Intellinetics Inc

This management proposal asks shareholders to approve an amendment that substantially increases the share reserve under the Company’s 2024 Equity Incentive Plan from 243,122 shares to 917,157 shares and to raise the cap on Incentive Stock Options to the same 917,157-share level. Management and the Compensation Committee argue the increase is necessary because the 2024 Plan is the Company’s principal vehicle for equity-based compensation and, as of the record date, only a small number of shares remained available under the existing cap; without approval the Company could be constrained in granting competitive equity awards for recruiting, retention and long-term incentive purposes. The filing explains the types of awards authorized under the plan (stock options, SARs, restricted stock, RSUs, performance awards and other equity-based awards), describes administration by the Compensation Committee, and highlights anti-repricing protections and change-in-control acceleration features. The amendment will not take effect unless and until approved by shareholders and the Company has stated it will not grant awards from the additional pool prior to approval. From a governance perspective, the increase is material because it dilutes existing shareholders if and when additional awards are issued; the Company attempts to mitigate concerns by describing how awards are counted, limited ISO annual caps per participant and by committing to Compensation Committee oversight of grant decisions. The proposal also includes customary tax, Section 409A and amendment/adjustment provisions; it emphasizes that Equity Plan awards are granted at the Committee’s discretion and that specific future grants and recipients are not pre-determined. The Board’s unanimous recommendation to vote FOR is driven by the Committee’s view that equity awards are a critical tool to align management and employee interests with long-term shareholder value and to attract talent in a competitive market. Investors assessing this proposal should weigh the dilution risk from nearly quadrupling the reserve against the Company’s stated need to preserve flexibility for incentive compensation tied to long-term performance and retention objectives.

Proposal 3 seeks shareholder approval to increase the pool of shares available under the Company’s 2023 Non-Employee Director Compensation Plan from 150,000 to 302,863 to ensure continued equity compensation capacity for non-employee directors. The Company frames the change as necessary for director recruitment, retention and alignment with shareholder interests and notes that historically director awards have been granted as non-qualified stock options under this plan. The Compensation Committee administers the plan and sets grant levels; the proxy discloses current director annual option grants (4,500 options per director, plus 4,500 additional for the Board Chair) and lists existing outstanding director awards, providing visibility into current dilution and usage. The amendment would double the director pool, which could lead to shareholder dilution concentrated among board-level awards rather than employee broad-based programs; the filing states no awards will be made under the increased reserve until shareholder approval and that the Committee retains discretion on timing and recipients. From a governance perspective, investors should evaluate whether the proposed expansion is justified by board composition/staffing needs and whether existing director compensation policy is sufficiently calibrated to limit unnecessary dilution or excessive pay. The Board’s unanimous recommendation to vote FOR reflects its view that equity awards are a key tool for aligning directors with long-term stockholder value. Analytically, the proposal is less contentious than broad employee plan increases because it targets non-employee director compensation specifically, but it still raises dilution questions that investors should compare against peer practices and the Company’s overall equity usage and dilution history.

This is a standard non-binding say-on-pay proposal asking shareholders to approve the Company’s named executive officer compensation as disclosed in the proxy, including the Summary Compensation Table and related disclosures. Management emphasizes a pay-for-performance philosophy combining base salary, annual performance-based cash bonuses tied to corporate and individual goals, and periodic equity awards to align executives’ interests with long-term shareholder value while discouraging excessive risk-taking. The proxy highlights governance safeguards such as independent members on the Compensation Committee, meaningful stock ownership by executives and directors, and no tax gross-ups for executive pay, which management cites in support of the program. The proposal is advisory — the Board and Compensation Committee will consider the vote’s outcome but are not legally bound by it — and the proxy states the Company will consider shareholder feedback when setting future compensation. For institutional investors, relevant evaluation points include the balance between cash and equity incentives, the clarity and rigor of performance metrics (management cites Adjusted EBITDA among measures), recent compensation trends (including equity usage), and whether realized pay has correlated with long-term performance. The Board’s unanimous recommendation to vote FOR signals that the committee views current pay practices as appropriate and aligned with strategy; however, investors concerned about dilution or specific pay decisions should review the detailed compensation tables and the Pay Versus Performance disclosure. Given the advisory nature, a decisive negative vote would likely trigger a more substantive management response, while an affirmative vote supports continuity in current compensation arrangements.

Proposal 5 asks shareholders to indicate their preferred frequency for future advisory say-on-pay votes — annual, biennial or triennial — with the Company’s Board recommending a triennial vote. The Board’s rationale is that the Company’s compensation program is oriented toward long-term performance and that three-year intervals allow sufficient time to implement and evaluate changes in compensation design and measure outcomes meaningfully, rather than reacting to single-year fluctuations. Management also notes ongoing engagement with shareholders between advisory votes so the say-on-frequency vote is one element of investor communication, not the sole mechanism for feedback. From a governance perspective, institutional investors often prefer annual votes to increase responsiveness and accountability, while some issuers argue multi-year votes reduce short-termism and give boards time to implement strategic changes. A vote selecting the option with the plurality of votes will be treated as the preferred frequency by the Company, but it will remain advisory and non-binding; the Board says it will consider the outcome when setting policy. Analysts evaluating this item should weigh the Company’s long-term compensation structures (e.g., multi-year equity vesting, performance metrics) and recent responsiveness to shareholder feedback against investor preferences for frequency and accountability. The Board’s explicit recommendation for three years should be considered alongside the firm’s track record on compensation responsiveness and the level of shareholder engagement the Company demonstrates between advisory votes.