autodef14a_apr2021
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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 ☐
Check
the appropriate box:
☐
Preliminary Proxy
Statement
☐
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
☒
Definitive Proxy
Statement
☐
Definitive
Additional Materials
☐
Soliciting Material
Pursuant to § 240.14a-12
AutoWeb, Inc.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
☐
Fee computed on
table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1)
Title of each class
of securities to which transaction applies:
(2)
Aggregate number of
securities to which transaction applies:
(3)
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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aggregate value of transaction:
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with preliminary materials.
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Check box if any
part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting 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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Form, Schedule or
Registration Statement No.:
AUTOWEB, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 16, 2021
TO OUR STOCKHOLDERS:
NOTICE
IS HEREBY GIVEN that the Annual Meeting of Stockholders
(“Annual
Meeting”) of AutoWeb, Inc., a Delaware corporation
(“AutoWeb” or
“Company”), will
be held at the Company’s principal executive offices at 400
North Ashley Drive, Suite 300, Tampa, Florida 33602, on
Thursday, June 16, 2021, at 8:00 a.m. Eastern Time for the
following purposes:
1.
|
To
elect three (3) Class II Directors (“Election of Directors
Proposal”);
|
2.
|
To hold
an advisory vote on the compensation of the Company’s named
executive officers (“Say-on-Pay
Proposal”);
|
3.
|
To
ratify the appointment, by the Company’s Audit Committee, of
Moss Adams LLP as the Company’s independent registered public
accounting firm for 2021 (“Accounting Firm Ratification
Proposal”); and
|
4.
|
To
transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
|
At the Annual
Meeting, the Company’s Board of Directors
(“Board”)
intends to present Michael A. Carpenter, Mark N. Kaplan, and Jose
Vargas as nominees for election to the Board.
The
Board has fixed the close of business on April 22, 2021, as the
record date for the determination of the holders of record of the
Company’s common stock entitled to notice of, and to vote at,
the Annual Meeting.
A list
of stockholders entitled to vote at the Annual Meeting will be open
for examination by any stockholder for any purpose germane to the
meeting during ordinary business hours for a period of 10 days
prior to the Annual Meeting at the principal executive offices of
AutoWeb located at 400 North Ashley Drive, Suite 300, Tampa,
Florida 33602, and will also be available for examination by any
stockholder present at the Annual Meeting until adjournment of the
Annual Meeting.
PLEASE READ CAREFULLY THE ACCOMPANYING PROXY STATEMENT. AUTOWEB
INVITES ALL STOCKHOLDERS TO ATTEND THE ANNUAL MEETING. TO
ENSURE THAT YOUR SHARES WILL BE VOTED AT THE ANNUAL MEETING, PLEASE
COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
Although we intend to hold the Annual Meeting in person, we are
actively monitoring the public health and travel concerns of our
stockholders, directors, and employees in light of the COVID-19
pandemic, as well as the related protocols that federal, state and
local governments have imposed. As part of our precautions, we may
consider the possibility of changing the location of the Annual
Meeting and/or holding a virtual meeting by means of remote
communication. We will announce any alternative arrangements for
the annual meeting as promptly as practicable if a decision is made
to change the location of the Annual Meeting and/or hold a virtual
meeting.
Tampa,
Florida
April
23, 2021
|
By
Order of the Board of Directors
|
|
Glenn
E. Fuller
Executive Vice President,
Chief Legal Officer and Secretary
|
IMPORTANT
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND
THE ANNUAL MEETING, PLEASE COMPLETE, DATE, AND SIGN THE ENCLOSED
PROXY CARD AND PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED TO VOTE
PROCESSING, C/O BROADRIDGE, 51 MERCEDES WAY, EDGEWOOD, NEW YORK
11717, TO BE RECEIVED NO LATER THAN 11:59 P.M. EASTERN TIME ON THE
DAY BEFORE THE ANNUAL MEETING. IN ORDER TO AVOID THE
ADDITIONAL EXPENSE TO AUTOWEB OF FURTHER SOLICITATION, THE COMPANY
ASKS YOUR COOPERATION IN MAILING IN YOUR PROXY CARD PROMPTLY. PRIOR
TO THE ANNUAL MEETING, STOCKHOLDERS MAY ALSO PROVIDE VOTING
INSTRUCTIONS USING THE INTERNET AT WWW.PROXYVOTE.COM
OR BY CALLING 1.800.690.6903 AS DESCRIBED IN THE PROXY STATEMENT
AND ACCOMPANYING PROXY CARD. THE CUTOFF TIME FOR PROVIDING VOTING
INSTRUCTIONS USING THE INTERNET OR BY CALLING IS 11:59 P.M. EASTERN
TIME THE DAY BEFORE THE DATE OF THE ANNUAL MEETING.
PROXY STATEMENT
AutoWeb, Inc.
400 North Ashley, Suite 300
Tampa, Florida 33602
Annual Meeting
To Be Held on June 16, 2021
The Annual Meeting
The
enclosed proxy is solicited by and on behalf of the Board of
Directors (“Board”) of AutoWeb, Inc., a
Delaware corporation (“AutoWeb” or “Company”), for use at
AutoWeb’s 2021 Annual Meeting of Stockholders
(“Annual
Meeting”) to be held on Thursday, June 16, 2021, at
8:00 a.m. Eastern Time at the Company’s principal
executive offices located at 400 North Ashley Drive, Suite 300,
Tampa, Florida 33602, and at any and all adjournments or
postponements thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders.
Although we intend to hold the Annual Meeting in person, we are
actively monitoring the public health and travel concerns of our
stockholders, directors and employees in light of the COVID-19
pandemic, as well as the related protocols that federal, state and
local governments have imposed. As part of our precautions, we may
consider the possibility of changing the location of the Annual
Meeting and/or holding a virtual meeting by means of remote
communication. We will announce any alternative arrangements for
the annual meeting as promptly as practicable if a decision is made
to change the location of the Annual Meeting and/or hold a virtual
meeting.
This
Proxy Statement of AutoWeb is being mailed on or about April 30,
2021, to each stockholder of record as of the close of business on
April 22, 2021.
Record Date and Outstanding Shares
The Board has fixed the close of business on April
22, 2021, as the record date for the Annual Meeting
(“Record Date”). Only holders of record of
AutoWeb’s common stock, $0.001 par value per share
(“Common Stock”), at the close of business on the Record
Date are entitled to notice of, and to vote at, the Annual
Meeting. As of the close of business on the Record Date, there
were 13,465,871 shares of Common Stock outstanding and entitled to
vote at the Annual Meeting.
Quorum and Voting
Quorum. The holders of record of a majority in voting
power of the shares of Common Stock of the Company issued and
outstanding and entitled to be voted, present in person or by
proxy, will constitute a quorum for the transaction of business at
the Annual Meeting or any adjournment or postponement thereof.
Shares not present in person or by proxy at the Annual Meeting will
not be counted for purposes of determining a quorum at the Annual
Meeting. In the event there are not sufficient shares present
to establish a quorum or to approve proposals at the time of the
Annual Meeting, the Annual Meeting may be adjourned in order to
permit further solicitation of proxies by the Company.
Vote Required. Holders of Common Stock are entitled to
one vote for each share held as of the Record Date on all matters
to be voted on at the Annual Meeting. The Company’s
Seventh Amended and Restated Bylaws (“Bylaws”), provide that, except as
otherwise provided in the Company’s Seventh Amended and
Restated Certificate of Incorporation (“Certificate of Incorporation”),
the rules or regulations of any stock exchange applicable to the
Company or by applicable law or regulation, all matters will be
decided by the vote of a majority in voting power of the shares
present in person or by proxy and entitled to vote at the Annual
Meeting and on the proposal. For Proposal 1 (Election of
Directors Proposal), the Bylaws provide that the persons receiving
the greatest number of votes, up to the number of directors then to
be elected, will be the persons elected. For Proposal 2 (Say-on-Pay
Proposal), the affirmative vote of a majority of the shares of
Common Stock present in person or by proxy and entitled to vote at
the Annual Meeting and on the proposal is required to approve the
advisory (non-binding) vote on executive compensation. For Proposal
3 (Accounting Firm Ratification Proposal), the affirmative vote of
a majority in voting power of the shares present in person or by
proxy and entitled to vote at the Annual Meeting and on the
proposal is required to approve the ratification of the appointment
of the accounting firm. Proposal 2 (Say-on-Pay Proposal) is
non-binding and advisory. None of the proposals are contingent upon
the approval of any other proposal.
Abstentions. Abstentions
will be counted for purposes of determining a quorum at the Annual
Meeting. An abstention for any proposal, other than
Proposal 1 (Election of Directors Proposal), will have the
same effect as a vote against such proposal. As to
Proposal 1 (Election of Directors Proposal), because the
number of nominees is equal to the number of directors being
elected at the Annual Meeting, abstentions will not affect the
election of the nominees to the Board as long as each nominee
receives at least one vote in favor of the nominee’s
election.
Broker Discretionary Voting. If your shares are held in
a brokerage account, by a bank or other nominee, you are considered
the beneficial owner of shares held in “street name,”
and the proxy materials are being sent to you by your broker, bank,
or other nominee which is considered, with respect to those shares,
the stockholder of record. As the beneficial owner, you have
the right to direct your broker, bank, or other nominee how to vote
your shares. If you do not give instructions to your brokerage
firm or bank, it will still be able to vote your shares with
respect to “discretionary” proposals, but will not be
allowed to vote your shares with respect to
“non-discretionary” proposals. The Company expects
that Proposal 3 (Accounting Firm Ratification Proposal) will
be considered to be a discretionary proposal on which banks and
brokerage firms may vote. The Company expects that all other
proposals being presented to stockholders at the Annual Meeting
will be considered to be non-discretionary items on which banks and
brokerage firms may not vote. Therefore, if you do not
instruct your broker or bank regarding how you would like your
shares to be voted, your bank or brokerage firm will not be able to
vote on your behalf with respect to these proposals. In the
case of these non-discretionary items, the shares will be treated
as “broker non-votes.” Broker non-votes are shares that
are held in “street name” by a bank or brokerage firm
that indicates on its proxy that it does not have discretionary
authority to vote on a particular matter. Your failure to give instructions to your bank or
broker will not (i) affect the outcome of
Proposal 1 (Nomination and Election of Directors
Proposal), as long as a nominee receives at least one vote in favor
of the nominee’s election; nor (ii) affect the outcome of
Proposal 2 (Say-on-Pay Proposal) because this
proposal requires the affirmative vote of a majority in voting
power of the shares present in person or by proxy and entitled to
vote at the Annual Meeting and on this proposal, and broker
non-votes will not be deemed “entitled to vote on the
proposal” and therefore are not counted in the vote for this
proposal.
Expenses of Proxy Solicitation
This
solicitation is being made by the Company. Officers, directors, and
regular employees of AutoWeb may solicit proxies in person or by
regular mail, electronic mail, facsimile transmission, or personal
calls. These persons will receive no additional compensation
for solicitation of proxies but may be reimbursed for reasonable
out-of-pocket expenses. In addition,
AutoWeb may retain a proxy solicitor in conjunction with the Annual
Meeting. If AutoWeb does engage a proxy solicitor, the Company
would likely engage Mackenzie Partners for such services, and
AutoWeb estimates that the fees and costs for those proxy
solicitation services will be approximately $7,500 plus reasonable
disbursements.
AutoWeb
will pay all of the expenses of soliciting proxies to be voted at
the Annual Meeting. Banks, brokerage firms and other
custodians, nominees or fiduciaries will be requested to forward
soliciting material to their principals and to obtain authorization
for the execution of proxies and will be reimbursed for their
reasonable out-of-pocket expenses incurred in that
regard.
Voting of Proxies
Shares
may be voted by completing, dating, and signing the accompanying
proxy card and promptly returning it in the enclosed envelope.
Stockholders may provide voting instructions for voting of their
proxies using the Internet at www.proxyvote.com
or by calling 1.800.690.6903. Providing voting instructions using
the Internet or by calling requires stockholders to input the
Control Number located on their proxy cards. The cutoff time
for providing voting instructions via the Internet or by calling is
11:59 p.m. Eastern Time the day before the date of the Annual
Meeting (“Voting Instructions
Cutoff Time”).
All
properly signed proxies received prior to the vote at the Annual
Meeting that are not properly revoked prior to the vote will be
voted at the Annual Meeting according to the instructions indicated
on the proxies or, if no direction is indicated, such proxies will
be voted “FOR”
Proposal 1 (Election of Directors Proposal);
“FOR”
Proposal 2 (Say-on-Pay Proposal); and “FOR”
Proposal 3 (Accounting Firm Ratification Proposal). The Board
does not presently intend to present any other matter for action at
the Annual Meeting and no stockholder has given timely notice in
accordance with the Bylaws of any matter that it intends to be
brought before the Annual Meeting. If any other matters are
properly brought before the Annual Meeting, the persons named in
the proxies will have discretion to vote on those matters in
accordance with their best judgment.
Revocability of Proxy
If you
are the holder of record for your shares, you may revoke your proxy
at any time before it is exercised at the Annual Meeting by taking
either of the following actions: (i) delivering to the
Company’s Corporate Secretary a revocation of the proxy or a
proxy relating to the same shares and bearing a later date prior to
the vote at the Annual Meeting; or (ii) attending the Annual
Meeting and voting in person, although attendance at the Annual
Meeting will not, by itself, revoke a proxy. Stockholders may also
revoke a prior proxy by providing later voting instructions for
voting of a later proxy prior to the Voting Instructions Cutoff
Time.
Recommendation of the Board of Directors
The
Board recommends that AutoWeb stockholders vote “FOR” the election of Messrs.
Michael A. Carpenter, Mark N. Kaplan, and Jose Vargas as Class II
Directors under Proposal 1 (Election of Directors Proposal);
“FOR”
Proposal 2 (Say-on-Pay Proposal); and “FOR” Proposal 3 (Accounting
Firm Ratification Proposal).
Additional Information
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
MEETING TO BE HELD ON JUNE 16, 2021: Copies of the
Notice of Annual Meeting of Stockholders, this Proxy Statement, the
form of Proxy Card, and the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2020, are
available online at http://www.autoweb.com/proxymaterials. Stockholders
wishing to attend the Annual Meeting may obtain directions by
calling the Company at 949.437.4651.
A copy
of the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2020, accompanies this Proxy
Statement. If requested, AutoWeb will furnish you with a copy
of any exhibit listed on the exhibit index to the Company’s
Annual Report on Form 10-K for the fiscal year ended December
31, 2020, upon payment of a reasonable copy fee.
Because
the Company qualifies as a “smaller reporting company”
(as defined in applicable Securities and Exchange Commission
(“SEC”) rules),
it has elected to comply with the scaled compensation disclosure
requirements applicable to smaller reporting companies.
Accordingly, this Proxy Statement does not include certain
disclosures and tables that would otherwise be
required.
TO
ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING,
PLEASE COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT
PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING. PRIOR TO THE VOTING
INSTRUCTIONS CUTOFF TIME, STOCKHOLDERS MAY ALSO PROVIDE VOTING
INSTRUCTIONS USING THE INTERNET AT PROXYVOTE.COM
OR BY CALLING 1.800.690.6903 AS DESCRIBED IN THIS PROXY STATEMENT
AND ACCOMPANYING PROXY CARD.
NOMINATION AND ELECTION OF DIRECTORS
Nominees for Class II Directors
Messrs.
Michael A.
Carpenter, Mark N. Kaplan, and Jose Vargas are the
Board’s nominees for election as Class II Directors at the
Annual Meeting. The Board made these nominations at the
recommendation of the Board’s Corporate Governance and
Nominations Committee. A Class II Director will hold
office until the 2024 Annual Meeting of Stockholders and until that
director’s successor is duly qualified and
elected.
Michael A.
Carpenter. Mr. Carpenter has served as a director of
AutoWeb since September 2012. Mr. Carpenter served as the Chief
Executive Officer and as a director of Ally Financial Inc. from
November 2009 until his retirement in February 2015. Ally Financial
is one of the nation’s largest financial services companies,
with a concentration in automotive lending. In 2007, Mr. Carpenter
founded Southgate Alternative Investments, Inc. From 2002 to 2006,
he was Chairman and Chief Executive Officer of Citigroup
Alternative Investments, overseeing proprietary capital and
customer funds globally in various alternative investment vehicles.
From 1998 to 2002, Mr. Carpenter was Chairman and Chief Executive
Officer of Citigroup’s Global Corporate & Investment Bank
with responsibility for Salomon Smith Barney Inc. and
Citibank’s corporate banking activities globally. Mr.
Carpenter was named Chairman and Chief Executive Officer of Salomon
Smith Barney Inc. in 1998, shortly after the merger that created
Citigroup. Prior to Citigroup, Mr. Carpenter was Chairman and Chief
Executive Officer of Travelers Life & Annuity and Vice Chairman
of Travelers Group Inc. responsible for strategy and business
development. From 1989 to 1994, Mr. Carpenter was Chairman of the
Board, President and Chief Executive Officer of Kidder Peabody
Group Inc., a wholly owned subsidiary of General Electric Company.
From 1986 to 1989, Mr. Carpenter was Executive Vice President of GE
Capital Corporation. He first joined GE in 1983 as Vice President
of Corporate Business Development and Planning and was responsible
for strategic planning and development as well as mergers and
acquisitions. Earlier in his career, Mr. Carpenter spent nine years
as Vice President and Director of the Boston Consulting Group and
three years with Imperial Chemical Industries of the United
Kingdom. Mr. Carpenter was elected to the board of CIT Group, Inc.
(“CIT”), a
publicly held financial holding company, on May 1, 2016, and is
anticipated to serve on the boards of First Citizens BancShares,
Inc. (“BancShares”), a publicly held
financial holding company, and First-Citizens Bank & Trust
Company, a North Carolina chartered commercial bank and
wholly-owned subsidiary of Bancshares, upon the merger of CIT with
a wholly-owned subsidiary of BancShares, which merger is
anticipated to be completed during the second quarter of 2021. In
addition, in March 2021 he became a director of SVF Investment
Corp. 3, a newly formed publicly held blank check company formed
for the purpose of effecting a business
combination with one or more businesses or
entities. He also serves
on the boards of Law
Finance Group, US Retirement Partners, the New York City Investment
Fund, the Rewards Network, Inc., Client 4 Life Group, LLC, and
Validity Capital, and has been a board member of the New York Stock
Exchange, General Signal, Loews Cineplex and various other private
and public companies. Mr. Carpenter received a Bachelor of Science
degree from the University of Nottingham, England, and a Master of
Business Administration from the Harvard Business School where he
was a Baker Scholar. Mr. Carpenter also holds an honorary degree of
Doctor of Laws from the University of Nottingham. Mr.
Carpenter’s experience in investment and commercial banking,
executive management and capital markets led the Board to conclude
that Mr. Carpenter should serve as one of the Company’s
directors.
Mark N.
Kaplan.
Mr. Kaplan has served as a director of AutoWeb since June
1998. Mr. Kaplan was a member of the law firm of Skadden, Arps,
Slate, Meagher & Flom LLP from 1979 through 1998 and currently
is of counsel to that firm, Chairman of the Board and Chief
Operating Officer of Engelhard Minerals & Chemicals Corporation
from 1977 to 1979, and President and Chief Executive Officer of
Drexel Burnham Lambert (investment banking) from 1970 to 1977. Mr.
Kaplan serves as Chairman of the compensation committee of the
board of directors of American Biltrite Inc. He is a Trustee of
Bard College, the New York Academy of Medicine, a member and former
Chairman of the New York City Audit Committee, a member of the New
York City Housing Authority Audit Committee, a Trustee and Chairman
of the Audit Committee of WNET.org (provider of public media in the
New York City metropolitan area), a director of twenty investment
funds managed by Gresham Investment Management LLC, as well as an
advisor to fifteen additional private Gresham fund properties. Mr.
Kaplan has also served on the boards of Volt Information Services,
Inc., Congoleum Corp., DRS Technologies Inc., and other privately
held entities or mutual funds. Mr. Kaplan was formerly the Chairman
of the Audit Advisory Committee of the Board of Education of The
City of New York, Vice-Chairman and Governor of the board of
directors of The American Stock Exchange, Inc., and a director of
Security Industry Automation Corporation. Mr. Kaplan holds a
Bachelor of Arts degree from Columbia College and a Bachelor of
Laws degree from Columbia Law School. Mr. Kaplan’s experience
in securities and corporate laws, mergers and acquisitions,
investment banking and business management, as well as his
qualification as an audit committee financial expert, led the Board
to conclude that Mr. Kaplan should serve as one of the
Company’s directors.
Jose Vargas. Mr.
Vargas has served as a director of AutoWeb since October 1, 2015
and as the Company’s Chief Revenue Officer from October 1,
2015 to April 12, 2018. From September 18, 2013 to October 1, 2015,
Mr. Vargas was a director and president of a company that provided
an internet-based, pay-per-click advertising marketplace for the
automotive industry, which was acquired by the Company as of
October 1, 2015. Mr. Vargas is a co-founder, director and the
president of People F, Inc.,
a British Virgin Islands business company (“PeopleFund”), a holding company that
is focused on investments in technology, internet and media,
and a co-founder of, and currently serves as a co-managing director
and president of PF Holding, Inc., a British Virgin Islands
business company (“PF
Holding”), a holding company
affiliated with PeopleFund that is focused on investments in
technology, internet and media affiliated with PeopleFund,
as well as vice president and a director of PF Auto, Inc., a
British Virgin Islands business company (“PF Auto”), also an entity
affiliated with PeopleFund, and co-managing director, president and
secretary of Auto Holdings Ltd., a British Virgin Islands business
company (“ Auto
Holdings”), also an entity affiliated with PeopleFund.
Mr. Vargas is also a director or officer of a number of
privately-held companies that include Iguama Inc., an online
marketplace offering U.S. products in Latin America,
Healthcare, Inc., an online search, comparison and recommendation
tool for healthcare consumers, Blue Mountain 17 Inc., Blue Mountain
18 Inc., Blue Mountain 30 Inc., Blue Mountain 31 Inc., Blue
Mountain 45 Inc., Blue Mountain 46 Inc., Blue Mountain 48 Inc.,
Blue Mountain 73 Inc., Classifieds Corp., Gray Mountain Inc.,
PeopleFund Inc., People Ventures Inc., People Ventures Investment
Inc., PV SU Holding, Inc., PV SU Investment, Limited Partnership,
MapFit Inc. (prior: GeoFi, Inc.), PF Classifieds Inc., PF
Healthcare Inc., Galeb3 Inc., and Healthcare.com Insurance
Services, LLC. Mr. Vargas received a Bachelor of Science degree
from Florida International University.
Voting
for Election of Class II Directors
The
persons named in the enclosed proxy card will vote
“FOR” the
election of Michael A. Carpenter, Mark N. Kaplan, and Jose Vargas
as Class II Directors unless instructed otherwise in the proxy.
Because no other nominees have been properly and timely nominated
in accordance with the Bylaws, Messrs. Carpenter, Kaplan, and
Vargas will each be elected as Class II Directors as long as
they each receive at least one vote for their respective
election. Holders of Common Stock are not entitled to
cumulate their votes in the election of directors. Although
Messrs. Carpenter, Kaplan, and
Vargas have each consented to serve as a director if
elected, and the Board has no reason to believe that any of them
will be unable to serve as a director. If Mr. Carpenter, Mr. Kaplan,
or Mr. Vargas withdraws his nomination or otherwise becomes
unavailable to serve, the persons named as proxies will vote for
any substitute nominee designated by the Board. Abstentions
and “broker non-votes” will not have any effect on the
outcome of the voting for the election of Class II Directors as
long as a nominee receives at least one vote in favor of the
nominee’s election.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE
“FOR” THE ELECTION OF MESSRS. MICHAEL A. CARPENTER,
MARK N. KAPLAN, AND JOSE VARGAS.
PROPOSAL 2
ADVISORY VOTE ON COMPENSATION OF NAMED EXECUTIVE
OFFICERS
The
Board believes that the Company’s long-term success depends
in large measure on the talents of its employees and their
commitment to the Company. AutoWeb’s compensation system
plays a significant role in its ability to attract, retain and
motivate the highest quality workforce. The Board believes
that the Company’s current compensation program directly
links executive compensation to performance, aligning the interests
of AutoWeb’s executive officers with those of its
stockholders. The Board endorses the Company’s
executive compensation program and encourages stockholders to
review the Named Executive Officer Compensation Narrative, tables
and disclosures included under the Section of this Proxy Statement
entitled “EXECUTIVE
COMPENSATION.”
Section
14A of the Securities Exchange Act of 1934, as amended
(“Exchange
Act”), requires that the Company periodically submit
to the stockholder for an advisory vote a resolution to approve the
compensation of its named executive officers as described in this
Proxy Statement. At the Company’s 2019 annual meeting of
stockholders, approximately 82% of the votes present and entitled
to vote on the proposal voted to approve the holding of this
advisory vote every two years. In light of this vote, the Board
determined to include a stockholder advisory vote on the
compensation of the named executive officers in the Company’s
proxy materials every two years. At the Company’s 2019 annual
meeting of stockholders, approximately 85% of the votes present and
entitled to vote on the proposal voted for approval of this
resolution.
The
Board recommends that the stockholders vote “FOR” the following
resolution:
Resolved, that the stockholders approve
the compensation of the Company’s named executive officers as
described in this Proxy Statement under “Executive
Compensation,” including the Named Executive Officer
Compensation Narrative and the tabular and narrative disclosure
contained in this Proxy Statement.
Because
the vote on this Proposal 2 is advisory, it will not be binding
upon the Board or the Board’s Compensation Committee, and
neither the Board nor the Compensation Committee will be required
to take any action as a result of the outcome of the vote on this
proposal. However, the Board and Compensation Committee value
the opinions that the Company’s stockholders express in their
votes and will take into account the outcome of the vote when
considering future executive compensation
arrangements.
Vote Required
The
affirmative vote of a majority of the shares of Common Stock
present in person or by proxy and entitled to vote at the Annual
Meeting and on the proposal is required to approve the advisory
(non-binding) vote on executive compensation. The persons
named in the enclosed proxy card will vote “FOR” the proposal unless
instructed otherwise in the proxy. Abstentions will have the
same effect as votes against the proposal. “Broker
non-votes” will not have any effect on the outcome of this
proposal.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL
2.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Board’s Audit Committee has appointed Moss Adams LLP
(“Moss Adams”)
as the Company’s independent registered public accounting
firm for 2021. The Audit Committee and the Board
recommend that the Company’s stockholders ratify this
appointment. In line with this recommendation, the Board
intends to introduce the following resolution at the Annual
Meeting:
Resolved, that the appointment of Moss
Adams LLP as the independent registered public accounting firm for
the Company for the year 2021 is ratified.
Stockholder
ratification of the Audit Committee’s selection of Moss Adams
as the Company’s independent registered public accounting
firm is not required by the Bylaws or otherwise. Nevertheless,
the Board is submitting the selection of Moss Adams to the
stockholders for ratification as a matter of good corporate
practice and the Audit Committee will reconsider whether to retain
Moss Adams if the stockholders fail to ratify its
selection. In addition, even if the stockholders ratify the
selection of Moss Adams, the Audit Committee may in its discretion
appoint a different independent registered public accounting firm
at any time during the year if the Audit Committee determines that
a change is in the best interests of the Company. A
representative of Moss Adams is expected to be present at the
Annual Meeting, either in person or available remotely, to make a
statement if the representative desires and to respond to
appropriate questions that may be asked by
stockholders.
Vote Required
The
affirmative vote of a majority of the shares of Common Stock
present in person or by proxy and entitled to vote at the Annual
Meeting and on the proposal is required to approve Proposal 3. The
persons named in the enclosed proxy card will vote
“FOR” the
proposal unless instructed otherwise in the proxy. Abstentions will
have the same effect as votes against the proposal. “Broker
non-votes” will not have any effect on the outcome of this
proposal.
Board of Directors Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL
3.
BOARD OF DIRECTORS
The
current members of the Board of AutoWeb are as
follows:
Name
|
|
Age
|
|
Position
|
Michael J. Fuchs
|
|
76
|
|
Chairman
of the Board
|
Michael
A. Carpenter
|
|
74
|
|
Director
|
Matias
de Tezanos
|
|
41
|
|
Director
|
Chan W.
Galbato
|
|
58
|
|
Director
|
Mark N.
Kaplan
|
|
91
|
|
Director
|
Jared
R. Rowe
|
|
47
|
|
Director,
President and Chief Executive Officer
|
Janet
M. Thompson
|
|
71
|
|
Director
|
Jose
Vargas
|
|
42
|
|
Director
|
Michael J.
Fuchs. Mr. Fuchs has served as
a director of AutoWeb since September 1996 and became Chairman in
June 1998. Since May 2001, Mr. Fuchs has been engaged in private
investing for his own behalf. From November 2000 to May 2001, Mr.
Fuchs was Chief Executive Officer of MyTurn.com, Inc. and was
Interim Chief Executive Officer from April 2000 to October 2000.
Mr. Fuchs was a consultant from November 1995 to April 2000. Mr.
Fuchs was Chairman and Chief Executive Officer of Home Box Office,
a division of TimeWarner Entertainment Company, L.P., a leading
pay-television company, from October 1984 until November 1995, and
Chairman and Chief Executive Officer of Warner Music Group, a
division of Time Warner Inc., from May 1995 to November 1995. Mr.
Fuchs holds a B.A. Degree from Union College and a J.D. Degree from
the New York University School of Law. Mr. Fuchs was a significant
early investor in the Company.
Michael A.
Carpenter.
See Mr. Carpenter’s biographical information included
under the section of this Proxy Statement entitled
“PROPOSAL 1–ELECTION OF
DIRECTORS–Nominees for Class II
Directors.”
Matias de Tezanos. Mr. de Tezanos has
served as a director of AutoWeb since October 1, 2015 and as the
Company’s Chief Strategy Officer from October 1, 2015 to
February 13, 2017. From October 1, 2013 to October 1, 2015, Mr. de
Tezanos was a director and chief executive officer of a company
that provided an internet-based, pay-per-click advertising
marketplace for the automotive industry, which was acquired by the
Company as of October 1, 2015. Mr. de Tezanos is a co-founder,
director and the Chief Executive Officer of PeopleFund, and a
co-founder of, and currently serves as co-managing director and
chief executive officer of PF Holding. Mr. de Tezanos also serves
as president and a director of PF Auto and secretary and a director
of Auto Holdings. In addition, Mr. de Tezanos is an officer
or director of a number of privately-held companies, including
Iguama Inc., an online marketplace offering U.S. products in Latin
America, P3 Global Management Inc., a smart city infrastructure
development and advisory firm, Bidtellect, Inc., Stellar
Corporation G.K, CLPF, Inc., Global Media, Ltd., Kaptyn Inc.
(formerly known as P3GM Holdings, Inc.), Longevity Holdings, Inc.,
Media Assets Management Inc., Orionis Biosciences LLC, PFO
Investment, LLC, Startups.com Holding Inc., Blue Mountain 30 Inc.,
Blue Mountain 31 Inc., Blue Pacific Ventures Inc., Classifieds
Corp., Gray Mountain Inc., Moshos Inc., People Ventures, Inc.,
Petrol Ventures Inc., PF Classifieds Inc., PF Healthcare Inc., PFO
Investment, Inc., PFP Investment, Inc., RDBCOM Corporation,
Nanostar Inc., Startups.com Inc., Technology Capital Partners 1
Ltd., and Japan Technology Partners Ltd.
Chan W. Galbato. Mr. Galbato has served as a director of
AutoWeb since January 2019. Mr. Galbato is Chief Executive Officer
of Cerberus Operations and Advisory Company, LLC. Prior to joining
Cerberus in 2009, he owned and managed CWG Hillside Investments
LLC, a consulting business, from 2007 to 2009. From 2005 to 2007,
he served as President and CEO of the Controls Group of businesses
for Invensys plc and President of Services for The Home Depot. Mr.
Galbato previously served as President and Chief Executive Officer
of Armstrong Floor Products and Chief Executive Officer of Choice
Parts. He spent 14 years with General Electric Company, holding
several operating and finance leadership positions within its
various industrial divisions as well as holding the role of
President and CEO of Coregis Insurance Company, a G.E. Capital
company. Mr. Galbato currently serves as Director of Blue Bird
Corporation, Director of Electrical Components International,
Director of FirstKey Homes, LLC, and Director of Staples Solutions
B.V. Previously, Mr. Galbato served as Chairman of the
publicly-traded Avon Products, Inc., and a director of the
publicly-traded Brady Corporation, including as Lead Director. He
also served as Chairman to North American Bus Industries, Inc.,
Guilford Mills and YP Holdings LLC until their sales in 2013, 2012
and 2017 respectively, and as director of Steward Healthcare,
Dyncorp International, New Avon LLC, and Tower International, Inc.
until Cerberus exited these businesses. Before beginning his
business career, he played professional baseball with the Montreal
Expos in their minor league system. Mr. Galbato holds a
master’s degree in business administration from the
University of Chicago and a Bachelor of Arts in Economics from the
State University of New York.
Mark N. Kaplan.
See Mr. Kaplan’s biographical information included
under the section of this Proxy Statement entitled
“PROPOSAL 1–ELECTION OF
DIRECTORS–Nominees for Class II
Directors.”
Jared R. Rowe. Mr. Rowe was appointed
President and Chief Executive Officer, and as a director, of
AutoWeb in April 2018. Prior to joining AutoWeb, Mr. Rowe
served as Senior Operating Executive at Cerberus Operations and
Advisory Company and as Chief Executive Officer at The Real Yellow
Pages (YP), a local marketing solutions provider and Cerberus
portfolio company. Before his work with YP and Cerberus, Mr. Rowe
held several senior leadership positions within Cox Automotive,
where he was President of Kelley Blue Book, President of
Autotrader, and ultimately the President of Cox Automotive’s
Media Solutions Group, where he was responsible for leading the
Autotrader, Kelley Blue Book, Dealer.com and Haystak businesses.
Mr. Rowe serves on the board of Off Lease Only, a privately-held
company that operates used automobile dealerships. Mr. Rowe has a
Master of Business Administration from the Stephen M. Ross School
of Business at the University of Michigan at Ann Arbor and received
his Bachelor of Business Administration, Automotive Marketing from
Northwood University.
Janet M.
Thompson. Ms. Thompson has
served as a director of AutoWeb since March 2008. Ms. Thompson is
Executive Vice President of HAAH Automotive Holdings, an
exclusive distributor for Asian automotive brands in North
America.
From January 2015 to February 2019, Ms. Thompson was Senior Vice
President of Ipsos Automotive, a global automotive market research
company. Prior to that Ms. Thompson was Vice President, Marketing
of Advanstar Communications Inc., the leading provider of
integrated media solutions to the automotive aftermarket,
pharmaceutical, healthcare, power sports and fashion industries
from July 2011 to January 1, 2015; Vice President, Automotive Group
for The Marketing Arm, an Omnicom Group agency, from January 2011
to June 2011; Executive Vice President of the Diversified Agency
Services Division of Omnicom Group, an advertising firm, from
November 2007 to August 2010; Vice President, Marketing Nissan and
Infiniti Divisions of Nissan North America, from July 2004 to
September 2007; and from July 1999 to July 2004, Ms. Thompson was
Chief Executive Officer and President of The Designory, Inc., a
marketing firm owned by the Omnicom Group. Ms. Thompson held sales
or marketing positions at Mazda Motor of America, Toyota Motor
Sales, U.S.A. and Chrysler Corporation, from 1972 to 1994. Ms.
Thompson received a Bachelor of Arts degree in business from
Western Michigan University and a Master of Business Administration
from University of Detroit. Ms. Thompson has the distinction of
being named one of the Top 100 Women in the Automotive Industry in
both 2005 and 2010.
Jose
Vargas. See
Mr. Vargas’s biographical information included under the
section of this Proxy Statement entitled “PROPOSAL 1–ELECTION OF
DIRECTORS–Nominees for Class II
Directors.”
Messrs. de Tezanos and
Vargas were appointed to the Board pursuant to an Amended and
Restated Stockholder Agreement dated as of October 1, 2015, by and
among AutoWeb, Auto Holdings, Investment and Development Finance
Corp., a Panama business company (“IDFC”),
Mr. de Tezanos, Mr. Vargas, and other parties to that agreement (as
amended, “Stockholder
Agreement”) upon the
Company’s acquisition as of October 1, 2015 of the company
that at the time of the acquisition was named AutoWeb, Inc. and
which is now named Autobytel, Inc. (“Acquired
Entity”). They serve as
the two representatives on the Board designated by the former
owners of the Acquired Entity prior to its acquisition by the
Company. Their experience in founding and growing technology and
online media companies led the Board to conclude that they should
serve as directors of the Company.
EXECUTIVE OFFICERS
The
current executive officers of AutoWeb are as follows:
Name
|
|
Age
|
|
Position
|
Jared
R. Rowe
|
|
47
|
|
President,
Chief Executive Officer, and Director
|
Daniel
R. Ingle
|
|
51
|
|
Executive
Vice President, Chief Operating Officer
|
Glenn
E. Fuller
|
|
66
|
|
Executive
Vice President, Chief Legal Officer and Secretary
|
Michael
A. Sadowski
|
|
43
|
|
Executive
Vice President, Chief Financial Officer
|
Sara E.
Partin
|
|
39
|
|
Senior
Vice President, Chief People Officer
|
Jared R.
Rowe. See
Mr. Rowe’s biographical information included under the
section of this Proxy Statement entitled “BOARD OF DIRECTORS.”
Daniel R. Ingle. Mr.
Ingle joined AutoWeb as Executive Vice President, Chief Operating
Officer in January 2019. Prior to joining AutoWeb, Mr. Ingle was
Vice President of International Business Development at Cox
Automotive and focused on the global expansion of Kelley Blue Book.
Mr. Ingle joined Kelley Blue Book in 2006 and held several
different leadership positions, including Vice President of Vehicle
Valuations and Industry Solutions and Vice President of Analytic
Insights and Technology. Prior to Kelley Blue Book, Mr. Ingle
served as Director of Information Technology for Capital One Auto
Finance and held other positions at PeopleFirst.com, Thomson
Technology Consulting Group and Ernst and Young, in addition to
conducting his own consulting business. Mr. Ingle received his
Bachelor of Science degree in Management Information Systems from
Ohio University.
Glenn E.
Fuller. Mr. Fuller joined AutoWeb as Vice
President, Legal Affairs in October 2006 and was promoted to Senior
Vice President, Chief Legal Officer and Secretary in
April 2008, Senior Vice President, Chief Legal and
Administrative Officer and Secretary in December 2008, Executive
Vice President, Chief Legal and Administrative Officer and
Secretary as of January 19, 2009, and Executive Vice
President, Chief Legal Officer and Secretary as of March 1,
2019. Prior to joining AutoWeb, Mr. Fuller was in private
legal practice from August 2002 to October 2006, and from June 1996
to July 2002, he served as Senior Vice President, Chief Legal
Officer and General Counsel of Freedom Communications, Inc.
(newspapers, television stations, magazines and other
media). From April 1994 to June 1996, Mr. Fuller was of
counsel to the law firm of Gibson, Dunn & Crutcher LLP and
was associated with that firm from September 1980 to May
1987. Mr. Fuller was a partner in the law firm of Pettis,
Tester, Kruse & Krinsky from January 1988 to December 1992
and was associated with that firm from May 1987 to December 1987
and from January 1993 to June 1993. From July 1993 to January
1994, Mr. Fuller was Executive Vice President and General
Counsel of Airline Computerized Ticketing (airline
ticketing). Mr. Fuller received his Bachelor of Arts
degree from California State University at Long Beach and a Juris
Doctor degree from the University of Southern
California.
Michael A. Sadowski. Mr. Sadowski
joined AutoWeb as Executive Vice President, Chief Financial Officer
in November 2020. Prior to joining AutoWeb, he served as Chief
Commercial Officer of Gameworks, Inc. and held multiple financial
and operational leadership positions at Cox Automotive for Kelley
Blue Book, Autotrader and Dealer.com. Earlier in his career, Mr.
Sadowski served in various financial management roles at publicly
traded companies like General Electric Company (NYSE: GE) and
NextGen Healthcare, Inc. (Nasdaq: NXGN), where he was responsible
for financial planning and analysis (FP&A), mergers and
acquisitions, strategy and treasury functions. Mr. Sadowski holds a
Bachelor of Business Administration degree from the University of
Massachusetts’ Isenberg School of Management and a Master of
Business Administration degree from the University of Southern
California’s Marshall School of Business. He was also a
recipient of Auto Remarketing Magazine’s 2017 “40 Under
40” designation.
Sara E. Partin. Ms.
Partin joined AutoWeb as Senior Vice President, Chief People
Officer in October 2018. Prior to joining AutoWeb, Ms. Partin was
the Chief Human Resources Officer of The Real Yellow Pages (YP) and
held multiple senior human resources leadership positions at Cox
Automotive, including leading people integration efforts for
Autotrader, Kelley Blue Book, and Dealer.com. Prior to her work
with Cox Automotive, Ms. Partin was an associate attorney at the
law firms of Kilpatrick Townsend & Stockton LLP, Dow Lohnes
PLLC, and Alston & Bird LLP. Ms. Partin received her Bachelor
of Arts Degree in History from Stanford University and her
Juris Doctor degree from Harvard Law School.
All of
the officers named in the Executive Officer table above served as
executive officers during 2020.
All
executive officers of AutoWeb are appointed by the Board and serve
as officers at the Board’s discretion.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth certain information regarding the
calculation of beneficial ownership of the Company’s Common
Stock as of the Record Date by all persons known by AutoWeb to be
beneficial owners of more than 5% of the Common Stock, each
director and nominee, each of the named executive officers
identified in the section of this Proxy Statement entitled
“EXECUTIVE
COMPENSATION–Summary Compensation,” and all
directors and executive officers as a group (including the named
executive officers). Shares of Common Stock are deemed to be
outstanding and to be beneficially-owned by the persons listed
below for the purpose of computing the percentage ownership of the
person if that person has the right to acquire beneficial ownership
of such shares within 60 days of the Record Date through the
exercise of any option, warrant or other right or the conversion of
any security, or pursuant to the power to revoke, or the automatic
termination of, a trust, discretionary account or similar
arrangement, but those shares are not treated as outstanding for
the purpose of computing the percentage ownership of any other
person. Except as otherwise noted, the persons or entities in
this table have sole voting and dispositive power with respect to
all shares of Common Stock beneficially owned by them subject to
community property laws, where applicable. The information
with respect to each person specified is as supplied or confirmed
by that person, based upon statements filed with the SEC or based
upon the actual knowledge of AutoWeb.
Name of Beneficial
Owner (1)
|
Number of Shares of
Common Stock Beneficially Owned
|
Percent of Common
Stock Beneficially Owned
|
Investment and
Development Finance Corp. (2)(5)
|
2,902,928
|
21.6%
|
Matias de Tezanos
(4)(5)
|
2,882,928
|
21.4%
|
Jose Vargas
(3)(5)
|
2,882,710
|
21.4%
|
Auto Holdings Ltd
(5)
|
2,782,928
|
20.7%
|
Jared R. Rowe
(6)
|
1,422,275
|
9.7%
|
1 8 999 Trust
(7)
|
1,173,445
|
8.7%
|
Piton Capital
Partners LLC (8)
|
973,000
|
7.2%
|
Glenn E.
Fuller(9)
|
402,579
|
2.9%
|
Daniel R. Ingle
(10)
|
288,599
|
2.1%
|
Michael J. Fuchs
(11)
|
118,847
|
*
|
Michael A.
Carpenter (12)
|
77,167
|
*
|
Mark N. Kaplan
(13)
|
73,167
|
*
|
Janet M. Thompson
(14)
|
68,207
|
*
|
Chan W. Galbato
(15)
|
23,550
|
*
|
All executive
officers (including named executive officers) and directors as a
group (12 persons) (16)
|
6,465,462
|
41.3%
|
* Less
than 1%
(1)
|
Unless
otherwise indicated, the address of all the owners is: c/o AutoWeb,
Inc., 400 North Ashley Drive, Suite 300, Tampa, Florida
33602.
|
(2)
|
In
addition to the beneficial ownership reported in Footnote 5 below,
the beneficial ownership of IDFC includes the additional 120,000
shares, in the aggregate, reported on Form 4s filed May 21, 23, and
24, 2018.
|
(3)
|
In
addition to the beneficial ownership reported in Footnote 5 below,
the beneficial ownership of Mr. Vargas includes the additional
82,029 shares reported on a Form 4 filed December 11,
2018.
|
(4)
|
In
addition to the beneficial ownership reported in Footnote 5 below,
the beneficial ownership of Mr. de Tezanos includes the additional
100,000 shares reported on Form 4s filed December 11, 2018 and
August 16, 2019.
|
(5)
|
The
information presented in this line item with respect to the
beneficial ownership of Auto Holdings, IDFC, and Messrs. de Tezanos
and Vargas was obtained from the Schedule 13D/A filed April 26,
2018 (“Auto Holdings Schedule
13D/A”), jointly filed by the following persons: (i)
Auto Holdings; (ii) PF Holding;(iii) Ceiba International Corp., a
Panama business company (“Ceiba”); (iv) Jose Vargas, a
director of AutoWeb; (v) Galeb3 Inc., a Florida corporation owned
solely by Mr. Vargas (“Galeb3”); (vi) Matias de Tezanos,
a citizen of Costa Rica and director of AutoWeb; (vii) Manatee
Ventures Inc., a British Virgin Islands business company wholly
owned by Mr. de Tezanos and his wife Isabel Ruiz Estrada
(“Manatee”);
(viii) John Peter Klose de Ojeda, a citizen of Guatemala; (ix)
Richard Aitkenhead Castillo, a citizen of Guatemala; (x) IDFC; (xi)
IDC Financial, S.A., a Panama business company (“IDC Financial”); (xii) Juan
Christian Klose Pieters; (xiii) Margarita Klose; (xiv) Jorge Miguel
Fernandez Bianchi, a citizen of Guatemala; (xv) PeopleFund; and
(xvi) PF Auto (collectively, “Auto Holdings Reporting Persons”).
The Auto Holdings Schedule 13D/A states that each of the Auto
Holdings Reporting Persons disclaims beneficial ownership of the
reported shares except to the extent of their pecuniary interest
therein and discloses that Mr. Vargas has sole voting and
dispositive power with respect to 17,753 shares and that he and the
other Auto Holdings Reporting Persons share dispositive power with
respect to 2,782,928 shares. The Auto Holdings Schedule 13D/A lists
the addresses of the Auto Holdings Reporting Persons as follows:
(i) Auto Holdings, PF Auto, Mr. de Tezanos, Manatee, Mr. Juan
Christian Klose Pieters, Ms. Margarita Klose IDC Financial, Jorge
Miguel Fernandez Bianchi, PF Holding, PeopleFund, Diagonal 6, 12-42
zona 10, Edificio Design Center, Torre II, Of. 1103, Guatemala
City, Guatemala 01010; (ii) Ceiba, IDFC, Mr. John Peter Klose de
Ojeda and Mr. Aitkenhead Castillo: 13 calle 2-60, zona 10, Edificio
Topacio Azul, Of. 1301, Guatemala City, Guatemala 01010; and (iii)
Mr. Vargas and Galeb3: 3401 N. Miami Avenue, Suite 205, Miami,
Florida 33127. The reported shares do not include up to 1,153,110
shares that may be acquired upon exercise of certain warrants
(“AWI Warrants”)
to purchase Common Stock at an exercise price of $18.45 per share.
The AWI Warrants became exercisable on October 1, 2018, subject to
the following vesting conditions: (i) with respect to the first
one-third of the warrant shares, if at any time after the issuance
date of the AWI Warrants and prior to the expiration date of the
AWI Warrants the weighted average closing price of the Common Stock
on The Nasdaq Capital Market for the preceding thirty (30) trading
days (adjusted for any stock splits, stock dividends, reverse stock
splits or combinations of the Common Stock occurring after the
issuance date) (“AWI Warrants
Weighted Average Closing Price”) is at or above
$30.00; (ii) with respect to the second one-third of the warrant
shares, if at any time after the issuance date of the AWI Warrants
and prior to the expiration date the AWI Warrants Weighted Average
Closing Price is at or above $37.50; and (iii) with respect to the
last one-third of the warrant shares, if at any time after the
issuance date of the AWI Warrant and prior to the expiration date
the AWI Warrants Weighted Average Closing Price is at or above
$45.00. The AWI Warrants expire on October 1, 2022.
|
(6)
|
Includes
85,000 shares of Restricted Stock and 1,262,500 shares issuable
upon exercise of options exercisable within 60 days of the Record
Date. The reported shares do not include 113,056 shares that would
be issuable upon exercise of options exercisable within 60 days of
the Record Date but for the fact that such options are subject to
the additional vesting condition that at any time after August 6,
2019 and prior to the expiration date of the stock options the
weighted average closing price of the Common Stock on The Nasdaq
Capital Market must be at or above $5.00 (adjusted for any stock
splits, stock dividends, reverse stock splits or combinations of
the common stock occurring after the grant date of the stock
options) for ten consecutive trading days (“August 2019 Options Stock Closing Price Vesting
Condition”).
|
(7)
|
The
information presented in the table with respect to the beneficial
ownership of The 1 8 999 Trust was obtained from the Schedule 13D/A
filed on March 4, 2019 (“1 8
999 Trust Schedule 13D/A”), jointly by the following
persons: (i) The 1 8 999 Trust; (ii) Daniel M. Negari; (iii) The
Insight Trust; and (iv) Michael R. Ambrose, (collectively, the
“1 8 999 Reporting
Persons”). The 1 8 999 Trust Schedule 13D/A lists the
address of the 1 8 999 Trust Reporting Persons as follows: 2121 E.
Tropicana Avenue, Suite 2, Las Vegas, NV 89119. The 1 8 999 Trust
Schedule 13D/A discloses that the 1 8 999 Trust has shared voting
and dispositive power with respect to 973,112 shares; Mr. Negari
has sole voting and dispositive power with respect to 133 shares
and shared voting and dispositive power with respect to 973,245
shares; and the Insight Trust and Mr. Ambrose have shared voting
and dispositive power with respect to 200,200 shares. Pursuant to a
Tax Benefit Preservation Plan Exemption Agreement dated as of
November 30, 2018, by and among the Company and the 1 8 999 Trust
Reporting Persons (“1 8 999
Trust Exemption Agreement”), approximately 538,383
shares of the shares of Common Stock reported as beneficially owned
by the 1 8 999 Reporting Persons are subject to irrevocable proxies
in favor of AutoWeb’s Chief Executive Officer, Chief
Financial Officer and Chief Legal Officer, and each of them
individually, to exercise all voting rights of the applicable
stockholders with respect to the shares at any meeting of
stockholders of the Company, and in any action by written consent
of the stockholders of the Company, in accordance with the
recommendations of or instructions provided by the
Board.
|
(8)
|
The
information presented in the table with respect to the beneficial
ownership of Piton Capital Partners LLC (“Piton”) was obtained solely from
the Schedule 13G/A filed February 11, 2021 (“Piton Schedule 13G/A”). The Piton
Schedule 13G/A lists the address of Piton Capital Partners LLC as
follows: c/o Kokino LLC, 201 Tresser Boulevard, 3rd Floor,
Stamford, Connecticut 06901, Attention: Garrett Lynam. Pursuant to
a Tax Benefit Preservation Plan Exemption Agreement dated as of
November 15, 2017, by and between the Company and Piton
(“Piton Exemption
Agreement”), approximately 313,172 shares of the
shares of Common Stock reported as beneficially owned by Piton are
subject to irrevocable proxies in favor of AutoWeb’s Chief
Executive Officer, Chief Financial Officer and Chief Legal Officer,
and each of them individually, to exercise all voting rights of the
applicable stockholders with respect to the shares at any meeting
of stockholders of the Company, and in any action by written
consent of the stockholders of the Company, in accordance with the
recommendations of or instructions provided by the
Board.
|
(9)
|
Includes
45,000 shares of Restricted Stock and 302,500 shares issuable upon
exercise of options exercisable within 60 days of the Record Date.
The reported shares do not include 21,389 shares that would be
issuable upon exercise of options exercisable within 60 days of the
Record Date but for the fact that such options are subject to the
August 2019 Options Stock Closing Price Vesting
Condition.
|
(10)
|
Includes
45,000 shares of Restricted Stock and 236,459 shares issuable upon
exercise of options exercisable within 60 days of the Record Date.
The reported shares do not include 61,111 shares that would be
issuable upon exercise of options exercisable within 60 days of the
Record Date but for the fact that such options are subject to the
August 2019 Options Stock Closing Price Vesting
Condition.
|
(11)
|
Includes
63,167 shares issuable upon exercise of options exercisable within
60 days of the Record Date.
|
(12)
|
Includes
63,167 shares issuable upon exercise of options exercisable within
60 days of the Record Date.
|
(13)
|
Includes
63,167 shares issuable upon exercise of options exercisable within
60 days of the Record Date.
|
(14)
|
Includes
63,167 shares issuable upon exercise of options exercisable within
60 days of the Record Date.
|
(15)
|
Includes
23,550 shares issuable upon exercise of options exercisable within
60 days of the Record Date.
|
(16)
|
Includes
220,000 shares of Restricted Stock and 2,189,483 shares issuable
upon exercise of options exercisable within 60 days of the Record
Date. Also includes 851,555 shares subject to irrevocable proxies
granted to Company’s management as provided for in the 1 8
999 Trust Exemption Agreement and the Piton Exemption Agreement.
The reported shares do not include 216,945 shares that would be
issuable upon exercise of options exercisable within 60 days of the
Record Date but for the fact that such options are subject to the
August 2019 Options Stock Closing Price Vesting
Condition.
|
CORPORATE GOVERNANCE MATTERS
Board Classes
The
Board is divided into three classes, with each class holding office
for staggered three-year terms. The term of the Class II
Directors, Michael A. Carpenter, Mark N. Kaplan, and Jose Vargas,
expires at the Annual Meeting; the term of the Class III Directors,
Michael J. Fuchs and Janet M. Thompson, expires in 2022; and the
term of the Class I Directors, Jared R. Rowe, Matias de Tezanos,
and Chan W. Galbato, expires in 2023.
Committees of the Board of Directors
The
Board has constituted an Audit Committee, a Compensation Committee,
and a Corporate Governance and Nominations Committee. Copies of the
charters of each of these committees are posted and available on
the Corporate Governance link of the Investor Relations section of
the Company’s website,
www.autoweb.com. Information on the Company’s
website is not incorporated by reference in this Proxy
Statement.
Audit Committee. The Audit Committee was
established by the Board in accordance with
Section 3(a)(58)(A) of the Exchange Act and applicable Nasdaq
listing rules. The Audit Committee met on seven
occasions in 2020 and operates under a charter approved by the
Board. The Audit Committee’s primary responsibilities
are to:
●
oversee
AutoWeb’s accounting and financial reporting policies,
processes, practices and internal controls; and
●
appoint, approve
the compensation of, and oversee the Company’s independent
registered public accounting firm.
The
Audit Committee currently consists of Mark N. Kaplan (Chairman),
Michael A. Carpenter, Chan W. Galbato, and Janet M.
Thompson. The Audit Committee meets periodically with the
Company’s independent registered public accounting firm, both
with and without management present. The Board has determined
that Mr. Kaplan is an “audit committee financial
expert” within the meaning of Item 407(d)(5)(ii) of
Regulation S-K under the Securities Act of 1933, as amended
(“Securities
Act”). The identification of Mr. Kaplan as
an “audit committee financial expert” does not impose
on him any duties, obligations or liabilities that are greater than
the duties, obligations and liabilities imposed on him as a member
of the Audit Committee in the absence of this
identification.
Compensation Committee. The Compensation Committee was
established by the Board in accordance with Section 10C of the
Exchange Act and applicable Nasdaq listing rules. The Compensation
Committee met on three occasions in 2020 and operates under a
charter approved by the Board. The Compensation Committee is
responsible for:
●
determining or
recommending to the Board the compensation of the Chief Executive
Officer and each other executive officer or any other officer who
reports directly to the Chief Executive Officer based on the
performance of each officer;
●
making
recommendations to the Board regarding stock option plans and other
equity compensation arrangements;
●
granting equity
awards and approving any delegation of such responsibility under
certain circumstances; and
●
preparing reports
regarding executive compensation for disclosure in AutoWeb’s
proxy statements or as otherwise required by applicable
laws.
The
Compensation Committee currently consists of Janet M. Thompson
(Chairwoman), Michael J. Fuchs, Mark N. Kaplan, and Chan W.
Galbato. The Compensation Committee does not have authority to
delegate its responsibilities to a subcommittee without approval of
the Board. The Board has approved the creation of the
Non-Executive Stock Option Committee, a committee of the Board that
currently consists of one director, Jared R. Rowe, the
Company’s President and Chief Executive Officer. The
Non-Executive Stock Option Committee has the authority to grant
stock options to eligible persons who (i) are employed by the
Company or its subsidiaries and are not subject to reporting under
Section 16(a) of the Exchange Act or (ii) are consultants
or service providers to the Company or its subsidiaries. The
Non-Executive Stock Option Committee may not grant more than
250,000 options in the aggregate in any one fiscal year, and
individual grants cannot exceed more than 25,000 options. In
accordance with the Bylaws, the Board has also authorized the
Company’s Chief Executive Officer to appoint vice presidents
of the Company (“CEO
Appointed Vice Presidents”) who are not (i) executive
officers of the Company; (ii) officers subject to Section 16 of the
Exchange Act; or (iii) reporting directly to the Chief Executive
Officer, and in connection with such grant of authority the
Compensation Committees recommended that the Board authorize, and
the Board did authorize, the Company’s Chief Executive
Officer to determine the compensation (including salaries pursuant
to the Bylaws) of CEO Appointed Vice Presidents; provided that any
CEO Appointed Vice President’s annual base salary does not
exceed $300,000 and any annual incentive compensation target does
not exceed 40% of the CEO Appointed Vice President’s annual
base salary. The processes of the Compensation Committee and the
role of the Chief Executive Officer and compensation consultants in
determining or recommending the amount or form of executive or
director compensation are discussed in the section of this Proxy
Statement entitled “EXECUTIVE
COMPENSATION–Named Executive Officers Compensation
Narrative.”
Corporate
Governance and Nominations Committee. The Corporate
Governance and Nominations Committee was established by the Board
in accordance with applicable Nasdaq listing rules. The Corporate
Governance and Nominations Committee met twice in 2020 and operates
under a charter approved by the Board. The Corporate Governance and
Nominations Committee is responsible for:
●
identifying
individuals qualified to become directors and selecting director
nominees or recommending nominees to the Board for
nomination;
●
recommending
nominees for appointment to committees of the
Board;
●
developing and
recommending charters of committees of the Board;
and
●
overseeing the
corporate governance of AutoWeb and, as deemed necessary or
desirable from time to time, developing and recommending corporate
governance policies to the Board.
The
Corporate Governance and Nominations Committee currently consists
of Michael J. Fuchs (Chairman), Mark N. Kaplan, and Chan W.
Galbato.
Attendance at Board and Committee Meetings
During
the fiscal year ended December 31, 2020, the Board held a total of
nine meetings. Each member of the Board who served in 2020 attended
80% or more of the aggregate of (i) the total number of meetings of
the Board held during the period in 2020 for which the director was
a member; and (ii) the total number of meetings held by all
committees of which the director was a member during 2020 and
during the period in which the director served as a member of the
committees. The Board and its committees typically meet in
executive session without management present during regularly
scheduled meetings of the Board and the committees.
Attendance at Annual Meeting of Stockholders
All
directors who served in 2020 attended the 2020 annual meeting of
stockholders. Mr. Rowe attended the 2020 annual meeting of
stockholder in-person and all other directors attended by
telephone. Typically, a Board meeting is scheduled on the date of
any annual meeting of stockholders. Although the Board has not
adopted a formal policy, all directors are expected to attend the
annual meeting of stockholders.
Director Independence
All
directors, other than Messrs. de Tezanos, Rowe, and Vargas, and all
members of the Audit, Compensation, and Corporate Governance and
Nominations Committees satisfy the definition of independent
director under the Nasdaq listing rules. The current members
of the Audit Committee, Compensation Committee and Corporate
Governance and Nominations Committee are “independent”
under the Nasdaq listing rules and the SEC rules regarding audit
committee and compensation committee membership.
Board Leadership Structure
The
Board does not have a policy on whether the roles of Chief
Executive Officer and Chairman of the Board should be separate and,
if they are to be separate, whether the Chairman of the Board
should be selected from the non-employee directors or be an
employee of the Company. The Board believes that the Company
and its stockholders benefit when the Board is free to determine
the most appropriate leadership structure in light of the
experience, skills and availability of directors and the Chief
Executive Officer as well as other circumstances. Currently,
Mr. Fuchs serves as the Chairman of the Board, and Mr. Rowe serves
as a director and Chief Executive Officer. The Board believes
this is the most appropriate structure for the Company at this time
because it makes the best use of the experience, skills and
availability of Mr. Fuchs and Mr. Rowe.
Board’s Role in Oversight of Risk
It is
management’s responsibility to manage risk and bring to the
Board’s attention the most material risks to
AutoWeb. The Board, including through Board committees
comprised solely of independent directors, regularly reviews
various areas of significant risk to AutoWeb and advises and
directs management on the scope and implementation of policies,
strategic initiatives and other actions designed to mitigate
various types of risks. Specific examples of risks reviewed by the
Board with management include competition risks, industry risks,
economic risks, liquidity risks, business operations risks, cyber
security risks and risks related to acquisitions and
dispositions. The Audit Committee regularly reviews with
management and the independent auditors significant financial risk
exposures and the processes management has implemented to monitor,
control and report these exposures. Specific examples of risks
reviewed by the Audit Committee include risks related to the
preparation of the Company’s financial statements, disclosure
controls and procedures, internal controls and procedures required
by the Sarbanes-Oxley Act of 2002, accounting, financial and
auditing risks, treasury risks (insurance, credit and debt),
matters reported to the Audit Committee through anonymous reporting
procedures, risks posed by significant litigation matters and
compliance with applicable laws and regulations. The Audit
Committee also oversees compliance with the Company’s Code of
Conduct and Ethics for Employees, Officers and Directors and
evaluates proposed transactions with related persons for compliance
with laws and regulations and with Company policies and contracts.
The Company’s Compensation Committee reviews and evaluates
potential risks related to the attraction and retention of talent
and risks related to the design of compensation programs
established by the Compensation Committee for AutoWeb’s
executive officers. These procedures, however, cannot guaranty that
all material risks will be identified, or if identified, reasonably
and adequately mitigated. They also cannot assure that all persons
are in compliance with the Company’s policies and procedures
or that the Company and its employees are in compliance with all
applicable laws and regulations.
Executives’
base salaries are fixed in amount and thus do not encourage
excessive risk-taking. Incentive compensation in large part is
tied to overall corporate performance. A significant portion
of compensation provided to the executive officers is in the form
of equity awards subject to service-based vesting conditions, with
some equity awards also including performance-based vesting
conditions, that are intended to further align executives’
interests with those of the Company’s stockholders. The
Compensation Committee believes that these awards do not encourage
unnecessary or excessive risk-taking since the ultimate value of
the awards is tied to the Company’s stock price, and since
awards are staggered and subject to long-term vesting schedules to
help ensure that executives have significant value tied to
long-term stock price performance.
The
Compensation Committee has also reviewed the Company’s
compensation programs for employees generally and has concluded
that these programs do not create risks that are reasonably likely
to have a material adverse effect on the Company. The
Compensation Committee believes that the design of the
Company’s annual cash and long-term equity incentives
provides an effective and appropriate mix of incentives to help
ensure the Company’s performance is focused on long-term
stockholder value creation and does not encourage the taking of
short-term risks at the expense of long-term results. In
general, incentive compensation opportunities for Company employees
are capped, and the Company has discretion to reduce or increase
incentive compensation payments (or pay no incentive compensation)
based on individual performance and any other factors it may
determine to be appropriate in the circumstances. As with the
compensation of the Company’s executive officers, a portion
of the compensation for other officers and some other
managerial-level employees generally is delivered in the form of
equity awards that help further align the interests of these
officers and other employees with those of
stockholders.
Board Nominee Process
The
Corporate Governance and Nominations Committee considers candidates
for nomination as directors who are suggested by the
committee’s members and other directors, as well as by
management and stockholders. A stockholder who wishes to
recommend a prospective nominee for the Board should notify
AutoWeb’s Corporate Secretary or any member of the Corporate
Governance and Nominations Committee in writing with whatever
supporting material the stockholder considers appropriate. The
Corporate Governance and Nominations Committee will also consider
whether to nominate any person nominated by a stockholder pursuant
to the provisions of the Bylaws relating to stockholder nominations
as described in the section of this Proxy Statement entitled
“FUTURE STOCKHOLDER
NOMINATIONS AND PROPOSALS.”
Generally, once the
Corporate Governance and Nominations Committee identifies a
prospective nominee, the Corporate Governance and Nominations
Committee will make an initial determination as to whether to
conduct a full evaluation of the candidate. This initial
determination will be based on the information provided to the
Corporate Governance and Nominations Committee with the
recommendation of the prospective candidate, as well as the
Corporate Governance and Nominations Committee’s own
knowledge of the prospective candidate, which may be supplemented
by inquiries to the person making the recommendation or
others. Generally, the preliminary determination will be based
primarily on the need for additional Board members to fill
vacancies or expand the size of the Board and the likelihood that
the prospective nominee can satisfy evaluation factors determined
by the Corporate Governance and Nominations Committee to be
appropriate from time to time for that evaluation. If the
Corporate Governance and Nominations Committee determines, in
consultation with the other members of the Board, as appropriate,
that additional consideration is warranted, it may request a
third-party search firm to gather additional information about the
prospective nominee’s background and experience and to report
its findings to the Corporate Governance and Nominations
Committee.
The
Corporate Governance and Nominations Committee will then evaluate
the prospective nominee against factors it considers appropriate
from time to time, which currently include:
●
The ability of the
prospective nominee to represent the interests of the stockholders
of AutoWeb;
●
The prospective
nominee’s standards of integrity, commitment and independence
of thought and judgment; and
●
The extent to which
the prospective nominee would contribute to the range of talent,
skill and expertise appropriate for the Board.
The
Corporate Governance and Nominations Committee generally intends to
nominate current members of the Board in the year in which their
respective term expires so long as they continue to exhibit the
qualities described above and are otherwise qualified to serve as
members of the Board.
The
Corporate Governance and Nominations Committee may also consider
such other relevant factors as it deems appropriate, including the
current composition of the Board, the balance of management and
independent directors, the need for Audit Committee expertise and
the evaluations of other prospective nominees. In connection
with this evaluation, the Corporate Governance and Nominations
Committee will determine whether to interview the prospective
nominee, and if warranted, one or more members of the Corporate
Governance and Nominations Committee and others, as appropriate,
will interview prospective nominees in person or by telephone or
other remote means. After completing this evaluation and
interview, the Corporate Governance and Nominations Committee will
make a recommendation to the full Board as to the individuals who
should be nominated by the Board, and the Board determines the
nominees after considering the recommendation and report of the
Corporate Governance and Nominations Committee.
The
Corporate Governance and Nominations Committee and the Board review
the qualities of the Board members as a group, including the
diversity of the Board’s career experiences, viewpoints,
company affiliations, expertise with respect to the various facets
of the Company’s business operations and business
experiences. The Board has not adopted a formal policy and
does not employ any particular benchmarks with respect to these
qualities but is mindful of achieving an appropriate balance of
these qualities with respect to the Board as a
whole. Moreover, the Board and Corporate Governance and
Nominations Committee considers each nominee’s overall
service to the Company during the previous term, each
nominee’s personal integrity and willingness to apply sound
and independent business judgment with respect to the
Company’s matters, as well as the individual experience of
each director noted within their biographies included in this Proxy
Statement.
Stockholder Communications with the Board of Directors
Stockholders and
other parties interested in communicating directly with any
director or with the non-management directors as a group may do so
by writing to the Company’s Corporate Secretary, AutoWeb,
Inc., 400 North Ashley Drive, Suite 300, Tampa, Florida
33602. The Company has established a process for handling
correspondence received by it addressed to non-management members
of the Board. Under that process, the Corporate Secretary
reviews all such correspondence and forwards to the Board a summary
of all such correspondence and copies of all correspondence that,
in the opinion of the Corporate Secretary, deals with the functions
of the Board or committees thereof or that the Corporate Secretary
otherwise determines requires the attention of the Board. The
Board may at any time review a log of all correspondence received
by AutoWeb that is addressed to members of the Board and request
copies of any such correspondence. Concerns relating to
accounting, internal controls or auditing matters are immediately
brought to the attention of the Chairman of the Audit Committee and
handled in accordance with procedures established by the Audit
Committee with respect to those matters.
Code of Conduct and Ethics
The
Board has adopted a Code of Conduct and Ethics for Employees,
Officers and Directors (“Code
of Ethics”). The Code of Ethics is applicable to
the Company’s employees, officers and directors, including
the principal executive officer, the principal financial officer
and the principal accounting officer. The Code of Ethics is
posted and available on the Corporate Governance link of the
Investor Relations section of the Company’s website,
www.autoweb.com, and a copy of the Code of Ethics may also be
obtained, free of charge, by writing to the Company’s
Corporate Secretary, AutoWeb, Inc., 400 North Ashley Drive, Suite
300, Tampa, Florida 33602. The Company intends to post
amendments to, or waivers from, the Code of Ethics (to the extent
applicable to the Company’s Chief Executive Officer,
Principal Financial Officer or Principal Accounting Officer or
directors) at this location on the Company’s website.
Information on the Company’s website is not incorporated by
reference in this Proxy Statement. The adoption of the Code of
Ethics and other standards of conduct is not a representation or
warranty that all persons subject to the Code of Ethics or
standards are or will be in complete compliance with the Code of
Ethics or any other standards of conduct that may be
adopted.
Certain Relationships and Related Party Transactions
The
Company’s Code of Ethics provides specific guidelines
regarding conflict of interest situations as well as a process for
reporting and approving related party transactions.
The
Company’s Code of Ethics defines a related party transaction
as any transaction (or series of transactions) in excess of
$120,000 since the beginning of the Company’s last fiscal
year, or any currently proposed transactions, in which the Company
is a participant and in which any member of the Management Group
(as defined below), any stockholder owning more than 5% of the
Company’s voting stock, or any immediate family member of any
of the foregoing persons has a direct or indirect material
interest. An “immediate family member” means
any child, stepchild, parent, stepparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law of such director, executive officer
or nominee for director, and any person (including domestic
partners, but excluding tenants or employees) sharing the household
of a director, director nominee, executive officer or stockholder
owning more than 5% of the Company’s voting stock. A
“transaction” includes, but is not limited to, any
commercial or financial transaction or arrangement or relationship
(including any indebtedness or guarantee of indebtedness) or any
series of similar transactions, arrangements or
relationships. The “Management Group” is comprised
of the Chief Executive Officer, Principal Financial Officer,
Principal Accounting Officer (or any person performing similar
functions), any other officer of the Company and any director or
nominee for director. Any covered person who may be
involved in a related party transaction must promptly report that
transaction to the Chairman of the Audit Committee or the
Company’s Chief Legal Officer (“CLO”), who must then report the
transaction to the Chairman of the Audit Committee upon becoming
advised of such transaction. The Audit Committee, in its sole
discretion, must approve or disapprove all related party
transactions. Conflicts of interest or potential conflicts of
interest must be reported to the CLO who will evaluate the
circumstances relating to the conflict of interest or potential
conflict of interest and report the findings of such evaluation to
the Chief Executive Officer, who in turn, if warranted under the
circumstances, must report such situation or activity to the
Chairman of the Audit Committee;
provided, however, (i) that if the conflict of interest
or potential conflict of interest involves any member of the
Management Group, the CLO must report that situation or activity to
the Chairman of the Audit Committee; and (ii) the CLO is not
precluded from reporting any conflict of interest or potential
conflict of interest involving any covered person who is not a
member of Management Group directly to the Chairman of the Audit
Committee should the CLO believe such direct reporting to the
Chairman of the Audit Committee is warranted under the
circumstances. Upon being advised of a complaint, concern or
other reporting under the Code of Ethics, the Chairman of the Audit
Committee will confer with the other members of the Audit
Committee. If appropriate under the circumstances, the
Chairman of the Audit Committee may request that the CLO issue a
written advisory to the covered person as to whether or not the
reported situation or activity constitutes a violation of the Code
of Ethics. If the CLO would not be the appropriate party to
issue a written advisory, outside counsel may be retained to issue
such written advisory unless the Audit Committee determines that
such written advisory can be issued by the Chairman of the Audit
Committee without outside counsel input.
Although the
Company’s Code of Ethics provides guidelines regarding
conflict of interest situations, it cannot and does not set forth
every possible conflict of interest scenario. Therefore, the
Code of Ethics provides that there is no substitute for sound
judgment and common sense by directors, officers or other employees
in each case based upon the particular facts involved. The
foregoing description of the Company’s Code of Ethics is not
intended to constitute a representation as to compliance by any
covered person.
AutoWeb has engaged Soluciones AW, S.A.
(“Soluciones”) to provide office space and related
office services to AW GUA, Sociedad de Responsabilidad Limitada,
AutoWeb’s wholly-owned, indirect subsidiary in Guatemala
(“AW
GUA”). Under the
agreement between AW GUA and Soluciones, AW GUA pays Soluciones
107% of the actual expenses paid and costs incurred by Soluciones
in providing the office space and related office services.
During the period from January 1,
2020 to March 31, 2021, AW GUA made payments to Soluciones of
approximately $153,107. The Company has been informed by Messrs.
de Tezanos and Vargas, each a director of AutoWeb and the
representatives of PeopleFund serving on the Board, that Soluciones
is managed and operated by one of the principals of PeopleFund. As
a result, Soluciones may be deemed to be controlled by PeopleFund,
which in turn is controlled by Messrs. de Tezanos and Vargas.
For information concerning the
beneficial ownership of the Company’s Common Stock by Messrs.
de Tezanos and Vargas and PeopleFund, see the section of this Proxy
Statement entitled “SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT.” The Audit Committee evaluated the
terms of the business relationship with Soluciones and considered
whether any conflict of interest existed as a result of
Soluciones’ affiliation with PeopleFund. Based on its evaluation the Audit Committee
determined that the business relationship with Soluciones did not
constitute a conflict of interest and approved the Soluciones
arrangement in accordance with the Company’s Code of
Ethics.
Securities Trading Policy
The
Company has adopted a policy (“Securities Trading Policy”)
governing trading in Company securities by Company officers,
directors, and employees (“Covered Persons”). Under the
Securities Trading Policy, Covered Persons are prohibited from
selling Company securities short or buying or selling call or put
options or other derivatives in respect of Company
securities. Covered Persons are also prohibited from entering
into other transactions which have the effect of hedging the
economic value of any direct or indirect interests of the person in
the Company’s equity securities. Trading in Company
securities is restricted to trading windows following the
Company’s earnings releases, and trading by Company officers,
directors and other designated employees during open trading
windows requires pre-clearance by the Company’s chief legal
officer.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
AND
AUDIT COMMITTEE REPORT
Independent
Registered Public Accounting Firm
Moss
Adams has been appointed by the Company’s Audit Committee as
the Company’s independent registered public accounting firm
to audit the Company’s consolidated financial statements for
the fiscal year ending December 31, 2021, and to perform
procedures related to the financial statements included in the
Company’s quarterly reports on Form 10-Q, beginning with
the quarter ended March 31, 2021. Moss Adams also served
as the Company’s independent registered public accounting
firm for the years ended December 31, 2020, 2019 and 2018. A
representative of Moss Adams is expected to be present at the
Annual Meeting, either in person or available remotely, to make a
statement if the representative desires and to respond to
appropriate questions that may be asked by
stockholders.
Principal Accountant Fees and Services
Aggregate fees for
professional services rendered by Moss Adams for the years ended
December 31, 2020 and 2019 were as follows:
|
|
|
Audit
fees
|
$543,531
|
$530,500
|
Audit-related
fees
|
10,500
|
8,000
|
Tax
fees
|
6,700
|
9,375
|
Total
|
$560,731
|
$547,875
|
Audit Fees. Audit
fees consist of professional services rendered in connection
with the 2020 audit and 2019 audit of the Company’s annual
consolidated financial statements and reviews of interim
consolidated financial statements included in the Company’s
Quarterly Reports on Form 10-Q and of the Company’s
Registration Statement on Form S-3.
Audit-Related Fees. Audit-related fees for 2020
and 2019 consist of services rendered in connection with the audit
of the Company’s Retirement Savings 401(k) Plan.
Tax Fees. Tax fees for 2020 and 2019 consist of fees related
to tax consulting services and evaluations of the Company’s
tax benefits, including net operating loss carryovers, under
Internal Revenue Code Section 382.
The
Audit Committee has determined that the services described above
were compatible with maintaining Moss Adams’ audit
independence.
Pre-Approval Policy for Services
Under
its charter, the Audit Committee is required to pre-approve all
audit (including the annual audit engagement letter with the
independent registered public accounting firm) and permitted
non-audit services (including the fees and terms thereof) provided
to the Company by the Company’s independent registered public
accounting firm, subject to the de minimis exception for non-audit
services as described in the Exchange Act. The Audit Committee
consults with management with respect to pre-approval, including
whether the provision of permitted non-audit services is compatible
with maintaining the registered public accounting firm’s
independence, and may not delegate these responsibilities to
management. The Audit Committee may delegate to any member or
members of the Audit Committee the power to grant any pre-approval,
provided that the pre-approval is reported to the Audit Committee
at the next scheduled Audit Committee meeting.
Each
member of the Audit Committee has the authority to approve fees for
services by the Company’s independent registered public
accounting firm of up to $50,000. Any approved fees may be
exceeded by no more than 20% of the approved amount without seeking
further approval, even if the total amount of those fees, including
the excess, exceeds $50,000. This authority is delegated first
to Mr. Kaplan, then in the following order to
Ms. Thompson, Mr. Galbato and
Mr. Carpenter. Any approval by a member of the Audit
Committee is required to be reported to the Audit Committee at the
next regularly scheduled meeting of the Audit Committee. All
fees for services provided by Moss Adams during 2020 and 2019,
respectively, were approved by the Audit Committee.
From time to
time, the Audit Committee pre-approves fees and services up to a
maximum amount for future services relating to recurring tax
matters and securities filings.
Audit Committee Report
The
following Audit Committee Report is provided in accordance with the
rules and regulations of the SEC. Pursuant to those rules and
regulations, this Audit Committee Report is not to be deemed
“soliciting materials” or “filed” with the
SEC, subject to Regulation 14A or 14C of the Exchange Act or
subject to the liabilities of Section 18 of the Exchange
Act. This Audit Committee Report shall not be deemed to be
incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities
Act or the Exchange Act except to the extent that AutoWeb
specifically incorporates this information by
reference.
The
Audit Committee has reviewed and discussed the Company’s
audited financial statements for the fiscal year ended December 31,
2020, with the management of the Company. The Audit Committee
has discussed with Moss Adams the matters required to be discussed
by the applicable requirements of the Public Company Accounting
Oversight Board (“PCAOB”) and the SEC. The
Audit Committee has also received the written disclosures and the
letter from Moss Adams required by applicable requirements of the
PCAOB regarding the independent accountant’s communications
with the Audit Committee concerning independence, and has discussed
with Moss Adams the independent accountant’s
independence.
Based
on the foregoing review and discussions, the Audit Committee has
recommended to the Board that the audited financial statements be
included in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2020.
The
members of the Audit Committee are not professionally engaged in
the practice of auditing or accounting and are not employed by
AutoWeb for accounting, financial management or internal control
purposes. Members of the Audit Committee relied, without
independent verification, on the information provided to them and
on the representations made by management and the independent
auditors. Accordingly, the Audit Committee’s oversight
does not provide any basis, other than the review and discussions
with management and the independent auditors referred to above, to
determine that management has maintained appropriate accounting and
financial reporting principles and policies or internal controls
over financial reporting and procedures designed to assure
compliance with accounting standards and applicable laws and
regulations. Furthermore, the Audit Committee’s
considerations and discussions referred to above do not assure that
the audit of AutoWeb’s financial statements has been carried
out in accordance with the standards of the PCAOB or that
AutoWeb’s auditors are in fact
“independent.”
The
Audit Committee
Mark N.
Kaplan, Chairman
Michael
A. Carpenter
Chan W.
Galbato
Janet
M. Thompson
EXECUTIVE COMPENSATION
Named Executive Officers Compensation Narrative
For
2020, the Company’s named executive officers
are:
●
Jared R. Rowe,
President and Chief Executive Officer
●
Daniel R. Ingle,
Executive Vice President, Chief Operating Officer
●
Glenn E. Fuller,
Executive Vice President, Chief Legal Officer and
Secretary
The
names, ages and backgrounds of the Company’s current
executive officers are included in the section of this Proxy
Statement entitled “EXECUTIVE
OFFICERS.”
General Compensation
Philosophy and Objectives. The role of the Compensation
Committee is to determine, or recommend to the Board for
determination, the salaries and other compensation of the
Company’s executive officers and any other officer who
reports directly to the Chief Executive Officer, and to make grants
under, and to administer, the stock option, restricted stock and
other employee equity and incentive compensation
plans.
To
promote responsible compensation practices:
●
The Compensation
Committee directly engaged an independent compensation consultant
(see “Compensation
Consultant”);
●
The Company’s
2018 Equity Incentive Plan prohibits repricing of option and stock
appreciation rights (except for certain adjustments upon changes in
capitalization or control) without stockholder approval;
and
●
The Company’s
securities trading policy generally precludes executive officers
from engaging in transactions involving put or call options, short
sales and buying or holding Common Stock on margin. All trades by
executive officers must be pre-cleared with the Company’s
Chief Legal Officer.
The
Company’s compensation philosophy for executive officers is
to align compensation with corporate performance and efforts to
increase stockholder value, while providing a total compensation
opportunity that is broadly competitive and enables the Company to
attract, motivate, reward and retain key executives and employees.
The Company does not target specific compensation
percentiles. Accordingly, each executive officer’s
compensation package is typically comprised of the following three
elements:
●
Base annual salary
that is designed primarily to reflect individual responsibilities
and personal experience and to compare with similar roles at the
Company and at technology and online marketing companies that are
of comparable size to the Company and with which the Company
competes for executive personnel;
●
Annual variable
performance awards, such as incentive compensation, payable in
cash, stock options or shares of stock to reward executive officers
for the achievement of pre-established Company financial
performance goals; and
●
Long-term,
equity-based incentive awards to strengthen the mutuality of
interests between the executive officers and the Company’s
stockholders, reward executive officers for increasing stockholder
value, and retain executive officers through continued service
requirements.
Additionally, the
Company’s executive officers are typically entitled to
severance payments in the event of termination of employment
without cause or by the executive officer for good reason and other
benefits and perquisites that are discussed below.
Compensation
decisions are designed to promote the Company’s business
objectives and strategy and enable the Company to attract, retain
and motivate qualified executive officers who are able to
contribute to the Company’s long-term success. Among the
factors considered by the Company in determining executive officer
compensation are the ability to recruit individuals with the
necessary talents and the need to retain and motivate the
Company’s executive officers. The Company considers the
competitive market for executives in setting each element of
compensation indicated above. However, the Company does not
attempt to set each compensation element for each executive within
a particular range related to levels provided by comparable
companies. Rather, the Company uses market comparisons as one
factor in making compensation decisions. The Company also
considers other factors in making executive compensation decisions,
including local market forces, individual contribution and
performance, management skills, internal pay equity, the
undertaking of new roles and responsibilities, importance of the
executive’s role and responsibilities to the Company’s
future success and the executive’s experience, including
prior work experience, length of service to the Company, leadership
and growth potential.
Under
the Company’s compensation structure, the mix of base annual
salary, annual variable performance awards, and long-term,
equity-based incentive awards varies depending upon level of
responsibility and experience. In allocating compensation
among these elements, the Company believes that the compensation of
members of senior management who have the greatest ability to
influence the Company’s performance should have a greater
proportion of their compensation based on Company performance than
lower levels of management. There is, however, no
pre-established policy for the allocation between either cash and
non-cash or short-term and long-term compensation. The mix of
compensation determined by the Company is between base annual
salary compensation and incentive compensation. Long-term,
equity-based compensation is determined separately and may or may
not be awarded every year in the discretion of the Compensation
Committee.
Base Annual Salary.
The objective of base annual salary is to secure the services of
the Company’s executive officers and reflect job
responsibilities, individual performance, market competitiveness,
the value of such services to the Company’s business, and the
size of the Company’s business. Salaries for executive
officers are generally determined on an individual basis by
evaluating each executive officer’s scope of responsibility,
performance, prior experience, and salary history, as well as,
competitive market information. The Compensation Committee
also considers the recommendations of the Chief Executive Officer
(except in the case of the Chief Executive Officer’s own
compensation). The Chief Executive Officer is not present
during any voting or deliberations by the Compensation Committee or
the Board with respect to the Chief Executive Officer’s
compensation. The Compensation Committee may, in its discretion,
elect to recommend an executive officer’s base annual salary
to the Board for approval, particularly in the case of awards to
the Company’s Chief Executive Officer.
Annual Non-Equity-Based
Incentive Compensation, Retention and Discretionary
Awards. The Company’s compensation structure
provides for the opportunity for executive officers to be awarded
annual incentive compensation pursuant to incentive compensation
plans established each year (“Annual Incentive Compensation
Plans”). Annual Incentive Compensation Plans are
generally performance-based, and all awards are ultimately made at
the sole discretion of the Compensation Committee. The
objective of the annual incentive compensation awards under these
plans is to enhance retention and motivate individuals to achieve
specific goals established by the Compensation
Committee. These goals may consist of any or all of the
following:
●
Company-wide
performance goals;
●
Individual
contributions to the Company’s overall financial and
operating performance;
●
Specific individual
goals that are intended to advance the Company’s business and
create long-term stockholder value;
●
Level of
achievement of Company initiatives and projects that may arise
during the year;
●
Overall individual
performance; or
●
Other factors
deemed relevant to the Company’s overall financial and
operating performance, including market and competitive
factors.
The Compensation Committee from time to time also considers various
other discretionary, retention or incentive compensation
alternatives for the Company’s executive officers, including
discretionary awards for completion of special projects (including
acquisition and disposition transactions).
The
Compensation Committee establishes a target annual incentive
compensation award opportunity for each executive officer based on
a percentage of base annual salary. The Compensation Committee
establishes target award opportunities for executive officers after
reviewing survey data provided by the Company’s Independent
Compensation Consultant (described below), and, in the case of
executive officers other than the Chief Executive Officer, input
from the Chief Executive Officer. The Company believes this is
a meaningful incentive to achieve the incentive compensation goals
and an appropriate and reasonable allocation to performance-based
annual cash incentive compensation to motivate executive
officers.
Typically, the
Compensation Committee, with the participation of the Chief
Executive Officer, sets compensation performance goals for the
Company for the year. Unless specific individual performance goals
are established, the target annual incentive compensation award
opportunity for executive officers has typically been based upon
the attainment of Company-wide performance goals set forth in the
Company’s annual operating plan approved by the Board, which
reflects the Company’s belief that executive officers are
accountable for the Company’s overall operating performance.
If the Compensation Committee elects to allocate any portion of an
executive officer’s target annual incentive compensation
award opportunity to specific individual performance goals, the
Compensation Committee sets the individual performance goals for
the Chief Executive Officer, and the Chief Executive Officer, after
consultation with the Compensation Committee, sets the specific
individual performance goals for the other executive
officers. If specific individual performance goals are
established, a percentage allocation between Company-wide business
objectives and individual performance goals is determined that the
Company believes is an appropriate and reasonable allocation that
aligns the annual incentive compensation of executive officers with
individual performance. The individual performance goals are
based on, and reflect, each individual’s responsibilities
and, to the extent applicable, contribution to revenue, and may at
times include such factors as leadership, teamwork, growth
initiatives and other activities that are considered important to
contributing to the long-term performance of the
Company.
For
Company-wide goals, the Compensation Committee may adopt a formula
that establishes an award payout range based on the level of
performance attained, with a minimum below which no payment is made
and a maximum beyond which no additional incentive compensation is
paid. In determining the extent to which the Company-wide
performance goals are met for a given period, the Compensation
Committee exercises its judgment whether to reflect or exclude
specific circumstances that the Company experienced during the year
as well as the impact of unusual or infrequently occurring events
or other particular circumstances affecting the Company’s
business, changes in accounting principles, acquisitions,
dispositions, impairment of assets, restructuring charges and
litigation costs and successes, and may also consider the relative
risks in achieving the goals reflected in the Company’s
annual operating plan.
The
Compensation Committee approves all target annual incentive
compensation opportunities for executive officers and stock option
and other equity-based awards, subject to limited delegation to the
Non-Executive Stock Option Committee, which consists of the
Company’s Chief Executive Officer, for stock option grants to
non-executive officers. Generally, the Compensation Committee
approves stock option grants to newly hired employees who are
executive officers prior to the date of commencement of employment,
with the employment commencement date as the grant date. The
Compensation Committee may, in its discretion, elect to recommend
an executive officer’s non-equity incentive award terms and
payouts to the Board for approval, particularly in the case of
awards and payouts to the Company’s Chief Executive
Officer.
Long-Term, Equity-Based
Incentive Awards. Equity-based compensation in the form
of stock options or restricted stock awards are provided to link
the interests of executive officers with the long-term interests of
the Company’s stockholders, support a pay-for-performance
culture, foster employee stock ownership, focus the management team
on increasing value for the stockholders and to encourage executive
officers to remain in the Company’s employ. In addition,
stock options and restricted stock awards help to provide a
long-term balance to the overall compensation program. While
cash bonus payments are focused on short-term performance, the
multi-year vesting schedule of stock options and the forfeiture
restrictions on restricted stock awards create incentives for
increases in stockholder value over a longer term.
The
Company grants stock options that are performance-based,
service-based or a combination of the two. Although the
Company views all stock options as performance-based because they
require the stock price to increase in order for the recipient to
realize value from the stock options, the Company has granted stock
options subject to vesting based on levels of achievement of
specified Company goals that encourage preservation and enhancement
of stockholder value. Service-based vesting also encourages
executive retention. Restricted stock that is subject to
forfeiture in the event an executive officer leaves the Company
prior to the lapse of the forfeiture restrictions provides similar
retention and long-term motivational effects. The Company
views restricted stock as providing employment retention incentives
and an incentive to increase stock values because they become more
valuable as the price of Common Stock increases.
The
level of long-term incentive compensation is determined based on an
evaluation of competitive factors, the position and level of
responsibility of each executive officer, the Company’s
belief that stock options should be a significant part of the total
mix of executive officer compensation and the goals of the
compensation objectives described above. Options are granted
with exercise prices of not less than the closing price of the
Company’s stock on the date of grant. Depending on the
circumstances, in establishing grant levels, the Company may
consider the equity ownership levels of the recipients and exercise
prices of existing grants or prior grants that are fully or
partially vested. The Company does not have a policy requiring
executive officers or directors to hold shares acquired following
stock option exercise or restricted stock vesting for any
additional length of time, unless the shares are specifically
subject to a resale restriction, and there are no ownership
guidelines for executives or directors, as this is not viewed as
competitive for a public company of AutoWeb’s
size.
The
Company typically awards stock options or restricted stock to
executive officers upon first joining the Company, promotion to
more senior executive positions and annually, with approximately
mid-year supplemental annual award adjustments made in some
years. At the discretion of the Compensation Committee,
executive officers may also be granted stock options or restricted
stock awards based upon completion of special projects (including
acquisition or disposition transactions) or to provide greater
incentives to continue their employment with the Company and to
strive to increase the value of the Common Stock. The number of
shares subject to each stock option granted or restricted stock
awarded to executive officers is within the discretion of the
Compensation Committee and is based on anticipated future
contributions and ability to impact the Company’s results,
past performance or consistency within the officer’s internal
pay level. The Compensation Committee considers these factors,
as well as applicable contractual requirements, the value of
long-term equity incentive grants, the compensation expense
associated with awards, leverage and stockholder
dilution. Stock option grants expire no later than seven years
from the date of grant. Stock options and restricted stock
awards generally vest and become exercisable over a three-year
period, and the vesting of stock options and lapsing of forfeiture
restrictions for restricted stock awards typically accelerate upon
(i) a termination of employment without cause by the Company or for
good reason by the executive officer; or (ii) a change in control
of the Company, which may or may not be coupled with a termination
of employment by the Company without cause or by the executive
officer for good reason, or if the acquirer does not assume, retain
or exchange the options as provided in the applicable plan pursuant
to which the options were granted or the applicable option award
agreement. Equity awards may also provide for full or limited
acceleration of vesting upon the death or disability of the award
recipient.
The
Compensation Committee approves all stock option and other
equity-based awards, subject to limited delegation to the
Non-Executive Stock Option Committee, which consists of the
Company’s Chief Executive Officer, for stock option grants to
non-executive officers. Generally, the Compensation Committee
approves stock option grants to newly hired employees who are
executive officers prior to the date of commencement of employment,
with the employment commencement date as the grant date. The
Compensation Committee may, in its discretion, elect to recommend
an executive officer’s stock option and other equity-based
awards to the Board for approval, particularly in the case of
awards to the Company’s Chief Executive Officer.
Stockholder Approval of
Executive Compensation. At the Company’s
2019 Annual Meeting of Stockholders (“2019 Annual Meeting”), the
stockholders voted on an advisory proposal regarding approval of
the compensation paid to the Company’s named executive
officers. The Compensation Committee considered that
approximately 85% of the shares present at the 2019 Annual Meeting
and entitled to vote on the proposal were voted in favor of
approval of the proposal. The Company values
stockholders’ opinions and will consider the outcome of the
Company’s say-on-pay proposals when making future executive
compensation decisions regarding the Company’s named
executive officers. In addition, at the 2019 Annual Meeting,
the stockholders voted on an advisory basis with respect to the
frequency of future advisory votes to approve the compensation of
the Company’s named executive officers. Approximately
81% of the votes cast on this proposal were cast for a frequency of
every two years. In light of this vote, the Board determined
that it would present to stockholders a proposal for an advisory
say-on-pay proposal every two years, which proposal is being
presented to stockholders at the Annual Meeting.
Compensation
Consultant. The Compensation Committee may, from
time to time, directly retain the services of independent
consultants and other experts to assist the Compensation Committee
in connection with executive compensation matters. During 2020, the
Compensation Committee engaged the services of Frederic W.
Cook & Co., Inc., a national executive compensation
consulting firm (“Independent
Compensation Consultant”), to provide market data and
to review and provide recommendations regarding the Company’s
executive compensation programs and compensation of the
non-management members of the Board and its committees. The
Independent Compensation Consultant performs services solely on
behalf of the Compensation Committee and has no relationship with
the Company’s management except as it may relate to the
Independent Compensation Consultant’s performance of its
services for the Compensation Committee. The Company’s
executive officers did not participate in the selection of the
Independent Compensation Consultant. Periodically, the
Company’s Chief Executive Officer seeks input from the
Independent Compensation Consultant on compensation matters
relating to named executive officers other than the Chief Executive
Officer in providing information to the Compensation Committee
regarding executive compensation matters. These inquiries
relating to named executive officer compensation occur with the
advance knowledge of the Compensation Committee
chairperson. The Compensation Committee has concluded that the
Independent Compensation Consultant is independent and that no
conflict of interest exists that would prevent the Independent
Compensation Consultant from independently advising the
Compensation Committee.
Forfeiture of Equity
Awards. The award agreements for stock option and
restricted shares, as applicable, granted to the named executive
officers provide for (i) the forfeiture and cancellation of
unexercised options (vested or unvested) and restricted shares
(whether vested or unvested) still in the possession of the named
executive officer; and (ii) the recovery of any gain realized by
the named executive officer from the exercise of any stock options
and the recovery of any proceeds realized by the named executive
officer from the sale of any restricted shares if at any time
within 12 months after (i) the named executive officer exercises
the options or the vesting restrictions lapse on the restricted
shares, or (ii) the date of the termination of the named executive
officer’s employment with the Company, as applicable, it is
determined that the named executive officer engaged in misconduct,
including misconduct that resulted in an accounting restatement due
to material noncompliance with any financial reporting requirement
under applicable securities laws.
2020 Compensation
Decisions. For 2020, the Compensation Committee
determined the compensation of the Company’s 2020 named
executive officers in accordance with the general compensation
philosophy and objectives described above.
Compensation Reviews and Peer Group. In addition to the
foregoing general compensation philosophy and objectives, in August
2019, the Compensation Committee consulted with the Independent
Compensation Consultant, which conducted an independent review of
the Company’s executive compensation program on behalf of the
Compensation Committee (“2019
Executive Compensation Review”) to provide a
competitive reference on pay levels and performance
alignment. The 2019 Executive Compensation Review used a peer
group, proposed by the Independent Compensation Consultant and
approved by the Compensation Committee in June 2019, with industry-
and size-appropriate companies that were mostly based in high cost
of living locations (e.g., Boston, New York, Seattle and northern
California) similar to the Company’s location in Orange
County, California to reflect local labor market and cost of
living. The peer group used for the 2019 Executive Compensation
Review (“2019 Peer
Group”) consisted of the following 18 U.S. based,
publicly-traded, internet technology, marketing services, and
automotive industry broadly similar to the Company, with an
approximate range of $56 million to $358 million in revenue and
market capitalizations below $1.116 billion at the time:
Brightcove, Care.com, ChannelAdvisor, DHI Group, Ideanomics, Leaf
Group, Limelight Networks, Marchex, Rubicon Project, Seachange
Int’l, Support.com, TechTarget, Telaria, Telenav, Travelzoo,
TrueCar, U.S. Auto Parts, and Zix Corp.
Market
comparisons were provided for the Company’s executive
officers covering base salaries; annual incentives (levels and plan
design); long-term incentive grant values, awards, types and mix;
and total direct compensation. The Compensation Committee reviewed
market pay and relative performance data from the 2019 Peer Group.
At the time, AutoWeb’s estimated 2019 revenue approximated
the peer group median and the Company’s market capitalization
value approximated the 25th
percentile of the peer group. Further, the Company’s GAAP
operating income was in the 25th percentile for the peer group. The
Company does not target a particular benchmark level for the
pay and performance levels.
The
Compensation Committee, in consultation with the Independent
Compensation Consultant, considered the base salary, incentive
compensation, and equity-based compensation information contained
in the 2019 Executive Compensation Review in connection with the
Committee’s decisions regarding base salaries, incentive
compensation and equity-based awards to the named executive
officers during and with respect to 2020.
2020 Base Annual Salary. The Compensation
Committee did not consider any changes in the base annual salaries
for Messrs. Rowe, Ingle or Fuller for 2020 compared to their 2019
base annual salaries.
2020 Annual Incentive Compensation Plan
Awards. The 2020 Annual Incentive Compensation
Plan (“2020 Incentive
Plan”) allowed for annual discretionary cash incentive
compensation awards for Company personnel selected to participate
in the 2020 Incentive Plan. The annual incentive compensation award
opportunities under the 2020 Incentive Plan for Messrs. Rowe, Ingle
and Fuller under the 2020 Incentive Plan were 100%, 65% and 70%,
respectively.
A
factor that the Compensation Committee considers in determining
award payouts under the 2020 Incentive Plan for each of the 2020
named executive officers is the percentage achievement of the
Company-wide 2020 Incentive Plan revenue performance goal
(“2020 Revenue
Goal”) and 2020 Incentive Plan adjusted EBITDA
(defined as (i) GAAP net income before interest, taxes,
depreciation, amortization, non-cash stock-based compensation,
non-cash gains or losses, and other extraordinary items)
performance goal (“2020
Non-GAAP Adjusted EBITDA Goal”) compared to the
corresponding percentage on a sliding award payout scale
(“2020 Award Opportunity
Scale”) that (i) in the case of the 2020 Revenue Goal,
reduced award payout opportunities by 10% for every 1% that
achievement fell below the 2020 Revenue Goal (with no award payout
opportunity below 90% achievement of the 2020 Revenue Goal) and
increased award payout opportunities by 10% for every 1% that
achievement exceeded the 2019 Revenue Goal (with the payout award
opportunity capped at 200%); and (ii) in the case of the 2020
Non-GAAP Adjusted EBITDA Goal, reduced award payout opportunities
by 5% for every 1% that achievement fell below the 2020 Non-GAAP
Adjusted EBITDA Goal (with no award payout opportunity below 90%
achievement of the 2020 Non-GAAP Adjusted EBITDA Goal) and
increased award payout opportunities by 5% for every 1% that
achievement exceeded the 2020 Non-GAAP Adjusted EBITDA Goal (with
the payout award opportunity capped at 200%). The sum of the
weighted percentages derived from the 2020 Award Opportunity Scale
for the 2020 Revenue Goal and the 2020 Non-GAAP Adjusted EBITDA
Goal was considered for each named executive officer’s target
annual incentive compensation award opportunity in the
determination of a named executive officer’s 2020 award
payout under the 2020 Incentive Plan. The Compensation Committee
set the Company’s 2020 Revenue Goal at $111.5 million and the
Non-GAAP Adjusted EBITDA Goal at $1.8 million, both goals based on
the Company’s 2020 operating plan approved by the
Board.
In
determining the amount of award payouts, if any, under the 2020
Incentive Plan, the 2020 Incentive Plan provides that Compensation
Committee may consider the following factors:
●
Level of
achievement of the 2020 Revenue Goal and 2020 Non-GAAP Adjusted
EBITDA Goal. Non-GAAP Adjusted EBITDA was calculated by adding
depreciation and amortization, interest expense, other income
(expense), non-cash stock compensation expense and gain/loss on
disposal of assets to, and subtracting interest income, income
taxes, gain on government grant and gain/loss on sale of asset
from, GAAP net loss.
●
Contributions of
individual 2020 Incentive Plan participants to the Company’s
overall financial and operating performance.
●
Level of
achievement of individual goals that may be established for Plan
participants.
●
Level of
achievement of Company initiatives and projects that may arise
during the year.
●
Evaluation of a
participant’s overall performance during the
year.
●
Other factors
deemed relevant to the Company’s overall financial and
operating performance, including market and competitive
factors.
In
making its determination of the amount of award payouts, if any,
under the 2020 Incentive Plan, the Compensation Committee
considered the fact that the Company did not meet the 2020 Revenue
Goal or the 2020 EBITDA Goal and also considered operational and
financial achievements in 2020, including the following
achievements by the Company’s executive
management:
●
Turned Adjusted
EBITDA and cashflow positive for the second half of
2020.
●
The significant
operational progress notwithstanding unprecedented challenges of
managing the early 2020 malware attack on the Company’s
network and systems and the impact of the Covid-19 pandemics, such
as growing retail click participation by 6.5% year-over-year,
improving average cost-per-lead by 19.2% YOY, and improving
technology delivery quality and velocity.
●
Financial
improvements including reducing operating expense 46.2% from 2018
to 2020, improving margin efficiency from 19.3% in 2018 to 30.9% in
2020, and turning Adjusted EBITDA and cash flow positive for the
second half of 2020.
●
The need to retain
and engage Company personnel for stability and business continuity
and to avoid recruiting costs associated with potential personnel
resignations and difficulty in recruiting potential employees as a
result of 0% aware payouts.
●
Elect a one-time
compensation incentive compensation payout over broad-based
compensation adjustments to contain continued head count
expense.
●
Preserve the
investment in, and motivation of, members of senior
management.
●
That fact that
there were no annual cash incentive compensation awards made to
members of senior management in 2020 with respect to the
Company’s 2019 Annual Incentive Compensation
Plan.
●
Base pay for
members of senior management was reduced in the second quarter of
2020 as part of the Company pandemic-related expense savings
effort.
●
2019-2020 stock
option grants to members of senior management are largely
underwater.
●
Seamlessly
transitioned CFO role from Mr. J.P. Hannan to Mr. Michael
Sadowski.
The
Compensation Committee also considered the 2019 Executive
Compensation Review and relied on the advice provided to the
Compensation Committee by the Independent Compensation
Consultant.
Based
upon its evaluation, the Compensation Committee determined that
award payouts under the 2020 Incentive Compensation Plan would
consist of (i) a base award payout to all 2020 Incentive Plan
participants equal to 45% of their full target payout percentage,
which reflects the continued progress the Company made in improving
its business operations during 2020, while at the same time
navigating challenges presented during the year, including the
COVID-19 pandemic and its adverse impact on the Company
specifically and on the automotive industry as a whole, including
the reduction in Seasonally Adjusted Annual Rate of auto sales and
computer chip manufacturing shortages; and (ii) additional
supplemental awards to certain 2020 Incentive Plan participants in
recognition of their individual performance and efforts during
2020. As a result, the Compensation
Committee approved base award payouts under the 2020 Incentive Plan
to Messrs. Rowe, Ingle and Fuller of $247,500, $111,154 and
$110,328, respectively. In addition, in recognition of their
significant individual contributions and efforts during 2020, the
Compensation Committee approved supplemental incentive compensation
award payouts to Messrs. Ingle and Fuller of $65,000 and $25,000,
respectively, resulting in total award payouts under the 2020
Incentive Plan to Messrs. Rowe, Ingle and Fuller of $247,500,
$176,154 and $135,329, respectively. The Board approved the base
award payout to Mr. Rowe upon the recommendation of the
Compensation Committee.
2020 Long-Term, Equity-Based Incentive Awards.
February 2020 Stock Option
Grants. On February 26, 2020, stock options were granted to
Messrs. Ingle and Fuller in connection with the Company’s
annual equity awards to employees. Options were granted because
they require the Company’s share price to increase after the
grant in order to provide value to the executive, consistent with
the Company strategic turnaround and transformation efforts. The
Company views options as inherently performance-based and aligned
with creating value for stockholders. After considering the Chief
Executive Officer’s recommendation for grants to named
executive officers other than himself, and after consultation with
the Independent Compensation Consultant, the Compensation Committee
approved the grants of 100,000 and 75,000 stock options,
respectively, to Messrs. Ingle and Fuller, at an exercise price of
$2.00 per share. The exercise price for these stock option grants
was the closing price for the Common Stock on The Nasdaq Capital
Market as of the grant date. These stock option grants vest
one-third on the first anniversary of the grant date, with the
remaining two-thirds vesting ratably over 24 months thereafter and
expire seven years from the date of grant. The vesting of stock
options will accelerate upon the occurrence of certain events as
provided in the applicable plan pursuant to which the stock options
were granted or the applicable stock option award agreement,
including (i) upon termination of the named executive
officer’s employment with the Company without cause or by the
named executive officer for good reason; and (ii) upon a change in
control of AutoWeb if such change in control is coupled with a
termination of the named executive officer’s employment
without cause or by the named executive officer for good reason or
if the acquirer does not assume, retain or exchange the
options.
In deciding to make this annual award of stock
options, the Compensation Committee considered the 2019 Executive
Compensation Review and data from the 2019 Peer Group, consulted
with the Independent Compensation Consultant, and considered the
Chief Executive Officer’s recommendations as to named
executive officers other than himself. The awards were
proposed in light of the efforts of Company management to address
various non-ordinary course events such as the implementation of a
new credit facility, the response to the Company’s network
security incident in January 2020, and management taking on
additional duties and responsibilities as a result of various
reductions in the Company’s workforce. The Compensation
Committee elected to not make a stock option award to Mr. Rowe at
the time.
The
foregoing 2020 equity grants reflected the Compensation
Committee’s belief that equity-based compensation in the form
of stock options link the interests of named executive officers
with the long-term interests of the Company’s stockholders,
supports a pay-for-performance culture, fosters stock ownership by
named executive officers, focuses the management team on increasing
value for the stockholders, and encourages named executive officers
to remain in the Company’s employ.
For
additional information concerning the change in control provisions
of the above stock option awards, see the section of this Proxy
Statement below entitled “EXECUTIVE COMPENSATION–Potential Payments
Upon Termination or Change in Control.”
Severance and Change in
Control Terms. The Company has entered into
agreements with the named executive officers that provide for
severance benefits, including continuation of monthly salary or
lump sum cash payments and continuation of health and welfare
benefits for specified periods of time, upon termination of the
named executive officer’s employment with the Company by the
Company without cause or by the named executive officer for good
reason. In addition, the vesting of stock options and
restricted stock awarded to the named executive officers may
accelerate upon the occurrence of various events, including (i)
termination of the named executive officer’s employment by
the Company without cause or by the named executive officer with
good reason; and (ii) upon a change in control of AutoWeb if such
change in control is coupled with a termination of the named
executive officer’s employment without cause or by the named
executive officer for good reason or if the acquirer does not
assume, retain or exchange the options; provided, however, that in
the case of the inducement options granted to Mr. Rowe in
connection with the commencement of his employment, a termination
of employment in connection with a change in control is not
required for the acceleration of the vesting of any such unvested
inducement options. The arrangements are designed as a recruiting
and retention mechanism to assist the Company in providing adequate
employment security to compete for highly qualified executive
officers and induce them to invest themselves in a career with the
Company, to assist in retention of the Company’s executive
officers during the uncertainty that might accompany any possible
change in control, and to offset any motivation executive officers
might otherwise have to resist a change in control that could
result in loss of their employment. Information
regarding applicable terms of the foregoing severance arrangements
for the Company’s named executive officers is provided below
under the section of this Proxy Statement entitled
“EXECUTIVE
COMPENSATION–Potential Payments Upon Termination or Change in
Control.”
Benefits and
Perquisites. Except
as discussed below, executive officers typically participate in
employee benefit plans that are generally available to all
employees on the same terms.
All
employees have company-provided life insurance with a death benefit
of one-time the employee’s annual salary, capped at
$300,000.
All
employees above the senior manager level are provided with enhanced
supplemental short and long-term disability insurance by the
Company in addition to the Company’s standard short- and
long-term disability insurance in order to attract and retain these
employees. For executive officers who qualify for the
coverage, the Company also provides an additional supplemental
long-term disability plan that offers a benefit of up to 75% of the
executive’s base annual salary, up to a maximum benefit of
$5,000 per month. The benefit begins 90 calendar days after the
onset of the disability and may continue up to age 65.
During
the term of Mr. Rowe’s employment agreement, as amended, Mr.
Rowe receives a monthly travel and housing accommodation in the
amount of $15,000. In the event Mr. Rowe elects to relocate to the
Tampa, Florida area, this monthly travel and housing accommodation
will cease, and the Company will pay actual moving costs and actual
sales brokerage fees incurred for the sale of his personal
residence. This moving and relocation assistance is not to exceed
$200,000 in the aggregate.
Tax Implications
IRC
Section 162(m). In general, Section 162(m)
disallows a tax deduction for the compensation paid in any tax year
in excess of $1.0 million to certain executives of
publicly-held companies. The $1.0 million limitation
applies per executive per year and only to the compensation paid to
the chief executive officer and to each of the next three most
highly compensated officers other than the chief financial officer
(for years commencing before 2018). In December 2017, Congress
enacted Public Law No. 115-97, commonly referred to as the
“Tax Cuts and Jobs Act” (“TCJA”), which, among other things,
eliminated the “performance-based compensation”
exemption from Section 162(m) of the Internal Revenue Code
(“IRC”),
effective for tax years beginning after December 31, 2017, such
that compensation paid to the Company’s executives subject to
Section 162(m) in excess of $1.0 million will not be deductible
unless the compensation qualifies for transition relief applicable
to certain arrangements in place as of November 2, 2017. In
addition, the TCJA now includes the chief financial officer in the
group of officers subject to the limitation. Moreover, the recent
enactment of Public Law No. 117-2, commonly known as the American
Rescue Plan Act of 2021, has further expanded the scope to include
the five most highly compensated employees, for tax years beginning
after 2026. The Company cannot give any assurance that any
incentive awards outstanding after December 31, 2017 that the
Compensation Committee intended to satisfy the Section 162(m)
“performance-based compensation” exemption requirements
will in fact do so because of uncertainties regarding the
application and interpretation of Section 162(m) of the IRC,
including the uncertain scope of the abovementioned transition
relief.
The
Compensation Committee believes that stockholder interests are best
served by not restricting its discretion and flexibility in
crafting compensation programs even when those programs could
result in certain non-deductible compensation
expenses. Therefore, the Compensation Committee has from
time to time approved elements of compensation for certain covered
officers that may not be fully deductible. In
addition, although some
amounts recorded as compensation by the Company to certain of the
Company’s executive officers may be limited by
Section 162(m), that limitation currently is not expected to
result in the current payment of increased federal income taxes by
the Company due to the Company’s significant net operating
loss carry forwards.
IRC Sections 280G and
4999. The Compensation Committee has considered
the potential impact of Sections 280G and 4999 of the IRC in
structuring the compensation and severance packages for the
Company’s executives. Section 280G disallows a tax
deduction by the payor for “excess parachute payments”
made to executives, and Section 4999 imposes a 20%
non-deductible excise tax on the executive receiving an excess
parachute payment. In general, a parachute payment to an
executive is a payment to the executive in the nature of
compensation that is contingent on a change in control of the
Company and that exceeds three times the executive’s
“base amount.” An executive’s base amount is
generally the average compensation received by the executive from
the Company during the five-year period preceding the change in
control of the Company. An excess parachute payment is any
amount over the portion of the base amount allocated to that
parachute payment.
In
general, it is the Compensation Committee’s policy to qualify
its executives’ compensation for deductibility under
applicable tax laws. The Compensation Committee believes,
however, that stockholder interests are best served by not
restricting its discretion and flexibility in crafting compensation
programs even though those programs may result in certain
non-deductible compensation expenses. Therefore, the
Compensation Committee has from time-to-time approved elements of
compensation for certain officers that may not be fully deductible
and that provide for the Company to “gross up” the
payment made to the executive to compensate the executive for the
20% excise tax, and the Compensation Committee reserves the right
to do so in the future in appropriate circumstances. Currently,
none of the Company’s executives have tax “gross
up” provisions.
Summary Compensation
The
table below and the accompanying footnotes summarize the
compensation attributed for fiscal years 2020 and 2019, as
applicable, to the named executive officers for the fiscal year
ended December 31, 2020.
2020 Summary Compensation Table
Name and Principal
Position
|
|
|
|
|
|
Non-Equity
Incentive Plan
Compensation
($)(2)
|
All Other Compensation
($)
|
|
Jared R. Rowe
|
2020
|
508,750(3)
|
—
|
—
|
—
|
247,500
|
152,251(4)
|
908,501
|
President and Chief
|
2019
|
550,000
|
—
|
—
|
942,261
|
—
|
186,932(5)
|
1,679,193
|
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel R. Ingle
|
2020
|
370,516(3)
|
—
|
—
|
109,130
|
176,155
|
6,653(6)
|
662,454
|
|
2019
|
364,182
|
—
|
—
|
626,923
|
—
|
6,760(7)
|
997,865
|
President,
Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glenn E. Fuller
|
2020
|
341,494(3)
|
—
|
—
|
81,847
|
135,329
|
4,222(8)
|
562,892
|
Executive Vice
|
2019
|
350,250
|
—
|
—
|
158,076
|
—
|
8,758(9)
|
517,084
|
President, Chief Legal Officer and Secretary
|
|
|
|
|
|
|
|
|
(1)
|
The
dollar amounts listed do not necessarily reflect the dollar amounts
of compensation actually realized or that may be realized. The
dollar amount reported for stock awards and option awards is the
aggregate grant date fair value of awards granted during the year
calculated in accordance with FASB ASC Topic 718. See Note 10 of
the “Notes to Consolidated Financial Statements” in
Part IV, Item 15-Exhibits and Financial Statement Schedules of the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2020, which accompanies this Proxy Statement, for
assumptions made in these valuations.
|
(2)
|
Represents
amounts awarded under the Company’s Annual Non-Equity
Incentive Compensation Plan. For information on the amounts earned
in 2020, see the section of this Proxy Statement entitled
“EXECUTIVE
COMPENSATION–Named Executive Officers Compensation
Narrative–2020 Compensation Decisions–2020 Annual
Incentive Compensation Plan Awards.”
|
(3)
|
In
light
of the financial impact of the COVID-19 pandemic on the Company,
Mr. Rowe voluntarily agreed to a temporary 30% reduction in his
monthly base salary, and Messrs. Ingle and Fuller voluntarily
agreed to temporary 10% reductions in their respective monthly base
salary. These temporary reductions were in effect for the months of
April, May and June 2020, and the reduction amounts would have been
payable in the event a change in control of the Company occurred
during 2020. The other elements of these executives’
compensation were unchanged.
|
(4)
|
Represents
$135,000 for travel and housing accommodations, $3,000 for 401(k)
plan match, $3,851 for group term life and supplemental insurance
benefits, and $10,400 in legal expenses paid on behalf of Mr. Rowe
in connection with the negotiation of his employment agreement. In
addition to the voluntary salary reduction described in Footnote 3
above, Mr. Rowe voluntarily agreed to forego temporarily his
$15,000 per month travel and housing accommodation allowance for
the same three-month period.
|
(5)
|
Represents
$180,000 for travel and housing accommodations, $3,000 for 401(k)
plan match, and $3,932 for group term life and supplemental
insurance benefits.
|
(6)
|
Represents
$3,000 for 401(k) plan match and $3,653 for group term life and
supplemental insurance benefits.
|
(7)
|
Represents
$3,000 for 401(k) plan match and $3,760 for group term life and
supplemental insurance benefits.
|
(8)
|
Represents $4,222
for group term life and supplemental insurance
benefits.
|
(9)
|
Represents
$3,000 for 401(k) plan match and $5,758 for group term life and
supplemental insurance benefits.
|
|
|
|
|
|
|
Outstanding Equity Awards at 2020 Year-End
The
following table sets forth, for each of the named executive
officers, information concerning outstanding stock option awards as
of December 31, 2020.
2020 Outstanding Equity Awards at Fiscal Year-End
Table
Name
|
Grant
Date
|
Number of
Securities Underlying Options Exercisable (#)
|
Number of
Securities Underlying Options Unexercisable (#)
|
Equity Incentive
Plan Awards: Number of Securities Underlying Unexercised Unearned
Options (#)
|
Option Exercise
Price ($)
|
Option Expiration
Date
|
Number of Shares
or Units of Stock That Have Not Vested (#)
|
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 of Unearned Shares, Units or Other
Rights That Have Not Vested ($)
|
Jared R.
Rowe
|
08/06/19(1)
|
—
|
—
|
185,000
|
3.17
|
08/06/26
|
—
|
—
|
—
|
—
|
|
03/01/19(2)
|
204,167
|
145,833
|
—
|
3.39
|
03/01/26
|
—
|
—
|
—
|
—
|
|
04/12/18(3)
|
888,889
|
111,111
|
—
|
3.26
|
04/12/25
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Daniel R.
Ingle
|
02/26/20(2)
|
—
|
100,000
|
—
|
2.00
|
02/26/27
|
—
|
—
|
—
|
—
|
|
08/06/19(1)
|
—
|
—
|
100,000
|
3.17
|
08/06/26
|
—
|
—
|
—
|
—
|
|
03/01/19(2)
|
48,125
|
34,375
|
—
|
3.39
|
03/01/26
|
—
|
—
|
—
|
—
|
|
01/06/19(2)
|
105,417
|
59,583
|
—
|
3.53
|
01/16/26
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Glenn E.
Fuller
|
02/26/20(2)
|
—
|
75,000
|
—
|
2.00
|
02/26/27
|
—
|
—
|
—
|
—
|
|
08/06/19(1)
|
—
|
—
|
35,000
|
3.17
|
08/06/26
|
—
|
—
|
—
|
—
|
|
03/01/19(2)
|
32,083
|
22,917
|
—
|
3.39
|
03/01/26
|
—
|
—
|
—
|
—
|
|
04/12/18(2)
|
111,112
|
13,888
|
—
|
3.26
|
04/12/25
|
—
|
—
|
—
|
—
|
|
01/26/17(2)
|
25,000
|
—
|
—
|
13.81
|
01/26/24
|
—
|
—
|
—
|
—
|
|
07/15/16(2)
|
30,000
|
—
|
—
|
14.41
|
07/15/23
|
—
|
—
|
—
|
—
|
|
01/21/16(2)
|
22,000
|
—
|
—
|
17.09
|
01/21/23
|
—
|
—
|
—
|
—
|
|
05/18/15(2)
|
8,000
|
—
|
—
|
13.22
|
05/18/22
|
—
|
—
|
—
|
—
|
|
01/23/15(2)
|
20,000
|
—
|
—
|
10.20
|
01/23/22
|
—
|
—
|
—
|
—
|
|
03/17/14(2)
|
8,000
|
—
|
—
|
14.32
|
03/17/21
|
—
|
—
|
—
|
—
|
|
01/21/14(2)
|
12,000
|
—
|
—
|
17.64
|
01/21/21
|
—
|
—
|
—
|
—
|
(1)
|
The
options granted are subject to the satisfaction of the following
service-based and performance-based vesting conditions: (i)
One-third of the stock options granted vest on the first
anniversary following the grant date, and the remaining two-thirds
vesting ratably over 24 months thereafter; and (ii) the August 2019
Options Stock Closing Price Vesting Condition. The vesting of these
stock options will accelerate upon (i) a termination of
employment without cause by the Company or for good reason by the
named executive officer; or (ii) a change in control of the Company
if coupled with a termination of employment by the Company without
cause or by the named executive officer for good reason or if the
acquirer does not assume, retain or exchange the options as
provided in the applicable plan pursuant to which the options were
granted or the applicable option award agreement.
|
(2)
|
The
options granted are subject to the following service-based vesting
condition: one-third of the stock options granted vest on the first
anniversary following the grant date, and the remaining two-thirds
vesting ratably over 24 months thereafter. The vesting of these
stock options will accelerate upon (i) a termination of
employment without cause by the Company or for good reason by the
named executive officer; or (ii) a change in control of the Company
if coupled with a termination of employment by the Company without
cause or by the named executive officer for good reason or if the
acquirer does not assume, retain or exchange the options as
provided in the applicable plan pursuant to which the options were
granted or the applicable option award agreement.
|
(3)
|
Mr.
Rowe was granted stock options to purchase 1,000,000 shares of
Common Stock upon the commencement of his employment with the
Company, which vest monthly in 36 monthly installments on the first
day of each calendar month beginning on May 1, 2018.
|
Employment Agreements
The
Company has entered into written employment agreements with the
named executive officers. The employment of these executive
officers is “at will” and not for a specified
term. Under the terms of their respective agreements, each
executive is entitled to all customary benefits afforded generally
to executive officers of the Company, including any qualified or
non-qualified pension, profit sharing and savings plans, any death
benefit and disability benefit plans, life insurance coverages, any
medical, dental, health and welfare plans or insurance coverages
and any stock purchase programs that are approved in writing by the
Board. The Company will pay or reimburse each of these
executives for all reasonable business expenses incurred while
employed by the Company. The employment agreements with these
executive officers also provide for specified payments and
continuation of benefits in the event of a termination of the
executive officer’s employment with the Company by the
Company without cause or by the executive officer for good reason,
including any such termination in connection with a change in
control of the Company. For a description of these termination
and change in control provisions see the section of this Proxy
Statement below entitled “Potential Payments Upon Termination or Change
in Control.” Each of these employment agreements
contains confidentiality and non-solicitation provisions that
extend beyond termination of employment.
Jared R.
Rowe. The Company
and Mr. Rowe, the Company’s President and Chief Executive
Officer, have entered into an employment agreement dated April
2018, as amended on August 26, 2019 (collectively, the
“Rowe Employment
Agreement”) pursuant to which the Company paid Mr.
Rowe a one-time signing bonus in the amount of $250,000 and a base
annual salary of $550,000, which may be increased in the discretion
of the Board or the Compensation Committee. Mr. Rowe is also
eligible to receive an annual incentive compensation opportunity
targeted at 100% of his base annual salary based upon annual
performance goals and achievement of those goals, as established
and determined by the Board or the Compensation
Committee.
Mr.
Rowe also receives a monthly travel and housing accommodation in
the amount of $15,000. In the event that Mr. Rowe elects to
relocate to the Tampa, Florida area, this monthly travel and
housing accommodation will cease, and the Company will pay actual
moving costs and actual sales brokerage fees incurred for the sale
of his personal residence. This moving and relocation assistance is
not to exceed $200,000 in the aggregate. Additionally, the Company
paid on behalf Mr. Rowe approximately of $29,700 in legal fees
incurred in connection with the negotiation and review of the Rowe
Employment Agreement by Mr. Rowe’s counsel. Mr. Rowe is
entitled to all customary benefits afforded generally to executive
employees of the Company.
Daniel R. Ingle. The
Company and Mr. Ingle entered into an employment agreement dated as
of January 16, 2019, in connection with his joining the Company as
the Company’s Executive Vice President, Chief Operating
Officer. In addition, the Company and Mr. Ingle have entered into
an Amended and Restated Severance Benefits Agreement dated March 3,
2021. Mr. Ingle’s current base annual salary is $400,016. Mr.
Ingle is also eligible to receive an annual incentive compensation
opportunity targeted at 65% of his base annual salary based upon
annual performance goals and the achievement of those goals, as
established and determined by the Compensation
Committee.
Glenn E. Fuller. The
Company and Mr. Fuller entered into an employment agreement dated
as of October 10, 2006, in connection with his joining the Company
as the Company’s Vice President, Legal Affairs, which
agreement has been amended at various dates in connection with Mr.
Fuller’s various promotions within the Company and
compensation adjustments. In addition, the Company and Mr. Fuller
have entered into a Third Amended and Restated Severance Agreement
dated as of March 3, 2021. Mr. Fuller’s current base annual
salary is $350,250. Mr. Fuller is also eligible to receive an
annual incentive compensation opportunity targeted at 70% of his
base annual salary based upon annual performance goals and the
achievement of those goals, as established and determined by the
Compensation Committee.
Potential Payments Upon Termination or Change in
Control
Payments and other
benefits payable upon various termination and change in control
situations are set out as if the conditions for payments had
occurred and the terminations or change in control took place on
December 31, 2020. The amounts set forth in the table below
are estimates of the amounts which would have been paid out to each
named executive officer listed in the table upon termination of
employment or change in control of the Company based on
compensation and agreements in effect for the year ended December
31, 2020. The actual amounts to be paid out can be determined
only at the time of such named executive officer’s separation
from the Company or change in control event. In addition, it
is possible that the Company and the executive may hereafter agree
to payments and other benefits that differ materially from those
described below. The table below reflects the amount of
compensation to each of the named executive officers, in the event
of termination of such executive’s employment by the Company
without cause or by the named executive officer for good reason (in
connection with and not in connection with a change in control of
the Company); and (ii) upon a change in control of the Company not
in connection with a termination of such executive’s
employment by the Company without cause or by the named executive
officer for good reason. The disclosures below do not take
into consideration any requirements under IRC Section 409A,
which could affect, among other things, the timing of payments and
distributions.
Termination and Change in Control Estimated Payments
Table
Name
|
Benefit
Description
|
Termination without
cause by Company or for good reason by executive NOT in connection
with a Change in Control($) (1)
|
Termination without
cause by Company or for good reason by executive in connection with
a Change in Control($) (1)
|
Change in Control NOT
in connection with Termination without cause by Company or for good
reason by executive ($) (1)
|
Jared R. Rowe
(2)
|
24-month base
monthly salary continuation
|
1,100,000
|
—
|
—
|
|
Lump sum severance
payment
|
—
|
2,200,000
|
—
|
|
Non-equity
incentive- based compensation
|
247,500
|
550,000
|
—
|
|
Stock-based
awards
|
—
|
—
|
—
|
|
Continuation of
health and welfare benefits
|
46,577
|
46,577
|
—
|
|
|
|
|
Daniel R. Ingle
(3)
|
Lump sum severance
payment
|
190,000
|
190,000
|
—
|
|
Stock-based
awards
|
47,000
|
47,000
|
47,000(5)
|
|
Continuation of
health and welfare benefits
|
15,422
|
15,422
|
—
|
|
Career transition
services
|
3,950
|
3,950
|
—
|
|
|
|
|
Glenn E. Fuller
(4)
|
Lump sum severance
payment
|
525,375
|
525,375
|
—
|
|
Non-equity
incentive- based compensation
|
135,329
|
135,329
|
—
|
|
Stock-based
awards
|
68,183
|
68,183
|
68,183(5)
|
|
Continuation of
health and welfare benefits
|
49,278
|
49,278
|
—
|
|
Career transition
services
|
3,950
|
3,950
|
—
|
(1)
|
For
stock options, the amount represents the positive difference
between the closing price of the Company’s stock on December
31, 2020 and the exercise price of the stock option.
|
(2)
|
If Mr.
Rowe’s employment is terminated by the Company without cause
or by Mr. Rowe with good reason, Mr. Rowe is entitled to: (i)
continued monthly payments of his base annual salary for 24 months
after the employment termination date; (ii) reimbursement or
payment of the premiums for continuation of the medical, dental,
and visions benefits under COBRA for a period of 18 months after
the employment termination date; and (iii) his annual incentive
compensation payout based on actual performance for the entire
performance period, prorated for the amount of time Mr. Rowe was
employed by the Company prior to the date of termination during
such performance period. If Mr. Rowe’s employment is
terminated by the Company without cause or by Mr. Rowe for good
reason upon, or within 18 months following, a change in control of
the Company, Mr. Rowe is entitled to: (i) a lump sum payment equal
to two (2) times the sum of his base annual salary plus his annual
incentive compensation opportunity target; (ii) reimbursement or
payment of the premiums for continuation of his medical, dental,
and visions insurance benefits under COBRA for a period of 18
months after employment termination; and (iii) his annual incentive
compensation payout based on his target annual incentive
compensation, prorated for the amount of time Mr. Rowe was employed
by the Company prior to the date of termination during such
performance period. The Company is not obligated to make additional
payments to Mr. Rowe to compensate for his additional tax
obligations if Mr. Rowe’s compensation is deemed to be excess
parachute payments under the Internal Revenue Code. Payment of the
severance benefits under the Rowe Employment Agreement is
conditioned on Mr. Rowe’s execution of a general release in
favor of AutoWeb.
|
(3)
|
Under
Mr. Ingle’s severance benefits agreement in effect as of
December 31, 2020, if Mr. Ingle’s employment is terminated by
the Company without cause or if he terminates his employment with
good reason, Mr. Ingle is entitled to (i) a lump sum payment
equal to 50% of Mr. Ingle’s annual base salary (determined as
the highest annual base salary paid to Mr. Ingle while employed by
the Company); (ii) continuation of AutoWeb medical, dental,
vision, life and disability insurance benefits for Mr. Ingle and
Mr. Ingle’s eligible dependents (at the time of termination)
for six months; and (iii) outplacement services for six
months.
|
(4)
|
Under
Mr. Fuller’s severance benefits agreement in effect as of
December 31, 2020, if Mr. Fuller’s employment is terminated
by the Company without cause or if he terminates his employment
with good reason, Mr. Fuller is entitled to (i) a lump sum
payment equal to 1.5 times Mr. Fuller’s annual base salary
(determined as the highest annual base salary paid to Mr. Fuller
while employed by the Company); (ii) continuation of AutoWeb
medical, dental, vision, life and disability insurance benefits for
Mr. Fuller and Mr. Fuller’s eligible dependents (at the time
of termination) for eighteen months; (iii) Mr. Fuller’s
annual incentive compensation plan payout for the annual incentive
compensation plan year in which date of termination occurred, based
on actual performance for the entire performance period and
prorated for the amount of time Mr. Fuller was employed by the
Company prior to the date of termination during such plan year; and
(iv) outplacement services for six months.
|
(5)
|
Assumes
that stock options unvested as of December 31, 2020 are not assumed
by acquiring entity and the vesting of these options is accelerated
immediately prior to a change in control.
|
Under
the employment or severance benefits agreements with each of the
named executive officers, “cause” will generally be deemed to
exist when the individual has been convicted of, or pled nolo
contendere to, a felony, has engaged in willful misconduct or gross
dishonesty that has a materially injurious effect on the
Company’s business or reputation, or has materially failed to
consistently discharge the officer’s duties for thirty days
after notice, subject to a cure period in some events;
“termination without
cause” will generally be deemed to occur if AutoWeb
terminates the named executive officer’s employment for any
reason other than cause or no reason at all, or the termination by
the executive officer for good reason. “Good reason” will generally exist
when the named executive officer’s duties and
responsibilities, compensation or benefits have been materially
decreased when the named executive officer has been required to
relocate; when the Company has breached the Company’s
agreement with the named executive officer; or a successor company
fails to assume the officer’s agreement following a change in
control. In general, a “change in control” of the Company
is deemed to occur if: (i) the Company sells all or
substantially all of the Company’s assets; (ii) as a
result of transactions a person or group becomes the beneficial
owner of more than 50% of the Common Stock; or (iii) a
majority of the Company’s directors in office are not
nominated for election or elected to the Board with the approval of
two-thirds of the directors who are in office just prior to the
time of such nomination or election.
Unvested stock
options may vest and the forfeiture restrictions on restricted
stock awards still subject to restrictions shall lapse upon:
(i) a termination of employment without cause by the Company
or for good reason by the named executive officer; or (ii) a
change in control if coupled with a termination of employment by
the Company without cause or by the named executive officer for
good reason or if the acquirer does not assume, retain or exchange
the options as provided in the applicable plan pursuant to which
the stock options were granted or the applicable stock option award
agreement. In the event of a change in control of the
Company prior to the determination of awards under the
Company’s then-current annual incentive compensation plan,
the Compensation Committee will determine the level of achievement
of the applicable plan for purposes of such officer’s awards
and the applicable award payouts, if any, as of the change in
control event.
Effective March 3,
2021, the severance benefits agreements for Messrs. Ingle and
Fuller were amended to provide that if the applicable
individual’s employment is terminated by the Company without
cause or if he terminates his employment with good reason, the
applicable individual is entitled to (i) a lump sum payment
equal to the applicable person’s severance period (which in
the case of Mr. Ingle is 12 months and in the case of Mr. Fuller is
18 months (“Applicable
Person’s Severance Period”) of the applicable
person’s annual base salary (determined as the highest annual
base salary paid to the applicable person while employed by the
Company); (ii) continuation of AutoWeb’s medical,
dental, vision, life and disability insurance benefits for the
applicable person and the applicable person’s eligible
dependents (at the time of termination) for the Applicable
Person’s Severance Period; and (iii) outplacement
services for the Applicable Person’s Severance Period. In
addition, the applicable person will be entitled to receive: (i) in
the case of a termination of employment by the Company without
cause or by the applicable person with good reason, and not in
connection with or within 18 months following a change in control
of the Company, a lump sum payment equal to the applicable
person’s annual incentive compensation payout under the
Company’s then-current annual incentive compensation plan
based on actual performance for the entire performance period,
prorated for the amount of time that the applicable person was
employed by the Company prior to the date of termination during
such performance period (“Actual Incentive Compensation
Payout”); or (ii) in the case of a termination of
employment by the Company without cause or by the applicable person
with good reason, and in connection with or within 18 months
following a change in control of the Company, a lump sum payment
equal to the applicable person’s annual incentive
compensation payout based on the applicable person’s annual
incentive compensation target payout, prorated for the amount of
time the applicable person was employed by the Company prior to the
date of termination during such performance period
(“Target Incentive
Compensation Payout”) plus, if the Actual Incentive
Compensation Payment is more than the Target Incentive Compensation
Payment, then the applicable person will receive an additional lump
sum payment equal to the difference between the Actual Incentive
Compensation Payment and the Target Incentive Compensation
Payment.
Director Compensation
The
following table provides summary information concerning
compensation paid or accrued by the Company to or on behalf of the
Company’s non-employee directors who served during the year
ended December 31, 2020.
2020 Director Compensation Table
Name
|
Fees Earned or
Paid in Cash
($)
|
|
Option Awards ($)(1)
|
|
Total
($)
|
Michael J. Fuchs
|
75,375
|
|
6,804(2)
|
|
82,179
|
Michael A. Carpenter
|
46,125
|
|
6,804(2)
|
|
52,929
|
Mark N. Kaplan
|
78,000
|
|
6,804(2)
|
|
84,804
|
Chan W. Galbato
|
48,125
|
|
6,804(2)
|
|
54,929
|
Janet M. Thompson
|
55,375
|
|
6,804(2)
|
|
62,179
|
(1)
|
The
dollar amounts listed do not necessarily reflect the dollar amounts
of compensation actually realized or that may be realized by the
Company’s directors. The option award amounts represent the
aggregate grant date fair value of the option awards, as estimated
for financial statement purposes in accordance with FASB ASC Topic
718. For additional information regarding assumptions
made in these valuations, refer to Note 10 of the “Notes
to Consolidated Financial Statements” in Part IV,
Item 15–Exhibits and Financial Statement Schedules of
the Company’s Annual Report on Form 10-K for the year
ended December 31, 2020, accompanying this Proxy
Statement.
|
(2)
|
10,000
option awards granted on June 18, 2020, at an exercise price of
$1.10 per share.
|
The
Company’s outside directors currently receive cash
compensation for service on the Board or any committee or
subcommittee thereof. These directors currently receive the
following fees: (i) annual fee of $35,000 payable
quarterly and (ii) $1,000 for each Board or committee meeting
attended, whether by phone or in person, with the Chairman of the
Board or committee, as applicable, receiving $2,000 for each such
meeting rather than $1,000. The Company also reimburses
directors for expenses incurred in connection with attendance at
Board and committee or subcommittee meetings. In addition to
the foregoing annual and meeting fees, each of the Chairman of the
Board and the Chairman of the Audit Committee is currently entitled
to a $25,000 annual retainer payable quarterly; the Chairman of the
Compensation Committee is entitled to a $10,000 annual retainer
payable quarterly; and the Chairman of the Corporate Governance and
Nominations Committee is entitled to a $5,000 annual retainer
payable quarterly. The retainers were established based on
market data provided by the Compensation Committee’s
Independent Compensation Consultant and an internal assessment of
the amount of time required to be devoted to Company
matters.
In
light of the financial impact of the COVID-19 pandemic on the
Company, the Board’s Compensation Committee approved a
temporary 50% reduction in the quarterly and meeting fees for the
Board’s independent outside directors. These temporary
reductions were in effect for the months of April, May and June
2020.
Annual
grants of 10,000 stock options were made to each non-employee
director. To receive these option grants, a director must be a
non-employee director at the time of grant. The option grant dates
were determined by the Board, but the Board generally has granted
options in conjunction with the Company’s annual meeting of
stockholders. Options awarded in 2020 have a term of seven
years and vest in equal monthly installments over a twelve-month
period commencing with the date of grant. The exercise price of
these options was no less than 100% of the fair market value per
share of Common Stock on the date of the grant of the
option. The annual grant of options to new non-employee
directors generally have been made upon joining the Board, with the
number of stock options granted being pro-rated for the year in
which the new director joins the Board based on the period of
service from the grant date to the date of the next annual
meeting.
Directors who are
also full-time employees or who are not otherwise deemed to be
independent outside directors do not receive stock options or other
compensation for their service as directors. Neither Mr. de Tezanos
nor Mr. Vargas received any stock options or other compensation for
their service as directors.
Equity Compensation Plans
The
following table summarizes information, as of December 31, 2020,
relating to the Company’s equity compensation plans pursuant
to which the Common Stock may be issued (or that have options
outstanding under expired or terminated plans).
|
Number of securities
to be issued upon
exercise of outstanding
options and rights
|
Weighted-average
exercise price of
outstanding options
and rights
|
Number of
securities remaining
available for
future issuance
under equity
compensation
plans (excluding
securities reflected
in column (a))
|
Plan Category
|
|
|
|
Equity compensation plans approved by
stockholders (1)
|
2,347,003
|
$5.68
|
2,497,070
|
Equity compensation plans not approved by
stockholders (2)
|
1,411,667
|
$3.12
|
—
|
Total
|
3,758,670
|
$4.26
|
2,497,070
|
(1)
|
Includes
the Company’s 2010 Equity Incentive Plan, Amended and
Restated 2014 Equity Incentive Plan, and the 2018 Equity Incentive
Plan. Only the 2018 Plan is currently available for future stock
option or other equity-based awards.
|
(2)
|
Includes
(i)1,000,000
inducement stock options granted to Mr. Jared R. Rowe, the
Company’s President and Chief Executive Officer, under an
Inducement Stock Option Agreement dated April 12, 2018, which
options expire April 12, 2025; (ii) 50,000 inducement stock options
granted to Ms. Sara E. Partin, the Company’s Senior Vice
President, Chief People Officer, under Inducement Stock Option
Agreements dated October 22, 2018, which options expire October 22,
2025; (iii) 165,000 inducement stock options granted to Mr. Daniel
R. Ingle, the Company’s Executive Vice President, Chief
Operating Officer, under an Inducement Stock Option Agreement dated
January 16, 2019, which options expire January 16, 2026; (iv)
120,000 inducement stock options granted to Mr. Michael Sadowski,
the Company’s Executive Vice President, Chief Financial
Officer, under an Inducement Stock Option Agreement dated November
30, 2020, which options expire November 30, 2027; and (v) 76,667
inducement stock options granted to Mr. Joseph P. Hannan, the
Company’s former Executive Vice President, Chief Financial
Officer, under an Inducement Stock Option Agreement dated December
17, 2018, all of which were exercised by Mr. Hannan prior to the
date of this Proxy Statement.
|
|
|
The
Compensation Committee of the Board and the Board approved the
grants of the stock options to acquire shares of the
Company’s Common Stock to the individuals referenced in
Footnote 2 to the Equity Compensation Plans table above, at an
exercise price equal to the closing price of the Common Stock on
The Nasdaq Capital Market on the day the individual commenced
employment with the Company (“Grant Date”). The options were
granted as inducement options under Nasdaq governance rules and
have a term of seven years. One-third of the options vest on the
first anniversary of the Grant Date and one thirty-sixth of the
options shall vest on each successive monthly anniversary of the
Grant Date for the following twenty-four months, except for Mr.
Rowe’s grant which vests in 36 monthly installments on the
first day of each calendar month following the April 12, 2018 grant
date. Vesting of the options will accelerate upon the occurrence of
certain events, including upon a change in control of the Company
or upon a termination of the individual’s employment by the
Company without cause or by the individual for good reason, as set
forth in each individual’s employment or severance benefit
agreement.
TRANSACTION OF OTHER BUSINESS AT ANNUAL MEETING
As of
the date of this Proxy Statement, the Board does not presently
intend to present any other matter for action at the Annual Meeting
and no stockholder has given timely notice in accordance with the
Company’s Bylaws of any matter that it intends to be brought
before the meeting. Should any other matters arise
requiring the vote of stockholders, it is intended that proxies
will be voted in respect thereto in accordance with the best
judgment of the person or persons voting the proxies.
FUTURE STOCKHOLDER NOMINATIONS AND PROPOSALS
In
order to be included in AutoWeb’s proxy materials for the
2022 annual meeting of stockholders, any proposal must be received
no later than December 31, 2021 and otherwise comply with the
requirements of Rule 14a-8 of the Exchange Act.
In
addition, the Bylaws establish advance notice procedures with
regard to stockholder nominations for the election of directors or
other business to be properly brought before an annual
meeting. For nominations or other business to be properly
brought before the meeting by a stockholder, a stockholder must
provide written notice delivered to the Corporate Secretary of
AutoWeb no less than 90 nor more than 120 days prior to the
anniversary date of the immediately preceding annual
meeting. The notice must contain specified information and
representations concerning the stockholder (and the beneficial
owner, if any, on whose behalf the nomination or proposal is made),
the nominee(s) or other business. However, in the event that
the date of the annual meeting is more than 30 days before or more
than 70 days after such anniversary date, the stockholder must
deliver the notice not earlier than the close of business on the
120th day prior to such annual meeting and not later than the close
of business on the later of the 90th day prior to such annual
meeting or the 10th day following the day on which public
announcement of the date of such meeting is first made by
AutoWeb. Notwithstanding compliance with the foregoing advance
notice provisions, unless required by applicable law, if the
stockholder (or a qualified representative of the stockholder) does
not appear at the annual meeting to present the nomination or other
business, the nomination will be disregarded and other business
will not be transacted, notwithstanding that proxies in respect of
the nomination or other business may have been received by
AutoWeb. All notices of nominations or proposals by
stockholders, whether or not to be included in AutoWeb’s
proxy materials, should be sent to AutoWeb, Inc., 400 North Ashley
Drive, Suite 300, Tampa, Florida 33602, Attention: Corporate
Secretary. A copy of the full text of the provisions of the
Bylaws discussed above may be obtained by writing to the Corporate
Secretary of AutoWeb.
AutoWeb
reserves the right to reject, rule out of order or take other
appropriate action with respect to any nominations or proposals
that do not comply with these and other applicable
requirements.
Because
AutoWeb did not have timely notice of any other matters to be
brought before the Annual Meeting, the enclosed proxy card confers
discretionary authority to vote on any other matters that may be
presented at the meeting.
Please
return your proxy as soon as possible. Unless a quorum
consisting of a majority of the outstanding shares entitled to vote
is represented at the meeting, no business can be
transacted. Therefore, please be sure to complete, date and
sign your proxy exactly as your name appears on your proxy, and
return it in the enclosed prepaid return envelope. Prior to the
Voting Instructions Cutoff Time, stockholders may also provide
voting instructions using the Internet at www.proxyvote.com
or by calling 1.800.690.6903 as described in this Proxy Statement
and accompanying proxy card. Please act promptly to ensure
that you will be represented at the Annual Meeting.
April
23, 2021
|
By
Order of the Board of Directors
|
|
Glenn
E. Fuller
Executive Vice President,
Chief Legal Officer and Secretary
|