INUVO, INC.
10-Ks and 10-Qs
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SCHEDULE 14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment
No. )
Filed
by the Registrant
☒
Filed
by a party other than the Registrant
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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☒
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Definitive
Proxy Statement
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☐
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Definitive
Additional Materials
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☐
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Soliciting
Material Under Rule 14(a)(12)
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Inuvo, Inc.
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(Name
of Registrant as Specified in Its Charter)
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Not
Applicable
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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No fee
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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of each class of securities to which transaction
applies:
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2.
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Aggregate
number of securities to which transaction applies:
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3.
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
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fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
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Schedule or Registration Statement No.:
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Party:
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NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS
____________________
TO BE HELD ON AUGUST 11, 2021
Our
Board of Directors (the “
Board
”) has called and
invites you to attend the 2021 annual meeting of stockholders of
Inuvo, Inc. (the “
Company
”,
“
Inuvo
”,
“
we
”,
“
us
” or
“
our
”) at the Company’s offices
located at
500 President Clinton Avenue, Suite 300, Little
Rock, Arkansas 72201
on
August 11, 2021 at 9:00 a.m. local time.
At the
2021 annual meeting you will be asked to vote on the following
matters:
●
the
election of two Class I directors (the “
Election of Director
Proposal
”);
●
the
ratification of the appointment of Mayer Hoffman McCann P.C. as our
independent registered public accounting firm (the
“
Accounting Firm
Proposal
”);
●
the
approval of an amendment to our articles of incorporation
increasing the number of authorized shares of our common stock,
$0.001 par value per share (“
Common Stock
”), that we
may issue from 150,000,000 to 200,000,000 (the “
Amendment
Proposal
”);
●
to
approve an adjournment of the 2021 annual meeting, if necessary, to
solicit additional proxies if there are not sufficient votes in
favor of the Amendment Proposal (the “
Adjournment Proposal
”);
and
●
any
other business as may properly come before the
meeting.
The
Board has fixed the close of business on June 24, 2021 as the
record date for determining the stockholders that are entitled to
notice of and to vote at the 2021 annual meeting and any
adjournments thereof.
All
stockholders are invited to attend the 2021 annual meeting in
person. Your vote is important regardless of the number of shares
you own. Please vote your shares in person, by proxy over the
Internet by following the instructions provided in the Notice of
Internet Availability of Proxy Materials, or, if you request
printed copies of the proxy materials by mail, you can also vote by
mail, by telephone or by facsimile.
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By
Order of the Board of Directors
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/s/ Richard
K. Howe
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Little
Rock, Arkansas
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Richard
K. Howe
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June
30, 2021
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Chairman
and Chief Executive Officer
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Important Notice Regarding the
Availability of Proxy Materials for the 2021 annual meeting to be
held on August 11, 2021
. This proxy statement, along with
our Annual Report on Form 10-K for the year ended December 31,
2020, as amended, are available free of charge on our website
www.inuvo.com
.
INUVO, INC.
PROXY STATEMENT
2021 ANNUAL MEETING OF STOCKHOLDERS
TABLE OF CONTENTS
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Page No.
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General
Information
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1
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Proposal
1 – Election of Director Proposal
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4
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Proposal
2 – Accounting Firm Proposal
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5
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Proposal
3 – Amendment Proposal
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6
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Proposal
4 – Adjournment Proposal
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7
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Other
Matters
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8
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Dissenter’s
Rights
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8
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Corporate
Governance
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8
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Executive
Compensation
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14
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Principal
Stockholders
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20
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Certain
Relationships and Related Transactions
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22
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Stockholder
Proposals to be Presented at the Next Annual Meeting
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22
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Availability
of Annual Report on Form 10-K
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22
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Stockholders
Sharing the Same Last Name and Address
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22
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Where
You Can Find More Information
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22
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Exhibit
A:
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Form of
Articles of Amendment
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A-1
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FORWARD-LOOKING STATEMENTS
This proxy statement contains
“forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These
statements are based on our current expectations and involve risks
and uncertainties which may cause results to differ materially from
those set forth in the statements. The forward-looking statements
may include statements regarding actions to be taken in the future.
We undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise. Forward-looking statements should be evaluated together
with the many uncertainties that affect our business, particularly
those set forth in the section on forward-looking statements and in
the risk factors in Item 1.A of our Annual Report on Form 10-K for
the fiscal year ended December 31, 2020 as filed with the
Securities and Exchange Commission (the “
SEC
”) on February 11, 2021, as amended as filed
with the SEC on March 10, 2021 (collectively, the
“
2020
10-K
”).
i
Stockholders Should Read the Entire Proxy Statement
Carefully Prior to Returning Their Proxies
PROXY STATEMENT
FOR
2021 ANNUAL MEETING OF STOCKHOLDERS
General Information
The
accompanying proxy is solicited by the Board of Inuvo, Inc. for use
at our 2021 annual meeting of stockholders
to be held at the Company’s offices located
at
500 President Clinton Avenue, Suite 300, Little Rock,
Arkansas 72201
on August
11, 2021 at 9:00 a.m. local time
or any adjournment or postponement
thereof, for the purposes set forth in the accompanying Notice of
2021 Annual Meeting of Stockholders. The date of this proxy
statement is June 28, 2021, and this proxy statement and the
enclosed proxy are first being mailed or otherwise delivered to our
stockholders on or about June 30, 2021.
Soliciting Proxies
This
proxy statement and the accompanying proxy card are being mailed to
owners of our Common Stock in connection with the solicitation of
proxies by the Board for the 2021 annual meeting of stockholders.
We will pay the entire cost of preparing, assembling, printing,
mailing and distributing these proxy materials and soliciting
votes.
Proxies may be solicited,
without extra compensation, by our officers and employees by mail,
telephone, fax, personal interviews or other methods of
communication. We will request brokers, custodians, nominees and
other record holders of Common Stock to forward copies of this
proxy statement and other soliciting materials to persons for whom
they hold Common Stock and to request authority for the exercise of
proxies. In these cases, the Company will, upon the request of the
record holders, reimburse these holders for their reasonable
expenses. The Company has also retained
Alliance Advisors,
LLC,
a proxy solicitation firm, for
assistance in connection with the solicitation of proxies for the
2021 annual meeting. Any customary fees of Alliance Advisors, LLC
will be paid by the Company. The Company estimates that its proxy
solicitor fees will be approximately
$10,000
plus reasonable out of pocket
expenses.
If
you have any questions concerning the matters described or this
proxy statement or need assistance voting your shares, please
contact the proxy solicitor at the address or telephone number
listed below:
Alliance
Advisors, LLC
200
Broadacres Drive, 3
rd
Floor
Bloomfield,
New Jersey 07003
Shareholders Call Toll Free:
833-550-0991
Electronic
access
.
To access
our proxy statement and 2020 10-K electronically, please visit our
corporate website at
www.inuvo.com
. The information
which appears on our website is not part of this proxy
statement.
1
Voting
securities
.
Only our
stockholders of record as of the close of business on June 24,
2021, the record date for the 2021 annual meeting, will be entitled
to vote at the meeting and any adjournment thereof. As of that
date, there were 118,516,204 shares of our common stock
outstanding, all of which are entitled to vote with respect to all
matters to be acted upon at the 2021 annual meeting. Each holder of
record as of that date is entitled to one vote for each share
held.
Quorum
. In
accordance with our by-laws, the presence, in person or by proxy,
of the holders of at least 33 1/3% of the Common Stock issued and
outstanding and entitled to vote, regardless of whether the proxy
has authority to vote on all matters, constitutes a quorum which is
required in order to hold the 2021 annual meeting and conduct
business. Presence may be in person or by proxy. You will be
considered part of the quorum if you voted on the Internet, by
telephone, by facsimile or by properly submitting a proxy card or
voting instruction form by mail, or if you are present and vote at
the 2021 annual meeting. Votes for and against, abstentions and
“broker non-votes,” if any, will each be counted as
present for purposes of determining the presence of a
quorum.
Broker
non-votes
.
If you
are a beneficial owner whose shares are held of record by a broker,
bank or other nominee, you should instruct the broker, bank or
other nominee how to vote your shares. If you do not provide voting
instructions, your shares will not be voted on any proposal that is
a “non-routine” matter which the broker, bank or other
nominee does not have discretionary authority to vote. This is
called a “broker non-vote.” In these cases, the broker,
bank or other nominee can register your shares as being present at
the 2021 annual meeting for purposes of determining the presence of
a quorum, but will not be able to vote on those matters for which
specific authorization is required. Your broker, bank or other
nominee has discretionary voting authority to vote your shares on
Proposals 2, 3 and 4 if the broker, bank or other nominee does not
receive voting instructions from you because such proposals are
considered to be “routine” matters under the rules of
the NYSE. Your broker, bank or other nominee, however, does not
have discretionary authority to vote on Proposal 1 at the 2021
annual meeting without instructions from you, in which case a
broker non-vote will occur and your shares will not be voted on
these matters.
In any event, it is
particularly important that you instruct your broker as to how you
wish to vote your shares as it ensures that your shares will be
voted in accordance with your instructions.
Voting of
proxies
.
All valid
proxies received prior to the meeting will be exercised. All shares
represented by a proxy will be voted, and where a proxy specifies a
stockholder’s choice with respect to any matter to be acted
upon, the shares will be voted in accordance with that
specification. If no choice is indicated on the proxy, the shares
will be voted by the individuals named on the proxy card as
recommended by the Board.
Revocability of
proxies
. A stockholder giving a proxy has the power to
revoke his or her proxy, at any time prior to the time it is
exercised, by delivering to our corporate secretary a written
instrument revoking the proxy or a duly executed proxy with a later
date, or by attending the meeting and voting in person.
If your shares are held in
“street name” through a brokerage firm, bank, nominee,
fiduciary or other custodian, you must check with your brokerage
firm, bank, nominee, fiduciary or other custodian to determine how
to revoke your proxy.
Shares held in street
name
. A stockholder wanting to vote in person at the 2021
annual meeting and holding shares of our Common Stock in street
name must obtain a proxy card from his or her broker
and bring that proxy card to the 2021 annual
meeting, together with a copy of a brokerage statement reflecting
such share ownership as of the record date
.
Vote required.
Election of Director Proposal
.
The two nominees receiving the
greatest numbers of votes at the meeting, assuming a quorum is
present, will be elected as Class I directors to serve until their
terms expire or until their successors have been duly elected and
qualified. Because directors are elected by plurality, abstentions
from voting and broker non-votes will be entirely excluded from the
vote and will have no effect on its outcome.
Accounting Firm Proposal
. The Accounting
Firm Proposal
requires the affirmative
vote of holders of a majority of the shares of Common Stock
present, in person or represented by proxy, at the 2021 annual
meeting and entitled to vote on the Accounting Firm Proposal.
Accordingly,
a
bstentions will
have the same effect as a vote “AGAINST” the Accounting
Firm Proposal, while broker non-votes, if any, and shares not in
attendance at the 2021 annual meeting will have no effect on the
outcome of any vote on the Accounting Firm
Proposal.
Amendment Proposal
. The Amendment
Proposal requires “FOR” votes from the holders of a
majority of the shares of our Common Stock outstanding as of the
record date. A stockholder’s failure to submit a proxy card
or to vote in person at the 2021 annual meeting, an abstention from
voting, or a broker non-vote, if any, will have the same effect as
a vote “AGAINST” the Amendment Proposal.
2
Adjournment Proposal
.
Approving the adjournment of the 2021 annual
meeting, if necessary or appropriate, to solicit additional proxies
if there are not sufficient votes to approve the Amendment Proposal
requires the affirmative vote of holders of a majority of the
shares of Common Stock present, in person or represented by proxy,
at the 2021 annual meeting and entitled to vote on the Adjournment
Proposal. Accordingly, abstentions will have the same effect as a
vote “AGAINST” the proposal to adjourn the 2021 annual
meeting, while broker non-votes, if any, and shares not in
attendance at the 2021 annual meeting will have no effect on the
outcome of any vote to adjourn the 2021 annual
meeting.
Interests of Directors and
Executive Officers
. Our directors and executive officers
have no substantial interests, directly or indirectly, in the
matters set forth in the proposals, except to the extent of their
ownership of shares of our Common Stock and any outstanding equity
awards or equity awards that may be granted to them under our
equity incentive plans in the future.
Board
recommendations
.
The Board unanimously recommends a vote “FOR” election
of the Class I Director Nominees.
The Board unanimously recommends a vote “FOR” the
Accounting Firm Proposal.
The Board unanimously recommends a vote “FOR” the
Amendment Proposal.
The Board unanimously recommends a vote “FOR” the
Adjournment Proposal.
Attendance at the
meeting
. You are invited to attend the 2021 annual meeting
only if you were an Inuvo stockholder or joint holder as of the
close of business on June 24, 2021, the record date, or if you hold
a valid proxy for the 2021 annual meeting.
In addition, if you are a stockholder of record
(owning shares in your own name), your name will be verified
against the list of registered stockholders on the record date
prior to your being admitted to the 2021 annual meeting. If you are
not a stockholder of record but hold shares through a broker or
nominee (in street name), you will need to provide proof of
beneficial ownership on the record date, such as a recent account
statement or a copy of the voting instruction card provided by your
broker or nominee. The meeting will begin at
9:00 a.m.
local time. Check-in will begin
at
8:45 a.m.
local
time.
Communications with our
Board.
You may contact any of our directors by writing to
them c/o Inuvo, Inc., 500 President Clinton Avenue, Suite 300,
Little Rock, Arkansas 72201. Each communication should specify the
applicable director or directors to be contacted as well as the
general topic of the communication. We may initially receive and
process communications before forwarding them to the applicable
director. We generally will not forward to the directors a
stockholder communication that is determined to be primarily
commercial in nature, that relates to an improper or irrelevant
topic, or that requests general information about Inuvo. Concerns
about accounting or auditing matters or communications intended for
non-management directors should be sent to the attention of the
Chairman of the Audit Committee at the address above. Our directors
may at any time review a log of all correspondence received by
Inuvo that is addressed to the independent members of the Board and
request copies of any such correspondence.
Who can help answer your
questions?
If you have additional questions after reading
this proxy statement, you may seek answers to your questions by
writing, calling or emailing:
John B.
Pisaris, Esq.
General
Counsel
Inuvo,
Inc.
500
President Clinton Avenue
Suite
300
Little
Rock, Arkansas 72201
Telephone:
(501) 205-8508
Telecopier:
(877) 311-5050
email:
john.pisaris@inuvo.com
3
PROPOSAL 1 – ELECTION OF DIRECTOR PROPOSAL
ELECTION OF CLASS I DIRECTORS
The Board, upon recommendation by the Nominating,
Corporate Governance and Compensation Committee, has nominated
Messrs. Richard K. Howe and Gordon J. Cameron for re-election as
Class I directors, each to hold office until the 2024 annual
meeting of stockholders or until his successor has been duly
elected and qualified. In the event either Mr. Howe or Mr. Cameron
is unable or unwilling to serve as a director, the individual named
as proxy on the proxy card will vote the shares that he represents
for election of such other person or persons as the Board may
recommend. The Board has no reason to believe that either Mr. Howe
or Mr. Cameron will be unable or unwilling to
serve.
The
following is biographical information on the current members of our
Board:
Directors Standing for Election as Class I directors
|
Name
|
Age
|
Positions
|
Director Since
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Richard
K. Howe
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59
|
Executive
Chairman of the Board and Chief Executive Officer; Class I
Director
|
2008
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Gordon
J. Cameron
|
56
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Class I
Director
|
2016
|
Richard K. Howe
.
Mr. Howe has been a member of our
Board since November 2008 and has served as Executive Chairman of
the Board since March 2012 and as our Chief Executive Officer since
December 2012. Previously, he served as our President and Chief
Executive Officer from November 2008 until March 2012. Prior to
joining Inuvo, Mr. Howe served as Chief Marketing, Strategy and
M&A Officer at the billion dollar multi-channel marketing
services leader Acxiom Corporation (NasdaqGS: ACXM) where, since
2004, he led the company’s transition to online marketing
services, the expansion into China and the development of the big
data consulting services group. From 2001 to 2004, he served as
general manager of Global Marketing Services (GMS) at Fair Isaac
& Company (NYSE: FICO), a leading provider of analytics
products and services where he drove the company’s online
initiatives. Between 1999 and 2001, Mr. Howe started, grew and sold
private Internet search innovator, ieWild. Mr. Howe has over his
career led the acquisition, merger or divestiture of a dozen
companies on three continents worth many hundreds of millions of
dollars to shareholders. Mr. Howe earned a bachelor’s degree
with distinction in engineering from Concordia University, Canada,
and he earned his master’s degree in engineering from McGill
University, Canada.
Gordon J. Cameron
.
Mr. Cameron has been a member of our
Board since November 2016. He is a business transformation
executive with three decades of success in growing businesses while
managing risk. Mr. Cameron is currently Chief Consumer Credit Risk
Officer at Fifth Third Bank. Prior to Fifth Third, Mr. Cameron was
EVP of consumer risk at PNC Financial Services from 2008 until
2019. He was the Chief Credit Officer, Retail and Small Business
Lending, at Canadian Imperial Bank of Commerce from 2005 to 2008.
Mr. Cameron was the Chief Scientist Transaction Analytics, Global
Account Management Solutions at Fair Isaac Corporation FICO from
2001 to 2005. Prior to his tenure with Fair Isaac Corporation, Mr.
Cameron held executive positions at IeWild Inc., HNC Software Inc.,
Advanta National Bank/Fleet, The Cambell Group LTD and Fidelity
Bank N.A. Mr. Cameron received a MBA from Widener University School
of Management and a B.S. in Finance from Pennsylvania State
University.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”
ELECTION
OF THE CLASS I DIRECTOR
NOMINEES.
Directors Not Standing For Election
|
Name
|
Age
|
Positions
|
Director Since
|
|
G. Kent
Burnett
|
76
|
Class
II Director
|
2016
|
|
Charles
D. Morgan
|
78
|
Lead
Independent Director; Class III Director
|
2009
|
Class II Director
Term Expires at the 2022 Annual Meeting
Kent
Burnett
.
Mr. Burnett has been a member of our Board since
November 2016. He is a retired technology and ecommerce executive.
Mr. Burnett joined Dillard’s, Inc., one of the nation’s
largest fashion retailers, in 1979. Mr. Burnett held various
executive level technology positions at Dillard’s, including
Chief Information Officer, Western Division Chairman and from 2009
to 2016 was Vice President of Technology and Ecommerce. Prior to
joining Dillard’s, Mr. Burnett held various marketing,
technology and engineering positions with IBM. Since 2012 he has
been a member of the Board of Directors of First Orion Corp., a
phone call protection and data provider, and from February 2012 to
April 2013 he served as a member of the Board of Directors of
Acumen Brands, an ecommerce retailer. Mr. Burnett received his
undergraduate degree from the University of
Arkansas.
Class III Director
Term Expires at the 2023 Annual Meeting
Charles D.
Morgan.
Mr. Morgan has been a
member of our Board since June 2009. Since 2008, he has been the
Chief Executive Officer of First Orion Corp., a private company
that developed and markets PrivacyStar, an application that helps
protect the mobile phone users’ privacy. He also serves as a
member and is the past Chairman of the Board of Trustees of Hendrix
College. Mr. Morgan has extensive experience managing and investing
in both private and public companies including Acxiom Corporation
(NasdaqGS: ACXM), an information services company he helped grow
from an early stage company to $1.4 billion in revenues during his
tenure as Chief Executive Officer from 1975 to 2008. Mr. Morgan has
served on the board and in various leadership roles with the Direct
Marketing Association (DMA) throughout his career, serving in 2001
as chairman of the DMA board. Mr. Morgan was employed by IBM as a
systems engineer for six years prior to joining Acxiom, and he
holds a mechanical engineering degree from the University of
Arkansas.
4
PROPOSAL 2 – ACCOUNTING FIRM PROPOSAL
RATIFICATION OF THE APPOINTMENT OF MAYER HOFFMAN MCCANN
P.C.
The
Audit Committee has appointed Mayer Hoffman McCann P.C. as our
independent registered public accounting firm to audit our
consolidated financial statements for the fiscal year ending
December 31, 2021. Representatives of Mayer Hoffman McCann P.C.
will be present at the 2021 annual meeting and will have an
opportunity to make a statement or to respond to appropriate
questions from stockholders. Although stockholder ratification of
the appointment of our independent auditor is not required by our
by-laws or otherwise, we are submitting the selection of Mayer
Hoffman McCann P.C. to our stockholders for ratification to permit
stockholders to participate in this important corporate decision.
If not ratified, the Audit Committee will reconsider the selection,
although the Audit Committee will not be required to select a
different independent auditor for our company. Even if the
appointment is ratified, the Audit Committee, in its discretion,
may direct the appointment of a different independent registered
public accounting firm at any time during the year if the Audit
Committee determines that such a change would be in our best
interests.
Fees
and Services
The
following table shows the fees that were billed for the audit and
other services provided for the years indicated.
|
|
2020
|
2019
|
|
Audit
Fees
|
$
258,768
|
$
288,350
|
|
Audit-Related
Fees
|
$
75,600
|
$
42,020
|
|
Tax
Fees
|
-
|
-
|
|
All Other
Fees
|
-
|
-
|
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Total
|
$
334,368
|
$
330,370
|
Audit Fees
— This category
includes the audit of our annual financial statements, review of
financial statements included in our quarterly reports on Form 10-Q
and services that are normally provided by the independent
registered public accounting firm in connection with engagements
for those fiscal years. This category also includes advice on audit
and accounting matters that arose during, or as a result of, the
audit or the review of interim financial statements.
Audit-Related Fees
— This
category consists of assurance and related services by the
independent registered public accounting firm that are reasonably
related to the performance of the audit or review of our financial
statements and are not reported above under “Audit
Fees.” The services for the fees disclosed under this
category include consultation regarding our correspondence with the
Securities and Exchange Commission and other accounting
consulting.
Tax Fees
— This category consists
of professional services rendered by CBIZ MHM, an affiliate of our
independent registered public accounting firm, for tax compliance
and tax advice.
All Other Fees
— This category
consists of fees for other miscellaneous items.
Mayer
Hoffman McCann P.C. leases substantially all of its personnel, who
work under the control of Mayer Hoffman McCann P.C. shareholders,
from wholly-owned subsidiaries of CBIZ, Inc., in an alternative
practice structure.
Our
Board has adopted a procedure for pre-approval of all fees charged
by our independent registered public accounting firm. Under the
procedure, the Audit Committee of the Board approves the engagement
letter with respect to audit, tax and review services. Other fees
are subject to pre-approval by the Audit Committee of the Board.
The audit fees paid to the auditors with respect to 2020 were
pre-approved by the Audit Committee of the Board.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE
RATIFICATION
OF THE APPOINTMENT OF MAYER
HOFFMAN MCCANN P.C.
5
PROPOSAL 3 – AMENDMENT PROPOSAL
APPROVAL OF AN AMENDMENT TO THE ARTICLES OF INCORPORATION TO
INCREASE THE SHARES OF COMMON STOCK AUTHORIZED FROM 150,000,000 TO
200,000,000
Our Board has approved a proposal to amend our
articles of incorporation to increase the number of authorized
shares of our Common Stock, from 150,000,000 to 200,000,000 in the
form of the articles of amendment (the “
Amendment
”)
attached to this proxy statement as
Exhibit
A
. Our Board approved the
Amendment on
May 27
, 2021,
subject to stockholder approval.
As of
May 28, 2021
, there were
118,516,204
shares of Common Stock outstanding, 2,241 treasury
shares, no preferred shares outstanding,
4,378,167
shares of our Common Stock subject to
outstanding grants under our equity compensation plans including
our 2010 Equity Compensation Plan (“
2010
Plan
”) and our 2017
Equity Compensation Plan (“
2017
Plan
”) and an aggregate
of
2,655,861
shares of our
Common Stock available for grants under our 2017 Plan. Our 2010
Plan expired in April 2020, accordingly, there are no additional
shares reserved for issuance thereunder, although outstanding
grants remain.
The
Amendment amends our articles of incorporation, as previously
amended, to increase the number of authorized shares of our Common
Stock from 150,000,000 shares to 200,000,000 shares. The additional
shares of Common Stock to be authorized under the Amendment would
be identical to the shares of Common Stock now authorized. Our
stockholders will not have preemptive rights to acquire such shares
of our Common Stock.
The increase in the number of
authorized shares of our Common Stock will provide additional
shares that will be available for use by our Board as it deems
appropriate or necessary. The additional shares could be used,
among other things, for fulfilling future issuances under the 2017
Plan, for potential public or private financings to raise
additional capital, for the declaration of stock splits or stock
dividends, for acquisitions of other companies, for the expansion
of business operations, or for the issuance of stock under warrants
granted or to be granted in the future. However, we have no
specific plans or agreements at this time with respect to any
additional acquisitions or financing transactions that would exceed
the amount of our currently authorized shares of Common Stock and
no assurances can be given that an acquisition or financing
transaction or transactions will take place or will be available on
terms that are favorable to us.
Other than as
set forth herein, there are currently no plans, agreements,
arrangements, or understanding, for the issuance of additional
shares of our Common Stock that would exceed the amount of our
currently authorized shares of Common
Stock.
If the Amendment is not approved by our
stockholders, our
business acquisition opportunities and financing
alternatives may be limited by the lack of sufficient unissued and
unreserved authorized shares of Common Stock, and stockholder value
may be harmed by this limitation. In addition, our success depends
in part on our continued ability to attract, retain and motivate
highly qualified personnel, and if the Amendment is not approved by
our stockholders, the lack of sufficient unissued and unreserved
authorized shares of Common Stock to provide future equity
incentive opportunities that our Board deems appropriate could
adversely impact our ability to achieve these goals. In summary, if
our stockholders do not approve the Amendment, we may not be able
to access the capital markets, complete corporate collaborations or
partnerships, attract, retain and motivate employees and others
required to make our business successful, and pursue other business
opportunities integral to our growth and success, all of which
could harm our company and our prospects.
The issuance of additional shares of our Common Stock may, among
other things, have a dilutive effect on the earnings per share and
on the equity and voting power of existing holders of our Common
Stock and may adversely affect the market price of our Common
Stock. The increase in the authorized number of shares of our
Common Stock could also have an anti-takeover effect as the
availability for issuance of additional shares of Common Stock
could discourage, or make more difficult, efforts to obtain control
of Inuvo. For example, without further stockholder approval, our
Board could strategically sell Common Stock in a private
transaction to purchasers who would oppose a takeover. In addition,
because stockholders do not have preemptive rights, the rights of
existing stockholders may (depending on the particular
circumstances in which the additional shares of Common Stock are
issued) be diluted by any such issuance and increase the potential
cost to acquire control of Inuvo. Although our Board was motivated
by business and financial considerations in adopting the Amendment,
and not by the threat of any attempt to accumulate shares or
otherwise gain control of Inuvo, stockholders should nevertheless
be aware that approval of the Amendment could facilitate our
efforts to deter or prevent changes of control in the future if the
mergers are not consummated. Our Board does not intend to issue any
additional shares of Common Stock except on terms that it deems to
be in the best interest of Inuvo and its stockholders.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE
AMENDMENT
TO OUR ARTICLES OF INCORPORATION
6
PROPOSAL 4 – ADJOURNMENT PROPOSAL
ADJOURNMENT OF THE 2021 ANNUAL MEETING TO SOLICIT ADDITIONAL
PROXIES
If there are
insufficient votes at the time of the 2021 annual meeting to
approve the Amendment Proposal, the Company intends to propose to
adjourn the 2021 annual meeting for a period of not more than 30
days for the purpose of soliciting additional proxies in favor of
the
Amendment Proposal.
The Company does not
intend to propose adjournment at the 2021 annual meeting if there
are sufficient votes to approve the Amendment
Proposal.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE
ADJOURNMENT PROPOSAL.
7
OTHER MATTERS
As of
the date hereof, there are no other matters that we intend to
present, or have reason to believe others will present, at the 2021
annual meeting. If, however, other matters properly come before the
2021 annual meeting, the accompanying proxy authorizes the person
named as proxy or his substitute to vote on such matters as he
determines appropriate.
DISSENTER’S RIGHTS
Under
Nevada law there are no dissenter’s rights available to our
stockholders in connection with any matter submitted to a vote of
our stockholders at the 2021 annual meeting.
CORPORATE GOVERNANCE
We are
committed to maintaining the highest standards of honest and
ethical conduct in running our business efficiently, serving our
stockholders interests and maintaining our integrity in the
marketplace. To further this commitment, we have adopted our Code
of Conduct and Business Code of Ethics, which applies to all our
directors, officers and employees. To assist in its governance, our
Board has formed two standing committees composed entirely of
independent directors, Audit and Nominating, Corporate Governance
and Compensation. A discussion of each committee’s function
is set forth below. Additionally, we have adopted and published to
all employees our Whistleblower Notice establishing procedures by
which any employee may bring to the attention of our Audit
Committee any disclosure regarding accounting, internal control or
other auditing issues affecting our company or any improper
activities of any officer or employee. Disclosure may be made
anonymously.
Our
by-laws, the charters of each Board committee, the independent
status of a majority of our Board, our Code of Conduct and Business
Code of Ethics and our Whistleblower Notice provide the framework
for our corporate governance. Copies of our by-laws, committee
charters, Code of Conduct and Business Code of Ethics and
Whistleblower Notice may be found on our website at
www.inuvo.com
.
Copies of these materials also are available without charge upon
written request to our corporate secretary.
Board of Directors
The Board oversees our business affairs and
monitors the performance of management. In accordance with our
corporate governance principles, the Board does not involve itself
in day-to-day operations. The directors keep themselves informed
through discussions with the Executive Chairman and Chief Executive
Officer and our Chief Financial Officer and by reading the reports
and other materials that we send them and by participating in Board
and committee meetings. Commencing with our 2008 annual meeting,
our directors were divided into three classes and designated Class
I, Class II and Class III. Directors may be assigned to each class
in accordance with a resolution or resolutions adopted by the
Board. Directors are elected for a full term of three years. Our
directors hold office until their successors have been elected and
duly qualified unless the director resigns or by reason of death or
other cause is unable to serve in the capacity of director. If any
director resigns, dies or is otherwise unable to serve out his or
her term, or if the Board increases the number of directors, the
Board may fill any vacancy by a vote of a majority of the directors
then in office, although less than a quorum exists. A director
elected to fill a vacancy shall serve for the unexpired term of his
or her predecessor. Vacancies occurring by reason of the removal of
directors without cause may only be filled by vote of the
stockholders.
A total
of four formal meetings of the Board were held during 2020 and the
Board took action by unanimous written consent twelve times. No
director attended less than 75% of the aggregate of (i) the total
number of meetings of the Board held during the time in which such
director was a member of the Board and (ii) the total number of
meetings held by all committees of the Board on which such director
served during the period such director served as a member of such
committee.
There
are no family relationships between any of the directors and
executive officers.
We do
not have a formal policy regarding director attendance at annual
meetings of stockholders. All of our directors are stockholders and
are invited to attend our stockholder meetings. Last year, one of
our directors attended the 2020 annual meeting of
stockholders.
8
Board Leadership Structure and our Board’s Role in Risk
Oversight
Mr.
Richard K. Howe serves as both the Executive Chairman of our Board
and our Chief Executive Officer. Mr. Charles D. Morgan, an
independent director, serves as our Lead Independent Director. Our
Board believes our current structure provides independence and
oversight, and facilitates the communication between senior
management and the full Board regarding risk oversight, which the
Board believes strengthens its risk oversight activities. Moreover,
the structure allows the Executive Chairman and Chief Executive
Officer to better focus on his responsibilities of running the
company, enhancing stockholder value and expanding and
strengthening our business, while allowing the Lead Independent
Director to lead the Board in its fundamental role of providing
independent oversight of management.
Risk is
inherent with every business, and how well a business manages risk
can ultimately determine its success. We face a number of risks,
including operational risks associated with our industry, credit
risk, interest rate risk, liquidity risk, operational risk,
strategic risk and reputation risk. Management is responsible for
the day-to-day management of the risks we face, while the Board, as
a whole and through its committees, has responsibility for the
oversight of risk management. In its risk oversight role, the Board
has the responsibility to satisfy itself that the risk management
processes designed and implemented by management are adequate and
functioning as designed. To do this, the Board meets regularly with
management, as well as independently, to review Inuvo’s
risks. Both our General Counsel and our Chief Financial Officer
attend many of the Board meetings and are available to address any
questions or concerns raised by any member of the Board on risk
management and any other matter. The independent members of the
Board work together to provide strong, independent oversight of our
management and affairs through the Board’s standing
committees and, when necessary, special meetings of independent
directors. Our independent directors may meet at any time in their
sole discretion without any other directors or representatives of
management present. Each independent director has access to the
members of our management team or other employees as well as full
access to our books and records. We have no policy limiting, and
exert no control over, meetings of our independent
directors.
Board Committees
The
Board has standing Audit and Nominating, Corporate Governance and
Compensation Committees. Each committee has a written charter. The
charters are available on our website at
www.inuvo.com
. Except as set
forth below, all committee members are independent directors.
Information concerning the current membership and function of each
committee is as follows:
|
Director
|
Audit Committee Member
|
Nominating, Corporate Governance and Compensation Committee
Member
|
|
Charles
D. Morgan
|
|
✓
|
|
Gordon
J. Cameron
|
✓
(1)
|
✓
|
|
G. Kent
Burnett
|
✓
|
✓
(1)
|
(1)
Denotes
Chairperson.
Audit Committee
The
Audit Committee assists the Board in fulfilling its oversight
responsibility relating to:
●
the
integrity of our financial statements;
●
our
compliance with legal and regulatory requirements; and
●
the
qualifications and independence of our independent registered
public accountants.
The
Audit Committee is composed of two directors, each of whom have
been determined by the Board to be independent as defined by the
NYSE American Company Guide. The Board has determined that each of
Mr. Cameron and Mr. Burnett qualifies as an “audit committee
financial expert” as defined by the SEC. During 2020, the
Audit Committee held four meetings.
9
Report of the Audit Committee of the Board of
Directors
The
primary function of the Audit Committee is to assist the Board in
its oversight of our financial reporting processes. Management is
responsible for the preparation, presentation and integrity of the
financial statements, including establishing accounting and
financial reporting principles and designing systems of internal
control over financial reporting. Our independent auditors are
responsible for expressing an opinion as to the conformity of our
consolidated financial statements with generally accepted
accounting principles and auditing management’s assessment of
the effectiveness of internal control over financial
reporting.
With
respect to the year ended December 31, 2020, in addition to its
other work, the Audit Committee:
|
●
|
reviewed
and discussed with management and Mayer Hoffman McCann P.C., our
independent registered public accounting firm, our audited
consolidated financial statements as of December 31, 2020 and the
year then ended;
|
|
|
|
|
●
|
discussed
with Mayer Hoffman McCann P.C. the matters required to be discussed
by Statement on Auditing Standards No. 61, “
Communication with Audit
Committees
,” as amended, with respect to its review of
the findings of the independent registered public accounting firm
during its examination of our consolidated financial statements;
and
|
|
|
|
|
●
|
received
from Mayer Hoffman McCann P.C. written affirmation of its
independence as required by the Independence Standards Board
Standard No. 1, “
Independence Discussions with Audit
Committees
.” In addition, the Audit Committee
discussed with Mayer Hoffman McCann P.C., its independence and
determined that the provision of non-audit services was compatible
with maintaining auditor independence.
|
The
audit committee recommended, based on the review and discussion
summarized above, that the Board include the audited consolidated
financial statements in the 2020 10-K for filing with the
SEC.
|
Dated
February 5,
2021
|
|
Audit Committee of the Board of Directors of Inuvo,
Inc.
|
|
|
|
|
|
|
|
/s/ Gordon J. Cameron, Chairman
|
|
|
|
/s/ G. Kent Burnett
|
Nominating, Corporate Governance and Compensation
Committee
The
Nominating, Corporate Governance and Compensation Committee is
responsible for:
●
overseeing
our compensation programs and practices, including our executive
compensation plans and incentive compensation plans;
●
recommending
the slate of director nominees for election to our
Board;
●
identifying
and recommending candidates to fill vacancies occurring between
annual stockholder meetings;
●
reviewing
the composition of Board committees; and
●
monitoring
compliance with, reviews, and recommends changes to our various
corporate governance policies and guidelines.
10
The
Chief Executive Officer provides input to the committee with
respect to the individual performance and compensation
recommendations for the other executive officers. The
committee’s charter authorizes the committee to retain an
independent consultant, and from time to time has done so. The
committee did not retain a consultant in 2020. The committee also
prepares and supervises the Board’s annual review of director
independence and the Board’s annual
self-evaluation.
A
majority of the persons serving on our Board must be independent.
Thus, the committee has considered transactions and relationships
between each director or any member of his immediate family and us
or our affiliates, including those reported under “Certain
Relationships and Related Transactions” below. The committee
also reviewed transactions and relationships between directors or
their affiliates and members of our senior management or their
affiliates. As a result of this review, the committee affirmatively
determined that each of Messrs. Morgan, Cameron and Burnett are
independent as defined by the NYSE American Company
Guide.
The
committee considers all qualified candidates for our Board
identified by members of the committee, by other members of the
Board, by senior management and by our stockholders. The committee
reviews each candidate including each candidate’s
independence, skills and expertise based on a variety of factors,
including the person’s experience or background in
management, finance, regulatory matters and corporate governance.
Further, when identifying nominees to serve as director, while we
do not have a policy regarding the consideration of diversity in
selecting directors, the committee seeks to create a Board that is
strong in its collective knowledge and has a diversity of skills
and experience with respect to accounting and finance, management
and leadership, vision and strategy, business operations, business
judgment, industry knowledge and corporate governance. In addition,
prior to nominating an existing director for re-election to the
Board, the committee will consider and review an existing
director’s Board and committee attendance and performance,
length of Board service, experience, skills and contributions that
the existing director brings to the Board, equity ownership in
Inuvo and independence.
The
committee follows the same process and uses the same criteria for
evaluating candidates proposed by stockholders, members of the
Board and members of senior management. Based on its assessment of
each candidate, the committee recommends candidates to the Board.
However, there is no assurance that there will be any vacancy on
the Board at the time of any submission or that the committee will
recommend any candidate for the Board.
Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (“
Dodd-Frank
”)
requires public companies to provide stockholders with an advisory
vote on compensation of the most highly compensated executives,
which are sometimes referred to as “say on pay” as well
as an advisory vote on how often the company will present say on
pay votes to its stockholders. At our 2017 annual meeting of
stockholders held on June 19, 2017, our stockholders approved a
non-binding proposal that the frequency of an advisory vote on our
executive compensation would be held every three years. At our 2019
annual meeting of stockholders held on October 4, 2019, our
stockholders approved a non-binding resolution approving our
executive compensation as described in that proxy statement. As
such, this proxy statement does not contain a non-binding say on
pay proposal for the approval of our current executive compensation
structure.
In
general, we discourage hedging and pledging transactions. The
committee has a policy prohibiting hedging and pledging activity in
our equity securities except where the activity is precleared by
our general counsel in limited circumstances. The policy applies to
our directors, executive officers, other members of our executive
leadership team, and other officers subject to Section 16 of the
Securities Exchange Act. The hedging and pledging prohibitions
apply with respect to any shares of our equity securities owned by
the covered persons, directly or indirectly, whether granted by us
as compensation or otherwise acquired and held. Prohibited hedging
activity includes purchasing financial instruments (including
zero-cost collars and forward contracts establishing short
positions in our securities) or otherwise engaging in transactions
that are designed to, or have the effect of, hedging or offsetting
any decrease in the market value of our securities. Hedging
activity may only occur if approved by our general counsel in
advance. Our equity securities may not be pledged as collateral for
a loan or held in a margin account, except with respect to pledging
activity approved by our general counsel in advance where
securities are pledged as collateral for a loan and the covered
person clearly demonstrates the financial capacity to repay the
loan without resort to the pledged securities.
The
Nominating, Corporate Governance and Compensation Committee is
composed of two directors, each of whom have been determined by the
Board to be independent as defined by the NYSE American Company
Guide. During 2020, the Nominating, Corporate Governance and
Compensation Committee held one formal meeting and took action by
unanimous written consent two times.
11
Stockholder Nominations
Stockholders who
would like to propose a candidate to serve on our Board may do so
by submitting the candidate’s name, resume and biographical
information to the attention of our corporate secretary. All
proposals for nomination received by the corporate secretary will
be presented to the committee for appropriate consideration. It is
the policy of the Nominating, Corporate Governance and Compensation
Committee to consider director candidates recommended by
stockholders who appear to be qualified to serve on our Board. The
Nominating, Corporate Governance and Compensation Committee may
choose not to consider an unsolicited recommendation if no vacancy
exists on the Board and the Nominating, Corporate Governance and
Compensation Committee does not perceive a need to increase the
size of the Board. In order to avoid the unnecessary use of the
Nominating, Corporate Governance and Compensation Committee’s
resources, the Nominating, Corporate Governance and Compensation
Committee will consider only those director candidates recommended
in accordance with the procedures set forth below. To submit a
recommendation of a director candidate to the Nominating, Corporate
Governance and Compensation Committee, a stockholder should submit
the following information in writing, addressed to the corporate
secretary of Inuvo at our main office:
●
the
name and address of the person recommended as a director
candidate;
●
all
information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors
pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended;
●
the
written consent of the person being recommended as a director
candidate to be named in the proxy statement as a nominee and to
serve as a director if elected;
●
as to
the person making the recommendation, the name and address, as they
appear on our books, of such person, and number of shares of our
common stock owned by such person;
provided, however
, that if the person
is not a registered holder of our common stock, the person should
submit his or her name and address along with a current written
statement from the record holder of the shares that reflects the
recommending person’s beneficial ownership of our common
stock; and
●
a
statement disclosing whether the person making the recommendation
is acting with or on behalf of any other person and, if applicable,
the identity of such person.
Director Qualification
The
following is a discussion for each director of the specific
experience, qualifications, attributes or skills that led the
Nominating, Corporate Governance and Compensation Committee to
recommend to the Board, and for the Board to conclude that the
individual should be serving as a director of Inuvo.
Class I Directors
Richard K. Howe
-
Mr. Howe’s track
record as a successful
high-technology operating and marketing executive in data,
analytics, and marketing services as a result of building and/or
running over a dozen businesses in five countries
were
factors considered by the Nominating, Corporate Governance and
Compensation Committee and the Board. Specifically, the Nominating,
Corporate Governance and Compensation Committee and the Board
viewed favorably his position at companies that include Inuvo,
Acxiom Corporation, where he served as chief marketing, business
strategy and M&A officer, Fair Isaac & Company, where he
served as general manager, and ieWild, Inc., where he was
co-founder and chairman and CEO, together with his service as a
board member for the non-profit organization Business for
Diplomatic Action and his academic achievements at Concordia
University and McGill University in making their
recommendation.
Gordon J. Cameron
-
Mr. Cameron’s track record as a senior executive in a variety
of business segments and his in excess of three decades of
experience in building successful businesses were factors
considered by the Nominating, Corporate Governance and Compensation
Committee and the Board. Specifically, the Nominating, Corporate
Governance and Compensation Committee and the Board viewed
favorably his position as Executive Vice President in Retail
Lending at PNC Financial Services, one of the largest diversified
financial services institutions in the United States, as well as
his positions with companies such as Canadian Imperial Bank of
Commerce, Fair Isaac Corporation FICO, IeWild Inc., HNC Software
Inc., Advanta National Bank/Fleet, The Cambell Group LTD and
Fidelity Bank N.A. together with and his academic achievements at
Widener University School of Management and Pennsylvania State
University in making their recommendation.
12
Class II Director
G. Kent Burnett
-
Mr. Burnett’s track record as a successful technology and
e-commerce executive holding executive level technology positions
were factors considered by the Nominating, Corporate Governance and
Compensation Committee and the Board. Specifically, the Nominating,
Corporate Governance and Compensation Committee and the Board
viewed favorably his experience at Dillard’s including as
Chief Information Officer, Western Division Chairman and Vice
President of Technology and Ecommerce, as well as his experience in
various marketing, technology and engineering positions with IBM
and his membership on the boards of directors of First Orion Corp.
and Acumen Brands in making their recommendation.
Class III Director
Charles D. Morgan
-
Mr. Morgan’s successful track record as a high-technology
executive in data, analytics, outsourcing and marketing services
with a network of relationships worldwide as a result of building a
billion dollar annual revenue enterprise as chairman and chief
executive officer were factors considered by the Nominating,
Corporate Governance and Compensation Committee and the Board.
Specifically, the Nominating, Corporate Governance and Compensation
Committee and the Board viewed favorably his experience at
companies such as Acxiom Corporation as Chairman and CEO and IBM as
a systems engineer; his role as an equity owner of Bridgehampton
Capital Management LLC and a significant investor in its funds; his
service as Chairman of the Advisory Board and co-manager of
investments for Bridgehampton Capital Management LLC; his
leadership on the Board and in various leadership roles with the
Direct Marketing Association (DMA) including his service as
chairman of the DMA in 2001; his service as a member and past
chairman of the board of trustees of Hendrix College; and his
academic achievements at the University of Arkansas in making their
recommendation.
In
addition to the each of the individual skills and background
described above, the Nominating, Corporate Governance and
Compensation Committee and Board also concluded that each of these
individuals will continue to provide knowledgeable advice to our
other directors and to senior management on numerous issues facing
our company and on the development and execution of our
strategy.
Compensation of Directors
During
2020, at the recommendation of our Nominating, Corporate Governance
and Compensation Committee, each independent member of our Board
received a combination of a cash retainer and restricted stock
units.
The
following table provides information concerning the compensation
paid to our independent directors for their services as members of
our Board for 2020. The information in the following table excludes
any reimbursement of out-of-pocket travel and lodging expenses
which we may have paid.
|
|
Director
Compensation
|
||||||
|
Name
|
Fees
earned or paid in cash ($)
|
Stock
awards
($)
|
Option
awards
($)
|
Non-equity
incentive plan
compensation
($)
|
Nonqualified
deferred
compensation
earnings
($)
|
All
other
compensation
($)
|
Total
($)
|
|
Charles
D. Morgan
|
22,500
|
7,500
|
—
|
—
|
—
|
—
|
30,000
|
|
Gordon J.
Cameron
|
22,500
|
7,500
|
—
|
—
|
—
|
—
|
30,000
|
|
G. Kent
Burnett
|
22,500
|
7,500
|
—
|
—
|
—
|
—
|
30,000
|
|
Patrick Terrell
(1)
|
15,000
|
7,500
|
—
|
—
|
—
|
—
|
22,500
|
(1)
Mr.
Terrell served as a member of our Board from January 2013 until
June 30, 2020.
2020 Director Compensation Policy
In
April 2020, in response to the adverse impact of the COVID-19
pandemic on our Company, our Board modified independent director
compensation so that independent directors were provided a
restricted stock unit grant equivalent to $7,500 worth of stock per
quarter, calculated at fair market value at the time of grant,
vesting six months after the date of issuance and an annual grant
of $30,000 worth of stock, calculated at fair market value at the
time of grant.
13
Compliance with Section 16(a) of the Exchange Act
Based
solely upon a review of Forms 3 and 4 and amendments thereto
furnished to us under Rule 16a-3(d) of the Securities Exchange Act
of 1934 during the year ended December 31, 2020 and Forms 5 and
amendments thereto furnished to us with respect to the year ended
December 31, 2020, as well as any written representation from a
reporting person that no Form 5 is required, we are not aware that
any officer, director or 10% or greater stockholder failed to file
on a timely basis, as disclosed in the aforementioned Forms,
reports required by Section 16(a) of the Securities Exchange Act of
1934 during the year ended December 31, 2020, except for one late
Form 4 filing for each of Messrs. Morgan, Burnett, Cameron,
Barrett, Howe, Pisaris and Ruiz, each of which were inadvertently
filed one day late.
EXECUTIVE COMPENSATION
Executive Officers
|
Name
|
|
Positions
|
|
Richard
K. Howe
|
|
Executive
Chairman and Chief Executive Officer
|
|
Wallace
D. Ruiz
|
|
Chief
Financial Officer, Secretary
|
|
John B.
Pisaris, Esq.
|
|
General
Counsel
|
Executive officers
of our company are appointed by the Board and serve at the pleasure
of the Board.
Richard K. Howe
. For
information regarding Mr. Howe, please see “Board of
Directors” which appears earlier in this proxy
statement.
Wallace D. Ruiz
. Mr.
Ruiz, 70, has served as our Chief
Financial Officer since June 2010. From 2005 until April 2009, Mr.
Ruiz was Chief Financial Officer and Treasurer of SRI Surgical
Express, Inc. (Nasdaq: STRC), a Tampa, Florida provider of
outsourced sterilization and supply chain management services to
healthcare providers that was acquired by
Synergy Health
plc
. From 1995 until 2004, he
was Chief Financial Officer of Novadigm, Inc. (Nasdaq: NVDM), a
developer and worldwide marketer of enterprise infrastructure
software that was acquired by Hewlett-Packard Company. Since March
2018, he has been a member of the board of directors of
Recruiter.com Group, Inc. (OTCQB: RCRT). Mr. Ruiz received a B.S.
in Computer Science from St. John’s University and a M.B.A.
in Accounting and Finance from Columbia University. Mr. Ruiz is a
Certified Public Accountant.
John B. Pisaris
. Mr.
Pisaris, 55,
has served as our General
Counsel since March 2012, following our acquisition of Vertro, Inc.
He served as general counsel of Vertro, Inc. from October 2004
until March 2012. From February 2004 to September 2004, Mr. Pisaris
served as vice president of legal of Vertro, Inc., and prior to
that was a partner at Porter Wright Morris & Arthur, LLP, a law
firm, from January 2002 to January 2004.
Compensation Philosophy
The
fundamental objectives of our executive compensation program are to
attract and retain highly qualified executive officers, motivate
these executive officers to materially contribute to our long-term
business success, and align the interests of our executive officers
and stockholders by rewarding our executives for individual and
corporate performance based on targets established by the
Nominating, Corporate Governance and Compensation
Committee.
We
believe that achievement of these compensation program objectives
enhances long-term stockholder value. When designing compensation
packages to reflect these objectives, the Nominating, Corporate
Governance and Compensation Committee has adopted the following
four principles as a guide:
●
Alignment with stockholder
interests:
Compensation should
be tied, in part, to our stock performance through the granting of
equity awards to align the interests of executive officers with
those of our stockholders;
●
Recognition for business
performance:
Compensation
should correlate in large part with our overall financial
performance;
●
Accountability for individual
performance:
Compensation
should partially depend on the individual executive’s
performance, in order to motivate and acknowledge the key
contributors to our success; and
●
Competition:
Compensation should generally reflect
the competitive marketplace and be consistent with that of other
well-managed companies in our peer group. In implementing this
compensation philosophy, the Nominating, Corporate Governance and
Compensation Committee takes into account the compensation amounts
from the previous years for each of the named executive officers,
and internal compensation equity between the named executive
officers and other employees.
14
2020 Compensation Determination Process
In
2020, the compensation program for our executive officers consisted
of the following components:
●
base
salary;
●
discretionary
bonuses;
●
plan
awards; and
●
other
fringe benefits and perquisites.
The
Nominating, Corporate Governance and Compensation Committee
believes that our executive compensation package consists of
elements of compensation that are typically used to incentivize and
reward executive management at other companies of our size, in our
geographic area or in our industry. Each of these components is
designed to meet the program’s objectives of providing a
combination of fixed and variable, performance-based compensation
linked to individual and corporate performance. In the course of
setting the initial compensation level for new hires or adjusting
the compensation of existing employees, the Nominating, Corporate
Governance and Compensation Committee considered the advice and
input of our management. Our Chief Executive Officer typically
makes recommendations to the Nominating, Corporate Governance and
Compensation Committee for any proposed changes in salary, as well
as performance-based awards and stock option grants, for the other
named executive officers. The Nominating, Corporate Governance and
Compensation Committee decides any salary change, as well as
performance-based awards and stock option grants, for the Chief
Executive Officer.
Base Salary
Base
salary is an important component of executive compensation because
it provides executives with an assured-level of income, assists us
in attracting executives and recognizes different levels of
responsibility and authority among executives. The determination of
base salaries is based upon the executive’s qualifications
and experience, scope of responsibility and potential to achieve
the goals and objectives established for the executive.
Additionally, contractual provisions in executive employment
agreements, past performance, internal pay equity and comparison to
competitive salary practices are also considered.
In
general, the Nominating, Corporate Governance and Compensation
Committee considers two types of potential base salary increases
including “merit increases” based upon the
executives’ individual performance and/or “market
adjustments” based upon the peer group salary range for
similar executives.
2020 Temporary Changes to our Executive Compensation
On
April 29, 2020, in response to the adverse impact of the COVID-19
pandemic on Inuvo, our Board implemented a temporary compensation
change (“
Temporary
Salary Reduction Plan
”) for senior officers and
employees. Effective May 1, 2020, certain employees with salaries
in excess of $100,000 per year were required, on a temporary basis,
to forego a specified percentage of their salary ranging from 50%
to 7% (the “
Reduction Percentage
”).
To incentivize these employees, each will be granted restricted
stock unit awards (each, an “
Award
”) pursuant to our
2017 Plan. Management anticipated that these actions would reduce
ongoing expenses and assist Inuvo in achieving its short-term
goals. The participants included our Executive Chairman and Chief
Executive Officer, Richard Howe, our Chief Financial Officer,
Wallace Ruiz, and our former Chief Operating Officer, Trey Barrett.
The temporary salaries for these executive officers were as
follows:
|
Name
and Principal Position
|
Temporary Salary
|
|
Richard K. Howe,
Executive Chairman and Chief Executive Officer
|
$
212,500
|
|
Wallace Ruiz, Chief
Financial Officer
|
$
200,750
|
|
Don (Trey) Barrett
III, Former Chief Operating Officer
|
$
200,000
|
The
Awards to be issued to the affected employees were issued at the
end of each semi-monthly pay period commencing May 15, 2020. The
number of shares of common stock issued pursuant to each Award was
computed as follows: applicable Reduction Percentage of one
one-twenty-fourth (1/24) of the employee’s annual salary
prior to the reduction divided by the per share closing price of
our common stock on the NYSE American stock exchange on the trading
day prior to the end of each semi-monthly pay period. The Awards
vest six months after issuance at which time the shares would be
issued. Except as otherwise provided in the 2017 Plan or any
applicable employment agreement, the employee must remain in the
employ of Inuvo during the vesting period and the Awards are not
transferable prior to vesting. These actions remained in effect
until June 30, 2020 at which time base salaries reverted to their
prior levels.
15
Discretionary Cash Bonus Awards
From
time to time, we utilize discretionary signing, promotion,
retention or other bonus awards as compensation tools that provide
incentives for executives to accept employment offers, to reward
outstanding performance by executives and to retain key executives.
We believe that these bonus awards are consistent with our overall
executive compensation philosophy to achieve our recruiting and
retention objectives as well as to allow discretion to address the
needs of our businesses, which operate in a constantly evolving and
highly competitive environment. Bonus recommendations are not
determined on a formulaic basis, and no particular weight is
assigned to any of the factors considered in determining
discretionary bonuses.
In
September 2020 the Nominating, Corporate Governance and
Compensation Committee awarded discretionary bonuses of (i)
$245,000 to Mr. Howe and $75,000 to Mr. Ruiz, in each case
payable over twelve months, for retention and as a reward for
performance, and (ii) $40,000 to Mr. Barrett for retention and as a
reward for performance.
Plan Awards
The
objective of our long-term incentive program is to provide a
long-term retention incentive for the named executive officers and
others and to align their interests directly with those of our
stockholders by way of stock ownership. Under our 2017 Plan, the
Board or the Nominating, Corporate Governance and Compensation
Committee has the discretion to determine whether equity awards
will be granted to named executive officers and if so, the number
of shares subject to each award. Both our 2010 Plan and 2017 Plan
allow the Board or the Nominating, Corporate Governance and
Compensation Committee to grant options and restricted stock and
other stock-based awards with respect to up to shares of our common
stock, valued in whole or in part by reference to the fair market
value of the stock. In most instances, these long-term grants vest
over a multi-year basis.
The
Board or the Nominating, Corporate Governance and Compensation
Committee determines the recipients of long-term incentive awards
based upon such factors as performance, the length of continuous
employment, managerial level, any prior awards, and recruiting and
retention demands, expectations and needs. All our employees are
eligible for awards. The Board or the Nominating, Corporate
Governance and Compensation Committee grants such awards by formal
action, which awards are not final until a stock option agreement
is delivered by us and executed by both the Company and the
employee. There is no set schedule for the Board or the Nominating,
Corporate Governance and Compensation Committee to consider and
grant awards. The Board and the Nominating, Corporate Governance
and Compensation Committee have the discretion to make grants
whenever it deems it appropriate in our best interests. The
Nominating, Corporate Governance and Compensation Committee has
discretion to grant equity awards at any time.
We
do not have any program, plan or practice in place to time option
or other award grants with the release of material, non-public
information and does not release such information for the purpose
of affecting the value of executive compensation. The exercise
price of stock subject to options awarded under our plans is the
fair market value of the stock on the date the grant is approved by
the Board or the Nominating, Corporate Governance and Compensation
Committee. Under the terms of each plan, the fair market value of
the stock is the closing sales price of the stock on the date the
grant is approved by the Board or the Nominating, Corporate
Governance and Compensation Committee as reported by the NYSE
American.
Other Compensation and Benefits
We
have historically provided perquisites and other types of non-cash
benefits on a very limited basis in an effort to avoid an
entitlement mentality, reinforce a pay-for-performance orientation
and minimize expense. Such benefits, when provided, can include
additional health care benefits and additional life
insurance.
Retirement and Other Post-Termination Benefits
Other
than our 401(k) plan, employment agreements with our named
executive officers and certain other employment agreements which
provide for severance for termination without cause, we have not
entered into any employment agreements that provide for a
continuation of post-employment benefits. Our benefits plans are
generally the same for all employees, and so as of the date of this
proxy statement, the Nominating, Corporate Governance and
Compensation Committee does not believe that any such plans in
their present forms would continue post-employment, except as
required by law (including with respect to COBRA), or otherwise set
forth in our 2020 10-K. We do not currently maintain any other
retirement or post-termination benefits plans.
16
Change in Control Severance Policy
We
do not currently maintain any change in control severance plans or
severance policies, except as provided in the executive employment
agreements and the 2010 Plan and 2017 Plan, both of which are
discussed in this section. Therefore, none of our named executive
officers will receive any cash severance payments in the event we
undergo a change in control, unless their employment agreement
otherwise provides.
Insurance
All
full-time employees, including the named executive officers, are
eligible to participate in our standard medical, dental and life
insurance plans. The terms of such benefits for the named executive
officers are generally the same as those for all other company
employees, with the exception of the level of life insurance
coverage. We pay approximately 95% of the annual health insurance
premium with employees paying the balance through payroll
deductions. We pay for up to $1,000,000 of basic life insurance and
AD&D insurance for our CEO, CFO, COO and General Counsel. All
other full-time employees can elect basic life insurance and
AD&D insurance coverage equal to their annual salary, up to
$50,000, paid by us.
401(k)
Our employees can participate in a 401(k) plan,
which is a qualified defined contribution retirement plan,
sponsored by the company. Participants are provided the opportunity
to make salary reduction contributions to the plan on a pre-tax
basis. We have the ability to make discretionary matching
contributions and discretionary profit sharing contributions to
such plan. Our practice has been to match participant’s
contributions up to the first four percent of their annual
earnings. Our match is fully vested when made. We suspended our
match throughout 2019 a
nd resumed it in 2020
except for a two month suspension in May and June
2020.
Other Benefits
We
seek to maintain an open and inclusive culture in our facilities
and operations among executives and other company employees. Thus,
we do not provide executives with separate dining or other
facilities, nor do we have programs for providing personal-benefit
perquisites to executives, such as defraying the cost of personal
entertainment or family travel. Our basic health care and other
insurance programs are generally the same for all eligible
employees, including the named executive officers.
Summary Compensation Table
The
following table summarizes all compensation recorded by us in each
of the last two completed fiscal years for:
●
all
individuals serving as our principal executive officer or acting in
a similar capacity during the year ended December 31,
2020;
●
our two
most highly compensated named executive officers at December 31,
2020 whose annual compensation exceeded $100,000; and
●
up to
two additional individuals for whom disclosure would have been made
in this table but for the fact that the individual was not serving
as a named executive officer of our company at December 31,
2020.
17
|
Name
and principal position
|
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
(1)
($)
|
Option
Awards
($)
|
Nonequity incentive plan
compen-sation ($)
|
Non-qualified deferred
compen-sation earnings ($)
|
All
other
compen-sation
($)
|
Total
($)
|
|
Richard
K. Howe,
Executive
Chairman and Chief Executive Officer
|
|
2020
|
389,583
|
245,000
|
35,447
|
—
|
—
|
—
|
4,280
|
674,310
|
|
|
|
2019
|
379,073
|
—
|
121,333
|
—
|
—
|
—
|
4,280
|
504,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wallace
D. Ruiz,
Chief
Financial Officer
|
|
2020
|
262,625
|
75,000
|
12,385
|
—
|
—
|
—
|
7,200
|
357,210
|
|
|
|
2019
|
262,625
|
—
|
42,000
|
—
|
—
|
—
|
7,200
|
311,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Don
(Trey) Barrett III,
F
ormer Chief Operating Officer
(2)
|
|
2020
|
241,667
|
40,000
|
8,341
|
—
|
—
|
—
|
2,619
|
292,627
|
|
|
|
2019
|
240,625
|
—
|
65,333
|
—
|
—
|
—
|
2,619
|
308,577
|
(1)
The value
attributable to any stock awards is computed in accordance with
FASB ASC Topic 718. The assumptions made in the valuations of the
stock awards are included in Note 13 of the notes to our
consolidated financial statements for the year ended December 31,
2020 appearing in our 2020 10-K.
(2)
Mr. Barrett
resigned his position at the Company effective May 31
st
,
2021.
On
March 1, 2012, we entered into employment agreements with each of
Messrs. Howe and Ruiz. Mr. Barrett did not have an employment
agreement and his compensation was set by the Nominating, Corporate
Governance and Compensation Committee.
Executive Employment Agreements
The
employment agreements entered into by Messrs. Howe and Ruiz, each
referred to as an executive, have an initial term of one year,
after which each executive’s employment agreement
automatically renews for additional one-year periods on the same
terms and conditions, unless either party to the agreement
exercises the respective termination rights available to such party
in the agreement. The employment agreements currently provide for a
minimum annual base salary of $425,000 for Mr. Howe and $275,000
for Mr. Ruiz, however, each of Messers. Howe and Ruiz agreed to
temporary base salary reductions to $212,500 and $200,750,
respectively, under the Temporary Salary Reduction Plan described
above. The employment agreements require our company to compensate
the executives and provide them with certain benefits if their
employment is terminated. The compensation and benefits the
executives are entitled to receive upon termination of employment
vary depending on whether their employment is
terminated:
●
by
us for cause (as defined in the employment
agreements);
●
by
us without cause, or by the executive for good reason (as defined
in the employment agreements);
●
due
to death or disability; or
●
by
the executive without good reason.
18
In
the event of a termination by our company without cause or a
termination by the executive for good reason, the executive would
be entitled to receive the following:
●
his
earned but unpaid basic salary through the termination date, plus a
portion of the executive’s bonus based upon the bonus he
would have earned in the year in which his employment was
terminated, pro-rated for the amount of time employed by us during
such year and paid on the original date such bonus would have been
payable;
●
an
amount payable over the 12-month period following termination equal
to one times the sum of his basic salary at the time of
termination, plus a termination bonus equal to the bonus paid to
the executive during the four fiscal quarters prior to the date of
termination (except that if a target bonus has been established for
Mr. Howe, each such person’s termination bonus is equal to
his target bonus for the fiscal year in which the termination
occurs, increased or decreased pursuant to actual performance
versus targeted performance in the then current plan measured as of
the end of the calendar month preceding the termination date), or
in the event of a change of control (as defined below), the greater
of the relevant calculation above or the bonus paid to the
executive during the four fiscal quarters prior to the change of
control;
●
any
other amounts or benefits owing to the executive under our
then-applicable employee benefit, long-term incentive, or equity
plans and programs, within the terms of such plans, payable over
the 12-month period following termination; and
●
benefits
(including health, life, and disability) as if the executive was
still an employee during the 12-month period following
termination.
Finally,
in the event of a termination without cause by our Company, with
good reason by the executive, or following a change of control (as
defined in the employment agreements), any equity award held by the
executive will immediately and fully vest and become exercisable
throughout the full term of such award as if the executive were
still employed by us. In the event of a termination by us with
cause, Messrs. Ruiz and Howe would be entitled to receive the
earned but unpaid portion of such executive’s base salary
through the date of termination.
In
the event of a termination by us of Mr. Ruiz upon the death or
permanent disability of such executive, the executive would be
entitled to receive the earned but unpaid portion of such
executive’s base salary through the date of termination, the
earned but unpaid portion of any vested incentive compensation
under and consistent with plans adopted by us prior to the date of
termination, and over the 12 months following the date of
termination an amount equal to 20% base salary at the time of
termination for each year of employment with us, capped at 100% of
the base salary.
In
the event of a termination by us of Mr. Howe upon the death or
permanent disability of such executive, the executive would be
entitled to receive the earned but unpaid portion of such
executive’s base salary through the date of termination, any
other amounts or benefits owing to the executive under any of our
then-applicable employee benefit, long-term incentive or equity
plans and programs, and over the 12 months following the date of
termination an amount equal to 20% base salary at the time of
termination for each year of employment with us, capped at 100% of
the base salary.
In
the event of a termination by Mr. Ruiz without good reason, such
executive is entitled to receive the earned but unpaid portion of
such executive’s base salary through the date of termination,
and the earned but unpaid portion of any vested incentive
compensation under and consistent with our plans adopted by us
prior to the date of termination. In the event of a termination by
Mr. Howe without good reason, such executive is entitled to receive
the earned but unpaid portion of his base salary through the
termination date and any other amounts and benefits owing to the
executive under our then applicable employee benefit, long term
incentive or equity plans and programs.
The
executive may terminate employment for any reason (other than good
reason) upon giving 30 days’ advance written notice to us. As
to a termination by Mr. Ruiz for any reason other than a good
reason, we will pay the executive the earned but unpaid portion of
his base salary through the termination date and any earned but
unpaid vested incentive compensation under and consistent with
plans adopted by us prior to the date of termination. As to a
termination by Mr. Howe for any reason other than a good reason, we
will pay the executive the earned but unpaid portion of his base
salary through the termination date and any other amounts and
benefits owing to the executive under our then applicable employee
benefit, long term incentive or equity plans and
programs.
19
Outstanding equity awards at year end
The
following table provides information concerning unexercised
options, stock that has not vested and equity incentive plan awards
for each named executive officer outstanding as of December 31,
2020.
|
|
OPTION
AWARDS
|
|
STOCK
AWARDS
|
||||||
|
Name
|
Number of
securities underlying unexercised options
(#)
exercisable
|
Number of
securities underlying unexercised options
(#)
unexercisable
|
Equity incentive
plan awards: Number of securities underlying unexercised unearned
options
(#)
|
Option exercise
price
($)
|
Option
expiration date
|
Number
of shares or units of stock that have not
vested
(1)
(#)
|
Market
value of shares or units of stock that have not vested
($)
|
Equity
incentive plan awards: Number of unearned shares, units or other
rights that have not vested (#)
|
Equity
incentive plan awards: Market or payout value of unearned shares,
units or other rights that have not vested ($)
|
|
Richard
K. Howe
|
—
|
—
|
—
|
—
|
—
|
433,333
|
195,000
|
—
|
—
|
|
Wallace
D. Ruiz
|
—
|
—
|
—
|
—
|
—
|
150,000
|
67,500
|
—
|
—
|
|
Don
(Trey) Barrett III
|
—
|
—
|
—
|
—
|
—
|
233,333
|
105,000
|
—
|
—
|
(1)
Restricted stock units reported in this column vested on
January 1, 2021.
Our Equity Compensation Plans
Information
regarding our 2010 Plan and 2017 Plan is contained in Note 13 to
the notes to our audited consolidated financial statements
appearing in our 2020 10-K.
PRINCIPAL STOCKHOLDERS
At May
31, 2021 we had 118,516,204 shares of common stock issued and
outstanding. The following table sets forth information known to us
as of May 31, 2021 relating to the beneficial ownership of shares
of our common stock by:
●
each
person who is known by us to be the beneficial owner of more than
5% of our outstanding common stock;
●
each
director and nominee;
●
each
named executive officer; and
●
all
named executive officers and directors as a group.
20
Unless
otherwise indicated, the address of each beneficial owner in the
table set forth below is care of 500 President Clinton Avenue,
Suite 300, Little Rock, Arkansas 72201. We believe that all
persons, unless otherwise noted, named in the table have sole
voting and investment power with respect to all shares of common
stock shown as being owned by them. Under securities laws, a person
is considered to be the beneficial owner of securities owned by him
(or certain persons whose ownership is attributed to him) and that
can be acquired by him within 60 days from May 31, 2021, including
upon the exercise of options, warrants or convertible securities.
We determine a beneficial owner’s percentage ownership by
assuming that options, warrants or convertible securities that are
held by him, but not those held by any other person, and which are
exercisable within 60 days of the that date, have been exercised or
converted.
|
Name of Beneficial Owner
|
No. of Shares Beneficially
Owned
|
% of Class
|
|
|
|
|
|
Charles
Morgan
|
5,198,965
|
4.4
%
|
|
Richard K.
Howe
|
2,210,370
|
1.9
%
|
|
Wallace D.
Ruiz
|
528,919
|
*
|
|
Don Walker
“Trey” Barrett III
|
523,425
|
*
|
|
G. Kent
Burnett
|
1,501,450
|
1.3
%
|
|
Gordon J. Cameron
(1)
|
465,723
|
*
|
|
All executive
officers and directors as a group (seven persons)
(1)
|
10,827,162
|
9.1
%
|
|
|
|
|
|
Robert H. Drysdale
(2)
|
10,127,316
|
8.5
%
|
*
represents less
than 1%.
(1)
Includes 6,630
shares held by Mr. Cameron’s spouse.
(2)
Pursuant to the
Schedule 13G/A filed with the SEC on February 9, 2021. The
principal business address of Mr. Drysdale is
132A Royal Circle, Honolulu, Hawaii
96816.
Securities Authorized for Issuance under Equity Compensation
Plans
The
following table sets forth securities authorized for issuance under
any equity compensation plans approved by our stockholders as well
as any equity compensation plans not approved by our stockholders
as of December 31, 2020.
|
Plan
category
|
Number of securities to be issued upon exercise of
outstanding options, warrants and rights
(1)
(a)
|
Weighted average exercise price of outstanding
options, warrants and rights
(2)
($)
(b)
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
(c)
|
|
|
|
|
|
|
Plans approved by our stockholders:
|
|
|
|
|
2010 Equity Compensation Plan
(3)
|
967,166
|
$
0.56
|
—
|
|
2017
Equity Compensation Plan
|
972,860
|
—
|
6,791,166
|
|
Plans not approved by stockholders
|
—
|
—
|
—
|
|
|
|
|
|
(1)
The numbers in this
column (a) reflect shares of common stock to be issued upon
exercise of outstanding stock options and the vesting of
outstanding RSUs.
(2)
The
weighted-average exercise prices in this column (b) are based on
outstanding options and do not take into account unvested awards of
RSUs as these awards do not have an exercise price.
(3)
Expired in April
2020.
21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There
have been no transactions since January 1, 2019 nor are there any
currently proposed transactions in which we were or are to be
participant in which any related person had or will have a direct
or indirect material interest.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT THE NEXT ANNUAL
MEETING
For a
stockholder proposal to be considered for inclusion in our proxy
statement for the 2022 annual meeting, the corporate secretary must
receive the written proposal at our principal executive offices no
later than the deadline stated below. Such proposals must comply
with SEC regulations under Rule 14a-8 regarding the inclusion of
stockholder proposals in company-sponsored proxy materials.
Proposals should be addressed to:
Inuvo,
Inc.
Attention:
Corporate Secretary
500
President Clinton Avenue
Suite
300
Little
Rock, Arkansas 72201
Facsimile:
(877) 311-5050
Under
Rule 14a-8, to be timely, a stockholder’s notice must be
received at our principal executive offices not less than 120
calendar days before the date of our proxy statement release to
stockholders in connection with the previous year’s annual
meeting. However, if we did not hold an annual meeting in the
previous year or if the date of next year’s annual meeting
has been changed by more than 30 days from the date of the previous
year’s annual meeting, then the deadline is a reasonable time
before we begin to print and send our proxy materials. Therefore,
stockholder proposals intended to be presented at the 2022 annual
meeting must be received by us at our principal executive office no
later than 120 days prior to the anniversary date that proxy
material for this year’s meeting were sent in order to be
eligible for inclusion in our 2022 proxy statement and proxy
relating to that meeting, which will be March 2, 2022.
Any shareholder proposal submitted outside the
processes of Rule 14a-8 under the Securities Exchange Act of 1934
for presentation at our 2022 annual meeting will be considered
untimely for purposes of Rule 14a-4 and 14a-5 if notice thereof is
not received by the Company in writing by
45 days prior to
the anniversary of the date that proxy materials are sent to
shareholders, which will be May 16, 2022. Upon receipt of any
proposal, we will determine whether to include such proposal in
accordance with regulations governing the solicitation of
proxies.
You may
propose director candidates for consideration by the Board’s
Nominating, Corporate Governance and Compensation Committee. Any
such recommendations should include the nominee’s name and
qualifications for Board membership, information regarding the
candidate as would be required to be included in a proxy statement
filed pursuant to SEC regulations, and a written indication by the
recommended candidate of her or his willingness to serve, and
should be directed to the Corporate Secretary of Inuvo at our
principal executive offices: Inuvo, Inc., 500 President Clinton
Avenue, Suite 300, Little Rock, Arkansas 72201 within the time
period described above for proposals other than matters brought
under SEC Rule 14a-8.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
As
required, we have filed our 2020 10-K with the SEC. Stockholders
may obtain, free of charge, a copy of the 2020 10-K by writing to
us at 500 President Clinton Avenue, Suite 300, Little Rock,
Arkansas 72201, Attention: Corporate Secretary, or from our
website,
www.inuvo.com
.
STOCKHOLDERS SHARING THE SAME LAST NAME AND ADDRESS
The SEC
has adopted rules that permit companies and intermediaries such as
brokers to satisfy delivery requirements for proxy statements with
respect to two or more stockholders sharing the same address by
delivering a single proxy statement addressed to those
stockholders. This process, which is commonly referred to as
“householding,” potentially provides extra convenience
for stockholders and cost savings for companies. We and some
brokers household proxy materials, delivering a single proxy
statement to multiple stockholders sharing an address unless
contrary instructions have been received from the affected
stockholders. Once you have received notice from your broker or us
that they are or we will be householding materials to your address,
householding will continue until you are notified otherwise or
until you revoke your consent. If, at any time, you no longer wish
to participate in householding and would prefer to receive a
separate proxy statement, or if you currently receive multiple
proxy statements and would prefer to participate in householding,
please notify your broker if your shares are held in a brokerage
account or us if you hold registered shares. You can notify us by
sending a written request to Inuvo, Inc., Attention: Corporate
Secretary, 500 President Clinton Avenue, Suite 300, Little Rock,
Arkansas 72201 or by faxing a communication to: (877)
311-5050.
WHERE YOU CAN FIND MORE INFORMATION
This
proxy statement refers to certain documents that are not presented
herein or delivered herewith. Such documents are available to any
person, including any beneficial owner of our shares, to whom this
proxy statement is delivered upon oral or written request, without
charge. Requests for such documents should be directed to Corporate
Secretary, Inuvo, Inc., 500 President Clinton Avenue, Suite 300,
Little Rock, Arkansas 72201. Please note that additional
information can be obtained from our website at
www.inuvo.com
,
and interested parties may contact us through our website at
www.inuvo.com
with any questions.
We file
annual and special reports and other information with the SEC.
Certain of our SEC filings are available over the Internet at the
SEC’s web site at http://www.sec.gov.
22
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INUVO, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
2021 ANNUAL MEETING OF STOCKHOLDERS ON
AUGUST
11
, 2021 AT
9:00 A.M.
LOCAL TIME
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CONTROL ID:
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REQUEST ID:
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The undersigned, a stockholder of Inuvo, Inc. (the
“Company”), hereby revoking any proxy heretofore given,
does hereby appoint Richard K. Howe and Wallace D. Ruiz, and each
of them, proxy, with power of substitution, for and in the name of
the undersigned to attend the 2021 annual meeting of stockholders
of the Company to be held
at
the Company’s offices located at
500 President Clinton
Avenue, Suite 300, Little Rock, Arkansas 72201
on August 11, 2021 at
9:00 a.m. local time, or at any adjournment or postponement
thereof, and there to vote, as designated
below:
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please mark, sign, date, and return this Proxy Card promptly using
the enclosed envelope.
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FAX:
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Complete the reverse portion of this Proxy Card and Fax to
202-521-3464
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INTERNET:
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https://www.iproxydirect.com/INUV
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PHONE:
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1-866-752-VOTE
(8683)
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2021 ANNUAL MEETING OF THE STOCKHOLDERS OF INUVO, INC.
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE:
☒
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PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal 1
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FOR
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AGAINST
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ABSTAIN
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Election of two Class I directors:
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Richard
K. Howe
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Gordon
J. Cameron
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Proposal 2
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FOR
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AGAINST
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ABSTAIN
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The ratification of the appointment of Mayer Hoffman McCann P.C. as
the Company’s independent registered public accounting
firm.
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Proposal 3
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FOR
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AGAINST
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ABSTAIN
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To
approve of an amendment to our articles of incorporation increasing
the number of authorized shares of our common stock, $0.001 par
value per share, that we may issue from 150,000,000 to
200,000,000.
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Proposal 4
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FOR
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AGAINST
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ABSTAIN
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To
approve an adjournment of the 2021 annual meeting, if necessary, to
solicit additional proxies if there are not sufficient votes in
favor of Proposal 3.
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MARK “X” HERE IF YOU PLAN
TO ATTEND THE MEETING:
☐
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In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the 2021 annual meeting,
and any adjournment or adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE ‘FOR’ THE
ELECTION OF THE CLASS I DIRECTOR NOMINEES AND ‘FOR’
PROPOSALS 2, 3, AND 4.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO CONTRARY INSTRUCTION IS
INDICATED, THE VOTE OF THE UNDERSIGNED WILL BE CAST
“FOR” ALL OF THE PROPOSALS. AT THE PRESENT TIME, THE
BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT
THE 2021 ANNUAL MEETING.
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MARK HERE FOR ADDRESS CHANGE
☐
New Address (if
applicable):
_______________________________
IMPORTANT:
Please sign exactly
as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as
such. If signer is a partnership, please sign in partnership name
by authorized person.
Dated: ________________________, 2021
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(Print Name of Stockholder and/or Joint Tenant)
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(Signature of Stockholder)
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(Second Signature if held jointly)
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24
EXHIBIT
A
TABLE OF CONTENTS