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Cogint,
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COGINT,
2650 North Military Trail, Suite
Boca Raton, Florida 33431
Vesey Street, 9
th Floor5, 2019
(1) |
(2) |
(3) | To hold a non-binding advisory vote |
(4) |
Michael Brauser
Executive Chairman
Boca Raton, Florida
30, 2019
5, 2019
Company’s website on the Investor Relations page
COGINT,
2650 North Military Trail, Suite
Boca Raton, Florida 33431
Vesey Street, 9th Floor
5, 2019
(1) |
(2) |
(3) | To hold a non-binding advisory vote |
(4) |
If your shares are registered in your name, you are a stockholder of record. If your shares are held in the name of your broker, bank or another holder of record, these shares are held in “street name.”
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. In the aggregate, stockholders representing approximately 35,306,430 shares of the Company’s common stock or 64.2% have entered into the Stockholders’ Agreement.
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This list will also be made available at the Meeting.
We are
Name | Position | Director Since | ||||
| ||||||
| ||||||
| Ryan Schulke | Director and Chief Executive Officer | 2015 | |||
Peter Benz | Director | 2015 | ||||
| Matthew Conlin | Director and | 2018 | |||
| Andrew Frawley | Director | 2018 | |||
| Donald Mathis | Director | ||||
| 2015 | |||||
| ||||||
|
Mr. Michael Brauser, 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 as
Dr. Phillip Frost, 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. 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 a member of the Florida Council of 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) 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, 45, has served as a member of the Board since March 2015, and presently serves as the Chief Executive Officer and 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 17 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 the Company provides valuable business, industry, and management advice to the Board.
Mr.Ryan Schulke, 34,36, has served as a director of the Company since December 2015 and has served as the Chief Executive Officer of the Company subsidiarysince March 26, 2018. Mr. Schulke co-founded 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, LLC since its inception. Before merging with the Company in 2015, Fluent, LLC was privately held. Fluent, LLC is now a leader in people-based digital marketing and customer acquisition.wholly-owned subsidiary of the Company. Prior to founding Fluent, LLC, Mr. Schulke served as Media Director of Clash Media, a global digital advertising network. Mr. Schulke earned a Bachelor of Communications Arts from Marymont Manhattan College.
Mr.
Mr. Robert Fried
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(“Ideation”), from November 2007 to October 2009. Mr. Fried is the founder and Chief Executive Officer of 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, 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. FriedFrawley has served as a director of Nasdaq listed ChromaDex Corp.Curo Group Holdings Corp since July 2015 and President and Chief Strategy Officer since Marchits initial public offering in December 2017. Mr. FriedFrawley has also served as a memberthe chief executive officer of AJ Frawley & Associates LLC since 2002 and as Chief Executive Officer and Vice Chairman of the NominatingBoard of V12 Data since July 2018. From December 2014 to September 2016, Mr. Frawley served as chief executive officer of Epsilon, a segment of Alliance Data Systems Corporation. Prior to that, he served as Epsilon’s President from January 2012 to December 2014 and Corporate Governance Committeeas its president of ChromaDex Corp.Marketing Technology from July 2015January 2009 to MarchDecember 2011. Mr. Frawley has also served on the board of directors of the Data & Marketing Association since 2016, and has been the chairman of the board of directors of Cybba Inc., a privately held company, since September 2017. Mr. Frawley earned a Master of Business Administration from Babson College and a Bachelor of Science in Finance from The Nominating CommitteeUniversity of Maine.
Mr.experience.
Mr. Steven Rubin, 56, has served as a director of the Company since October 2009. Mr. Rubin has served as the Executive Vice President of OPKO since May 2007 and a director of OPKO since February 2007. Mr. Rubin currently serves on the board of directors 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, since 2008, Cocrystal Pharma, Inc., formerly Biozone Pharmaceuticals, Inc., a publicly traded biotechnology company developing new treatments for viral diseases, since January 2014, Sevion Therapeutics, Inc., a clinical stage company which discovers and develops next-generation biologics for the treatment of cancer and immunological diseases, since May 2014, Castle Brands, Inc., a developer and marketer of premium 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 as a director of Dreams, Inc., a vertically integrated sports licensing and products company, from 2006 to 2012, Safestitch Medical, Inc. from September 2007 until its merger with TransEnterix, Inc. in September 2013, Tiger X Medical, Inc. from September 2008 until its merger with BioCardia, Inc. in October 2016, and PROLOR Biotech, Inc., from February 2008 until its acquisition by OPKO in August 2013. Mr. Rubin served as the Senior Vice President, General Counsel and Secretary of IVAX 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, 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 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.
Nominees
annual meeting. The Board may accept the resignation, refuse the resignation, or refuse the resignation subject to such conditions designed to cure the underlying cause as the Board may impose. Promptly following the decision regarding the tendered resignation, the policy states that we will file with the SEC a current report on Form 8-K disclosing the decision with respect to the resignation, describing the deliberative process and, if applicable, the specific reasons for rejecting the tendered resignation.
When
Name | Stock awards (1)(6) | Other compensation | Total | |||||||||
Current Directors | ||||||||||||
Peter Benz (2) | $ | 153,250 | $ | 50,000 | $ | 203,250 | ||||||
Andrew Frawley (3) | $ | 66,250 | $ | 33,750 | $ | 100,000 | ||||||
Donald Mathis (4) | $ | 66,250 | $ | 45,000 | $ | 111,250 | ||||||
Former Directors | ||||||||||||
Michael Brauser (5) | $ | — | $ | — | $ | — | ||||||
Robert Fried (5) | $ | — | $ | — | $ | — | ||||||
Dr. Phillip Frost (5) | $ | — | $ | — | $ | — | ||||||
Steven Rubin (5) | $ | — | $ | — | $ | — | ||||||
Robert Swayman (5) | $ | — | $ | — | $ | — |
(1) | The amounts in this column represent the aggregate grant date fair value of RSU awards granted in 2018 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. For a discussion of valuation assumptions used in calculation of these amounts, see Note 12 to our audited financial statements, included within our 2018 Annual Report on Form 10-K. |
(2) | Mr. Benz was granted 30,000 RSUs on March 8, 2018 at a fair value of $2.90 per share and 25,000 RSUs on March 27, 2018 at a fair value of $2.65 per share for his services as a director. Mr. Benz also received compensation of $50,000 in 2018 ($40,000 was for his services as a director and $10,000 was for his services as the Chairman of the Audit Committee). |
(3) | Mr. Frawley was granted 25,000 RSUs on March 27, 2018 at a fair value of $2.65 for his services as director. Mr. Frawley also received compensation of $33,750 in 2018 ($30,000 was for his services as a director and $3,750 was for his services as the Chairman of the Corporate Governance and Nominating Committee). |
(4) | Mr. Mathis was granted 25,000 RSUs on March 27, 2018 at a fair value of $2.65 for his services as director. Mr. Mathis also received compensation of $45,000 in 2018 ($40,000 was for his services as a director and $5,000 was for his services as the Chairman of the Compensation Committee). |
(5) | While serving in their capacity as directors prior to the Spin-off, Mr. Brauser, Mr. Fried, Dr. Frost, Mr. Rubin and Mr. Swayman were not granted any stock awards or provided any compensation in 2018. In connection with Spin-off, on March 12, 2018, all unvested RSUs and shares of restricted stock held by Mr. Brauser, Mr. Fried, Dr. Frost, Mr. Rubin and Mr. Swayman were fully vested. |
(6) | As of December 31, 2018, each director held RSUs as follows: Mr. Benz – 25,000, Mr. Frawley – 25,000, Mr. Mathis – 25,000. |
Additionally, on April 13, 2017,served as Secretary of Ideation. No other member of 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.
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
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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 Auditis a current or former officer or employee of ours or any of our subsidiaries. None of the members of our Compensation Committee member;had any relationship required to be disclosed under this caption under the rules of the Securities 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.
Exchange Commission (the “SEC”).
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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.
Committee.
The Board 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 our website atwww.cogint.com.
The Audit Committee held six meetings during 2016 and took no action by written consent.
www.fluentco.com on the Investors page under the corporate governance link.
Committee.
aligns with the interests of our stockholders. The Compensation Committee Interlocksalso periodically monitors any potential risks associated with the Company’s compensation program and Insider Participation
policies.
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Company's senior management team.
year.
Mr. Barsky will forward to the directors all communications that, in his or her judgment, are appropriate for consideration by the directors. Examples of communications that would not be appropriate for consideration by the directors include commercial solicitations and matters not relevant to the stockholders, to the functioning of the Board, or to the affairs of Fluent.
and backgrounds, including both gender and ethnic diversity and diversity in substantive matters pertaining to the Company's business.
Messrs. Schulke Pursuant to our Bylaw requirements 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 partassuming that beginning with the firstour 2020 annual meeting of stockholders followingis held on June 5, 2020, any stockholder proposal to be considered at the closing2020 annual meeting, including nominations of the Fluent Acquisition and thereafterpersons for so long as the Fluent stockholders beneficially own, in the aggregate, at least 30%election to our board of the shares issued in the Fluent Acquisition, Sellers are entitleddirectors, must be properly submitted to nominate two individuals to the Board.
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us not earlier than February 6, 2020, nor later than March 7, 2020.
FOR FISCAL YEAR 2019
Changes in Independent Registered Public Accounting
Effective July 14, 2015,
During the period May 14, 2015 through July 14, 2015, the Company had 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.2019.
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.
2016 | 2015 | |||||||
Audit Fees | $ | 837,096 | $ | 595,481 | ||||
Audit-Related Fees | 80,763 | 34,556 | ||||||
Tax Fees | — | 8,697 | ||||||
All Other Fees | — | — | ||||||
|
|
|
| |||||
Total | $ | 917,859 | $ | 638,734 |
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2017.
2018 | 2017 | |||||||
Audit Fees | $ | 827,864 | $ | 849,076 | ||||
Audit-Related Fees | — | 297,260 | ||||||
Tax Fees | — | — | ||||||
All Other Fees | — | — | ||||||
Total | $ | 827,864 | $ | 1,146,336 |
Tax fees in 2015 relates to tax consulting services performed by Grant Thornton prior to being engaged asacquisitions and the Company’s independent registered public accountant.
Spin-off of Red Violet.
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. 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, |
Robert Swayman
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EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
Name | Age | Position | ||
Ryan Schulke | 36 | Chief Executive Officer | ||
Matthew Conlin | 36 | President | ||
Alexander Mandel | 49 | Chief Financial Officer | ||
Donald Patrick | 58 | Chief Operating Officer |
Cogint’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 recommendedCompany since July 2018. From February 2016 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, 2016.
Compensation Committee:
Steven D. Rubin — Chairman
Robert Fried
Peter Benz
Donald Mathis
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 the Company during 2016, and provides a brief summary of the compensation to be paid to the executive officers in 2017. Throughout this analysis, the individuals whoJune 2018, Mr. Mandel served as the Chief ExecutiveFinancial Officer andof IAC Applications, a division of IAC/InterActiveCorp. From 2010 to 2015, Mr. Mandel was employed by LendingTree, Inc., including as its Chief Financial Officer during 2016,from 2012 to 2015. He was a Managing Director at Centerview Partners LLC, an investment banking advisory firm in New York City, from 2008 to 2010. Prior to that, Mr. Mandel held various positions at investment banking firm Bear, Stearns & Co. Inc. from 1996 to 2008, including Managing Director beginning in 2003. He received his Bachelor of Arts in economics from Tufts University and his Masters of Business Administration from Columbia Business School.
Background. During 2014 and before the March 21, 2015 merger (“TBO Merger”) between Tiger Media, Inc. (“Tiger Media”) and The Best One, Inc. (“TBO”), Tiger Media was engaged in the outdoor advertising business in China. Before the TBO Merger, Peter W.H. TanJanuary 2018. Mr. Patrick served as Chief Executive Officer of Tiger Media and following the TBO Merger, whereby TBO becameSeneca One Finance, Inc., a wholly-owned subsidiary of the Company, Derek Dubner joined Peter Tan asCo-Chief Executive Officers of the Company. Jacky Wang joined Tiger Media as Chief Financial Officer on August 1, 2014. Before Mr. Wang, duringspecialty consumer finance company, from 2014 Peter Tanto 2017. From 2011 to 2013, he served as Interim Chief Financial Officer. Tiger Media changed its name to IDI,President of Infogroup Marketing Services, a business unit of InfoGROUP, Inc. in April 2015. Company subsidiary TBO changed its name to IDI Holdings in March 2015. In June 2015, in connection with the continuing shift in the Company’s focus towards the big data and analytics sector via subsidiary Interactive Data, the Company’s Board approved a plan to 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 MergerBefore that, Mr. Patrick 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 as the Company’s Executive Chairman and principal executive officer, Aaron Solomon as interim Chief Financial Officer, James Reilly as President and Chief Operating Officer and Mr. Wang changed positionof Merkle from Chief Financial Officer1997 to Chief Accounting Officer. In March 2016, Daniel MacLachlan, who had been the Chief Financial Officer of TBO until early February 2015, was appointed Chief Financial Officer and Mr. Solomon was appointed Senior Vice President of Finance and Administration. In December 2015, the Company provided Peter Tan notice ofnon-renewal of his employment agreement. In March 2016, the 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 Market2010. He graduated with an MBA from the NYSE MKT.
Material ElementsUniversity of Our Compensation Policy
Chicago and a BA from St. Lawrence University.
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 responsibilitieseach of the named executive officers for the last two completed fiscal years.
Name and principal position | Year | Salary | Bonus | Stock awards (1) | Non-equity incentive plan compensation (2) | All other compensation (3) | Total | |||||||||||||||||||
Ryan Schulke (4) | 2018 | $ | 296,667 | $ | 125,000 | $ | 1,480,800 | $ | 401,857 | $ | 5,933 | $ | 2,310,257 | |||||||||||||
(Chief Executive Officer) | 2017 | $ | 260,000 | $ | — | $ | 280,000 | $ | 235,327 | $ | 7,367 | $ | 782,694 | |||||||||||||
Matt Conlin (5) | 2018 | $ | 296,667 | $ | 125,000 | $ | 1,480,800 | $ | 401,857 | $ | 11,000 | $ | 2,315,324 | |||||||||||||
(President) | 2017 | $ | 260,000 | $ | — | $ | 280,000 | $ | 235,327 | $ | 10,400 | $ | 785,727 | |||||||||||||
Donald Patrick (6) | 2018 | $ | 294,318 | $ | — | $ | 459,750 | $ | 371,757 | $ | 8,000 | $ | 1,133,825 | |||||||||||||
(Chief Operations Officer) | 2017 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Derek Dubner (7) | 2018 | $ | 82,937 | $ | — | $ | — | $ | — | $ | — | $ | 82,937 | |||||||||||||
(Former Chief Executive Officer) | 2017 | $ | 325,000 | $ | — | $ | 2,395,000 | $ | — | $ | — | $ | 2,720,000 |
(1) | The amounts in this column represent the aggregate grant date fair value of RSU awards granted in 2018 and 2017 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. For a discussion of valuation |
(2) | Represents performance-based bonuses earned by our named executive officers in respect of our performance in fiscal years 2017 and 2018. |
(3) | The amounts in this column represent the Company's 401(k) plan company-matching contributions for each officer. |
(4) | Mr. Schulke began service as the Company's Chief Executive Officer following the Spin-off on March 27, 2018. Mr. Schulke was paid an annual bonus for 2018 and 2017 of $1,480,800 and $280,000, respectively. Mr. Schulke was granted 80,000 RSUs on March 20, 2018 at a fair value of $2.61 per share, 480,000 deferred stock units in connection with the Spin-off on March 27, 2018 at a fair value of $2.65 and 50,000 RSUs on April 13, 2017 at a fair value of $5.60. Mr. Schulke additionally received a one-time cash bonus in connection with the Spin-off in 2018 of $401,857. |
(5) | Mr. Conlin began service as the Company's President following the Spin-off on March 27, 2018. Mr. Conlin was paid an annual bonus for 2018 and 2017 of $1,480,800 and $280,000, respectively. Mr. Conlin was granted 80,000 RSUs on March 20, 2018 at a fair value of $2.61 per share, 480,000 deferred stock units in connection with the Spin-off on March 27, 2018 at a fair value of $2.65 and 50,000 RSUs on April 13, 2017 at a fair value of $5.60. Mr. Conlin additionally received a one-time cash bonus in connection with the Spin-off in 2018 of $401,857. |
(6) | Mr. Patrick began service as the Company's Chief Operations Officer following the Spin-off on March 27, 2018. Mr. Patrick's salary reflects his service from January 8, 2018 through December 31, 2018. Mr. Patrick was paid an annual bonus for 2018 of $459,750. Mr. Patrick was granted 100,000 RSUs on March 20, 2018 at a fair value of $2.61 per share and 75,000 deferred stock units in connection with the Spin-off on March 27, 2018 at a fair value of $2.65. |
(7) | Mr. Dubner served as the Company’s Chief Executive Officer and director from March 9, 2016 through March 26, 2018. Mr. Dubner's salary for 2018 reflects his service from January 1, 2018 through March 26, 2018. Mr. Dubner was granted 125,000 RSUs on April 13, 2017 at a fair value of $5.60 per share and 300,000 shares of restricted stock on September 7, 2017 at a fair value of $5.65 per share. |
Grants of equitystatutory limits.
Before the TBO Merger, compensation matters were largely determinedDecember 31, 2018.
Name | Stock awards | |||||||
Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested (5) | |||||||
Ryan Schulke | 333,333 | (1) | $ | 1,199,999 | ||||
Matt Conlin | 333,333 | (2) | $ | 1,199,999 | ||||
Donald Patrick | 100,000 | (3) | $ | 360,000 | ||||
Derek Dubner | — | (4) | $ | — |
(1) | Represents (i) 550,000 RSUs granted to Mr. Schulke under the 2015 Plan on December 8, 2015, which vest in increments of 30% on January 1, 2017 and January 1, 2018 and 40% on January 1, 2019, (ii) 50,000 RSUs granted on April 13, 2017, which vest in three equal annual installments beginning on February 1, 2018, and (iii) 80,000 RSUs granted on March 20, 2018, which vest in three equal annual installments beginning on March 1, 2019. Each RSU represents the right to receive one share of common stock upon vesting. The 680,000 RSUs held by Mr. Schulke as of December 31, 2018 include 346,667 shares that have been vested but not delivered. |
(2) | Represents (i) 550,000 RSUs granted to Mr. Conlin under the 2015 Plan on December 8, 2015, which vest in increments of 30% on January 1, 2017 and January 1, 2018 and 40% on January 1, 2019, (ii) 50,000 RSUs granted on April 13, 2017, which vest in three equal annual installments beginning on February 1, 2018, and (iii) 80,000 RSUs granted on March 20, 2018, which vest in three equal annual installments beginning on March 1, 2019. Each RSU represents the right to receive one share of common stock upon vesting. The 680,000 RSUs held by Mr. Conlin as of December 31, 2018 include 346,667 shares that have been vested but not delivered. |
(3) | Represents (i) 75,000 RSUs granted to Mr. Patrick under the 2015 Plan on March 20, 2018, which vest in three equal annual installments beginning on February 1, 2019, and (ii) 25,000 RSUs granted on March 20, 2018, which vest in three equal annual installments beginning on March 1, 2019. Each RSU represents the right to receive one share of common stock upon vesting. |
(4) | Mr. Dubner did not have any shares or units of stock that remained unvested as of December 31, 2018, as all of his shares issued under the 2015 Plan were accelerated on March 27, 2018, the date of the Spin-off. |
(5) | Determined by multiplying the closing price of the Company’s common stock on December 31, 2018, $3.60, by the number of shares of common stock underlying the RSUs or restricted stock. |
Long-Term Equity Incentive Compensation
Plan Information
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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 the 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, and in September 2011, to 900,000 shares and to 1.2 million shares in December 2013.
The 2008 Plan expired by its terms on January 1, 2018.
2016 Effective September 6, 2017, the Board and the Company’s Compensation PoliciesCommittee approved an increase in the 2015 Plan by one million shares, resulting in an aggregate of 13.5 million shares of common stock issuable under the 2015 Plan. Stockholders representing a majority in voting power of the Company approved the amendment to the 2015 Plan on September 6, 2017 and 2017 Compensation Matters
We continue our policythe amendment was effective on January 8, 2018.
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted average exercise price of outstanding options warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||||
Equity compensation plans approved by security holders (1) | 6,442,741 | (2) | $ | 5.53 | (3) | 7,809,048 | ||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 6,442,741 | $ | 5.53 | 7,809,048 |
(1) | The equity compensation plans approved by security holders include the 2008 Plan and 2015 Plan. |
(2) | Includes 3,831,965 shares of RSUs and restricted stock to be issued upon the vesting of such RSUs and restricted stock. |
(3) | The weighted-average exercise price does not reflect the shares that will be issued in connection with the vesting of RSUs and restricted stock, since RSUs and restricted stock have no exercise price. |
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 by considering all factors deemed relevant. In determining base salaries for 2016, the Compensation Committee considered the experience, skills, knowledge, and responsibilities of the named executive officers as disclosed in their respective roles.
As a result of providing certain consulting services, Mr. Brauser was granted 175,000 RSUsthis proxy statement as described in April 2015, which vest over three years. Mr. Brauser was elected to the Company’s Board and was appointed Executive Chairman in June 2015. Mr. Brauser began receiving an annual salary of $1.00 commencing in September 2015.
In recognition of Mr. Brauser’s efforts, including those as the driving force in identifying Fluent as a strategic merger partner and consummating the transaction in December 2015, based on Mr. Brauser’s preference that compensation for his efforts on behalf of the Company be aligned primarily with the interests of the Company and its stockholders, the Compensation Committee entered into an employment agreement with Mr. Brauser on November 16, 2015 to increase his salary to $25,000 per annumDiscussion and provide forAnalysis, the award of 5.0 million RSUs outside of the 2015 Plan, subject to stockholder approval (the “Brauser RSUs”). The Brauser RSUs were 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 change in control, (ii) a termination of Brauser’s employment without cause, (iii) Mr. Brauser’s termination of his employment for 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 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. Brauser may elect to defer delivery of any vested RSUs until a later date.
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Mr. Dubner served as ourCo-Chief Executive Officer from March 2015 until his appointment as sole Chief Executive Officer on March 2016. Prior to the TBO Merger, Mr. Dubner was employed by TBO pursuant to a September 30, 2014 Employment Agreement that was amended in March 2015. The Company assumed Mr. Dubner’s agreement as part of the TBO Merger, whereby TBO became a wholly-owned subsidiary of the Company. Mr. Dubner’s base salary was $200,000executive compensation tables and the agreement provided for atwo-year term. 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. Dubner for good reason, or by the Company due to an adverse ruling, as those terms are defined in the agreement, Mr. Dubner will be paid severance equal to the greater of (x) Mr. Dubner’s base salary for the remainder of the termnarrative discussion 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 violationcompensation disclosure rules of the Confidentiality, Nondisclosure, Noncompetition, Nonsolicitation and Nondisparagement Agreement attachedSEC (commonly known as Exhibit Ba “Say on Pay” proposal). At the Meeting, the Company will present its Say on Pay proposal for approval.
The agreement 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 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. Mr. Dubner was paid the $100,000 bonusbe binding on the closing of the TBO Merger and was paid the $150,000 bonus following the July 23, 2015 registered direct placement of Company shares which resulted in approximately $10.0 million in gross proceeds.
On August 22, 2015,Board, the Compensation Committee, increased Mr. Dubner’s salary to $264,000 per annum, based on his individual andor the Company’s performance. In recognition of his efforts in closing the Fluent Acquisition and related transactions,Company. However, the Compensation Committee amended Mr. Dubner’s agreement on November 16, 2015 to reflectwill take into account the previous increase in base salary, to award him 500,000 RSUs under the 2015 Plan, and to extend the term until September 30, 2017. The RSUs vest over three years and are subject to the Performance Vesting Conditions and the Additional Vesting Conditions. The Company determined the Performance Vesting Conditions were met, effective March 14, 2017. On July 7, 2016, the Compensation Committee increased Mr. Dubner’s salary to $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 his employment through April 30, 2020 and to award 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 an “adverse ruling” (as each such term is defined in the employment agreement).
Mr. Solomon served as the Company’s Interim Chief Financial Officer from June 2015 through March 29, 2016 and was appointed the Company’s Senior Vice President of Finance & Administration 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 that vest over three years and are subject to the Performance Vesting Conditions and the Additional Vesting 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 2019, subject to accelerated vesting under certain conditions. Within 30 daysoutcome of the effective grant date, Mr. Solomon may elect to defer delivery of any vested RSUs until a later date.
In March 2016, the Board appointed Mr. MacLachlan as Chief Financial Officer and principal financial officer. Pursuant to the terms of his employment agreement with TBO effective on October 2, 2014, as amended,
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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 received 50,000 RSUs, which vested in equal quarterly installments during the term of the agreement and were delivered at the end of thetwo-year vesting period. The term of the employment agreement was 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 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 namedvote when considering future 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.”
compensation arrangements.
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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.termination. At our annual meeting of stockholders held in June 2016,2018, approximately 98.6%97.1% 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 20162018 proxy statement. Although the advisory say on paySay 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 (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 |
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GRANTS OF PLAN-BASED AWARDS — 2016
The following table sets forth each grant of an award made to a named executive officer for the fiscal year ended December 31, 2016 under any Company plan.
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OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END — 2016
The following table sets forth certain information regarding equity-based awards held by the named executive officers as of December 31, 2016.
Option Awards | Stock Awards (1) | |||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (2) | ||||||||||||||||||
Michael Brauser | — | — | $ | — | — | 6,116,666 | $ | 21,102,498 | ||||||||||||||||
Derek Dubner | — | — | $ | — | — | 616,666 | $ | 2,127,498 | ||||||||||||||||
Daniel MacLachlan | — | — | $ | — | — | — | $ | — | ||||||||||||||||
Jeff Dell | — | — | $ | — | — | 35,000 | $ | 120,750 | ||||||||||||||||
Aaron Solomon | — | — | $ | — | — | 83,333 | $ | 287,502 | ||||||||||||||||
Harry Jordan | — | — | $ | — | — | 100,000 | $ | 345,000 |
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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, 2016.
Name | Stock Awards | |||||||
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 | ||||
Daniel MacLachlan | 100,000 | (3) | $ | 330,000 | ||||
Jeff Dell | — | $ | — | |||||
Aaron Solomon | 16,667 | (4) | $ | 82,168 | ||||
Harry Jordan | — | $ | — |
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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, 2016.
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 |
Executive Employment Agreements
Michael Brauser
Effective November 16, 2015, the Company entered into an employment agreement with Mr. Brauser in connection with his service as Executive Chairman. The employment agreement has an initial term of five years and automatically extends for successiveone-year terms unless either party gives the other party six months written notice of termination before the expiration of the applicableone-year term or unless terminated earlier pursuant to the terms of the employment agreement. Pursuant to the employment agreement, Mr. Brauser receives an annual salary of $25,000. Also, pursuant to the employment agreement, on November 16, 2015,
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Mr. Brauser was granted 5.0 million RSUs outside of the 2015 Plan, subject to stockholder approval (the “Brauser RSUs”). The Brauser RSUs were 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, 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, and not revoke a general release within forty-five (45) days of his termination of employment.
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For purposes of Mr. Brauser’s employment 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 Board 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 Board 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 a resolution duly adopted by the affirmative vote of a majority of the entire 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 beginning of such period constituted the Board (together with any new or replacement directors whose election by the Board, or whose nomination for
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election 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
(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).
Derek Dubner and Daniel MacLachlan
Below is a summary of Messrs. Dubner’s and MacLachlan’s employment agreements, as amended.
Effective April 11, 2017 (the “Effective Date”), the Company amended the employment agreements with each of Mr. Dubner (the “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 Dubner RSUs vest 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 100,000 RSUs under the 2015 Plan (the “MacLachlan RSUs”). The MacLachlan RSUs vest 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. MacLachlan may elect to defer delivery of any vested RSUs until a later date.
In addition, the Dubner 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 delivery 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
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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 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
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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 2
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 Cogint, Inc. approve, on an advisory basis, the compensation of its named executive officer, as disclosed in the Cogint, Inc. Proxy Statement for the 2017 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 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.
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Vesey Street, 9
th Floor, New York, New York 10282.Current Named Executive Officers and Current Directors/Nominees | Common Stock Beneficially Owned | Percentage of Common Stock Beneficially Owned (1) | |||||
Current Named Executive Officers: | |||||||
Ryan Schulke | 9,199,932 | (2) | 12.0 | % | |||
Matthew Conlin | 7,984,129 | (3) | 10.4 | % | |||
Alexander Mandel | — | (4) | * | ||||
Donald Patrick | 108,334 | (5) | * | ||||
Current Directors/Nominees: | |||||||
Peter Benz | 118,334 | (6) | * | ||||
Andrew Frawley | 8,334 | (7) | * | ||||
Donald Mathis | 58,334 | (8) | * | ||||
All current Directors and Executive Officers as a group (7 persons) | 15,477,397 | (9) | 20.2 | % | (9) | ||
5% Holders: | |||||||
Dr. Phillip Frost | 18,784,874 | (10) | 24.5 | % | |||
JB Capital Partners, L.P. | 5,266,219 | (11) | 6.9 | % | |||
Wellington Trust Company, National Association | 4,910,780 | (12) | 6.4 | % |
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(2) | Mr. |
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Company. Mr. Schulke’s shares include (i) |
(3) | Mr. Conlin also serves as a director of the Company. Mr. Conlin’s shares include (i) 5,300,229 shares held directly, (ii) 2,000,000 shares held by RSMC Partners, LLC, |
(4) | Mr. Mandel's shares do not include (i) 75,000 RSUs that vest in three annual installments beginning on February 1, 2020, (ii) 175,000 RSUs that vest in four annual installments, beginning on February 1, 2021, and (iii) 308,000 shares of |
(5) | Mr. Patrick’s shares do not include (i) 50,000 RSUs that vest in three annual installments beginning on February 1, 2020, (ii) 16,666 RSUs that vest in two annual installments beginning on March 1, 2020, (iii) 50,000 deferred stock units that vested on March 27, 2018, subject to deferred delivery in two annual installments beginning on March 27, 2020, (iv) 225,000 RSUs that vest in four annual installments, beginning on February 1, 2021, and (v) 396,000 shares of common stock subject to options exercisable as early as February 1, 2020. |
(6) | Mr. Benz’s shares do not include 16,666 RSUs that vest in two annual installments beginning on March 27, 2020. |
(7) | Mr. Frawley’s shares do not include 16,666 RSUs that vest in two annual installments beginning on March 27, 2020. |
(8) | Mr. Mathis’ shares do not include 16,666 RSUs that vest in two annual installments beginning on |
(9) | The 2,000,000 shares held RSMC Partners, LLC, which are deemed beneficially owned by both Mr. |
(10) | Dr. Frost’s shares include |
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Frost Gamma |
(11) | Based on the Schedule 13G/A filed by |
(12) | Based on the Schedule 13G filed by Wellington Trust Company, National Association on February 12, 2019. The address for Wellington is 280 Congress Street, Boston, MA 02210. |
or reported.
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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 the Company’s benefit and is upon terms no less favorable to the Company than if the related party transaction was with an unrelated third party.
Earn-out Shares
On March 11, 2016, the Company issued 900,108 shares
Business Consulting Agreement
On October 13, 2014, the Company entered into a business consulting services agreement with Marlin Capital for a term of four years (the “Marlin Consulting Agreement”). 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 provided for equity compensation issued to Marlin Capital in the amount of 2,000,000two managers, held RSUs of TBO. The Company assumed these RSUs in the TBO Merger and the RSUs representrepresenting the right to receive 2,000,000 shares of the Company’sCompany's common stock. Thestock, for consulting services provided by Marlin Capital. These RSUs were to vest on four equal annual installmentsannually beginning from October 13, 2015 only if certain performance goals of the Company arewere met. The shares underlying such RSUs willwould not behave been delivered until October 13, 2018, unless there iswas a change of control of the Company.Company, termination of the agreement by the Company without cause, or termination of the agreement by Marlin Capital for good reason. The Company recognizeddetermined the performance goals were met as of December 31, 2015. On March 12, 2018, the Company terminated the Business Consulting Agreement. The unvested 500,000 shares were accelerated, and related share-based compensation expensesexpense of $1,252,000$906,000 was recognized during the first quarter of 2018.
Conversion 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,2018 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 cancelled2017, respectively. In addition, upon the exchange.
acceleration, the remaining unvested 2,500,000 shares were accelerated, and related share-based compensation expense of $6,468,000 was recognized during the first quarter of 2018. The Consulting Agreement was terminated upon the Spin-off of Red Violet.
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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 our Executive Chairman, to pay a set hourly rate for Company-related usage of the aircraft. The Company recognized aircraft lease fee of $216,000 for the year ended December 31, 2016.
OTHER MATTERS
A copy of our Form10-K for the year ended December 31, 2016,2018, without exhibits, is being mailed with this proxy statement. Stockholders are referred to the Form10-K for financial and other information about the Company.
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YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
Vote by Internet – QUICK *** EASY *** IMMEDIATE
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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.
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SignatureSignature, if held jointlyDate, 2017.
Note: Please sign exactly as name appears hereon. When sharesAs of the date of the filing of this Proxy Statement, we are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please give title as such
Important Notice Regarding the Availabilitynot aware of Materials for the Annual
Meeting of Stockholdersany matters to be held June 13, 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, 2016
are available at http://www.cogint.com
p FOLD HERE● DO NOT SEPARATE● INSERT IN ENVELOPE PROVIDEDp
PROXY CARD
COGINT, INC.
2650 North Military Trail, Suite 300
Boca Raton, Florida 33431
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
2017 ANNUAL MEETING OF STOCKHOLDERS
JUNE 13, 2017 (10:00 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 undersignedraised at the Annual Meeting (the “Meeting”) of Stockholders of Cogint, Inc. (the “Company”)other than those referred to be held on June 13, 2017 (10:00 a.m. Eastern Time) at 2650 North Military Trail, Suite 300, Boca Raton, Florida 33431, and at any adjournments thereof, and to vote all shares of common stock of the Company held of record by the undersignedin this Proxy Statement. If other matters are properly presented at the closeMeeting for consideration, the persons named in the form of business on April 18, 2017 in accordance withproxy will vote the instructions set forth on this proxy card and,shares they represent 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 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 PROPOSAL 2.
(Continued and to be marked, dated, and signed on the other side)