with the procedures set forth in our bylaws will be eligible for election as directors. Nominations of persons for election to the Board and other proposals presented to our stockholders may be made at a meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board or (ii) by any stockholder of the Company entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in our bylaws. Such nominations and other proposals presented to our stockholders, other than those made by or at the direction of the Board, shall be made by timely notice in writing to the Secretary of the Company. To be timely, a stockholder’s nomination for a director or other stockholder proposal must be delivered to the secretarySecretary at the Company’s principal executive offices not later than the close of business on the ninetieth (90th) day, nor earlier than the close of business on the one hundred twentieth (120th) day, before the first anniversary of the preceding year’s annual meeting. The stockholder’s notice shall set forth as to each person whom the stockholder 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 all information that is required in connection with a stockholder proposal, in each case pursuant to and in accordance with the Section 14(a) of the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder, and (ii) such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected.

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Messrs. Schulke and Mathis have been nominated to the Board in accordance with the Stockholders’ Agreement entered into in connection with the Fluent Acquisition, which provides in part that beginning with the first annual meeting of stockholders following the closing of the Fluent Acquisition and thereafter for so long as the Fluent stockholders beneficially own, in the aggregate, at least 30% of the shares issued in the Fluent Acquisition, Sellers are entitled to nominate two individuals to the Board.

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of our Board (in this section, the “Committee”) has selected Grant Thornton LLP (“Grant Thornton”) to serveserves as ourthe Company’s independent registered public accounting firm to audit the consolidated financial statements of the Company for the fiscal year ending December 31, 2016.firm. Grant Thornton has acted in such capacity since its appointment effective July 14, 2015. A representative of Grant Thornton is expected to be present at the Meeting, with the opportunity to make a statement if the representative desires to do so, and is expected to be available to respond to appropriate questions.

Changes in Independent Registered Public Accounting

Effective July 14, 2015, the Committee appointed Grant Thornton as the Company’s principal independent registered public accountant to audit the Company’s consolidated financial statements for the fiscal year ended December 31, 2015. In connection with the appointment of Grant Thornton, the Committee dismissed RBSM LLP (“RBSM”) effective July 14, 2015, as the Company’s independent registered public accountants. RBSM had served as the Company’s independent registered public accountant since its engagement on May 14, 2015. RBSM did not issue a report on the Company’s financial statements for the year ended December 31, 2015.

During the period May 14, 2015 through July 14, 2015, the Company hashad not had any disagreements with RBSM on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to RBSM’s satisfaction, would have caused them to make reference thereto in their reports on the Company’s financial statements for such periods. During the period May 14, 2015 through July 14, 2015, there were no reportable events, as defined in Item 304(a)(1)(v) of RegulationS-K.

On May 14, 2015, the Committee appointed RBSM as the Company’s principal independent registered public accountant to audit the Company’s consolidated financial statements for the fiscal year ended December 31, 2015. This action effectively dismissed Marcum Bernstein & Pinchuk LLP (“MBP”) as of May 14, 2015, as the Company’s principal independent registered public accountants.

The audit report of MBP on the financial statements of the Company, as of and for the years ended December 31, 2014 and December 31, 2013, did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

During the years ended December 31, 2014 and 2013, there were no disagreements with MBP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which if not resolved to MBP’s satisfaction would have caused it to make reference thereto in connection with its reports on the financial statements for such years. During the years ended December 31, 2014 and 2013 and through May 14, 2015, there were no reportable events of the type described in Item 304(a)(1)(v) of RegulationS-K.

Previously, the consolidated financial statements of Company subsidiary IDI Holdings, LLC (“IDI Holdings”), formerly The Best One, Inc., for the year ended December 31, 2014 (the “2014 Financials”) were audited by L.L. Bradford & Company, LLP (“LLB”); however, LLB is no longer PCAOB registered and, as a result, the Company can no longer include LLB’s audit opinion with the Company’s filings. As a result, on March 15, 2016, the Committee appointed RBSM for the sole purpose of auditing IDI Holdings’ 2014 Financials.

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Auditor Fees And Services

The following table sets forth the fees billed to the Company by the Company’s independent registered public accountants, Grant Thornton, for the years ended December 31, 20152016 and December 31, 2014.2015.

 

  2015 2014 (3)(4)   2016   2015 

Audit Fees (1)

  $595,481(2)  $176,414    $837,096   $595,481 

Audit-Related Fees

   34,556    —       80,763    34,556 

Tax Fees (5)

   8,697    —       —      8,697 

All Other Fees

   —      —       —      —   
  

 

  

 

   

 

   

 

 

Total

  $638,734   $176,414    $917,859   $638,734 
  

 

  

 

 

 

(1)Audit fees consist of fees billed for professional services rendered for the audit of our consolidated annual financial statements, the review of the interim consolidated financial statements included in quarterly reports and services that are normally provided in connection with statutory and regulatory filings for engagements, consultations in connection with acquisitions and issuances of auditor consents and comfort letters in connection with SEC registration statements and related SEC registered and non-registered securities offerings.
(2)Represents $555,481 for fees billed by Grant Thornton for audit and quarterly review services and services related to comfort letter and accounting consultation and research on matters related to business combinations, and $40,000 for fees billed by RBSM.
(3)As TBO was determined to be the accounting acquirer of and the predecessor entity to Tiger Media, these balances represent $67,500 and $108,914, respectively, paid to RBSM and LLB, who were the independent accountants for TBO. Due to LLB (who was the initial independent accountant for TBO) having their PCAOB registration revoked, the company subsequently appointed RBSM as the independent accountant and RBSM performed an independent audit for 2014.
(4)TBO was determined to be the accounting acquirer of and the predecessor entity to IDI or the Company. Accordingly, the Company paid $154,663 for audit fees and $3,595 for audit-related fees to their independent registered public accountant MBP in 2014. These fees are not included in the table above.
(5)Relates to tax consulting services performed by Grant Thornton prior to being engaged as the Company’s independent registered public accountant.

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Audit fees consist of fees billed for professional services rendered for the audit of our consolidated annual financial statements, and internal control over financial reporting, the review of the interim consolidated financial statements included in quarterly reports and the fees for services such as comfort letters, consents and review of documents filed with the SEC that are normally provided in connection with statutory and regulatory filings for engagements. In 2015, audit fees billed by RBSM of $40,000 were also included.

Audit-related fees are fees billed for assurance and related services rendered by Grant Thornton that are not reported under audit fees, such as accounting consultations and audits in connection with acquisitions.

Tax fees in 2015 relates to tax consulting services performed by Grant Thornton prior to being engaged as the Company’s independent registered public accountant.

Pre-Approval Policies and Procedures for Audit and PermittedNon-Audit Services

The Audit Committee is responsible forpre-approving all auditing services and permittednon-audit services (including the fees for such services and terms thereof) to be performed for the Company by its independent registered public accounting firm. The Audit Committee is also responsible for considering whether the independent registered public accounting firm’s performance of permissiblenon-audit services is compatible with its independence. The Audit Committee chairman has authority to grantpre-approvals of audit and permissiblenon-audit services by the independent registered public accounting firm provided that allpre-approvals by the chairman must be presented to the full Audit Committee at its next scheduled meeting. Consistent with these policies and procedures, the Audit Committee approved all of the services rendered by the applicable auditors for the years ended December 31, 20152016 and December 31, 2014,2015, as described above.

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee reviews the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for establishing and maintaining adequate internal control over financial reporting, for preparing the financial statements and for the report process. The Audit Committee members do not serve as professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management or the independent registered public accounting firm. We have engaged as our independent public accountants to report on the conformity of the Company’s financial statements to accounting principles generally accepted in the United States. In this context, the Audit Committee hereby reports as follows:

 

 1.The Audit Committee has reviewed and discussed the audited financial statements with management of the Company.

 

 2.The Audit Committee has discussed with Grant Thornton, our independent registered public accounting firm, the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 16,1301,Communications with Audit Committees.

 

 3.The Audit Committee has also received the written disclosures and the letter from Grant Thornton required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and the Audit Committee has discussed the independence of Grant Thornton with that firm.

 

 4.Based on the review and discussion referred to in paragraphs (1) through (3) above, the Audit Committee recommended to the Board and the Board approved the inclusion of the audited financial statements in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2015,2016, for filing with the SEC.

The foregoing has been furnished by the Audit Committee:

Peter Benz (Chairman)

Robert Swayman

Donald Mathis

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This “Audit Committee Report” is not “Soliciting Material,” and is not deemed filed with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,,as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT

The following statement made by our Compensation Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate such statement by reference.

IDI’sCogint’s Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of RegulationS-K and, based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2015.2016.

Compensation Committee:

Steven D. Rubin — Chairman

Robert Fried

Peter Benz

Donald Mathis

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COMPENSATION DISCUSSION AND ANALYSIS

Overview

This discussion and analysis describes the material elements of compensation awarded to, earned by, or paid to the named executive officers of IDIthe Company during 2015,2016, and provides a brief summary of the compensation to be paid to the executive officers in 2016.2017. Throughout this analysis, the individuals who served as the Chief Executive Officer and Chief Financial Officer during 2015,2016, as well as other individuals included in the Summary Compensation Table and other tables below, are referred to as the “named executive officers.”

Background.During 2014 and prior tobefore the March 21, 2015 merger (“TBO Merger”) between Tiger Media, Inc. (“Tiger Media”) and The Best One, Inc. (“TBO”), IDITiger Media was engaged in the outdoor advertising business in China. Prior toBefore the TBO Merger, Peter W.H. Tan served as Chief Executive Officer of Tiger Media and following the TBO Merger, whereby TBO became a wholly-owned subsidiary of the Company, Derek Dubner joined Peter Tan asCo-Chief Executive Officers of the combined company.Company. Jacky Wang joined Tiger Media as Chief Financial Officer effectiveon August 1, 2014. Between November 2013 and August 1,Before Mr. Wang, during 2014, Peter Tan had served as Interim Chief Financial Officer. Tiger Media changed its name to IDI, Inc. onin April 8, 2015. OnCompany subsidiary TBO changed its name to IDI Holdings in March 2015. In June 30, 2015, in connection with the continuing shift in IDI’sthe Company’s focus towards the big data and analytics sector via subsidiary Interactive Data, the IDICompany’s Board approved a plan under which the Company discontinuedto discontinue the operations of its Chinese- and British Virgin Islands-based subsidiaries. None of the executives serving the Company during 2014 and through completion of the TBO Merger served as a named executive officer during 2016 and as such neither this discussion nor the tables that follow include 2014 information.

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In June 2015, the Board appointed Michael Brauser became IDI’sas the Company’s Executive Chairman and principal executive officer, Aaron Solomon became theas interim Chief Financial Officer, of IDI, James Reilly becameas President and Chief Operating Officer, and JackyMr. Wang movedchanged position from Chief Financial Officer to Chief Accounting Officer. OnIn March 29, 2016, DanDaniel MacLachlan, who had been the Chief Financial Officer of TBO until early February 2015, became thewas appointed Chief Financial Officer of IDI and AaronMr. Solomon was appointed Senior Vice President of Finance and Administration. In December 2015, IDIthe Company provided Peter Tan notice ofnon-renewal of his employment agreement. OnIn March 9, 2016, IDI’sthe Company’s Board of Directors removed Mr. Tan asCo-Chief Executive Officer and appointed Derek Dubner as sole Chief Executive Officer. In July 2016, a temporary injunction was entered against Mr. Reilly, in the matter of TransUnion Risk and Alternative Data Solutions, Inc. vs. James Reilly. On March 23, 2017, the court granted Mr. Reilly’s motion to modify the temporary injunction from a period of two years to one year. Mr. Reilly is scheduled to resume performance of services for the Company on July 1, 2017. During the pendency of the temporary injunction, Mr. Reilly’s responsibilities as President and Chief Operating Officer were assigned to Mr. Dubner. In August 2016, the Board appointed Harry Jordan as the Company’s Chief Operating Officer. In September 2016, the Board appointed Jeff Dell as Chief Information Officer. Also, in September 2016, IDI, Inc. changed its name to Cogint, Inc. and transferred its common stock exchange listing to The NASDAQ Stock Market from the NYSE MKT.

Material Elements of Our Compensation Policy

The core objective of our compensation programs for 20152016 was to secure and retain the services of highly qualified executives, with the goal of conserving cash and usingnon-cash compensation as incentive. We principally use a combination of salary and long-term equity incentives, principally in the form of restricted stock units (“RSUs”), to compensate our executives.

The Compensation Committee has not engaged the services of outside compensation consultants nor has it used any specific formula, factors, or particular criteria to be met by a named executive officer or assigned any relative weight to any factors or criteria. Rather the Compensation Committee has considered, holistically, the experience, skills, knowledge and responsibilities of the named executive officers in their respective roles taking into account the strategic direction of the business. Thus, as our business has shifted focus from the outdoor advertising business to big data and analytics, we have evolved our compensation strategy to align with our revised strategic focus.

Grants of equity awards are designed to provide a strong incentive for achieving long-term results by aligning the interests of our executives with those of our stockholders, while at the same time encouraging our executives to remain with the company.Company. The Compensation Committee believes our compensation programs for the named executive officers is appropriately based upon the Company’s performance and the performance and level of responsibility of the executive officer.

Prior toBefore the TBO Merger, compensation matters were largely determined by the Compensation Committee, with input from PeterMr. Tan other than with respect to his compensation. The Compensation Committee is

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responsible for the oversight, implementation, and administration of all of the executive compensation plans and programs. At that time, the Compensation Committee was comprised of Steven D. Rubin, who was the Chairman, and Robert Fried. After the TBO Merger, and the subsequent discontinuation of the outdoor advertising business, Executive Chairman MichaelMessrs. Brauser and Co-Chief Executive Officer Derek Dubner made recommendations to the Compensation Committee other than with respect to their own respective compensation. OnIn December 8, 2015, Donald Mathis, a Fluent designee to our Board, joined the Compensation Committee. In September2016, Peter Benz joined the Compensation Committee.

Long-Term Equity Incentive Compensation

One of the key elements of our compensation strategy is long-term equity incentives, principally RSUs. A predecessor of IDIthe Company adopted the SearchMedia International Limited (“SMIL”) 2008 Amended and

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Restated Share Incentive Plan (the “2008 Plan”), which established an initial pool of 359,370 equity awards to employees, directors and consultants (SMIL was combined with Ideation Acquisition Corp., a predecessor of IDIthe Company in 2009). The 2008 Plan was approved by the combined entities’ stockholders at a Special Meeting of Stockholders held on October 27, 2009 and was later amended to increase the number of eligible equity awards to 600,000 shares, approved by shareholdersand in September 2011, to 900,000 shares approved in December 2012 and to 1.2 million shares approved in December 2013.

In April 2015, the Compensation Committee adopted subject to stockholder approval, the 2015 Stock Incentive Plan (the “2015 Plan”), which provided a pool of 2.5 million equity awards. The 2015 Plan was approved by the IDICompany stockholders at the Annual Meeting of Stockholders held onin June 2, 2015. OnIn November 16, 2015, the Board approved upon the recommendation of the Compensation Committee, an increase of the 2015 Plan from 2.5 million shares to 12.5 million shares. The Compensation Committee determined the increase in the 2015 Plan was warranted as a result of IDI’sthe Company’s acquisition by merger of Fluent and the need to establish a pool of equity awards for the Fluent employees, as well as the anticipated expansion of the Company’s business, including additional personnel. The increase in the 2015 Plan is subject to stockholder approval and is Proposal 2 to this proxy statement.was approved by the Company stockholders at the Annual Meeting of Stockholders held in June 2016.

2016 Compensation Policies Before the TBO Mergerand 2017 Compensation Matters

The core objectives of our compensation programs prior to the TBO Merger were to secure and retain the services of highly qualified executives and to provide compensation to our executives that was commensurate and aligned with our performance and advances both our short and long-term interests and those of our stockholders. We sought to achieve these objectives through two principal compensation programs: (1) base salary and (2) long-term equity incentives. We design our base salaries primarily to attract and retain talented executives while conserving cash resources and leveraging a greater portion of overall compensation to non-cash long-term equity incentives.

On February 7, 2012, we entered into an executive employment agreement with Peter W. H. Tan, effective as of February 13, 2012 in his capacity as Chief Executive Officer. The agreement had an initial three-year term and was automatically extended for successive one-year terms unless either party gave the other party written notice of termination no less than 60 days, and no more than 120 days, prior to the expiration of such one-year term. Pursuant to the agreement, Mr. Tan received a $350,000 annual base salary payable in 12 equal monthly installments, subject to annual review and adjustment by the Compensation Committee and was granted 80,000 stock options with an exercise price of $5.50 per share. Mr. Tan was also eligible to earn an annual bonus in an amount determined by the Compensation Committee or the Board, based upon achieving performance metrics and strategic goals established by the Compensation Committee. During his tenure. Mr. Tan’s salary remained static and he did not receive cash bonuses. Additionally, Mr. Tan was eligible to participate in any of our equity incentive plans as determined by the Compensation Committee, consistent with the terms provided to our other senior officers. In November 2013, Mr. Tan received an equity award in the form of 30,000 stock options with an exercise price of $8.10 per share vesting one-third per year annually and 70,000 RSUs vesting on January 2, 2014. On January 28, 2015, Mr. Tan received an equity award in lieu of cash bonus in the amount 99,800 RSUs which vested on July 28, 2015. In December 2015, IDI provided Peter Tan notice of non-renewal of his employment agreement. On March 9, 2016, IDI’s Board of Directors removed Mr. Tan as Co-Chief Executive Officer and appointed Derek Dubner as sole Chief Executive Officer.

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Mr. Wang became our Chief Financial Officer on August 1, 2014 and was paid an annual salary of $150,000 with a target bonus of $20,000. Mr. Wang was initially granted 60,000 RSUs which vested annually over four years. On January 28, 2015, the Compensation Committee granted Mr. Wang 20,000 RSUs which vested in full on July 28, 2015.

Compensation Policies After the TBO Merger

After the TBO Merger, we continuedcontinue our policy to secure and retain the services of highly qualifiedhighly-qualified executives and to provide compensation to our executives that was commensurate and aligned with our performance, and advancesadvancing both our shortshort- and long-term interests and those of our stockholders. We utilize base salary andnon-cash long-term incentives to retain talented executives while conserving cash resources and leveraging a greater portion of overall compensation tonon-cash, long-term equity incentives.

When determining base salary, the Compensation Committee did not use any specific formula, factors, or particular criteria to be met by a named executive officer and did not assign any relative weight to any factors or criteria to be considered. Rather, the Compensation Committee exercised its judgment, discretion, and experience with developing businesses with limited revenues by considering all factors they deemed relevant. In determining base salaries for 2015,2016, the Compensation Committee considered the experience, skills, knowledge, and responsibilities of the named executive officers in their respective roles.

As a result of providing certain consulting services, Mr. Brauser was granted 175,000 RSUs onin April 29, 2015, which vest over three years. Mr. Brauser was elected to the Company’s Board on June 2, 2015 and was appointed Executive Chairman onin June 16, 2015. Mr. Brauser began receiving an annual salary of $1.00 commencing onin September 1, 2015.

The Compensation Committee wasIn recognition of the view that Mr. Brauser wasBrauser’s efforts, including those as the driving force in identifying Fluent as a strategic merger partner and consummating the transaction.transaction in December 2015, based on Mr. Brauser believedBrauser’s preference that Fluent’s expertise incompensation for his efforts on behalf of the consumer marketing industryCompany be aligned primarily with the interests of the Company and its massive, first-party database of consumer information coupled with its advanced customer acquisition platform would present IDI with its entrée into the consumer marketing industry to apply IDI’s next-generation data fusion technology. Mr. Brauser also recognized that Fluent, profitable and cash flow positive, was financeable and would provide resources enabling us to bring our data fusion and analytics products to market. The Compensation Committee also acknowledged that Mr. Brauser was largely responsible for structuring the Fluent Acquisition and assembling the financing for the transaction. The transaction provided for aggregate consideration of approximately $100 million in cash and $123 million of convertible preferred stock which has since been converted into 15,001,850 shares of Common Stock. The cash component of the Fluent Acquisition and transaction costs were funded by $50.0 million from the sales of convertible preferred stock and warrants to Frost Gamma Trust (“Frost Gamma”) and certain other investors, $10.0 million of bridge loans from Frost Gamma, Mr. Brauser and another investor, and a $45.0 million term loan with Fluent as the borrower, IDI and related parties as guarantors and certain financial institutions as lenders, and Whitehorse Finance, Inc. Mr. Brauser was also instrumental in securing Dr. Frost’s agreement to join the Board. This was accomplished in a time span of less than three months from the first introduction to the Fluent principals to closing, and has had a transformative impact on IDI.

In recognition of his efforts,stockholders, the Compensation Committee entered into an employment agreement with Mr. Brauser on November 16, 2015 to increase his salary to $25,000 per annum and provide for the award of 5.0 million RSUs outside of the 2015 Plan, subject to stockholder approval (the “Brauser RSUs”). The Brauser RSUs are subject to annual vestingwere approved at the 2016 Annual Meeting of Stockholders. The Brauser RSUs vest over a four-year period, provided that the Company has gross revenue in excess of $100 million and positive EBITDA in any one fiscal year during the vesting period (the “Performance Vesting Conditions”). The Company determined the Performance Vesting Conditions were met, effective March 14, 2017, and as a result, 1.25 million RSUs vested. Mr. Brauser has elected to defer delivery of any vested RSUs until his separation from service from the Company or death or disability. In addition, the Brauser RSUs will vest immediately upon: (i) a Changechange in Control,control, (ii) a termination of Brauser’s employment without Cause,cause, (iii) Mr. Brauser’s termination of his employment for Good Reason,good reason, or (iv) his death or disability (as such terms are defined in the amended employment agreement) (the “Additional Vesting Conditions”).

On April 13, 2017, Mr. Brauser received a grant of 125,000 RSUs. The amended employment agreement provides thatRSUs vest over three years on June 1, 2017, 2018 and 2019, subject to accelerated vesting under certain conditions. Within 30 days of the effective grant date, Mr. Brauser may at hiselect to defer delivery of any vested RSUs until a later date.

 

1514


option and in accordance with Internal Revenue Code Section 409A, elect to satisfy tax withholdings (including any FICA and related income tax withholding that may apply on the vesting, as opposed to settlement, of the Brauser RSUs) by having IDI withhold a number of shares having a fair market value equal to the minimum amount of such tax withholdings. The employment agreement with Mr. Brauser does not provide for any cash severance if his employment is terminated for any reason.

Mr. Dubner served as ourCo-Chief Executive Officer from March 2015 until his appointment as sole Chief Executive Officer on March 2016. Previously,Prior to the TBO Merger, Mr. Dubner was employed by TBO pursuant to a September 30, 2014 Employment Agreement that was amended onin March 17, 2015. The Company assumed Mr. Reilly has served as our President and Chief Operating Officer since June 2015 and as President and Chief Operating Officer of TBO since its inception. Mr. Reilly was employed pursuant to a September 30, 2014Dubner’s agreement that was amended on March 17, 2015. We assumed the agreements, which are substantially identical as part of the TBO Merger. Messrs.Merger, whereby TBO became a wholly-owned subsidiary of the Company. Mr. Dubner’s and Reilly’s base salaries weresalary was $200,000 and the agreementsagreement provided for atwo-year term. The employment agreements with Messrs. Dubner and Reilly provideagreement provides that if theirhis employment is terminated without Causecause or as a result of any successor refusing to accept assignment, or by Mr. Dubner for good reason, or by the employee for Good Reason,Company due to an adverse ruling, as those terms are defined in the respective agreements, the terminated employeeagreement, Mr. Dubner will be paid severance equal to histhe greater of (x) Mr. Dubner’s base salary overfor the balanceremainder of the term. The agreementterm in accordance with the Company’s payroll practices in effect from time to time and (y) two (2) years of Mr. Dubner’s base salary in accordance with the Company’s payroll practices in effect from time to time, provided, however, Mr. Dubner is not in violation of the Confidentiality, Nondisclosure, Noncompetition, Nonsolicitation and Nondisparagement Agreement attached as Exhibit B to the employment agreement. Mr. Dubner’s agreement provided for an initial grant of 400,000 RSUs, and the employment agreement with Reilly provided for an initial grant of 200,000 RSUs, which awards vest quarterly over the term of the agreement and immediately vest upon a change of control of TBO. TheTBO, however, the March 17, 2015 amendment to their agreements provided that the TBO Merger would not constitute automatic vesting of the initial TBO RSU grants.

The agreementsagreement provided for a cash bonus of $100,000 upon consummation of TBO’s sale, merger, consolidation, share exchange or like transaction with a publicly-traded entity. Mr. Dubner’s agreemententity and also provided for a cash bonus of $150,000 upon raising the first $5.0 million in any financing or series of related financings following a transaction that triggers the first bonus. Messrs.Mr. Dubner and Reilly werewas paid the $100,000 bonus on the closing of the TBO Merger and Mr. Dubner was paid the $150,000 bonus following the July 23, 2015 registered direct placement of IDICompany shares which resulted in approximately $10.0 million in gross proceeds.

On August 22, 2015, the Compensation Committee increased Mr. Dubner’s and Mr. Reilly’s salary to $264,000 per annum, based on each of theirhis individual and IDI’sthe Company’s performance. In recognition of theirhis efforts in closing the Fluent Acquisition and related transactions, the Compensation Committee amended each of their agreementsMr. Dubner’s agreement on November 16, 2015 to reflect the previous increase in their base salary, to award themhim 500,000 RSUs under the 2015 Plan, and to extend the term until September 30, 2017. The RSUs which vest over three years and are subject to the Performance Vesting Conditions and the Additional Vesting Conditions. The Company determined the Performance Vesting Conditions are subjectwere met, effective March 14, 2017. On July 7, 2016, the Compensation Committee increased Mr. Dubner’s salary to stockholder approval$325,000 per annum, effective July 1, 2016, based on his individual and the Company’s performance in the preceding year.

On April 11, 2017, the Compensation Committee amended Mr. Dubner’s agreement to extend the term of Proposal 2his employment through April 30, 2020 and to increaseaward him 125,000 RSUs under the 2015 Plan effective April 13, 2017. The RSUs vest over three years on June 1, 2017, 2018 and 2019. Such RSUs vest in full upon a Company change in control, termination of Mr. Dubner without cause, termination by Mr. Dubner for good reason, Mr. Dubner’s death or disability, or a termination of Mr. Dubner due to 12.5 million shares.an “adverse ruling” (as each such term is defined in the employment agreement).

Mr. Solomon was appointed IDI’sserved as the Company’s Interim Chief Financial Officer infrom June 2015. Mr. Solomon previously served as2015 through March 29, 2016 and was appointed the Company’s Senior Vice President of Finance and& Administration since February 2015.on March 29, 2016. His salary is $158,000 per annum, and he was awarded 50,000 RSUs on April 29, 2015. The RSUs vest over three years. In recognition of his efforts in closing the Fluent Acquisition, Mr. Solomon was granted 50,000 RSUs subject to stockholder approval, that vest over three years and are subject to the Performance Vesting Conditions and the Additional Vesting Conditions,Conditions. The Company determined the Performance Vesting conditions were met, effective March 14, 2017. On April 13, 2017, Mr. Solomon received a grant of 30,000 RSUs. The RSUs vest over three years on June 1, 2017, 2018 and are2019, subject to stockholder approvalaccelerated vesting under certain conditions. Within 30 days of Proposal 2the effective grant date, Mr. Solomon may elect to increase the 2015 Plan to 12.5 million shares.defer delivery of any vested RSUs until a later date.

OnIn March 29, 2016, the Board appointed DanielMr. MacLachlan as the Company’s Chief Financial Officer and Principal Financial Officer.principal financial officer. Pursuant to the terms of his employment agreement with TBO effective on October 2, 2014, as amended,

15


which was assumed by the Company in the TBO Merger whereby TBO became a wholly-owned subsidiary of the Company, the Company pays Mr. MacLachlan an annual salary of $185,000, and under the agreement, Mr. MacLachlan is to receivereceived 50,000 restricted stock units,RSUs, which vestvested in equal quarterly installments during the term of the agreement and are to bewere delivered at the end of thetwo-year vesting period. The term of the employment agreement iswas through September 30, 2016. The Compensation Committee ratified Mr. MacLachlan’s employment agreement in March 2016. In October 2016, the Company entered into a second amendment to employment agreement with Mr. MacLachlan relating to his service as Chief Financial Officer of the Company (the “MacLachlan Amendment”). Pursuant to the MacLachlan Amendment, the Company and Mr. MacLachlan agreed to extend the term of his employment through September 30, 2017. All other terms of Mr. MacLachlan’s employment agreement remain unchanged. On July 7, 2016, the Compensation Committee increased Mr. MacLachlan’s salary to $220,000 per annum, effective July 1, 2016, based on March 29,his individual and the Company’s performance in the preceding year. Effective January 1, 2017, the Compensation Committee increased Mr. MacLachlan’s salary to $226,269 per annum.

On April 11, 2017, the Compensation Committee amended Mr. MacLachlan’s agreement to extend the term of his employment through April 30, 2020 and to award him 100,000 RSUs under the 2015 Plan effective April 13, 2017. The RSUs vest over three years on June 1, 2017, 2018 and 2019. Such RSUs vest in full upon a Company change in control, termination of Mr. MacLachlan without cause, termination by Mr. MacLachlan for good reason, Mr. MacLachlan’s death or disability, or a termination of Mr. MacLachlan due to an “adverse ruling” (as each such term is defined in the employment agreement). The agreement provides that if his employment is terminated without cause or as a result of any successor refusing to accept assignment, or by Mr. MacLachlan for good reason, or by the Company due to an adverse ruling, as those terms are defined in the agreement, Mr. MacLachlan will be paid severance equal to the greater of (x) Mr. MacLachlan’s base salary for the remainder of the term in accordance with the Company’s payroll practices in effect from time to time and (y) two (2) years of Mr. MacLachlan’s base salary in accordance with the Company’s payroll practices in effect from time to time, provided, however, Mr. MacLachlan is not in violation of the Confidentiality, Nondisclosure, Noncompetition, Nonsolicitation and Nondisparagement Agreement attached as Exhibit B to the employment agreement.

On August 8, 2016, the Board appointed Harry Jordan as the Company’s Chief Operating Officer. Mr. Jordan receives an annual salary of $225,000. Additionally, on August 8, 2016, Mr. Jordan was awarded 100,000 RSUs, which vest in three equal annual installments beginning August 8, 2017. The RSUs vest in full upon a Company change in control, as defined in the agreement, or Mr. Jordan’s death or disability. On April 13, 2017, Mr. Jordan received a grant of 50,000 RSUs. The RSUs vest over three years on June 1, 2017, 2018 and 2019, subject to accelerated vesting under certain conditions. Within 30 days of the effective grant date, Mr. Jordan may elect to defer delivery of any vested RSUs until a later date.

On September 13, 2016, the Board appointed Jeff Dell as Chief Information Officer.Mr. Dell served as our VP Information Security from July 2015 through May 2016 and Interim Chief Information Officer from June 2016 through September 2016, and was appointed Chief Information Officer on September 13, 2016. Mr. Dell’s salary was $150,000 per annum through May 15, 2016 and was increased to $185,000 per annum through December 31, 2016. Mr. Dell’s current salary is $215,000 per annum effective January 1, 2017. On April 13, 2017, Mr. Dell received a grant of 40,000 RSUs. The RSUs vest over three years on June 1, 2017, 2018 and 2019, subject to accelerated vesting under certain conditions. Within 30 days of the effective grant date, Mr. Dell may elect to defer delivery of any vested RSUs until a later date.

For additional information relating to Messrs. Brauser, Dubner and MacLachlan’s employment agreements and payments to our named executive officers upon a change in control or termination, see the sections below titled “Executive Employment Agreements” and “Potential Payments upon Termination or Change in Control.”

The Role of Stockholder Say on Pay Votes

The Board, Compensation Committee, and management value the opinions of our stockholders. We provide our stockholders with the opportunity to cast an advisory vote to approve named executive officer compensation,

 

16


including compensation that may be paid in connection with a change in control or a termination, every year. We refer to this advisory vote as Say on Pay. At our annual meeting of stockholders held in June 2016, approximately 98.6% of the stockholders who voted on the Say on Pay proposal voted in favor of the compensation of our named executive officers as disclosed in our 2016 proxy statement. Although the advisory say on pay vote isnon-binding, our Compensation Committee has considered the outcome of the vote and determined not to make material changes to our executive compensation programs because the Compensation Committee believes this advisory vote indicates considerable stockholder support for our approach to executive compensation. Our Compensation Committee will continue to consider the outcome of our Say on Pay votes when making future compensation decisions for our named executive officers.

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SUMMARY COMPENSATION TABLE

The following table summarizes the compensation for each of the named executive officers for the last three completed fiscal years.

 

Name and Principal

Position

 Year  Salary  Non-Equity
Incentive Plan
Compensation
  Stock
Awards(1)
  Option
Awards(1)
  Total 

Michael Brauser(2)

  2015   $2,083(2)  $—     $52,787,500(2)  $—     $52,789,583  

Executive Chairman

      

Derek Dubner(3)

  2015   $180,834(3)  $250,000(7)(8)  $6,302,500(3)  $—     $6,733,334  

Co-Chief Executive Officer

      

Peter Tan

  2015   $87,500   $—     $508,980   $—     $596,480  

Co-Chief Executive Officer

  2014    350,000   $—     $—     $—      350,000  
  2013    350,000   $—      556,500   $156,000    1,062,500  

James Reilly(4)

  2015   $180,834(4)  $100,000(7)  $5,977,500(4)  $—     $6,258,334  

President and Chief Operating Officer

      

Aaron Solomon(5)

  2015   $99,104(5)  $—     $841,500   $—     $940,604  

Interim Chief Financial Officer

      

Jacky Wang(6)

  2015   $150,000   $—     $102,000   $—     $252,000  

Chief Accounting Officer

  2014    62,500(6)  $—      186,000   $—     $248,500  

Name and Principal

Position

 Year (9)  Salary  Non-Equity
Incentive Plan
Compensation
  Stock
Awards (1)
  Option
Awards
  Total 

Michael Brauser(2)

  2016  $25,000  $—    $—    $—    $25,000 

Executive Chairman

  2015  $2,083(2)  $—    $52,787,500(2)  $—    $52,789,583 

Derek Dubner(3)

  2016  $294,500  $—    $—    $—    $294,500 

Chief Executive Officer

  2015  $180,834(3)  $250,000(8)  $6,302,500(3)  $—    $6,733,334 

Daniel MacLachlan (4)

  2016  $171,667  $—    $—    $—    $171,667 

Chief Financial Officer

      

Jeff Dell(5)

  2016  $171,875  $—    $—    $—    $171,875 

Chief Information Officer

      

Aaron Solomon(6)

  2016  $158,000  $—    $—    $—    $158,000 

Senior VP of Finance and Administration

  2015  $99,104(6)  $—    $841,500(6)  $—    $940,604 

Harry Jordan(7)

  2016  $93,750(7)  $—    $102,000(7)  $—    $195,750 

Chief Operating Officer

      

 

(1)This column reflects the aggregate grant date fair value of stock awards granted in 2013, 20142015 and 20152016 computed in accordance with FASB ASC Topic 718. In determining the grant date fair value for restricted stock units, the Company used the closing price of the Company’s common stock on the grant date. In determining the grant date fair value for stock options, the Company used the Black-Scholes option pricing model, and took into account the closing price of the Company’s common stock on the grant date, the respective exercise prices, the assumed period over which the options will be outstanding, a volatility rate, and a risk free rate.
(2)Mr. Brauser began service as the Company’s Executive Chairman on June 16, 2015. Mr. Brauser’s current annual salary is $25,000. The salary disclosed in the tablefor 2015 reflects Mr. Brauser’s service from June 16, 2015 through December 31, 2015. Mr. Brauser was granted 175,000 RSUs on April 29, 2015 at a fair value of $6.50 per share, and 5,000,000 RSUs on November 16, 2015 at a fair value of $10.33 per share. The November 2015 RSU grant is subject to stockholder approval at this Meeting.
(3)Mr. Dubner began service as the Company’sCo-Chief Executive Officer and Director on March 21, 2015, upon the consummation of the TBO Merger. Mr. Dubner’s current annual salary is $264,000.$325,000. The salary disclosed in the tablefor 2015 reflects Mr. Dubner’s service from March 21, 2015 through December 31, 2015. Mr. Dubner was granted 175,000 RSUs on April 29, 2015 at a fair value of $6.50 per share, and 500,000 RSUs on November 16, 2015 at a fair value of $10.33 per share. The November 2015 RSU grant is subject to stockholder ratification and approval of the increase of the 2015 Plan.
(4)Mr. ReillyMacLachlan began service as President andthe Company’s Chief OperatingFinancial Officer of IDI Holdings, LLC on March 21, 2015, upon the consummation of the TBO Merger. On June 15, 2015,29, 2016. Mr. Reilly was appointed President and Chief Operating Officer of the Company. Mr. Reilly’sMacLachlan’s current annual salary is $264,000.$226,269. The salary disclosed in the table reflects Mr. Reilly’sMacLachlan’s service from March 21, 201529, 2016 through December 31, 2015. Mr. Reilly was granted 125,000 RSUs on April 29, 2015 at a fair value of $6.50 per share, and 500,000 RSUs on November 16, 2015 at a fair value of $10.33 per share. The November 2015 RSU grant is subject to stockholder ratification and approval of the increase of the 2015 Plan.2016.
(5)Mr. Dell began service as the Company’s Chief Information Officer on September 13, 2016. Mr. Dell previously served as Interim Chief Information Officer and VP Information Security. Mr. Dell’s current annual salary is $215,000. The salary disclosed in the table reflects Mr. Dell’s service from January 1, 2016 through December 31, 2016.
(6)Mr. Solomon was appointed Interim Chief Financial OfficerSenior Vice President of Finance & Administration on June 30, 2015.March 29, 2016. Mr. Solomon previously served as the Company’s Interim Chief Financial Officer and Vice President of Finance & Administration. Mr. Solomon’s current annual salary is $158,000. The salary disclosed in the tablefor 2015 reflects Mr. Solomon’s service from March 21, 2015 through December 31, 2015.2015, and for 2016 reflects Mr. Solomon’s service from January 1, 2016 through December 31, 2016. Mr. Solomon was granted 50,000 RSUs on April 29, 2015 at a fair value of $6.50 per share, and 50,000 RSUs on November 16, 2015 at a fair value of $10.33 per share.

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(6)(7)Mr. WangJordan began service as the Company’s Chief AccountingOperating Officer on June 30, 2015.August 8, 2016. Mr. Wang previously served as the Company’s Chief Financial Officer from August 1, 2014 until June 30, 2015 when he was appointed Chief Accounting Officer. Mr. Wang’sJordan’s current annual salary is $150,000.$225,000. The salary disclosed in the table reflects Mr. Wang’sJordan’s service from August 1, 20148, 2016 through December 31, 2015.2016. Mr. Jordan was granted 100,000 RSUs on August 8, 2016 at a fair value of $5.17 per share.

18


(7)(8)Cash bonus of $100,000 paid to each of Messrs.Mr. Dubner and Reilly on consummation of the TBO Merger.
(8)CashMerger and cash bonus of $150,000 paid to Mr. Dubner upon completing a $10.0 million financing after the TBO Merger.
(9)None of the executives serving the Company during 2014 and through completion of the TBO Merger served as a named executive officer during 2016 and as such neither this table nor the tables that follow include 2014 information.

GRANTS OF PLAN-BASED AWARDS — 20152016

The following table sets forth each grant of an award made to a named executive officer for the fiscal year ended December 31, 20152016 under any IDICompany plan.

 

Name

  Grant Date   All Other Stock
Awards: Number of
Shares of Units
Units (#)
  Grant Date
Fair Value of
Stock Awards(5) (2)
 

Michael Brauser

   4/29/2015—  —  $—  

Derek Dubner

—  —  $—  

Daniel MacLachlan

—  —  $—  

Jeff Dell

—  —  $—  

Aaron Solomon

—  —  $—  

Harry Jordan

8/8/2016    175,000100,000(1)  $1,137,500517,000(1)
11/16/20155,000,000(3)$51,650,000(3)

Derek Dubner

4/29/2015175,000(1)$1,137,500(1)
11/16/2015500,000(2)$5,165,000(2)

Peter Tan

1/28/201599,800(4)$508,980(4)

James Reilly

4/29/2015125,000(1)$812,500(1)
11/16/2015500,000(2)$5,165,000(2)

Aaron Solomon

4/29/201550,000(1)$325,000(1)
11/16/201550,000(2)$516,500(2)

Jacky Wang

1/28/201520,000(4)$102,000(4) 

 

(1)Represents RSUs granted on April 29, 2015,August 8, 2016, which vest in three equal annual installments beginning on the 21st day of March in the year following grant.August 8, 2017. Each RSU unit represents the right to receive one share of common stock upon vesting. The grant date fair value of the RSU grant was $6.50$5.17 per share.
(2)Represents RSUs granted on November 16, 2015, which vest in three equal annual installments, subject to the Performance Vesting Conditions. Each RSU unit represents the right to receive one share of common stock upon vesting. These grants of RSUs are subject to stockholder ratification and approval of the increase to the 2015 Plan. The grant date fair value of the RSU grant was $10.33 per share.
(3)Represents RSUs granted on November 16, 2015, which vest in four equal annual installments, subject to the Performance Vesting Conditions. Each RSU represents the right to receive one share of common stock upon vesting. This grant of RSUs is subject to stockholder approval at this Meeting. The grant date fair value of the RSU grant was $10.33 per share.
(4)Represents RSUs granted on January 28, 2015 which vested on July 28, 2015. The grant date fair value of the RSU grant was $5.10 per share.
(5)Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. In determining the grant date fair value for RSUs, we used the closing price of our common stock on the grant date.

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OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END20152016

The following table sets forth certain information regarding equity-based awards held by the named executive officers as of December 31, 2015.2016.

 

  Option Awards   Stock Awards (3)   Option Awards   Stock Awards (1) 

Name

  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
 Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
 Option
Exercise
Price ($)
   Option
Expiration
Date
   Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
   Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($) (4)
   Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
   Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
   Option
Exercise
Price ($)
   Option
Expiration
Date
   Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
   Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($) (2)
 

Michael Brauser

   —      —     $—       —       6,408,333    $47,037,164     —      —     $—      —      6,116,666   $21,102,498 

Derek Dubner

   —      —     $—       —       760,417    $5,581,461     —      —     $—      —      616,666   $2,127,498 

Peter Tan

   15,000(1)   —     $5.30     February 8, 2022     —      $—    
   80,000(2)   —     5.50     February 13, 2022     —      $—    
   20,000(2)   10,000(5)  8.10     November 11, 2023     —      $—    

James Reilly

   —      —     $—       —       647,917    $4,755,711  

Daniel MacLachlan

   —      —     $—      —      —     $—   

Jeff Dell

   —      —     $—      —      35,000   $120,750 

Aaron Solomon

   —      —     $—       —       83,333    $611,664     —      —     $—      —      83,333   $287,502 

Jacky Wang

   —      —     $—       —       45,000    $330,300  

Harry Jordan

   —      —     $—      —      100,000   $345,000 

 

(1)Represents stock options granted under the 2008 Plan, which vested one year from the date of grant.
(2)Represents stock options granted under the 2008 Plan, which vested in three equal annual installments beginning on the date of grant. Stock options outstanding and unexercised, which are not exercised by Mr. Tan within ninety days of his March 9, 2016 separation date shall expire.
(3)Represents RSUs granted under the 2015 Plan, including grants made in November 2015, which are subject to stockholder approval at the Meeting.Plan. The RSUs vest in three equal annual installments beginning on the date of grant, except for 5,000,000 RSUs granted outside of the 2015 Plan held by Mr. Brauser that vest in four equal annual installments beginning on the date of grant. Each RSU represents the right to receive one share of common stock upon vesting. Receipt of 5,000,000 shares of common stock has been deferred in connection with the vesting of Mr. Brauser’s RSUs.

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(4)(2)Determined by multiplying the closing price of the Company’s common stock on December 31, 201530, 2016 ($7.34)3.45) by the number of shares of common stock underlying the RSUs.
(5)These options were outstanding at December 31, 2015, but were terminated upon Mr. Tan’s separation from the Company on March 9, 2016.

OPTION EXERCISES AND STOCK VESTED

The following table sets forth each exercise of stock options, SARs or similar instruments and each vesting of stock, RSUs and similar instruments by the named executive officers for the fiscal year ended December 31, 2015.2016.

 

Name

  Stock Awards   Stock Awards 
Number of Shares
Acquired on Vesting (#) (1)
   Value Realized on
Vesting ($)
  Number of Shares
Acquired on Vesting (#) (1)
 Value Realized on
Vesting ($)
 

Michael Brauser

   —      $—       158,334  $582,587 

Derek Dubner

   —      $—       458,334(2)  $1,467,587 

Peter Tan

   99,800    $1,017,960  

James Reilly

   —      $—    

Daniel MacLachlan

   100,000(3)  $330,000 

Jeff Dell

   —    $—   

Aaron Solomon

   —      $—       16,667(4)  $82,168 

Jacky Wang

   35,000    $338,250  

Harry Jordan

   —    $—   

 

(1)Amounts shown in these columns reflect RSU awards that vested during 2015.2016. See the Compensation Discussion and Analysis — 2016 Compensation Policies Before the TBO Merger for details on RSU awards.
(2)176,488 shares of common stock were withheld upon vesting of the RSUs and delivery of the underlying shares in connection with the payment of a tax liability.
(3)32,500 shares of common stock were withheld upon vesting of the RSUs and delivery of the underlying shares in connection with the payment of a tax liability.
(4)5,441 shares of common stock were withheld upon vesting of the RSUs and delivery of the underlying shares in connection with the payment of a tax liability.

 

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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

The following table sets forth information with respect to the value of payments or vesting acceleration, as applicable, such named executive officer would be entitled to receive assuming a qualifying termination or change in control, as applicable, as of December 31, 2015.2016.

 

Name and Principal Position

  Severance
Amount ($)
  Early
Vesting
of Stock
Options
   Early
Vesting
of Restricted
Stock ($) (1)
  Total ($) 

Michael Brauser

  $—     $—      $1,131,586(2)(3)  $1,131,586  

Executive Chairman

      

Derek Dubner

  $462,000(4)  $—      $1,590,336(2)(5)  $2,052,336  

Co-Chief Executive Officer

      

Peter Tan

  $43,750(10)  $—      $—     $43,750  

Co-Chief Executive Officer

      

James Reilly

  $462,000(4)  $—      $978,664(2)(6)  $1,440,664  

President and Chief Operating Officer

      

Aaron Solomon

  $—     $—      $244,664(2)(7)  $244,664  

Interim Chief Financial Officer

      

Jacky Wang

  $25,000(9)  $—      $330,300(2)(8)  $355,300  

Chief Accounting Officer

      

Name and Principal Position

  Severance
Amount ($)
  Early
Vesting
of Stock
Options
   Early
Vesting
of Restricted
Stock ($) (1)
  Total ($) 

Michael Brauser

  $—    $—     $13,339,998(2)(3)  $13,339,998 

Derek Dubner

  $243,750(4)(5)  $—     $1,552,497(2)(6)  $1,796,247 

Daniel MacLachlan

  $164,500(4)(5)  $—     $—    $164,500 

Jeff Dell

  $—    $—     $97,749(2)(7)  $97,749 

Aaron Solomon

  $—    $—     $229,998(2)(8)  $229,998 

Harry Jordan

  $—    $—     $345,000(2)(9)  $345,000 

 

(1)Calculated by multiplying early vesting of RSUs by $7.34,$3.45, which is the closing price per share of our common stock on December 31, 201530, 2016.
(2)In the event of a qualifying termination, all unvested RSUs at the time of termination shall expire and be forfeited immediately and returned to the Company. In the event of a change of control, all unvested RSUs shall immediately vest.
(3)Reflects vesting of 154,1675,175,000 RSUs of our common stock, and does not include 5,000,000 RSUs subject to stockholder approval at the Meeting.stock.
(4)In accordance with Mr. Dubner’s and Mr. Reilly’sMacLachlan’s employment agreement,agreements effective December 31, 2016, upon termination without cause, resignationor as a result of any successor refusing to accept assignment, termination for good reason death or disability,termination due to an Adverse Ruling (as defined below), base salary will be paid for the remainder of the respective employment term. The severance amount are $243,750 and $164,500 for Mr. Dubner and Mr. MacLachlan, respectively, assuming a qualifying termination as of December 31, 2016.
(5)Reflects vestingOn April 11, 2017, employment agreements for Mr. Dubner and Mr. MacLachlan were amended, and in accordance with the employment agreements, as amended, upon termination without cause or if any successor of 216,167 RSUsthe Company refuses to accept assignment of our common stock,the employment agreements, or if Mr. Dubner or Mr. MacLachlan terminates his respective employment agreement and does not include 500,000 RSUs subjectemployment with the Company for good reason or due to stockholder approval atan Adverse Ruling (as defined below), the Meeting.Company will pay to Mr. Dubner and Mr. MacLachlan the greater of (i) the applicable employee’s base salary for the remainder of the term in accordance with the Company’s payroll practices in effect from time to time and (ii) two (2) years of the applicable employee’s base salary. The severance amounts are $988,542 and $688,236 for Mr. Dubner and Mr. MacLachlan, respectively, assuming a qualifying termination as of April 18, 2017, the record date.
(6)Reflects vesting of 133,333449,990 RSUs of our common stock, and does not include 500,000 RSUs subject to stockholder approval at the Meeting.stock.
(7)Reflects vesting of 33,33328,333 RSUs of our common stock, and does not include 50,000 RSUs subject to stockholder approval at the Meeting.stock.
(8)Reflects vesting of 45,00066,666 RSUs of our common stock.
(9)In accordance with Mr. Wang’s employment agreement, upon termination without cause, resignation for good reason, death or disability, the company shall provide two (2) months salary as severance.Reflects vesting of 100,000 RSUs of our common stock.
(10)In accordance with Mr. Tan’s employment agreement, upon termination by the Company without cause, or resignation by Mr. Tan for good reason, base salary will be paid for the remainder of the respective employment terms.

Executive Employment Agreements

Michael Brauser

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Proposal 2

Effective November 16, 2015, IDI, INC.

STOCK INCENTIVE PLAN

Overview

the Company entered into an employment agreement with Mr. Brauser in connection with his service as Executive Chairman. The Boardemployment agreement has approvedan initial term of five years and unanimously recommends thatautomatically extends for successiveone-year terms unless either party gives the stockholders increaseother party six months written notice of termination before the number of shares of common stock available for issuance under the IDI, Inc. 2015 Stock Incentive Plan (the “2015 Plan”) by 10,000,000 shares from 2,500,000 shares to 12,500,000 shares. The proposed increase reflects the transformationexpiration of the Company as a result ofapplicableone-year term or unless terminated earlier pursuant to the TBO Merger in March 2015 and the Fluent Acquisition in December 2015. In these acquisitions and in related financing transactions, the Company issued an aggregate of 22,548,100 shares of common stock, including shares of convertible preferred stock that has converted into common stock. Furthermore, in the Fluent Acquisition, Sellers were provided the right to grant (subject to appropriate Board and Compensation Committee approvals) awards for up to seven million (7,000,000) shares of common stock. As set forth in the table titled New 2015 Plan Benefits below, awards have been granted to Fluent employees, which grants are subject to stockholder approval of the proposed increase in the 2015 Plan. Given the foregoing matters, the Board believes it is appropriate at this time to increase the number of shares available for issuance under the 2015 Plan and unanimously recommends that the stockholders approve such increase. The primary purpose of the 2015 Plan is to attract, retain, reward and motivate certain individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such individuals and the stockholders of the Company.

The following discussion summarizes the material terms of the 2015 Plan. This discussion is not intended to be complete and is qualified in its entirety by referenceemployment agreement. Pursuant to the full textemployment agreement, Mr. Brauser receives an annual salary of the 2015 Plan, which is incorporated by reference$25,000. Also, pursuant to the Company’s Definitive Proxy Statementemployment agreement, on Schedule 14A filed with the Securities and Exchange Commission on April 30,November 16, 2015, and the amendment to the 2015 Plan, a copy of which is attached to this proxy statement asAnnex A.

Administration

The 2015 Plan is administered by the Compensation Committee of the Board (for purpose of this description of the 2015 Plan, the “Committee”). If no Committee exists, the independent Board members will exercise the functions of the Committee.

All grants under the 2015 Plan will be evidenced by a grant agreement (an “Award Agreement”) that will incorporate the terms and conditions as the Committee deems necessary or appropriate.

Coverage Eligibility and Annual Grant Limits

The 2015 Plan provides for the issuance of awards (each, an “Award”) consisting of stock options (“Options”), stock appreciation rights (“SARs”), restricted stock (“Restricted Stock”), restricted stock units (“RSUs”), performance shares (“Performance Shares”) and performance units (“Performance Units”). Incentive stock options (“ISOs”) may be granted under the 2015 Plan only to our employees. Our employees, consultants, directors, independent contractors and certain prospective employees who have committed to become an employee are eligible to receive all other types of awards under the 2015 Plan (each an “Eligible Individual”).

The granting of Awards under the 2015 Plan shall be subject to the following limitations: (i) a maximum of 12,500,000 shares of common stock may be subject to grants of ISOs; (ii) a maximum of 12,500,000 shares may be issued in connection with Awards, other than Options and SARs, that are settled in common stock; (iii) a maximum of 12,500,000 of shares may be subject to grants of Options or SARs to any one Eligible Individual

 

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during any one fiscal year; (iv) a maximum of 12,500,000 of such shares may be subject to grants of Performance Shares, Restricted Stock,Mr. Brauser was granted 5.0 million RSUs and Awards of common stock to any one Eligible Individual during any one fiscal year; and (v) the maximum value on the date of grant of Performance Units which may be granted to any one Eligible Individual during any one fiscal year shall be $1,000,000.

Shares Reserved for Issuance Under the 2015 Plan

Subject to adjustment as described below and under the section titled “Change in Control,” upon approval of the increase in the number of shares available for issuance under the 2015 Plan, the total number of shares of common stock that may be issued pursuant to Awards granted under the Plan shall be 12,500,000 shares. Notwithstanding the foregoing, if any Award is cancelled, forfeited or terminated for any reason prior to exercise, delivery or becoming vested in full, the shares of common stock that were subject to such Award shall become available for future Awards granted under the 2015 Plan; provided, however, that any shares of common stock subject to an Award that are cancelled to pay the exercise price of a stock option, purchase price or any taxes or tax withholdings on an Award will not be available for future Awards granted under this 2015 Plan.

If the outstanding shares of common stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities by reason of any recapitalization, reclassification, reorganization, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock of the Company or other increase or decrease in such shares effected without receipt of consideration by the Company, an appropriate and proportionate adjustment shall be made by the Committee to: (i) the aggregate number and kind of shares of common stock available under the 2015 Plan, (ii) the calculation of the reduction of shares of common stock available under the 2015 Plan, (iii) the number and kind of shares of common stock issuable pursuant to outstanding Awards granted under the 2015 Plan and/or (iv) the exercise price of outstanding Options or SARs granted under the 2015 Plan. No fractional shares of common stock or units of other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole share or unit. Any adjustments made to any ISO shall be made in accordance with Section 424 of the Internal Revenue Code of 1986, as amended (the “Code”).

Stock Options

The Committee acting in its absolute discretion has the right to grant Options to Eligible Individuals to purchase shares of common stock. Each grant shall be evidenced by an option certificate setting forth whether the Option is an ISO, which is intended to qualify for special tax treatment under Section 422 of the Code, or a non-qualified incentive stock option (“Non-ISO”). Each Option granted under the 2015 Plan entitles the holder thereof to purchase the number of shares of common stock specified in the grant at the exercise price specified in the related option certificate. At the discretion of the Committee, the option certificate can provide for payment of the exercise price either in cash, by check, bank draft, money order, in common stock and by any other method which the Committee, in its sole and absolute discretion and to the extent permitted by applicable law, may permit.

The terms and conditions of each Option granted under the 2015 Plan will be determined by the Committee, but no Option will be granted at an exercise price which is less than the fair market value of the common stock on the grant date (generally, the closing price for the common stock on the principal securities exchange on which the common stock is traded or listed on the date the Option is granted or, if there was no closing price on that date, on the last preceding date on which a closing price was reported). In addition, if the Option is an ISO that is granted to a 10% stockholder of the Company, the Option exercise price will be no less than 110% of the fair market value of the shares of common stock on the grant date. Except for adjustments as described under “Shares Reserved for Issuance Under the 2015 Plan” above and “Change in Control” below, without the approval of the Company’s stockholders, the option price shall not be reduced after the Option is granted, an Option may not be cancelled in exchange for cash or another Award, and no other action may be made with respect to an Option that would be treated as a repricing under the rules and regulations of the principal securities exchange on which the common stock is traded.

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No Options may be exercised prior to the satisfaction of the conditions and vesting schedule provided for in the 2015 Plan and in the Award Agreement relating thereto. No Option may be exercisable more than 10 years from the grant date, or, if the Option is an ISO granted to a 10% stockholder of the Company, it may not be exercisable more than 10 years from the grant date. Moreover, no Option will be treated as an ISO to the extent that the aggregate fair market value of the common stock subject to the Option (determined as of the date the ISO was granted) which would first become exercisable in any calendar year exceeds $100,000. The Committee may not, as part of an Option grant, provide for an Option reload feature whereby an additional Option is automatically granted to pay all or a part of the Option exercise price or a part of any related tax withholding requirement.

Restricted Stock and Restricted Stock Units

The Committee may grant to such Eligible Individuals as the Committee may determine, Restricted Stock and RSUs, in such amounts and on such terms and conditions as the Committee shall determine in its sole and absolute discretion. The Committee shall impose such restrictions on any Restricted Stock and RSUs granted pursuant to the 2015 Plan as it may deem advisable including, without limitation, time-based vesting restrictions or the attainment of performance goals (“Performance Goals”). With respect to a grant of Restricted Stock, the Company may issue a certificate evidencing such Restricted Stock to the Eligible Individual or issue and hold such shares of Restricted Stock for the benefit of the Eligible Individual until the applicable restrictions expire. The Company may legend the certificate representing Restricted Stock to give appropriate notice of such restrictions. Unless otherwise provided in an Award Agreement, until the expiration of all applicable restrictions, (i) the Restricted Stock shall be treated as outstanding, (ii) the Eligible Individual holding shares of Restricted Stock may exercise full voting rights with respect to such shares, and (iii) the Eligible Individual holding shares of Restricted Stock shall be entitled to receive all dividends and other distributions paid with respect to such shares while they are so held. If any such dividends or distributions are paid in shares of common stock, such shares shall be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid. Notwithstanding anything to the contrary, at the discretion of the Committee, all such dividends and distributions may be held in escrow by the Company (subject to the same restrictions on forfeitability) until all restrictions on the respective Restricted Stock have lapsed. Holders of the RSUs shall not have any of the rights of a stockholder, including the right to vote or receive dividends and other distributions, until common stock shall have been issued in the Eligible Individual’s name pursuant to the RSUs; provided, however the Committee, in its sole and absolute discretion, may provide for dividend equivalents on vested RSUs.

Unless otherwise provided in the 2015 Plan or Award Agreement, common stock will be issued with respect to RSUs no later than March 15 of the year immediately following the year in which the RSUs are first no longer subject to a substantial risk of forfeiture as such term is defined in Section 409A of the Code and the regulations issued thereunder (“RSU Payment Date”). In the event that the Eligible Individual has elected to defer the receipt of common stock pursuant to an Award Agreement beyond the RSU Payment Date, then the common stock will be issued at the time specified in the Award Agreement or related deferral election form. In addition, unless otherwise provided in the Award Agreement, if the receipt of common stock is deferred past the RSU Payment Date, dividend equivalents on the common stock covered by the RSUs shall be deferred until the RSU Payment Date.

Stock Appreciation Rights

The Committee has the right to grant SARs to Eligible Individuals in such amounts and on such terms and conditions as the Committee shall determine in its sole and absolute discretion. Unless otherwise provided in an Award Agreement, the terms and conditions (including, without limitation, the limitations on the exercise price, exercise period, repricing and termination) of the SAR shall be substantially identical to the terms and conditions that would have been applicable were the grant of the SAR a grant of an Option. Unless otherwise provided in an Award Agreement, upon exercise of a SAR the Eligible Individual shall be entitled to receive payment, in cash,

23


in shares of common stock, or in a combination thereof, as determined by the Committee in its sole and absolute discretion. The amount of such payment shall be determined by multiplying the excess, if any, of the fair market value of a share of common stock on the date of exercise over the fair market value of a share of common stock on the grant date, by the number of shares of common stock with respect to which the SAR are then being exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to a SAR by including such limitation in the Award Agreement.

Performance Shares and Performance Units

Performance Shares and Performance Units may be granted to Eligible Individuals under the 2015 Plan. The applicable Award Agreement shall set forth (i) the number of Performance Shares or the dollar value of Performance Units granted to the participant; (ii) the performance period and Performance Goals with respect to each such Award; (iii) the threshold, target and maximum shares of common stock or dollar values of each Performance Share or Performance Unit and corresponding Performance Goals; and (iv) any other terms and conditions as the Committee determines in its sole and absolute discretion. Unless otherwise provided in an Award Agreement, the Committee shall determine in its sole and absolute discretion whether payment with respect to the Performance Share or Performance Unit shall be made in cash, in shares of common stock, or in a combination thereof.

Performance Goals

Performance Goals will be based on one or more of the following criteria: (i) the Company’s enterprise value or value creation targets; (ii) the Company’s after-tax or pre-tax profits including, without limitation, that attributable to Company’s continuing and/or other operations; (iii) the Company’s operational cash flow or working capital, or a component thereof; (iv) the Company’s operational costs, or a component thereof; (v) limiting the level of increase in all or a portion of bank debt or other of the Company’s long-term or short-term public or private debt or other similar financial obligations of the Company, which may be calculated net of cash balances and/or other offsets and adjustments as may be established by the Committee; (vi) earnings per share or earnings per share from the Company’s continuing operations; (vii) the Company’s net sales, revenues, net income or earnings before income tax or other exclusions; (viii) the Company’s return on capital employed or return on invested capital; (ix) the Company’s after-tax or pre-tax return on stockholder equity; (x) the attainment of certain target levels in the fair market value of the Company’s common stock; (xi) the growth in the value of an investment in the common stock assuming the reinvestment of dividends; and/or (xii) EBITDA (earnings before income tax, depreciation and amortization). In addition, Performance Goals may be based upon the attainment by a subsidiary, division or other operational unit of the Company of specified levels of performance under one or more of the measures described above. Further, the Performance Goals may be based upon the attainment by the Company (or a subsidiary, division, facility or other operational unit) of specified levels of performance under one or more of the foregoing measures relative to the performance of other corporations. To the extent permitted under Section 162(m) of the Code (including, without limitation, compliance with any requirements for stockholder approval), the Committee may, in its sole and absolute discretion: (i) designate additional business criteria upon which the Performance Goals may be based; (ii) modify, amend or adjust the business criteria described herein; or (iii) incorporate in the Performance Goals provisions regarding changes in accounting methods, corporate transactions (including, without limitation, dispositions or acquisitions) and similar events or circumstances. Performance Goals may include a threshold level of performance below which no Award will be earned, levels of performance at which an Award will become partially earned and a level at which an Award will be fully earned.

Non-Transferability

No Award will be transferable by an Eligible Individual other than by will or the laws of descent and distribution, and any Option or SAR will (absent the Committee’s consent) be exercisable during a Eligible Individual’s lifetime only by the Eligible Individual, except that the Committee may provide in an Award

24


Agreement that an Eligible Individual’s may transfer an award to a “family member”, as such term is defined in the Form S-8 Registration Statement under the Securities Act of 1933, as amended, under such terms and conditions as specified by the Committee.

Amendments to the 2015 Plan

The 2015 Plan may be amended by the Board to the extent that it deems necessary or appropriate provided, however, that the approval of the stockholders shall be required for any amendment: (i) that changes the class of individuals eligible to receive Awards under the 2015 Plan; (ii) that increases the maximum number of shares of common stock in the aggregate that may be subject to Awards that are granted under the 2015 Plan (except as otherwise permitted under the 2015 Plan); (iii) the approval of which is necessary to comply with federal or state law or with the rules of any stock exchange or automated quotation system on which the common stock may be listed or traded; or (iv) that proposed to eliminate a requirement provided herein that the stockholders of the Company must approve an action to be undertaken under the 2015 Plan. Except as expressly provided in the 2015 Plan, no amendment, suspension or terminationoutside of the 2015 Plan, shall, without the consent of the holder of an Award, alter or impair rights or obligations under any Award theretofore granted under the 2015 Plan. Awards granted prior to the termination of the 2015 Plan may extend beyond the date the 2015 Plan is terminated and shall continue subject to the terms of the 2015 Plan as in effect on the date the 2015 Plan is terminated.

Change in Control

Upon the occurrence of a Change in Control (as defined in the 2015 Plan), the Committee may, in its sole and absolute discretion, provide on a case by case basis that (i) all Awards shall terminate, provided that participants shall have the right, immediately prior to the occurrence of such Change in Control and during such reasonable period as the Committee in its sole discretion shall determine and designate, to exercise any Award, (ii) all Awards shall terminate, provided that participants shall be entitled to a cash payment equal to the price per share of common stock paid in the Change in Control transaction, with respect to shares subject to the vested portion of the Award, net of the exercise price thereof, if applicable, (iii) in connection with a liquidation or dissolution of the Company, the Awards, to the extent vested, shall convert into the right to receive liquidation proceeds net of the exercise price (if applicable), (iv) accelerate the vesting of Awards and (v) any combination of the foregoing. In the event that the Committee does not terminate or convert an Award upon a Change in Control of the Company, then the Award shall be assumed, or substantially equivalent Awards shall be substituted, by the acquiring, or succeeding corporation (or an affiliate thereof).

Federal Income Tax Consequences

The rules concerning the federal income tax consequences of Awards under the 2015 Plan are technical, and reasonable persons may differ on their proper interpretation. Moreover, the applicable statutory and regulatory provisions are subject to change, as are their interpretations and applications, which may vary in individual circumstances. Therefore, the following discussion is designed to provide only a brief, general summary description of the federal income tax consequences associated with such grants, based on a good faith interpretation of the current federal income tax laws, regulations (including certain proposed regulations) and judicial and administrative interpretations. The following discussion does not set forth (1) any federal tax consequences other than income tax consequences or (2) any state, local or foreign tax consequences that may apply.

ISOs. In general, an employee will not recognize taxable income upon the grant or the exercise of an ISO. For purposes of the alternative minimum tax, however, the employee will be required to treat an amount equal to the difference between the fair market value of the common stock on the date of exercise over the option exercise price as an item of adjustment in computing the employee’s alternative minimum taxable income. If the employee does not dispose of the common stock received pursuant to the exercise of the ISO within either (1) two years after the date of the grant of the ISO or (2) one year after the date of the exercise of the ISO, a

25


subsequent disposition of the common stock generally will result in long-term capital gain or loss to such individual with respect to the difference between the amount realized on the disposition and exercise price. The Company will not be entitled to any federal income tax deduction as a result of such disposition. In addition, the Company normally will not be entitled to take a federal income tax deduction on either the grant date or upon the exercise of an ISO.

If the employee disposes of the common stock acquired upon exercise of the ISO within either of the above-mentioned time periods, then in the year of such disposition, the employee generally will recognize ordinary income, and the Company will be entitled to a federal income tax deduction (provided the Company satisfies applicable federal income tax reporting requirements), in an amount equal to the lesser of (1) the excess of the fair market value of the common stock on the date of exercise over the option exercise price or (2) the amount realized upon disposition of the common stock over the exercise price. Any gain in excess of such amount recognized by the employee as ordinary income would be taxed to such individual as short-term or long-term capital gain (depending on the applicable holding period).

Non-ISOs. An Eligible Individual will not recognize any taxable income upon the grant of a Non-ISO, and the Company will not be entitled to take an income tax deduction at the time of such grant. Upon the exercise of a Non-ISO, the Eligible Individual generally will recognize ordinary income and the Company will be entitled to a federal income tax deduction (provided the Company satisfies applicable federal income tax reporting requirements) in an amount equal to the excess of the fair market value of the common stock on the date of exercise over the option exercise price. Upon a subsequent sale of the common stock by the Eligible Individual, such individual will recognize short-term or long-term capital gain or loss (depending on the applicable holding period).

SARs. An Eligible Individual will not recognize any taxable income upon the grant of a SAR, and the Company will not be entitled to take an income tax deduction at the time of such grant. A Eligible Individual will recognize ordinary income for federal income tax purposes upon the exercise of a SAR under the 2015 Plan for cash, common stock or a combination of cash and common stock, and the amount of income that the Eligible Individual will recognize will depend on the amount of cash, if any, and the fair market value of the common stock, if any, that the Eligible Individual receives as a result of such exercise. The Company generally will be entitled to a federal income tax deduction in an amount equal to the ordinary income recognized by the Eligible Individual in the same taxable year in which the Eligible Individual recognizes such income, if the Company satisfies applicable federal income tax reporting requirements.

Restricted Stock. The Eligible Individual who receives Restricted Stock generally will not be subject to tax until the shares are no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code (the “Restrictions”). At such time the Eligible Individual will be subject to tax at ordinary income rates on the fair market value of the Restricted Stock (reduced by any amount paid by the participant for such Restricted Stock). However, an Eligible Individual who makes an election under Section 83(b) of the Code within 30 days of the date of transfer of the shares will have taxable ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the Restrictions) over the purchase price, if any, of such restricted shares. Any appreciation (or depreciation) realized upon a later disposition of such shares will be treated as long-term or short-term capital gain (or loss) depending upon how long the shares have been held. If a Section 83(b) election has not been made, any dividends received with respect to restricted shares that are subject to the Restrictions generally will be treated as compensation that is taxable as ordinary income to the participant and not eligible for the reduced tax rate applicable to dividends. The Company generally will be entitled to a federal income tax deduction in an amount equal to the ordinary income recognized by the Eligible Individual in the same taxable year in which the Eligible Individual recognizes such income, if the Company satisfies applicable federal income tax reporting requirements.

Restricted Stock Units. Generally, no income will be recognized upon the award of RSUs. An Eligible Individual who receives RSUs generally will be subject to tax at ordinary income rates on any cash received and

26


the fair market value of any shares of common stock or other property on the date that such amounts are transferred to the Eligible Individual under the award (reduced by any amount paid by the Eligible Individual for such RSU). The Company generally will be entitled to a federal income tax deduction in an amount equal to the ordinary income recognized by the Eligible Individual in the same taxable year in which the Eligible Individual recognizes such income.

Performance Units and Performance Shares. No income generally will be recognized upon the grant of a Performance Unit or Performance Share. Upon payment in respect of a Performance Unit or Performance Share, the Eligible Individual generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of any nonrestricted shares of common stock or other property received. The Company generally will be entitled to a federal income tax deduction in an amount equal to the ordinary income recognized by the Eligible Individual in the same taxable year in which the Eligible Individual recognizes such income.

Code Section 162(m). Code Section 162(m) imposes a $1 million deduction limitation on the compensation paid to a public company’s most senior executives unless the compensation meets one of the exceptions to this limitation. One exception is for option grants made at fair market value. Another exception is for grants which are made subject to the satisfaction of one or more Performance Goals which are set in accordance with Code Section 162(m) and which are forfeited if there is a failure to satisfy those Performance Goals. The 2015 Plan has been designed so that the Committee can make grants which can satisfy the requirements for these exceptions.

Equity Compensation Plan Information

The following table lists all securities authorized for issuance and outstanding under our equity compensation plans at December 31, 2015:

Plan category

  Number of securities to
be issued upon exercise
of outstanding options and
stock awards
   Weighted average
exercise price of
outstanding options
(excluding
outstanding restricted
share units)
   Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding
outstanding options)
 
      
      
      
      
      
      

Equity compensation plans approved by security holders

   1,989,000    $9.51     1,048,563(1) 

Equity compensation plans not approved by security holders (2)

   —       —       —    

(1)Represents shares remaining available for future issuance under the 2008 Plan and 2015 Plan. Also, in the TBO Merger, which was approved by the Company’s stockholders, IDI assumed 960,000 RSUs previously granted to employees of TBO and Interactive Data, including 400,000 RSUs previously granted to Mr. Dubner. These RSUs now represent the right to acquire IDI’s common stock, and such RSUs are not included in the table above.
(2)Does not include 12,312,000 RSUs subject to stockholder approval pursuant to Proposals 2, 3 and 4.

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New 2015 Plan Benefits

The following table sets forth information regarding awards that have been made pursuant to the 2015 Plan from April 30, 2015 through April 13, 2016 to the individuals and groups listed. All of these awards are subject to stockholder approval of the 2015 Plan and ratification of the awards. If stockholder approval is not obtained then the recipients will not receive the awards granted at this time.

Name

 

Position

 Grant Date
Fair Value
of RSUs
  Number
of RSUs
  Grant Date
Fair Value of
Options
  Number
of Options
 

Derek Dubner

 Chief Executive Officer $5,165,000    500,000   $—      —    

James Reilly

 President and Chief Operating Officer $5,165,000    500,000   $—      —    

Aaron Solomon

 Interim Chief Financial Officer $516,500    50,000   $—      —    

Peter Tan

 Co-Chief Executive Officer $—      —     $—      —    

Michael Brauser

 Executive Chairman $—      —     $—      —    

Jacky Wang

 Chief Accounting Officer $—      —     $—      —    

Executive Officer Group (3 persons)

  $10,846,500    1,050,000    —      —    

Non-Executive Director Group (7 persons)

  $1,854,650    185,000    —      —    

Non-Executive Employee and Others Group

  $27,053,450    3,077,000    369,809    85,000  

Vote Required and Board Recommendation

Approval of the 2015 Plan increase and ratification of awards made subject to approval of the 2015 Plan increase require the affirmative vote of a majority of votes cast on the proposal at the Meeting.

The Board unanimously recommends a vote“FOR” approval of the increase in the number of shares available for issuance under the IDI, Inc. 2015 Stock Incentive Plan and ratification of awards made subject to such increase.

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Proposal 3

APPROVAL OF RSU GRANT TO OUR EXECUTIVE CHAIRMAN

On November 16, 2015, the Compensation Committee approved an employment agreement between the Company and our Executive Chairman, Michael Brauser (the “Brauser Employment Agreement”), including a proposed grant under the Brauser Employment Agreement of 5,000,000 restricted stock units (the “Brauser RSUs”). The Brauser RSUs are being granted outside the 2015 Plan, and as such must bewere approved by stockholders at the 2016 Annual Meeting separately from the 2015 Plan increase, which is the subject of Proposal 2.

Stockholders. The Brauser RSUs vest in four equal annual installments beginning on the first anniversary of the grant date,over a four-year period provided that during any fiscal year in which the Brauser RSUs are outstanding,Company has gross revenue is determined in accordance with the Company’s audited financial statements in excess of $100.0$100 million for any one fiscal year and positive EBITDA, is also determined based on the Company’s audited financial statements for such fiscal year, after subtracting all charges for equity compensation paid to executives or other service providers of the Company, in any one fiscal year during the vesting period (the “Performance Vesting Conditions”). The Company determined the Performance Vesting Conditions were met, effective March 14, 2017, and as a result 1.25 million RSUs vested. Mr. Brauser has elected to defer delivery of any vested RSUs until his separation from service from the Company or death or disability. In addition, the Brauser RSUs will vest immediately upon: (i) a change in control (as defined below), (ii) a termination of Mr. Brauser’s employment without cause (as defined below), (iii) Mr. Brauser’s termination of his employment for good reason (as defined below), or (iv) his death or disability (as defined below) (the “Additional Vesting Conditions”). Shares of common stock underlying the vested RSUs will generally be issued upon the earlier of (i) a change in control (as defined below) or (ii) Mr. Brauser’s separation from service as defined under the Internal Revenue Code Section 409A, provided that the delivery of shares will be delayed until the earlier of (a) six months following separation from service or (b) Mr. Brauser’s death, if necessary to comply with the Internal Revenue Code Section 409A. The employment agreement also provides that Mr. Brauser may, at his option and in accordance with Internal Revenue Code Section 409A, elect to satisfy tax withholdings (including any FICA and related income tax withholding that may apply on the vesting, as opposed to settlement, of the Brauser RSUs) by having the Company withhold a number of shares having a fair market value equal to the minimum amount of such tax withholdings. Also, Mr. Brauser is eligible to participate in the Company’s existing and future benefit plans, policies or arrangements maintained by the Company and made available to employees generally and for the benefit of executives.

The Company may terminate Mr. Brauser’s employment and the employment agreement at any time during the term for cause (as defined below), effective immediately upon written notice to Mr. Brauser. Also, the Company may terminate Mr. Brauser’s employment and the employment agreement without cause (as defined below) upon ninety (90) days prior written notice to Mr. Brauser, and Mr. Brauser may terminate his employment and the employment agreement for good reason (as defined below). Pursuant to the employment agreement, good reason shall not exist unless and until Mr. Brauser provides the Company with written notice of the acts alleged to constitute good reason within thirty (30) days of his knowledge of the occurrence of such event, and the Company fails to cure such acts within thirty (30) days of receipt of such notice. Mr. Brauser must terminate his employment within ninety (90) days following the expiration of such cure period for the termination to be on account of good reason.

Additionally, Mr. Brauser’s employment and the employment agreement will automatically terminate upon Mr. Brauser’s death. Also, if Mr. Brauser becomes physically or mentally disabled so as to become unable for a period of more than three consecutive months or for shorter periods aggregating at least six months during any twelve-month period to perform his duties on a substantially full-time basis, his employment will terminate as of the end of such three-month orsix-month period as applicable, and this will be considered a “disability” under the employment agreement. Such termination will not affect Mr. Brauser’s benefits under the Company’s disability insurance program, if any, then in effect.

In the event Mr. Brauser’s employment is terminated by the Company for cause, by Mr. Brauser without good reason or due to the expiration of the term of the employment agreement, Mr. Brauser is entitled to (i) his base salary earned but unpaid through and including the date of the termination of his employment and (ii) any benefits or payments to which Mr. Brauser is entitled under any Company plan, program, agreement or policy (“Accrued Benefits”). In the event Mr. Brauser’s employment is terminated by the Company without cause, by Mr. Brauser for good reason or as a result of Mr. Brauser’s death or disability during the term of the employment agreement, Mr. Brauser will be entitled to the Accrued Benefits and all outstanding awards granted to Mr. Brauser will immediately vest. As an additional prerequisite for receipt of benefits upon termination, Mr. Brauser must execute and deliver to the Company, (collectively, the “Vesting Conditions”), and provided further that the grant is approved by stockholders at the Meeting.not revoke a general release within forty-five (45) days of his termination of employment.

Mr. Brauser has served as a director and Executive Chairman of the Company since June 2015. In his capacity as Executive Chairman, Mr. Brauser is responsible for leadership of the Board, including setting its agenda and ensuring effectiveness in accomplishing the Company’s strategic plans, leading the Company in forging and nurturing relationships with various parties, including significant shareholders, financial institutions, and strategic alliances, as well as for certifying our annual and quarterly reports filed with the Securities and Exchange Commission.

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For his service, Mr. Brauser receives an annual salary of $25,000. As such, the Compensation Committee believes the award of 5,000,000 RSUs is appropriate in lightpurposes of Mr. Brauser’s serviceemployment agreement, “cause” shall mean a good faith finding by the Board of the following: (i) a willful failure or refusal on executive’s part to perform executive’s duties under the agreement or to carry out the lawful directions of the Board; (ii) gross misconduct, willful dishonesty, theft, embezzlement or fraud on executive’s part against the Company or its subsidiaries or affiliates or in connection with executive’s employment having the effect of materially injuring the business of the Company; (iii) conviction of or plea of nolo contendere to a felony involving moral turpitude, fraud, theft, or dishonesty; (iv) breach of anynon-competition, confidentiality ornon-solicitation agreement with the Company or any subsidiary or affiliate thereof; or (v) material breach of any provision of the agreement by executive and failure to cure such breach within thirty (30) days after the receipt of written notice of such breach from the Company. For purposes of Mr. Brauser’s employment agreement, no act, or failure to act, on the part of the executive shall be considered “willful” unless it is done, or omitted to be done, by the executive in bad faith or without reasonable belief that the executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company (or any act which the executive omits to do because of the executive’s reasonable belief that such act would violate law or the Company’s standards of ethical conduct in its corporate policies) shall be conclusively presumed to be done, or omitted to be done, by the executive in good faith and in the best interests of the Company. The termination of employment shall not be deemed to be for cause unless and until (A) within a reasonable period of time prior to the Company, his significant contributionsBoard meeting at which the Board will determine whether cause exists, the executive is provided written notice of such meeting and, unless prohibited by law, a reasonable opportunity to review prior to such meeting all information to be presented to the transformationBoard with respect to whether cause exists, (B) the executive is afforded the opportunity, together with counsel for the executive, to be heard before the Board, (C) there shall have been delivered to the executive a copy of the Company during 2015, including completing the TBO Merger and identifying, structuring and ultimately closing the Fluent Acquisition.

Vote Required and Board Recommendation

Approval of the Brauser RSU grant requiresa resolution duly adopted by the affirmative vote of a majority of votes cast on the proposalentire membership of the Board at a meeting of the Board called and held for such purpose finding that, in the good faith opinion of the Board, the executive committed the conduct that constitutes cause and specifying the particulars thereof in detail, and (D) if the conduct or act alleged to provide grounds for the executive’s termination for cause is curable in the discretion of the Board, the executive has not cured such conduct within thirty (30) days from the date of receiving a copy of the resolution adopted by the Board.

For purposes of Mr. Brauser’s employment agreement, “good reason” means a resignation by executive of executive’s employment following the occurrence of any of the following events: (i) without executive’s written consent, the material reduction of his authorities, duties, or responsibilities; (ii) without executive’s written consent, a reduction by the Company in the base salary as in effect immediately prior to such reduction; (iii) without executive’s written consent, a requirement by the Company that executive relocate his office to a location more than fifty (50) miles from its then-current location; or (iv) without executive’s written consent, any material breach of the agreement by the Company.

For purposes of Mr. Brauser’s employment agreement, a “change in control” shall mean:

(i) any one person, or more than one person acting as a group, acquires ownership of common stock of the Company that, together with common stock held by such person or group, possesses more than 50% of the total fair market value or total voting power of the common stock of the Company; provided, however, that if any one person, or more than one person acting as a group, is considered to own more than 50% of the total fair market value or total voting power of the common stock of the Company, the acquisition of additional common stock by the same person or persons will not be considered a change in control under the employment agreement. Notwithstanding the foregoing, an increase in the percentage of common stock of the Company owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires its common stock in exchange for property will be treated as an acquisition of common stock of the Company for purposes of this clause (i);

(ii) during any period of 12 consecutive months, individuals who at the Meeting.

Thebeginning of such period constituted the Board unanimously recommends a vote“FOR” approval of(together with any new or replacement directors whose election by the Brauser RSU grant.Board, or whose nomination for

 

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Proposal 4election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors then in office; or

APPROVAL OF RSU GRANT TO OUR VICE CHAIRMAN(iii) any one person, or more than one person acting as a group, acquires (or has acquired during the12-month period ending on the date of the most recent acquisition by the person or persons) assets from the Company, outside of the ordinary course of business, that have a gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For purposes of this Section, “gross fair market value” means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. Notwithstanding anything to the contrary in the employment agreement, the following shall not be treated as a change in control under this: (a) a transfer of assets from the Company to a stockholder of the Company (determined immediately before the asset transfer); (b) a transfer of assets from the Company to an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company; (c) a transfer of assets from the Company to a person, or more than one person acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding capital stock of the Company; or (d) a transfer of assets from the Company to an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in clause (iii).

On December 8, 2015, the Compensation Committee approvedDerek Dubner and Daniel MacLachlan

Below is a grantsummary of RSUs to our Vice Chairman, Phillip FrostMessrs. Dubner’s and MacLachlan’s employment agreements, as amended.

Effective April 11, 2017 (the “Frost Grant”“Effective Date”), the Company amended the employment agreements with each of 3,000,000 restricted stock unitsMr. Dubner (the “Frost“Dubner Agreement”) and Mr. MacLachlan (the “MacLachlan Agreement,” and together with the Dubner Agreement, the “Employment Agreements”) in connection with their service as Chief Executive Officer and Chief Financial Officer of the Company, respectively.

The term of the Employment Agreements commences on the Effective Date and ends on April 30, 2020, and automatically renews for successiveone-year terms unless either party gives the other party 120 days’ written notice of termination before the expiration of the applicableone-year term or unless terminated earlier pursuant to the terms of the Employment Agreements.

Mr. Dubner receives an annual salary of $325,000. Pursuant to the Dubner Agreement, on November 15, 2015, Mr. Dubner was granted 500,000 RSUs under the 2015 Plan, subject to stockholder approval. The RSUs were approved at the 2016 Annual Meeting of Stockholders, vest over three years from the date of grant and are subject to the Performance Vesting Conditions (as defined above) and the Supplemental Vesting Conditions (as defined below). The Company determined the Performance Vesting Conditions were met, effective March 14, 2017, and as a result 166,667 RSUs vested. Pursuant to the Dubner Agreement, on April 13, 2017, Mr. Dubner was also granted 125,000 RSUs under the 2015 Plan (together with the previously granted RSUs, the “Dubner RSUs”). The FrostDubner RSUs are beingvest in three approximately equal installments on June 1, 2017, 2018 and 2019, subject to the Supplemental Vesting Conditions (as defined below). Within 30 days of the effective grant date, Mr. Dubner may elect to defer delivery of any vested RSUs until a later date.

Mr. MacLachlan receives an annual salary of $226,269. Pursuant to the MacLachlan Agreement, on April 13, 2017, Mr. MacLachlan was granted outside100,000 RSUs under the 2015 Plan (the “MacLachlan RSUs”). The MacLachlan RSUs vest in three approximately equal installments on June 1, 2017, 2018 and as such must be approved by stockholders at2019, subject to the Meeting separately fromSupplemental Vesting Conditions (as defined below). Within 30 days of the 2015 Plan increase, which iseffective grant date, Mr. MacLachlan may elect to defer delivery of any vested RSUs until a later date.

In addition, the subject of Proposal 2.

The FrostDubner RSUs and the MacLachlan RSUs will vest immediately upon: (i) a change in control (as defined below), (ii) a termination of such employee’s employment without cause (as defined below),

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(iii) such employee’s termination of his employment for good reason (as defined below), (iv) his death or disability (as defined below), or (v) a termination of such employee due to an “Adverse Ruling” (as defined below) (the “Supplemental Vesting Conditions”). Shares of common stock underlying the vested RSUs will generally be issued upon the earlier of (i) a change in control (as defined below) or (ii) such employee’s separation from service as defined under the Internal Revenue Code Section 409A, provided that the grantdelivery of shares will be delayed until the earlier of (a) six months following separation from service or (b) such employee’s death, if necessary to comply with the Internal Revenue Code Section 409A. Also, Messrs. Dubner and MacLachlan are eligible to participate in the Company’s existing and future benefit plans, policies or arrangements maintained by the Company and made available to employees generally and for the benefit of executives.

The Company may terminate the Employment Agreements and each of Mr. Dubner’s and Mr. MacLachlan’s employment at any time during the term for cause (as defined below). Also, the Company may terminate the Employment Agreements and each of Mr. Dubner’s and Mr. MacLachlan’s employment without cause (as defined below) or refusal to accept assignment.

The Company may terminate the Dubner Agreement and Mr. Dubner’s employment with the Company at any time if compelled by a final,non-appealable ruling of a court of competent jurisdiction finding Mr. Dubner’s employment by the Company to be a violation of Mr. Dubner’s confidentiality and/or other legal or fiduciary obligations to TLO, LLC (“TLO”) and/or TransUnion Risk and Alternative Data Solutions, Inc., its parent(s), subsidiaries or affiliates (collectively “TransUnion”) (for purposes of the Dubner Agreement, an “Adverse Ruling”).

The Company may also terminate the MacLachlan Agreement and Mr. MacLachlan’s employment with the Company at any time if compelled by a final,non-appealable ruling of a court of competent jurisdiction finding Mr. MacLachlan’s employment by the Company to be a violation of (i) Mr. MacLachlan’s confidentiality and noncompetition agreement with TLO, which was purportedly subsequently assumed by TransUnion as part of TransUnion’s acquisition of substantially all of the assets of TLO, or (ii) Mr. MacLachlan’s noncompetition and nonsolicitation agreement with TransUnion (for purposes of the MacLachlan Agreement, each an “Adverse Ruling”).

Each of Mr. Dubner and Mr. MacLachlan may terminate his employment and the respective Employment Agreement for good reason (as defined below).

Each of Mr. Dubner and Mr. MacLachlan may also terminate his employment and the respective Employment Agreement for any reason or for no reason at all; provided, however, that such employee provides the Company with at least sixty (60) days prior written notice.

Each of Mr. Dubner’s and Mr. MacLachlan’s employment and the Employment Agreements will automatically terminate upon Mr. Dubner’s or Mr. MacLachlan’s death, as applicable. The Company may terminate the Employment Agreements and each of Mr. Dubner’s and Mr. MacLachlan’s employment with the Company immediately upon a determination of Disability (as hereinafter defined). For purposes of the Employment Agreements, the employee has a “Disability” if, for physical or mental reasons, such employee is unable to perform the essential duties required of the employee under the Employment Agreements, as applicable, even with a reasonable accommodation, for a period of six (6) consecutive months or a period of 180 days during any twelve-month period, as determined by an independent medical professional mutually acceptable to the parties. The applicable employee shall submit to a reasonable number of examinations by the independent medical professional making the determination of Disability.

Upon termination of the Employment Agreements due to Mr. Dubner’s or Mr. MacLachlan’s death or Disability, as applicable, the Company shall pay to the applicable employee’s estate such employee’s base salary accrued through the date of the employee’s death or Disability, as applicable. In the event Mr. Dubner’s or

25


Mr. MacLachlan’s employment is terminated by the Company for cause, the Company shall pay to the applicable employee such employee’s base salary and benefits accrued through the date of such employee’s termination.

In the event the Company terminates the Employment Agreements without cause or any successor of the Company refuses to accept assignment of the Employment Agreements, or if Mr. Dubner or Mr. MacLachlan terminates his respective Employment Agreement and employment with the Company for good reason or due to an Adverse Ruling, the Company shall pay to such employee the greater of (x) the applicable employee’s base salary for the remainder of the term in accordance with the Company’s payroll practices in effect from time to time and (y) two (2) years of the applicable employee’s base salary in accordance with the Company’s payroll practices in effect from time to time, provided, however, the applicable employee is not in violation of the Confidentiality, Nondisclosure, Noncompetition, Nonsolicitation and Nondisparagement Agreement attached as Exhibit B to each of the Employment Agreements (the “NDA”).

In the event Mr. Dubner or Mr. MacLachlan terminates his respective Employment Agreement and employment with the Company for any reason during the term of his applicable Employment Agreement, the Company shall pay to Mr. Dubner or Mr. MacLachlan, as applicable, such employee’s base salary through the date of such employee’s termination.

For purposes of the Employment Agreements, “cause” is defined as: (1) employee’s conviction of or plea of guilty or nolo contendere to a felony which involves moral turpitude or results in material harm to the Company, (2) employee’s fraud against the Company, theft, misappropriation or embezzlement of the assets or funds of the Company or any customer, or any breach of fiduciary duty owed to the Company, or engagement in misconduct that is materially injurious to the Company, including any violation of any of the restrictions set forth in the NDA, (3) employee’s gross negligence of his duties or willful misconduct in the performance of his duties under the Employment Agreements, as applicable, and (4) employee’s material breach of the Employment Agreements, as applicable.

For purposes of the Employment Agreements, Mr. Dubner or Mr. MacLachlan shall have “good reason” to terminate the respective Employment Agreement and his employment if (a) there is a material diminution in such employee’s (i) duties, responsibilities or title, or (ii) authority to make decisions or implement strategies within the scope of his duties and responsibilities; (b) there is a breach of a material term of the Employment Agreement by the Company and the Company fails to cure such breach within ten (10) days of receipt of written notice from the applicable employee; (c) the Company reduces the applicable employee’s base salary as in effect from time to time, without such employee’s prior written consent; or (d) the Company requests that the applicable employee participate in an unlawful act.

For purposes of the Employment Agreements, a “change in control” shall mean:

(i) any one (1) person, or more than one (1) person acting as a group, acquires ownership of common stock of Company or any material subsidiary that, together with common stock held by such person or group, possesses more than 50% of the total fair market value or total voting power of the common stock of Company or such subsidiary; provided, however, that if any one (1) person, or more than one (1) person acting as a group, is considered to own more than 50% of the total fair market value or total voting power of the common stock of Company, the acquisition of additional common stock by the same person or persons will not be considered a change in control under the Employment Agreements;

(ii) during any period of twelve (12) consecutive months, individuals who at the beginning of such period constituted the Board of the Company or any material subsidiary (together with any new or replacement directors whose election by the applicable board, or whose nomination for election by Company’s or any material subsidiary’s shareholders, was approved by stockholdersa vote of at the Meeting. Dr. Frost is a prominent and seasoned executive and the Compensation Committee believes his knowledge, experience, and vision will significantly benefit the strategic direction of the Company. As such, the Compensation Committee believes the award of 3,000,000 RSUs is appropriate at this time.

Vote Required and Board Recommendation

Approval of the Frost RSU grant requires the affirmative vote ofleast a majority of votes cast on the proposaldirectors then still in office who were either directors at the Meeting.

The Board unanimously recommendsbeginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a vote“FOR” approvalmajority of the Frost RSU grant.directors then in office; or

 

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(iii) any one (1) person, or more than one (1) person acting as a group, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by the person or persons) assets from the Company or any material subsidiary outside of the ordinary course of business, that have a gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company or such material subsidiary immediately prior to such acquisition or acquisitions. “Gross fair market value” means the value of the assets of the Company or any material subsidiary, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. Notwithstanding anything to the contrary in the Employment Agreements, the following shall not be treated as a change in control under the Employment Agreements:

(A) a transfer of assets from the Company or any material subsidiary to a shareholder of the Company (determined immediately before the asset transfer);

(B) a transfer of assets from the Company or any material subsidiary to an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company or such material subsidiary;

(C) a transfer of assets from the Company or any material subsidiary to a person, or more than one (1) person acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding capital stock of the Company or material subsidiary; or

(D) a transfer of assets from the Company or material subsidiary to an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in clause (C) above.

However, to the extent necessary for the Employee to avoid adverse tax consequences under Section 409A of the Internal Revenue Code, and its implementing regulations and guidance, a change of control shall not be deemed to occur unless it constitutes a “change in the ownership or effective control of a corporation or in the ownership of a substantial portion of the assets of a corporation” under Treas. Reg. Section1.409A-3(i)(5), as revised from time to time.

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Proposal 52

NON-BINDING ADVISORY VOTE

“SAY ON PAY”

The SEC rules and regulations require all public companies to hold a nonbinding advisory stockholder vote to approve the compensation of executive officers as described in the executive compensation tables and any related information in each such company’s proxy statement (commonly known as a “Say on Pay” proposal). At the Meeting, the Company will present its Say on Pay proposal for approval.

This Say on Pay proposal is set forth in the following resolution:

RESOLVED, that the stockholders of IDI,Cogint, Inc. approve, on an advisory basis, the compensation of its named executive officer, as disclosed in the IDI,Cogint, Inc. Proxy Statement for the 20162017 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the information included in the compensation tables, the potential payments upon termination or change in control table and any related information found in the proxy statement of IDI,Cogint, Inc.

Because your vote on this proposal is advisory, it will not be binding on the Board, the Compensation Committee, or the Company. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.

Vote Required and Board Recommendation

The advisory vote on the Say on Pay proposal requires the affirmative vote of a majority of the voting power of the issued and outstanding stock of the Company entitled to vote,votes present in person or represented by proxy at the Annual Meeting.Meeting and entitled to vote.

The Board unanimously recommends a vote “FOR” the Say on Pay proposal.

 

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BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth certain information regarding the beneficial ownership of common stock of the Company as of April 13, 201618, 2017 (the “Record Date”) by (i) all current directors, (ii) all named executive officers, (iii) all current executive officers and directors of the Company as a group, and (iv) each person known by the Company to beneficially own in excess of 5% of the Company’s outstanding common stock. Unless noted otherwise, the corporate address of each person listed below is 2650 North Military Trail, Suite 300, Boca Raton, Florida 33431.

The Company does not know of any other beneficial owner of more than 5% of the outstanding shares of common stock other than as shown below. Unless otherwise indicated below, each stockholder has sole voting and investment power with respect to the shares beneficially owned.

 

Named Executive Officers, Directors and Nominees

  Common Stock
Beneficially Owned
  Percentage of
Common Stock
Beneficially
Owned (1)
 

Michael Brauser(2)

   3,145,9253,848,656(3)   6.77.0

Derek Dubner(4)

   48,846514,635(5)   * 

James ReillyJeff Dell

   31,33833,427(6)   * 

Aaron Solomon

   14,47652,953(7)*

Jacky Wang

35,400(8)   * 

Dr. Phillip Frost

   13,417,97315,721,541(9)(8)   28.628.7

Steven D. Rubin

   220,255251,922(10)(9)   * 

Robert N. Fried

   367,338397,672(11)(10)   * 

Ryan Schulke (12)

   7,853,9008,064,537(13)(11)   16.714.7

Donald Mathis

   —  18,334(12)   * 

Robert Swayman

   21,46494,797(14)(13)   * 

Peter Benz

   18,33433,334(15)(14)   * 

Daniel MacLachlan

   2,000103,833(15)*

Harry Jordan

226,667(16)   * 

All directors and executive officers as a group (13(12 persons)

25,177,249(19)53.6

Peter Tan(18)

   446,27929,309,355(17)   *53.3% 

5% Holders

   

Frost Gamma Investment Trust

   13,417,97315,721,541(20)(18)   28.628.7

Matthew Conlin

   7,325,2007,475,020(21)(19)   15.613.7

 

*The person beneficially owns less than 1% of IDI’sthe Company’s outstanding common shares.
(1)Based on 46,924,18354,740,998 shares of common stock outstanding at the Record Date.
(2)Mr. Brauser’s shares do not include (i) 2,000,000 Restricted Stock Units (“RSUs”) owned by Marlin Capital, of which Mr. Brauser is a manager, and of which 1,000,000 RSUs are vested as of the Record Date but subject to deferred delivery, (ii) 5,154,1673,891,665 unvested RSUs in Mr. Brauser’s name. 500,000 of the Marlinname, and (iii) 1,250,000 RSUs held in Mr. Brauser’s name which are vested as of the Record Date but subject to deferred delivery.
(3)Mr. Brauser’s shares include (i) 2,061,9452,144,645 shares held by Grander Holdings, Inc. 401K, of which Mr. Brauser is the trustee, (ii) 954,1161,373,646 shares held by Birchtree Capital, LLC, of which Mr. Brauser is the manager, (iii) 121,734280,568 shares held by Mr. Brauser directly, and (iv) 16,259 shares held directly through BSIG, LLC of which Mr. Brauser owns a 50% interest.interest and (v) 41,667 RSUs that are expected to vest on June 1, 2017, which were granted on April 13, 2017. Within 30 days of the effective grant date, Mr. Brauser may elect to defer delivery of any vested RSUs until a later date. Mr. Brauser disclaims beneficial ownership of these shares except to the extent of any pecuniary interest he may have.
(4)Mr. Dubner served as ourCo-Chief Executive Officer from March 21, 2015 until March 9, 2016, when he was named Chief Executive Officer.
(5)

Mr. Dubner’s shares do not include 116,66658,332 unvested RSUs that vest on March 21, 2018, 333,333 RSUs that vest in two annual installments beginning on November 16, 2017, and 83,333 RSUs that vest in two annual

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installments beginning on June 1, 2018. Mr. Dubner’s shares include 41,667 RSUs that are expected to vest on June 1, 2017, which were granted on April 13, 2017. Within 30 days of the effective grant date, Mr. Dubner may elect to defer delivery of any vested RSUs until a later date.
(6)Mr. Dell’s shares do not include 15,000 unvested RSUs that vest in twothree equal annual installments beginning on March 21,August 22, 2017, and 400,000 RSUs granted to Mr. Dubner by TBO and assumed by IDI in the TBO Merger. The RSUs represent the right to receive shares of IDI common stock. 300,000 of these RSUs are vested as of the Record Date but subject to deferred delivery.

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(6)Mr. Reilly’s shares do not include 83,333 unvested13,333 RSUs that vest in two equal annual installments beginning on March 21,November 16, 2017 and 200,00026,667 RSUs that vest in two annual installments beginning on June 1, 2018. Mr. Dell’s shares include 13,333 RSUs that are expected to vest on June 1, 2017, which were granted to Mr. Reilly by TBO and assumed by IDI in the TBO Merger. The RSUs represent the right to receive shares of IDI common stock. 150,000 of these RSUs are vested ason April 13, 2017. Within 30 days of the Record Date but subjecteffective grant date, Mr. Dell may elect to deferred delivery.defer delivery of any vested RSUs until a later date.
(7)Mr. Solomon’s shares do not include 33,33316,666 unvested RSUs that vest on March 21, 2018, 20,000 RSUs that vest in two equal annual installments beginning on March 21, 2017.
(8)Mr. Wang’s shares do not include 45,000 unvestedJune 1, 2018 and 33,333 RSUs that vest in three equaltwo annual installments on beginning on AugustNovember 16, 2017. Mr. Solomon’s shares include 10,000 RSUs that are expected to vest on June 1, 2016.2017, which were granted on April 13, 2017. Within 30 days of the effective grant date, Mr. Solomon may elect to defer delivery of any vested RSUs until a later date.
(9)(8)Dr. Frost’s shares do not include 3,000,000 unvestedvested but deferred RSUs owned by Frost Gamma Investment Trust (“Frost Gamma”). and 33,333 RSUs that vest in two annual installments beginning on June 1, 2018. Dr. Frost’s shares include 16,667 RSUs that are expected to vest on June 1, 2017, which were granted on April 13, 2017. Within 30 days of the effective grant date, Dr. Frost may elect to defer delivery of any vested RSUs until a later date.
(10)(9)Mr. Rubin’s shares include vested options to purchase 32,000 shares of common stock, and do not include 50,00025,000 unvested RSUs that vest on March 21, 2018, 100,000 RSUs that vest in three annual installments beginning on November 16, 2016 but are subject to deferred delivery, 13,333 RSUs that vest in two equal annual installments beginning on March 21,June 1, 2018 and 5,000 RSUs that vest on January 1, 2018. Mr. Rubin’s shares include 6,667 RSUs that are expected to vest on June 1, 2017, which were granted on April 13, 2017. Within 30 days of the effective grant date, Mr. Rubin may elect to defer delivery of any vested RSUs until a later date.
(11)(10)Mr. Fried’s shares do not include 16,666 unvested RSUs that vest on March 21, 2018, 13,333 RSUs that vest in two annual installments beginning on November 16, 2017 and 10,000 RSUs that vest in two annual installments beginning on June 1, 2018. Mr. Fried’s shares include vested options to purchase 32,000 shares of common stock and do not include 33,333 unvested5,000 RSUs that are expected to vest in two equal annual installments beginning on March 21,June 1, 2017, which were granted on April 13, 2017. Within 30 days of the effective grant date, Mr. Fried may elect to defer delivery of any vested RSUs until a later date.
(12)Mr. Schulke was appointed a director on December 8, 2015, concurrent with the Fluent Acquisition.
(13)(11)Mr. Schulke’s shares include (i) 5,893,9006,064,537 shares held directly, and (ii) 2,000,000 shares held by RSMC Partners, LLC, of which Mr. Schulke is a member.member and do not include (i) 550,000 RSUs that vest over a three-year period of 30% on January 1, 2017, 30% on January 1, 2018 and 40% on January 1, 2019 but are subject to deferred delivery, and (ii) 50,000 RSUs that vest in three annual installments beginning on February 1, 2018. Mr. Schulke disclaims beneficial ownership of the shares held by RSMC Partners, LLC except to the extent of any pecuniary interest he may have.
(14)(12)Mr. Mathis’ shares do not include 16,666 RSUs that vest in two annual installments beginning on December 9, 2017, 10,000 RSUs that vest in two annual installments beginning on June 1, 2018, and 5,000 RSUs that vest on January 1, 2018. Mr. Mathis’ shares include 5,000 RSUs that are expected to vest on June 1, 2017, which were granted on April 13, 2017. Within 30 days of the effective grant date, Mr. Mathis may elect to defer delivery of any vested RSUs until a later date.
(13)Mr. Swayman’s shares include 13,3348,333 RSUs that are expected to vest on June 16, 2016,2017, 16,259 shares held directly through BSIG, LLC of which Mr. Swayman owns a 50% interest and 5,000 RSUs that are expected to vest on June 1, 2017, which were granted on April 13, 2017. Within 30 days of the effective grant date, Mr. Swayman may elect to defer delivery of any vested RSUs until a later date. Mr. Swayman’s shares do not include 16,6668,333 unvested RSUs that vest on June 16, 2018, 5,000 RSUs that vest in three annual installments beginning on November 16, 2016 but are subject to deferred delivery, 10,000 RSUs that vest in two equal annual installments beginning on June 16, 2017.1, 2018, and 5,000 RSUs that vest on January 1, 2018. Mr. Swayman disclaims beneficial ownership of the shares held by BSIG, LLC except to the extent of any pecuniary interest he may have.

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(15)(14)Mr. Benz’s shares include 18,3348,333 RSUs that are expected to vest on June 16, 2016,2017, and 5,000 RSUs that are expected to vest on June 1, 2017, which were granted on April 13, 2017. Within 30 days of the effective grant date, Mr. Benz may elect to defer delivery of any vested RSUs until a later date. Mr. Benz’s shares do not include 16,6668,333 unvested RSUs that vest on June 16, 2018, 3,333 RSUs that vest in two equalannual installments beginning on November 16, 2017, 10,000 RSUs that vest in two annual installments beginning on June 16, 2017.1, 2018 and 10,000 RSUs that vest on January 1, 2018.
(16)(15)Mr. MacLachlan’s shares include 2,0003,000 shares held in an IRA.IRA and 33,333 RSUs that are expected to vest on June 1, 2017, which were granted on April 13, 2017. Within 30 days of the effective grant date, Mr. MacLachlan may elect to defer delivery of any vested RSUs until a later date. Mr. MacLachlan’s shares do not include 100,00066,667 RSUs granted to that vest in two annual installments beginning on June 1, 2018.
(16)Mr. Maclachlan by TBO and assumed by IDIJordan’s shares include (i) 110,000 shares held in a revocable trust for the Merger,benefit of Mr. Jordan, of which 68,750Mr. Jordan is the trustee, (ii) 100,000 shares held in a revocable trust for the benefit of Mr. Jordan’s spouse, of which Mr. Jordan’s spouse is the trustee and (iii) 16,667 RSUs that are vested asexpected to vest on June 1, 2017, which were granted on April 13, 2017. Within 30 days of the Record Date but subjecteffective grant date, Mr. Jordan may elect to deferred delivery. Alldefer delivery of any vested RSUs represent the right to receiveuntil a later date. Mr. Jordan’s shares of IDI common stock.do not include 100,000 unvested RSUs that vest in three annual installments beginning August 8, 2017 and 33,333 RSUs that vest in two annual installments beginning on June 1, 2018.
(17)Mr. Tan served as our Co-Chief Executive Officer until March 9, 2016.
(18)Includes (i) 329,800 shares held by TGC Partners Limited of which Mr. Tan is the sole member and management director and (ii) 1,929 shares held by TGC Financial Partners Limited (“TGC Partners”), of which Mr. Tan owns 51%. Also includes vested options to purchase 115,00064,000 shares of common stock.
(19)(18)Includes vested options to purchase 189,000 shares of common stock.
(20)Based on a Schedule 13D/A filed with the SEC on March 29, 2015. Frost Gamma beneficially owns 13,417,97315,721,541 shares. Dr. Frost is the trustee of Frost Gamma. Frost Gamma L.P. is the sole and exclusive beneficiary of Frost Gamma. Dr. Frost is one of two limited partners of Frost Gamma L.P. The general partner of Frost Gamma L.P. is Frost Gamma, Inc., and the sole shareholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is also the sole shareholder of Frost-Nevada Corporation. Frost Gamma’s address is 4400 Biscayne Blvd., Suite 1500, Miami, FL 33137.
(21)(19)Mr. Conlin’s shares include (i) 5,305,2005,455,020 shares held directly, (ii) 20,000 shares held by Conlin Family Foundation Trust in which the Mr. Conlin serves asco-trustee and (iii) 2,000,000 shares held by RSMC Partners, LLC, of which Mr. Conlin is a member.member, and do not include (i) 550,000 RSUs that vest over a three-year period of 30% on January 1, 2017, 30% on January 1, 2018 and 40% on January 1, 2019 but are subject deferred delivery, and (ii) 50,000 RSUs that vest in three annual installments beginning on February 1, 2018. Mr. Conlin disclaims beneficial ownership of the shares held by RSMC Partners, LLC except to the extent of any pecuniary interest he may have.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires directors and executive officers of the Company and ten percent stockholders of the Company to file initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company with the Securities and Exchange Commission.SEC. Directors, executive officers, and ten percent stockholders are required to furnish the

33


Company with copies of all Section 16(a) forms they file. Before the Company completed the domestication to Delaware from the Cayman Islands on March 20, 2015, the Company qualified as a “foreign private issuer” under the rules and regulations of the Securities and Exchange Commission, and as such was no required to comply with Section 16(a). Upon completion of the domestication, the Company no longer qualified as a foreign private issuer and immediately began filing reports required of a domestic issuer, including, with respect to its officers and directors, Section 16(a).

To the Company’s knowledge, based solely on a review of copies of such reports furnished to the Company during and/or with respect to the year ended December 31, 2015,2016, the Company is not aware of any late or delinquent filings required under Section 16(a) of the Exchange Act in respect of the Company’s equity securities, other than two transactions on a Form 34 which was filed late by Ryan Schulke, one business daytransaction on a Form 4 which was filed late by Donald Mathis.Matthew Conlin, one transaction on a Form 4 which was filed late by Michael Brauser and one transaction on a Form 4/A which was filed late by Michael Brauser.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Audit Committee reviews and approves transactions in which IDIthe Company was or is to be a participant, where the amount involved exceeded or will exceed $120,000 annually and any of its directors, executive officers or their immediate family members had or will have a direct or indirect material interest. IDIThe

31


Company has a written policy stating that the Audit Committee is responsible for reviewing and, if appropriate, approving or ratifying any related party transactions. The related party transaction will not be approved unless at a minimum it is for IDI’sthe Company’s benefit and is upon terms no less favorable to the companyCompany than if the related party transaction was with an unrelated third party.

InterestEarn-out Shares

On March 11, 2016, the Company issued 900,108 shares of common stock subject to anearn-out to Frost Gamma, and 1,800,220 Series Aearn-out shares to certain investors (which were subsequently converted to 1,800,220 shares of common stock), including 567,069 shares to Grander Holdings, Inc. 401K, an entity owned by Michael Brauser, the Executive Chairman of the Board of Directors, upon a determination by the Board of Directors that certain financial targets had been achieved as set forth in the TBO Merger — Frost Gamma Investments Trust

Prior to the TBO Merger, but after giving effect to the Company’s March 19, 2015 1-for-5 reverse split, Frost Gamma owned 2,144,275 shares of IDI, representing 29.4% of the IDI’s outstanding ordinary shares. In addition, on March 21, 2015, after giving effect to a TBO recapitalization, Frost Gamma owned 80,000 shares of TBO common stock, 640,000 shares of TBO Series C Preferred Stock, and 4,000 shares of TBO Series D Preferred Stock, which resulted in IDI issuing to Frost Gamma 2,660,309 shares of Company common stock at closing, and an additional 900,108 shares of the Company common stock subject to an earn out. As a result, following the TBO Merger, Frost Gamma owned 34.6% of the Company’s common stock at closing and 38.6% of the Company’s common stock assuming the earn out shares are earned.

Phillip Frost, M.D.

On December 8, 2015, Phillip Frost, M.D., was appointed as a director of the Company to fill the Board seat vacated by Daniel Brauser, and was named Vice Chairman of the Board. Upon his appointment to the Company’s Board, Dr. Frost was granted 3,000,000 RSUs, subject to stockholder approval.

Financing — Frost Gamma Investments Trust

On November 16, 2015, approximately $7.0 million of gross proceeds was raised pursuant to a Securities Purchase Agreement (the “FGIT Securities Purchase Agreement”) between the Company and Frost Gamma. Frost Gamma received (i) 20,990 shares of Series B Non-Voting Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred”) and (ii) warrants to purchase up to 524,750 shares of the Company’s common stock, with an exercise price of $6.67 per share.

On November 16, 2015, the Company entered into the Stock Purchase Agreement with Frost Gamma providing for the sale of 119,940 shares of Series B Preferred to Frost Gamma, in exchange for $40.0 million (the “FGIT Stock Purchase Agreement”). Each share of Series B Preferred has automatically converted into 50 shares of common stock, on February 22, 2016. The sale was completed in connection with the Fluent Acquisition on December 8, 2015.

34


Bridge Loans

On December 8, 2015, the Company entered into and consummated bridge loans with each of Frost Gamma, Michael Brauser, and another investor, pursuant to which the Company received a $5.0 million bridge loan from Frost Gamma, a $4.0 million bridge loan from Michael Brauser, and a $1.0 million bridge loan from such other investor, for aggregate bridge financing in the amount of $10.0 million.Agreement.

Business Consulting Agreement — Marlin Capital Investments, LLC

On October 13, 2014, IDI Holdingsthe Company entered into a business consulting services agreement with Marlin Capital for a term of four years (the “Marlin Consulting Agreement”). Michael Brauser, the Company’s Executive Chairman, is a 50% owner and one of two managers of Marlin Capital. Under the Marlin Consulting Agreement, Marlin Capital serves in the capacity of a strategic advisor to TBO and provides services such as recommendations on organizational structure, capital structure, future financing needs, and business strategy. The Marlin Consulting Agreement providesprovided for equity compensation issued to Marlin Capital in the amount of 2,000,000 RSUs of TBO. IDIThe Company assumed these RSUs in the TBO Merger and the RSUs represent the right to receive 2,000,000 shares of IDIthe Company’s common stock. The RSUs vest on four equal annual installments beginning October 13, 2015 only if certain performance goals of IDIthe Company are met. The performance goals of IDI were met in January 2016. The shares underlying such RSUs will not be delivered until October 13, 2018, unless there is a change of control of IDI.the Company. The Company recognized share-based compensation expenses of $1,252,000 for the year ended December 31, 2016.

DAB Management GroupConversion of Series B Preferred

On February 22, 2016, the Company’sNon-Voting Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred”), 450,962 shares in total, including 141,430 shares previously issued to Frost Gamma in relation to certain financial arrangements, and 156,544 and 105,704 shares previously issued to Ryan Schulke, Chief Executive Officer of Fluent, and Matthew Conlin, President of Fluent, respectively, in connection with the Fluent Acquisition, automatically converted into the Company’s common stock, by multiplying each such share of Series B Preferred by 50.

Warrant Exchange

On March 11, 2016, 524,750 shares of common stock were issued to Frost Gamma in exchange for the surrender of a warrant to purchase common stock, with one share of common stock issued for each share of common stock available for purchase under the warrant. No additional consideration was paid by Frost Gamma and the warrants were cancelled upon the exchange.

Others

Effective on August 1, 2015, IDIthe Company entered into a consulting agreement with DAB Management Group Inc. (“DAB”) for DAB to provide consulting services related to business development, future acquisitionacquisitions and strategic transactions for a term of six months, and shall automatically renew for additional six-monthsix month periods, unless either party provides written notice to the other of its intent not to renew not fewer than 30 days prior to the expiration of the then current term (the “DAB Agreement”). DAB is owned by Daniel Brauser, a former director of the Company at the time the DAB Agreement was entered into and the son of Michael Brauser, Executive Chairman Michael Brauser.of the Company. Under the DAB Agreement, the consulting service fee is $20,000 per month. TotalThe Company recognized a consulting service feesfee of $100,000 were paid during the year ended December 31, 2015.

Warrant Exchange

Effective on March 11, 2016, the Board approved the issuance of an aggregate of 1,069,728 shares of common stock in exchange for warrants to purchase shares of common stock previously issued to four stockholders of the Company, including 524,750 shares to Frost Gamma. No additional consideration was paid by the stockholders and the warrants were, or will be cancelled, upon the exchange.

Other

Beginning in June 2015, the Company began paying monthly rental payments of $5,000 on behalf of Grander Holdings, Inc., an entity owned by Michael Brauser, the Company’s Executive Chairman, for a portion of its office lease at 4400 Biscayne Blvd, Miami, Florida 33137, to Frost Real Estate Holdings, LLC, an entity controlled by Dr. Phillip Frost, a significant shareholder in the Company at the time of the agreement and current Vice Chairman of the Company. The office is occupied by the Company’s Executive Chairman, as well as corporate and administrative personnel and is used to conduct Company-related business. The Company paid rental fees of $35,000 in total$240,000 for the year ended December 31, 2015.2016.

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In October 2015, the Company entered into aNon-Exclusive Aircraft Dry Lease Agreement with Brauser Aviation, LLC, an affiliated entity of Michael Brauser, our Executive Chairman, to pay a set hourly rate for Company-related usage of the aircraft. The Company recognized aircraft lease fee of $94,000 in total$216,000 for the year ended December 31, 2015.

35


Fluent has a vendor agreement with OnBlaze LLC (“OnBlaze”), a company which provides email marketing services for Fluent’s proprietary websites, and in which the spouse of Fluent’s President, Matthew Conlin, is the General Manager and an approximate 5% owner. Through the date of the Fluent Acquisition through December 31, 2015, Fluent paid $13,000 for media services provided and expects to spend approximately $350,000 in media services in 2016.

The brother of Fluent’s President, Matthew Conlin, is employed by Fluent as a sales representative.

OTHER MATTERS

A copy of our Form10-K for the year ended December 31, 2015,2016, without exhibits, is being mailed with this proxy statement. Stockholders are referred to the Form10-K for financial and other information about the Company.

Additional copies of our Form10-K for the year ended December 31, 20152016 may be obtained without charge by writing to Joshua Weingard, Corporate Counsel, 2650 North Military Trail, Suite 300, Boca Raton, Florida 33431. Exhibits will be furnished upon request. The Securities and Exchange CommissionSEC maintains a web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission.SEC. The address of such site ishttp://www.sec.gov.

We will pay for preparing, printing and mailing this proxy statement.the cost of soliciting proxies. Proxies may be solicited on our behalf by our directors, officers or employees in person or by telephone, electronic transmission and facsimile transmission, but such persons will not receive any special compensation for such services. We will reimburse banks, brokers and other custodians, nominees and fiduciaries for theirout-of-pocket costs of sending the proxy materials to our beneficial owners.

 

36


ANNEX A

AMENDMENT TO THE

IDI, INC.

2015 STOCK INCENTIVE PLAN

WHEREAS, IDI, Inc., a Delaware corporation (the “Company”) currently maintains and sponsors the IDI, Inc. 2015 Stock Incentive Plan (the “Plan”); and

WHEREAS, Section 14(k) of the Plan provides that the Board of the Directors of the Company (“Board”) may amend the Plan from time to time; and

WHEREAS, the Board has determined it to be in its best interests to amend the Plan as set forth herein; and

NOW, THEREFORE, effective upon the Company’s Stockholders’ approval as set forth in Section 14(k) of the Plan, the following amendment to the Plan is hereby adopted:

The last sentence of Section 5(a) of the Plan shall be amended and restated to read as follows:

“The total number of shares of Common Stock that may be issued pursuant to Awards granted under the Plan shall be 12,500,000.

Section 5(b) of the Plan shall be amended and restated to read as follows:

Certain Limitations on Specific Types of Awards.The granting of Awards under this Plan shall be subject to the following limitations:

(i) With respect to the shares of Common Stock issuable pursuant to this Section, a maximum of 12,500,000 of such shares may be subject to grants of Incentive Stock Options;

(ii) With respect to the shares of Common Stock issuable pursuant to this Section, a maximum of 12,500,000 of such shares may be issued in connection with Awards, other than Stock Options and Stock Appreciation Rights, that are settled in Common Stock;

(iii) With respect to the shares of Common Stock issuable pursuant to this Section, a maximum of 12,500,000 of such shares may be subject to grants of Options or Stock Appreciation Rights to any one Eligible Individual during any one fiscal year;

(iv) With respect to the shares of Common Stock issuable pursuant to this Section, a maximum of 12,500,000 of such shares may be subject to grants of Performance Shares, Restricted Stock, Restricted Stock Units and Awards of Common Stock to any one Eligible Individual during any one fiscal year; and

(v) The maximum value at Grant Date of grants of Performance Units which may be granted to any one Eligible Individual during any one fiscal year shall be $1,000,000.”

Except as modified by this Amendment, all of the terms and conditions of the Plan shall remain valid and in full force and effect.

IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the Company, has executed this instrument as of the      day of                      2016, on behalf of the Company.

IDI, INC.
By:
Name:
Title:
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YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.

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IDI,COGINT, INC. As a stockholder of IDI,Cogint, Inc., you have the option of voting your shares electronically through the Internet, eliminating the need to return the proxy card. Your electronic vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned the proxy card. Votes submitted electronically over the Internet must be received by 7:00 p.m., Eastern Time, on May 31, 2016.June 12, 2017.

 

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Use the Internet to vote your proxy. Have your proxy card available when you access the above website. Follow the prompts to vote your shares.

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Mark, sign and date your proxy card and return it in the postage-paid envelope provided.

 

 

PLEASE DO NOT RETURN THE PROXY CARD IF YOU    

ARE VOTING ELECTRONICALLY.    

 

  

p FOLD HERE DO NOT SEPARATE INSERT IN ENVELOPE PROVIDEDp

 

PROXY

  

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THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” EACH DIRECTOR NOMINEE LISTED AND “FOR” EACH OF PROPOSALS 2, 3, 4 AND 5.

PROPOSAL 2.

 

Proposal 1 – To elect the nine (9) directors listed below to IDI’sCogint Inc.’s Board of Directors to serve for a one year term until IDI’s 2017Cogint Inc.’s 2018 Annual Meeting of Stockholders or until a successor is duly elected and qualified.

 

FOR ALLNominees

Nominees

¨

 

  WITHHELD As

asto All Nominees

¨

NOMINEES:

 

(01)(1) Michael Brauser

(02)(2) Dr. Phillip Frost

(03)(3) Derek Dubner

(04)(4) Ryan Schulke

(05)(5) Peter Benz

(06)(6) Robert N. Fried

(07)(7) Donald Mathis

(08)(8) Steven D. Rubin

(09)(9) Robert Swayman

  
Proposal 3 – To approve an award of restricted stock units to our Executive Chairman.

FOR

¨

AGAINST

¨

ABSTAIN

¨

Proposal 4 – To approve an award of restricted stock units to our Vice Chairman.

FOR

¨

AGAINST

¨

ABSTAIN

¨

Proposal 52 – Advisory approval of IDI’s 2015Cogint Inc.’s 2016 executive compensation. 

FOR

¨

 

AGAINST

¨

 

ABSTAIN

¨

¨ 

Please check the box if you plan on attending the Annual Meeting.

IN THEIR DISCRETION THE PROXIES ARE AUTHORIZED AND EMPOWERED TO VOTE UPON OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING OF STOCKHOLDERS AND ALL CONTINUATIONS, ADJOURNMENTS OR POSTPONEMENTS THEREOF.

 

 

(Instruction: To withhold authority to vote for any individual nominee, mark “FOR ALL Nominees” and then strike a line through that nominee’s name in the list above)

 

Proposal 2 – To approve an amendment to the IDI, Inc. 2015 Stock Incentive Plan (“2015 Plan”) to increase the number of shares available for issuance under the 2015 Plan and ratify awards made under the 2015 Plan.

FOR

¨

AGAINST

¨

ABSTAIN

¨

IN THEIR DISCRETION THE PROXIES ARE AUTHORIZED AND EMPOWERED TO VOTE UPON OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING OF STOCKHOLDERS AND ALL CONTINUATIONS, ADJOURNMENTS OR POSTPONEMENTS THEREOF.

 

COMPANY ID:

 

PROXY NUMBER:

 

ACCOUNT NUMBER:

 
 

 

Signature                                                                 Signature, if held jointly                                                                                              Date                              , 2016.2017.

Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such.such


Important Notice Regarding the Availability of Materials for the Annual

Meeting of Stockholders to be held June 1, 201613, 2017

The Notice of the Annual Meeting of Stockholders, the Proxy Statement

and our Annual Report on Form10-K for the year ended December 31, 20152016

are available at http://www.ididata.comwww.cogint.com

 

 

 

 

 

 

p FOLD HERE DO NOT SEPARATE INSERT IN ENVELOPE PROVIDEDp

PROXY CARD

IDI,COGINT, INC.

2650 North Military Trail, Suite 300

Boca Raton, Florida 33431

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

20162017 ANNUAL MEETING OF STOCKHOLDERS

JUNE 1, 2016 (3:13, 2017 (10:00 P.M.A.M. EASTERN TIME)

The undersigned hereby appoints Derek Dubner and Joshua Weingard and each of them severally, as proxies of the undersigned, each with full power to appoint his substitute, to represent the undersigned at the Annual Meeting (the “Meeting”) of Stockholders of IDI,Cogint, Inc. (the “Company”) to be held on June 1, 2016 (3:13, 2017 (10:00 p.m.a.m. Eastern Time) at2650 North Military Trail, Suite 300, Boca Raton, Florida33431,, and at any adjournments thereof, and to vote all ordinary shares of common stock of the Company held of record by the undersigned at the close of business on April 13, 201618, 2017 in accordance with the instructions set forth on this proxy card and, in their discretion, to vote such shares on any other business as may properly come before the Meeting and on matters incident to the conduct of the Meeting. Any proxy heretofore given by the undersigned with respect to such ordinary shares of common stock is hereby revoked.

PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE

AND RETURN IT IN THE ENCLOSED ENVELOPE

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE REVERSE SIDE. IF THIS PROXY IS EXECUTED BUT NO VOTING INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR EACH OF THE DIRECTOR NOMINEES AND FOR PROPOSALS 2, 3, 4 AND 5.PROPOSAL 2.

(Continued and to be marked, dated, and signed on the other side)