UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
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| IEC Electronics Corp. |
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IEC ELECTRONICS CORP.
105 NORTON STREET
NEWARK, NEW YORK 14513
(315) 331-7742
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On
March 7, 201711, 2020
Dear Stockholder:
You are cordially invited to attend the annual meetingAnnual Meeting of stockholdersStockholders (the “Annual Meeting”) of IEC Electronics Corp.The meeting will be held on Tuesday,Wednesday, March 7, 201711, 2020 at 9:10:00 a.m. (local time) at(Eastern Time). The Annual Meeting will be conducted as a virtual meeting of stockholders by means of a live webcast. We believe that hosting a virtual meeting enables greater stockholder attendance and participation from any location. You will not be able to attend the offices of Harter Secrest & Emery LLP located at 1600 Bausch & Lomb Place, 13th Floor, Rochester, New York,Annual Meeting in person. You will be able to attend the Annual Meeting, vote your shares electronically, and submit your questions during the meeting via the internet by visiting www.virtualshareholdermeeting.com/IEC2020.
The Annual Meeting is being held for the following purposes:
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| 1. | To elect seven (7)six (6) directors to serve until the 20182021 Annual Meeting of Stockholders or until their successors are duly elected and qualified.qualified; |
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| 2. | To ratify the selection of Crowe HorwathDeloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2017.2020; |
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| 3. | To approve, on an advisory basis, the compensation paid to our named executive officers (“say-on-pay”).; and |
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| 4. | To transact such other business as may properly come before the meeting or any adjournment thereof. |
The record date for the annual meetingAnnual Meeting is January 13, 2017.14, 2020. Only stockholders at the close of business on that date may vote at the annual meetingAnnual Meeting or any adjournment thereof.
Your vote is important. Whether or not you expect to attend the meeting, please complete, date, sign and return the enclosed proxy card as promptly as possible in order to ensure your representation at the meeting. Your vote is important, no matter how many shares you owned on the record date. A return envelope is enclosed for your convenience and needs no postage if mailedparticipate in the United States.Annual Meeting, we hope you will vote as soon as possible. You may also vote by the internet or by telephone, or, Internet by following the instructions onif you received paper copies of the proxy card.materials by mail, by mailing a proxy card or voting instruction form. We encourage you to vote using the internet, as it is the most cost-effective way to vote. Even if you have voted by proxy card,internet, telephone or Internet,proxy card, you may still vote in personelectronically if you attend the virtual meeting. Please note, however,
We are following the Securities and Exchange Commission’s “e-proxy” rules that if your shares are heldallow public companies to furnish proxy materials to stockholders over the internet. The “e-proxy” rules remove the requirement for public companies to automatically send stockholders a full, printed copy of record byproxy materials and allow them instead to deliver to their stockholders a broker, bank or other nomineeNotice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) and to provide online access to the documents. The Notice of Internet Availability provides instructions on how to view our proxy materials for the Annual Meeting on the internet and vote, and request a printed copy of the proxy materials. These “e-proxy” rules allow us to provide you wish to vote atwith the meeting,information you must obtain a legal proxy from that record holder.need, while lowering the cost of delivery and reducing the environmental impact of our Annual Meeting.
Dated: January 26, 201723, 2020 By Order of the Board of Directors
Newark, New York Jennifer M. Brown, Corporate Secretary
Jeffrey T. Schlarbaum, President and Chief Executive Officer
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MARCH 7, 2017.11, 2020
Our proxy statement and Annual Report to Stockholders which are enclosed with this mailing, are also available online at www.proxyvote.com |
TABLE OF CONTENTS
IEC Electronics Corp.
105 Norton Street
Newark, New York 14513
(315) 331-7742
Proxy Statement
For 2017the 2020 Annual Meeting of Stockholders
QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why am I receiving these materials?
We are sending you this proxy statement and the enclosed proxy card because theThe board of directors of IEC Electronics Corp. (“IEC,” the “Company,” “we,” “our,” or “us”) is providing these proxy materials to you on the internet, or has delivered printed versions to you by mail, and is soliciting your proxy to vote at the 2017 annual meeting2020 Annual Meeting of stockholdersStockholders (the “Annual Meeting”) and any adjournment or postponement thereof. The Annual Meeting will be held on Wednesday, March 11, 2020 at 10:00 a.m. (Eastern Time). The Annual Meeting will be conducted as a virtual meeting of stockholders by means of a live webcast. We believe that hosting a virtual meeting will enable greater stockholder attendance and participation from any location. You will be able to attend the Annual Meeting, vote your shares, and submit your questions during the meeting via the internet by visiting www.virtualshareholdermeeting.com/IEC2020. There will not be a physical meeting location and you will not be able to attend in person. We invite you to attend the annual meetingAnnual Meeting and request that you vote on the proposals described in this proxy statement. The meeting will be held on Tuesday, March 7, 2017 at 9:00 a.m. (local time) at the offices of Harter Secrest & Emery LLP located at 1600 Bausch & Lomb Place, 13th Floor, Rochester, New York. To obtain directions to be able to attend the annual meeting and vote in person, please contact our Corporate Secretary, Jennifer Brown at (315) 331-7742. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, date, sign and return the enclosed proxy card, or vote by internet, telephone or Internet following the instructions on theby completing and mailing your proxy card.
We are mailing thismaking these proxy statement, the accompanyingmaterials available to you on or about January 23, 2020.
What is included in these proxy card, and ourmaterials?
These proxy materials include:
Our Annual Report to Stockholders for the fiscal year ended September 30, 20162019 (“Fiscal 2016”2019”) on or about January 26, 2017 to all stockholders entitled to vote at; and
Notice of the annual meeting.2020 Annual Meeting and proxy statement.
If you request and receive printed versions of the proxy materials by mail, these proxy materials also include a copy of the proxy card.
What am I voting on?
There are three matters scheduled for a vote, and the board of directors recommends that you vote “FOR” each of the Proposals:vote:
Proposal 1: the election of sevensix (6) directors to serve until the 20182021 Annual Meeting of Stockholders or until their successors are duly elected and qualified,qualified;
Proposal 2: the ratification of the selection of Crowe HorwathDeloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2017,2020; and
Proposal 3: an advisory vote to approve the compensation paid to our named executive officers (“say-on-pay”).
Our board of directors recommends that you vote “FOR” each of proposals 1, 2 and 3.
Our board of directors does not intend to bring any other matters before the meeting and is not aware of anyone else who will submit any other matters to be voted on. However, if any other matters properly come before the meeting, the people named on the proxy card,appointed as proxies, or their substitutes, will be authorized to vote on those matters in their own judgment.
Who can vote at the annual meeting?Annual Meeting?
Only stockholders at the close of business on January 13, 2017,14, 2020, the record date for the annual meeting,Annual Meeting, will be entitled to vote at the annual meeting.Annual Meeting. As of the record date, there were 10,277,04710,452,340 shares of common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
Name. If on January 13, 2017,14, 2020, your shares of IEC common stock were registered directly in your name with our transfer agent, Computershare, then you are a stockholder of record.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
Bank. If on January 13, 2017,14, 2020, your shares of IEC common stock were held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the annual meeting.Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the annual meeting.Annual Meeting. For instructions on how to vote your shares at the annual meeting,Annual Meeting, see “How“How do I vote?vote?” below.
Can I attend the Annual Meeting in person?
We will be hosting the Annual Meeting only by means of a live webcast. You will not be able to attend the meeting in person. Please be assured that you will be afforded the same rights and opportunities to participate in the virtual meeting as you would at an in-person meeting. You will be able to listen to the Annual Meeting, submit questions and vote by going to www.virtualshareholdermeeting.com/IEC2020. If you wish to listen to the Annual Meeting, but do not wish to submit questions or vote during the Annual Meeting, you may go to www.virtualshareholdermeeting.com/IEC2020 and log in as a guest.
The Annual Meeting webcast will start at 10:00 a.m. (Eastern Time) on Wednesday, March 11, 2020. We encourage you to access the meeting website prior to the start time to allow time for check in. If you encounter any technical difficulties with the virtual meeting platform on the meeting day, please call (315) 332-4559 for our technical support.
How do I register to attend the Annual Meeting?
You do not need to register to attend the Annual Meeting webcast. Follow the instructions on your Notice of Internet Availability of Proxy Materials (the "Notice of Internet Availability") or proxy card (if you received a printed copy of the proxy materials) to access the Annual Meeting. See “Can I attend the Annual Meeting in person?” above.
How can I submit a question at the Annual Meeting?
If you wish to submit a question the day of the Annual Meeting you may log into the virtual meeting platform at www.virtualshareholdermeeting.com/IEC2020, type your question into the “Ask a Question” field, and click “Submit.”
Questions pertinent to meeting matters will be answered during the Annual Meeting, subject to time constraints. Questions regarding personal matters, including those related to employment, are not pertinent to Annual Meeting matters and therefore will not be answered.
Why did I receive a one-page notice in the mail regarding the internet availability of proxy materials instead of a full set of proxy materials?
We are following the Securities and Exchange Commission’s (the “SEC”) “e-proxy” rules that allow public companies to furnish proxy materials to stockholders over the internet. The “e-proxy” rules remove the requirement for public companies to automatically send stockholders a full, printed copy of proxy materials and allow them instead to deliver to their stockholders a Notice of Internet Availability of Proxy Materials and to provide online access to the documents. As a result, we mailed the Notice of Internet Availability to many of our stockholders on or about January 23, 2020.
The Notice of Internet Availability provides instructions on how to:
View our proxy materials for the Annual Meeting on the internet and vote; and
Request a printed copy of the proxy materials.
In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. Choosing to receive your future proxy materials by e-mail will save us the cost of printing and mailing documents to you and will reduce the environmental impact of printed materials.
Where can I view the proxy materials on the internet?
We are making this proxy statement and voting instructions available to stockholders on or about January 23, 2020, at www.proxyvote.com. We are also making our 2019 Annual Report on Form 10-K available at the same time and by the same method. The 2019 Annual Report on Form 10-K is not a part of the proxy solicitation material and is not incorporated herein by reference.
How can I receive a printed copy of the proxy materials, including the annual report?
Stockholder of Record. You may request a printed copy of the proxy materials by any of the following methods:
Telephone: call toll-free at 1-800-579-1639;
Internet at www.proxyvote.com; or
E-mail at sendmaterial@proxyvote.com. If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the arrow on the Notice of Internet Availability included in the subject line.
Beneficial Owner. You may request a printed copy of the proxy materials by following the instructions provided to you by your broker, bank or nominee.
How do I vote?
The procedures for voting are set forth below:
Stockholder of Record: Shares Registered in Your Name
Name. If you are a stockholder of record, there are four ways to vote:
By internet at www.proxyvote.com. We encourage you mayto vote in personthis way.
By touch tone telephone: call toll-free at 1-800-690-6903.
By completing and mailing your proxy card.
At the Annual Meeting: instructions on how to vote during the Annual Meeting webcast are posted at www.virtualshareholdermeeting.com/IEC2020. Votes submitted during the Annual Meeting must be received no later than the closing of the polls at the annual meeting or vote by proxy using the enclosed proxy card. Annual Meeting.
Whether or not you plan to attend the meeting, we urge you to vote by submitting the proxy card, or following the telephone or Internet voting instructions on it to ensure your vote is counted. You may still attend the meeting and vote in personyour shares if you have already voted by proxy.
To vote in person, come to the annual meeting with photo identification and we will give you a ballot when you arrive.
To vote using the proxy card, simply complete, date and sign the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the annual meeting, we will vote your shares as you direct.
To vote by telephone or Internet, follow the instructions on the proxy card and the people named as a proxy holder on the proxy card will vote your shares as you direct. You will need your unique control number printed on the proxy card to vote by telephone or Internet.
Only the latest proxy you submit will be counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
Bank. If you hold your shares in “street name” as a beneficial owner of shares registered in the name of your broker, bank or other agentnominee (“broker”), you must vote your shares in the manner prescribed by your broker. Your broker has enclosed or otherwise provided a voting instruction card for you to use in directing the broker how to vote your shares. Check the voting instruction card used by that organization to see if it offers Internetinternet or telephone voting. To
Instead of directing your broker how to vote in personyour shares, you may elect to attend the Annual Meeting and vote your shares during the meeting. Instructions on how to vote during the Annual Meeting webcast are posted at www.virtualshareholdermeeting.com/IEC2020. Votes submitted during the Annual Meeting must be received no later than the closing of the polls at the annual meeting, you must present photo identification and a legal proxy from your broker. Contact your broker to request a voting instruction card or a legal proxy to vote in person at the annual meeting.Annual Meeting.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you owned as of January 13, 2017,14, 2020, the record date for the annual meeting.Annual Meeting.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the issued and outstanding shares entitled to vote are present at the meeting. Your shares are counted as present at the meeting if:
You are present and vote in person at the meeting;
You have voted by internet or telephone;
You have properly submitted a proxy card; or
You have voted by telephone or Internet; or
If your shares are held in street name, a proxy card is submitted by your broker has voted based on your instructions or voted by your broker has voted on a discretionary item.
Additionally, abstentionsAbstentions and broker non-votes on discretionarynon-discretionary items will be counted towards the quorum requirement. If there is no quorum, a majority of the shares present at the meeting and entitled to vote may adjourn the meeting to another date.
How are votes counted?
You may either vote “FOR” or “WITHHOLD” authority to vote for our nominees for the board of directors in Proposal 1, or you may withhold authority to vote for a particular nominee by voting “FOR ALL EXCEPT” and writing the number of one or more nominees in the designated space on the proxy card.1. You may vote “FOR”,“FOR,” “AGAINST” or “ABSTAIN” on Proposal 2 (ratification of the selection of our independent public accounting firm) and Proposal 3 (advisory vote to approve the compensation paid to our named executive officers).
If you submit your proxy but abstain from voting or withhold authority to vote on one or more matters, your shares will be counted as present at the meeting for the purpose of determining a quorum. Your shares also will be counted as present at the meeting for the purpose of calculating the required vote on the particular matter with respect to which you abstained from voting or withheld authority to vote.
If you hold your shares in street name and do not provide voting instructions to your broker, your broker may still be able to vote your shares with respect to certain “discretionary” (or routine) items, but it will not be allowed to vote your shares with respect to certain “non-discretionary” items. In the case of non-discretionary items, for which no instructions are received, the shares will be treated as “broker non-votes”.non-votes.” Shares that constitute broker non-votes will be counted as present at the meeting for the purpose of determining a quorum. A broker will have discretionary authority to vote on Proposal 2 relating to the ratification of the selection of our independent accounting firm, but will not have discretionary authority to vote on any other matter. As a result, if you do not vote your street name shares, your broker has the authority to vote on your behalf with respect to Proposal 2 (the ratification of the selection of the accounting firm), but not with respect to Proposal 1 (the election of directors) and Proposal 3 (advisory vote to approve the compensation paid to our named executive officers). We encourage you to provide instructions to your broker to vote your shares on ProposalProposals 1 and Proposal 3.
Who counts the votes?
Broadridge Financial Solutions has been appointed inspector of election by the Company and will tabulate votes at the annual meeting.Annual Meeting.
How many votes are needed to approve each Proposal?proposal and what are the recommendations of our board of directors?
Proposal 1 – Election of directorsdirectors:
The outcome of this vote will be determined by a plurality of the votes cast.cast at the Annual Meeting. This means that the sevensix director nominees with the most affirmative votes will be elected. Withheld votes and broker non-votes will have no effect on the outcome of the election of directors.The board recommends a vote FOR the election of all of the nominated directors.
Proposal 2 – Ratification of the selection of Crowe HorwathDeloitte & Touche LLP as the independent registered public accounting firm of the Company for the fiscal year ending September 30, 2017
Proposal 32020: – Advisory vote to approve the compensation paid to our named executive officers
Approval of each of Proposal 2 and Proposal 3 requires the affirmative vote of a majority of the shares present in person or by proxy at the meeting and entitled to vote at the meeting.thereon. Abstentions are counted and have the effect of a vote against these proposals,this proposal, because abstentions are deemed to be present and entitled to vote but are not counted toward the affirmative vote required to approve such proposal. BrokerSince brokers have authority to vote on your behalf with respect to Proposal 2, there will be no broker non-votes will count as votes against Proposal 3.
What if I return a proxy card but do not make specific choices? What are the recommendations of our board of directors?
If you return a signed and dated proxy card without marking any voting selections, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the board of directors. The board’s recommendation is set forth below together with the description of each proposal infor this proxy statement. In summary, theproposal. The board recommends a vote:
vote FOR election of all of the nominated directors (see Proposal 1);
FOR ratification of Crowe HorwathDeloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2017 (see Proposal 2); and2020.
FORProposal 3 – Advisory vote to approve the compensation paid to our named executive officers: In this non-binding advisory vote, stockholders are asked to vote with respect to the current compensation practices and policies as they apply to our named executive officers, and as more fully described in this proxy statement. Approval of this proposal requires the affirmative vote of a majority of the shares present in person or by proxy at the meeting and entitled to vote thereon. The results of the vote will be taken under advisement by the board of directors in its future consideration and development of our compensation practices. Abstentions are counted and have the effect of a vote against this proposal. Broker non-votes are not counted and will not impact the outcome of the vote on this proposal. The board recommends a vote FOR approval of the compensation paid to our named executive officers (see Proposal 3).
What happens if I do not give specific voting instructions?
Stockholder of Record. If you are a stockholder of record and you:
Indicate when voting on the internet or by telephone that you wish to vote as recommended by our board, or
Sign and return a signedproxy card without giving specific voting instructions,
then the named proxies will vote your shares in the manner recommended by our board (i.e. FOR each of the director nominees named in Proposal 1, and dated proxy card,FOR Proposals 2 and 3) and in their discretion with respect to any other matter thatmatters properly comes beforepresented for a vote at the meeting, the proxy holders will vote as recommended by the board of directorsAnnual Meeting.
Beneficial Owner. If you do not provide your broker with specific voting instructions, or if no recommendationyou do not obtain a legal proxy that gives you the right to vote the shares at the Annual Meeting, your shares will not be voted or counted with respect to Proposals 1 and 3 which are non-routine proposals. Your broker has discretionary authority to vote your uninstructed shares with respect to Proposal 2, which is given, in their own discretion.a routine proposal.
Can I change my vote after submittingor revoke my proxy?
Yes. You can change your vote or revoke your proxy at any time before the final voteclosing of the polls at the meeting. If you are a stockholder of record, you may change your vote or revoke your proxy in any one of three ways:by:
You may submitSubmitting a later-dated vote by internet or telephone (only your latest internet or telephone vote will be counted);
Submitting another properly completed, later-dated proxy card, or vote by telephone or Internet.card;
You may sendSending a written notice that you are revoking your proxy to: Corporate Secretary, IEC Electronics Corp., 105 Norton Street, Newark, New York 14513.14513, which must be received no later than March 10, 2020; or
You may attendParticipating in the annualAnnual Meeting webcast and voting during the meeting. Attending the meeting and vote in person. Attendingwithout voting during the meeting will not, by itself, revoke a previously submitted proxy unless you specifically request your proxy.prior proxy be revoked.
If you hold your shares in street name, contact your broker or other organization regarding how to revoke your instructions and change your vote. You may change your vote by submitting a later-dated vote on the internet or by telephone or by participating in the Annual Meeting webcast and by submitting a later vote during the meeting.
How can I find out the voting results of the annual meeting?Annual Meeting?
Preliminary voting results will be announced at the annual meeting.Annual Meeting. Final voting results will be published in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission (“SEC”)SEC within four business days after the annual meeting.Annual Meeting.
What does it mean if I receive more than one proxy cardNotice of Internet Availability or voting instruction card?
If you receive more than one proxy cardNotice of Internet Availability or voting instruction card, your shares are registered in more than one name or are registered in different accounts. Please complete, date, sign and returnvote using each proxy cardNotice of Internet Availability or voting instruction card to ensure that all of your shares are voted.
Who is paying for this proxy solicitation?
IECWe will pay for the entire cost of soliciting proxies. In addition to these mailedthe posting or mailing of the proxy materials, our directors, officers and employees also may solicit proxies in person, by telephone, by email or by other means of communication. We will not pay our directors, officers and employees any additional compensation for soliciting proxies. IEC hasWe have requested banks, brokerage houses and other custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the shares they hold of record. IECWe will reimburse these record holders for their reasonable out-of-pocket expenses in so doing.
When are stockholder proposals and director nominations due for next year’s annual meeting?Annual Meeting?
At our annual meetingAnnual Meeting each year, our board of directors submits to stockholders its nominees for election as directors. In addition, the board of directors may submit other matters to the stockholders for action at the annual meeting.Annual Meeting.
Our stockholders may submit proposals for inclusion in the proxy materials. These proposals must satisfy the requirements of Rule 14a-8 of the Securities Exchange Act of 1934, as amended.amended (the “Exchange Act”). To be considered for inclusion in next
year’s proxy materials, you must submit your proposal in writing by September 28, 201725, 2020 to our Corporate Secretary, IEC Electronics Corp., 105 Norton Street, Newark, New York 14513.
In addition, our by-lawsbylaws provide that a stockholder may present from the floor a proposal that is not included in the proxy statement if the stockholder delivers written notice to our Corporate Secretary not less than 90 days before the date of the meeting. The notice must set forth your name address and number of shares of stock you hold,address, a representation that you are a holder of record of our stock entitled to vote at the meeting and you intend to appear in person or by proxy at the meeting to make the proposal, and a description of the business to be brought before the meeting.meeting, and such other information regarding the proposal as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the SEC. We have received no such notice for the 2017 annual meeting.2020 Annual Meeting. Assuming a date of March 7, 201811, 2021 for our 20182021 annual meeting of stockholders, written notice must be delivered to our Corporate Secretary at our principal office, 105 Norton Street, Newark, New York 14513, no later than December 7, 2017.11, 2020.
Our by-lawsbylaws also provide that if a stockholder intends to nominate a candidate for election as a director at the annual meeting,Annual Meeting, the stockholder must deliver written notice of such intent to our Corporate Secretary. The notice must be delivered not less than 90 days before the date of a meeting of stockholders. The notice must set forth your name and address, the name and address of
the person to be nominated, a representation that you are a holder of record of stock entitled to vote at the meeting, a representation that you intend to appear in person or by proxy at the meeting to nominate the person specified in the notice, a description of all arrangements or understandings between such stockholder and each nominee and any other person (naming such person) pursuant to which the nomination is to be made by such stockholder, the nominee’s business address and experience during the past five years, any other directorships held by the nominee, the nominee’s involvement in certain legal proceedings during the past ten years and such other information concerning the nominee as would be required to be included in a proxy statement soliciting proxies for the election of the nominee. In addition, the notice must include the consent of the nominee to serve as a director if elected. Assuming a date of March 7, 201811, 2021 for our 20182021 annual meeting of stockholders, written notice of a nomination must be delivered to our Corporate Secretary at our principal office, 105 Norton Street, Newark, New York 14513 no later than December 7, 2017.11, 2020.
SECURITY OWNERSIPOWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below presents certain information as of January 13, 201714, 2020 about the persons known by us to be the record or beneficial owner of more than 5% of our common stock. Percentages are based on 10,277,04710,452,340 shares issued and outstanding.
| | | Name and Address of Beneficial Owner | Number of Shares
of Common Stock
Beneficially Owned | | Percent
of
Class | | Number of Shares
of Common Stock
Beneficially Owned | | Percent
of
Class |
Vintage Capital Management, LLC, et al
4705 S. Apopka Vineland Road, Suite 210
Orlando, Florida 32819 | 1,016,694 | (1) | 9.89 | % | | 1,016,694 |
| (1) | 9.73 | % |
Tocqueville Asset Management L.P.
40 West 57th Street, 19th Floor
New York, New York 10019 | 719,000 | (2) | 7.00 | % | |
Clayton Partners LLC
3160 College Avenue, Suite 203
Berkeley, CA 94705 | | | 817,431 |
| (2) | 7.82 | % |
Punch & Associates Investment Management, Inc.
7701 France Ave. So., Suite 300
Edina, MN 55435 | | | 545,200 |
| (3) | 5.22 | % |
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(1) | This information as to the beneficial ownership of shares of our common stock is based on an amendment to Schedule 13D dated February 2, 2015 filed with the SEC by Vintage Capital Management, LLC (“Vintage Capital”), Kahn Capital Management, LLC (“Kahn Capital”), a member and majority owner of Vintage Capital, and Brian R. Kahn, manager of each of Vintage Capital and Kahn Capital, and subsequent Section 16 reports filed with the SEC by Andrew M. Laurence, a partner of Vintage Capital, and Jeremy R. Nowak, a partner and Chief Operating Officer of Vintage Capital, that indicate that the 1,016,694 shares are held by Vintage Opportunity Partners LP, an affiliate of Vintage Capital. Vintage Capital, Kahn Capital Management, LLC and Brian R. Kahn each report shared voting and shared dispositive power with respect to all 1,016,694 shares. The amount indicated does not include shares directly held by Messrs. Laurence and Nowak. |
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(2) | This information as to the beneficial ownership of shares of our common stock is based on thean amendment to Schedule 13G dated December 31, 20152018 filed with the SEC by Tocqueville Asset Management L.P.Clayton Partners LLC (“Clayton Partners”), an investment adviser. Tocqueville Asset Management L.P. reportswhich indicated that Clayton Partners holds sole voting and sole dispositive power with respect to all 719,000these shares. |
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(3) | This information as to the beneficial ownership of shares of our common stock is based on a Schedule 13G dated December 31, 2018 filed with the SEC by Punch & Associates Investment Management, Inc. (“Punch & Associates”), which indicated that Punch & Associates holds sole voting and dispositive power with respect to these shares. |
SECURITY OWNERSIPOWNERSHIP OF MANAGEMENT
The table below presents certain information as of January 13, 201714, 2020 about shares of our common stock held by (1) each of our directors; (2) each of our named executive officers; and (3) all of our directors and executive officers as a group:
| | | Name of Beneficial Owner | Number of Shares
of Common Stock
Beneficially Owned (1) | | Percent
of
Class (1) | | Number of Shares
of Common Stock
Beneficially Owned (1) | | Percent
of
Class (1) |
| Directors | | | | | | |
| Keith M. Butler | 21,670 |
| | † | | 51,704 |
| | † |
| Charles P. Hadeed | 18,920 |
| | † | | 63,806 |
| | † |
| Lynn J. Hartrick | 11,670 |
| | † | |
| Andrew M. Laurence | 11,670 |
| (2) | † | | 27,556 |
| (2) | † |
| Jeremy R. Nowak | 11,670 |
| (3) | † | | 40,056 |
| (2) | † |
| Jeffrey T. Schlarbaum | 9,900 |
| | † | |
| Eric B. Singer | 116,321 |
| (4) | 1.13% | |
| Michael W. Osborne | | | 13,290 |
| | † |
| Named Executive Officers | | | | | |
| Jens Hauvn | 15,853 |
| | † | |
| Michael T. Williams | 33,934 |
| | † | |
| All directors and executive officers as a group (9 persons) | 251,608 |
| | 2.45% | |
Jeffrey T. Schlarbaum (3) | | | 433,026 |
| (4) | 3.98% |
| Thomas L. Barbato | | | 32,500 |
| (5) | † |
| All directors and executive officers as a group (7 persons) | | | 661,938 |
| (4) (5) | 6.08% |
| |
† | We have omitted percentages of less than 1% |
† We have omitted percentages of less than 1%
| |
(1) | The amounts reported by such persons are as of January 13, 2017,14, 2020, with percentages based on 10,277,04710,452,340 shares issued and outstanding except where the person has the right to receive shares within the next 60 days of such date, which would increase the number of shares owned by such person and the number of shares outstanding. Under the rules of the SEC, “beneficial ownership” is deemed to include shares for which an individual, directly or indirectly, has or shares voting or dispositive power, whether or not they are held for the individual’s benefit, and includes shares that may be acquired within 60 days, including, but not limited to, the right to acquire shares by the exercise of options. Shares that may be acquired within 60 days are referred to in the footnotes to this table as “presently exercisable options.” Unless otherwise indicated in the other footnotes to this table, each stockholder named in the table has sole voting and sole investment power with respect to the all of the shares shown as owned by the stockholder. |
| |
(2) | Does not include 1,016,694 shares of common stock held by Vintage Opportunity Partners LP, an affiliate of Vintage Capital. Each of Mr. Laurence a partnerand Mr. Nowak, partners of Vintage Capital, disclaims beneficial ownership of these shares. |
| |
(3) | Does not include 1,016,694 sharesMr. Schlarbaum is also a director of common stock held by Vintage Opportunity Partners LP, an affiliate of Vintage Capital. Mr. Nowak, a partner of Vintage Capital, disclaims beneficial ownership of these shares.the Company. |
| |
(4) | Includes 104,651The amount shown includes presently exercisable options for 416,145 shares of our common stock held by Vertex Capital Advisors, LLC (now known as VIEX Capital Advisors, LLC). Mr. Singer, the chairmanstock. |
| |
(5) | The amount shown includes presently exercisable options for 25,000 shares of VIEX Capital Advisors, disclaims beneficial ownership of these shares.our common stock. |
DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, officers and greater than 10% stockholders to file with the SEC reports of ownership and changes in ownership of our common stock.
During Based solely on our review of the copies of such forms received by us and written representations from certain reporting persons, we believe that during Fiscal 2016,2019, except for Mr. Schlarbaum, a director and officer, who filed one late Form 4 report with respect to two transactions, all of our directors and officers timely complied with the filing requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended.Act.
PROPOSAL 1
ELECTION OF DIRECTORS
The number of directors is established by the board and is currently fixedset at seven.six. At the annual meeting,Annual Meeting, the sevensix persons listed below will be nominated as directors. The term of office of each person elected as a director will continue until the next annual meeting or until his successor has been elected and qualified, or until the director’s earlier death, resignation or removal.
All of the board’s nominees for director were elected at the last annual meeting and were recommended by our nominating and governance committee. All nominees have consented to serve if elected. In the event that any nominee should be unable to serve or for good cause will not serve, the proxies will be voted for the election of such other persons as the nominating and governance committee of the board of directors may recommend.
Required Vote
Directors are elected by a plurality of the votes cast at the Annual Meeting, which means that the nominees that receive the most affirmative votes will be elected. In an uncontested election, all of the board’s nominees will be elected. You may vote “FOR” the nominees, or you may “WITHHOLD” your vote from one or more of the nominees. Withheld votes abstentions and broker non-votes will have no effect on the voting results.
The board of directors unanimously recommends a vote FOR the election as directors each of the nominees listed below.
NOMINEES FOR ELECTION AS DIRECTORS
The following paragraphs provide information as of the date of this proxy statement about each nominee. We believe these nominees are highly qualified individuals with a diversity of experience. Several of the nominees have experience serving on the boards of directors of public companies and/or operational experience in the electronic contract manufacturing sector. We also believe that all of our nominees have a reputation for integrity, honesty and adherence to high ethical standards. In addition, each has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to the Company and our board.
Keith M. Butler
Age: , age 58, has served as a director of the Company since 2015. He61
Director since: 2015
Mr. Butler has been the Chief Operating Officer of RxSafe LLC, a pharmacy automation equipment company, since April 2014. From October 2013 to April 2014, Mr. Butler pursued personal interests. From September 2010 to October 2013, Mr. Butler was Executive Vice President of Operations for OnCore Manufacturing Services, LLC, an electronic contract manufacturer. Mr. Butler has served as a strategic advisory board member of Vintage Capital Management, LLC, a private equity firm, since March 2009. Since October 2019, Mr. Butler has served as an executive coach under our Executive Mentoring Program.
Experience and Qualifications:
We believe that Mr. Butler brings extensive operational experience in the contract manufacturing sector. Mr. Butler’s past and present service as a founder and executive of several contract manufacturing companies provides him with significant experience and insight relative to our industry segment as well as the competitive advantages of our operations.
Charles P. Hadeed
Age:, age 66, has served as a director of the Company since 2015. He 69
Director since: 2015
Mr. Hadeed is a director and Chairman of the Board of Transcat, Inc. (NASDAQ:TRNS), a provider of accredited calibration and compliance services and distributor of professional grade handheld test, measurement and control instrumentation. Mr. Hadeed served as Transcat’s Executive Chairman from July 2013 until June 2014, as its Chief Executive Officer from April 2007 to July 2013 and as its President from May 2006 to September 2012.
Experience and Qualifications:
We believe that Mr. Hadeed’s extensive management, financial and operational experience as a former chief executive officer, chief financial officer and chief operating officer of a public company with a similar market capitalization to ours provides us with valuable experience at the board level. Mr. Hadeed’s prior experiences also include turnaround management of a public company that faced obstacles similar to ours and those experiences make him a valuable board member.
Lynn J. HartrickAndrew M. Laurence
Age:, age 69, has served as director of the Company since 2015. He has been the President and owner of Business Leadership Professionals, LLC, an executive coaching and business advisory firm, since April 2010. For 3 years prior to that, Mr. Hartrick was the sole proprietor of Coyote Consulting, LLC, which provided contracted interim chief executive officer services. Additionally, Mr. Hartrick was Managing Partner of Vitalwork, a management consulting firm and before that, he worked for 26 years in multiple senior roles at Rochester Telephone Corporation, including roles in operations, personnel, construction, engineering, customer service and commercial operations. 45
Director since: 2015
We believe that Mr. Hartrick’s executive leadership and executive coaching experience make him a valuable addition to our board of directors. Mr. Hartrick has over 20 years of experience in advising executive teams as they pursue strategies to change
prior habits and effect change in organizations. The board believes his experiences bring significant value as it moves to effect positive change within our organization.
Andrew M. Laurence, age 42, has served as a director of the Company since 2015. He is a partner of Vintage Capital Management, LLC., a private equity firm. Mr. Laurence joined Vintage Capital Management in January 2010 and is responsible for all aspects of Vintage’s transaction sourcing, due diligence and execution. Mr. Laurence has served as the Executive Vice President since October 2019, and the Chairman of the Board since September 2018, of Franchise Group, Inc. (NASDAQ:FRG), formerly Liberty Tax, Inc., a holding company specializing in the preparation of tax returns for individuals and small businesses and retail stores. Mr. Laurence served as Corporate Secretary of API Technologies Corp. (NASDAQ:ATNY), a leading provider of high performance radio frequency microwave, microelectronic, power, and security solutions, sincefrom January 2011 until its sale in February 2016. Mr. Laurence also served as API’s Vice President of Finance and Chief Accounting Officer from January 2011 to June 2011. Mr. Laurence also serves on the Board of Directors of Energes Services, LLC, an oilfield services company.company and as Manager of East Coast Welding & Fabrication, LLC, a metals fabrication business. He is also a director of non-profits Good Sports, Inc. and Beth Israel Deaconess Hospital - Milton.
Experience and Qualifications:
We believe that Mr. Laurence’s experience investing in, growing and improving companies, some of which are within our industry segment, makemakes him a valuable member of our board of directors.
Michael W. Osborne
Age: 49
Director since: 2017
Mr. Osborne has been a partner at Mirus Capital Advisors, a middle market investment bank, where he is responsible for merger advisory, capital-raising services, fairness opinions and valuations, since January 2019. From May 2017 to January 2019, Mr. Osborne was the Chief Revenue Officer at Angelica Corporation, a provider of healthcare linen and medical laundry services, where he was responsible for sales, marketing and customer service and also provided oversight of Angelica’s turnaround key initiatives and led the development of long-term strategic growth. Prior to joining Angelica, from October 2016 to April 2017, Mr. Osborne served as a Senior Vice President of Steel Partners, a private investment firm, providing advisory services to its public holding company, Steel Partners Holdings L.P. (NYSE:SPLP) and its hedge fund. From June 2012 to February 2016, he served as Senior Vice President, Corporate Development and from January 2009 to June 2012 as Senior Vice President, Business Development and Supply Chain at Sparton Corporation (NYSE:SPA), a provider of design, development and manufacturing services for complex electromechanical devices. Since October 2019, Mr. Osborne has also been a director of B.O.S. Better Online Solutions Ltd. (NASDAQ:BOSC).
Experience and Qualifications:
We believe that Mr. Osborne’s operational, sales and marketing experience make him a valuable member of our board. Mr. Osborne brings relevant experience in the management and operations of companies in our industry, which are critical in developing our strategic growth and market presence.
Jeremy R. Nowak
Age:, age 41, is our 44
Chairman of the Board and has served in such capacity since 2015. Director since: 2015
Mr. Nowak has been a partner and the Chief Operating Officer of Vintage Capital Management, LLC, a private equity firm, since July 2010. Mr. Nowak is responsible for Vintage’s business development, transactional due diligence and trading execution. Mr. Nowak joined Kahn Capital Management, LLC, a predecessor to Vintage, in September 2006.
Experience and Qualifications:
Mr. Nowak’s financial and investment experience make him a valuable member of our board. Mr. Nowak’s experiences at Vintage provide a needed stockholdervaluable perspective of the change the Company intendsparticularly as it relates to effect.our strategic planning and growth.
Jeffrey T. Schlarbaum
, age 50,Age: 53
President, Chief Executive Officer and Director since: 2015
Mr. Schlarbaum has served as a director and as our President and Chief Executive Officer since 2015. From February 2013 to June 2013 and from June 2014 to February 2015, Mr. Schlarbaum pursued personal interests. From June 2013 to June 2014, Mr. Schlarbaum served as Chief Operations Officer for LaserMax, Inc., a manufacturer of laser gun sights for law enforcement and the shooting sports community. From October 2010 to February 2013, Mr. Schlarbaum served as our President. Prior to that, Mr. Schlarbaum served as our Executive Vice President and President of Contract Manufacturing from October 2008 to October 2010, Executive Vice President from November 2006 to October 2008 and Vice President, Sales and Marketing from May 2004 to November 2006. Prior to joining us, Mr. Schlarbaum served in senior management roles with various contract manufacturing companies. Since July 2017, Mr. Schlarbaum also serves as a director and member of the audit committee of Lakeland Industries, Inc. (NASDAQ:LAKE), a global manufacturer of technologically-advanced protective clothing.
Experience and Qualifications:
We believe that Mr. Schlarbaum’s background as a senior executive of the Company provides him with extensive knowledge of our operating history. We believe that this long-term institutional knowledge of the Company, its customers and its executive team make Mr. Schlarbaum a significant asset to our board. Mr. Schlarbaum also brings general management, marketing and operational experience that is of value to the board.
Eric B. Singer, age 43, has been a director of the Company since 2015. He is the Chairman of VIEX Capital Advisors, LLC formerly Vertex Capital Advisors, LLC, a hedge fund which he founded in May 2014. From March 2012 to May 2014, Mr. Singer served as a co-managing member of Potomac Capital Management III, L.L.C., the general partner of Potomac Capital Partners III, L.P., and Potomac Capital Management II, L.L.C., the general partner of Potomac Capital Partners II, L.P. Previously, Mr. Singer served as an advisor to Potomac Capital Management, L.L.C. and its related entities from May 2009 to December 2014. Since March 2016, Mr. Singer has served on the board, the audit committee, and the nominating and corporate governance committee of Numerex Corp. (NASDAQ: NMRX), a provider of managed enterprise solutions. Since June 2016, Mr. Singer has served on the board, compensation committee, and nominating and governance committee of YuMe Inc. (NYSE: YUME), a multi-screen video advertising technology company. Since June 2016, Mr. Singer has served on the board, audit committee, compensation committee, and nominating and governance committee for Support.com (NASDAQ: SPRT), a provider of cloud-based software and services. Mr. Singer served as a director of TigerLogic Corporation (OTCQX: TIGR), a global provider in engagement solutions, from January 2015 to December 2016.
We believe that Mr. Singer brings to our board of directors significant experience as a director at public companies, as well as significant financial analysis and investment experience.
CORPORATE GOVERNANCE AND BOARD MATTERS
Corporate Governance Guidelines
Our business, property and affairs are managed under the direction of our board of directors. The board is committed to sound and effective corporate governance practices and, accordingly, has adopted Corporate Governance Guidelines that provide a system of best practices with respect to board function and communication. Our Corporate Governance Guidelines address matters including board composition, director responsibilities, director independence, selection of board nominees, board
membership criteria, mandatory retirement, meeting participation, executive sessions of our independent directors, evaluation of the performance of the chief executive officer, committees, succession planning, orientation and continuing education.
Director Independence
The NYSE MKT Company Guide requireslisting standards of The Nasdaq Stock Market LLC ("Nasdaq") require that a majority of the members of a listed company’s board of directors be independent. No director will qualify as “independent” unless the board affirmatively determines that the director has no relationship with the Company or any of its subsidiaries that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Based upon the NYSE MKT Company GuideNasdaq listing standards and applicable SEC rules and regulations, our board has determined that the following directors are independent: Messrs. Butler, Hadeed, Hartrick, Laurence, NowakOsborne and Singer.Nowak.
Board Leadership Structure and Role in Risk Oversight
Our board is responsible for the selection of the chairman of the board and the chief executive officer. The current board of directors believes that separating the roles of chairman of the board and chief executive officer best serves our interest in achieving effective corporate governance. The current board believes that separating these two positions allows each person to focus on his individual responsibilities, which is essential to the strategic focus on improving our operational and financial performance. Under this leadership structure, our chief executive officer can focus his attention on the day-to-day operations and performance of the Company and can work to implement our long-term strategic plans. At the same time, our non-executive chairman of the board can focus his attention on addressing long-term strategic issues, working collaboratively with our other board members, and providing independent insight and guidance to our chief executive officer. In addition, maintaining a separation of the roles of chairman of the board and chief executive officer aids the board in its oversight of our risk management. Although we believe that the separation of the roles of chairman of the board and chief executive officer is appropriate in the current environment, our board leadership structure may change in the future as our business, industry and corporate governance practices evolve.
The board of directors is responsible for overseeing risks that could affect our management’s processes for managing risk. This oversight is conducted primarily through the board’s committees. Our audit committee focuses on risks and exposures associated with financial matters, particularly financial reporting, tax, accounting, disclosure, internal control over financial reporting, financial policies, credit and liquidity matters and compliance with legal and regulatory matters. Our nominating and governance committee focuses on the management of risks associated with board membership and structure, as well as corporate governance. Our compensation committee focuses on the management of risks arising from our compensation policies and programs.
While our board committees are focused on these specific areas of risk, the full board retains responsibility for general oversight of risk. The board satisfies this responsibility by taking reports from each committee chairman regarding the risk considerations within each committee’s area of expertise. In addition, the board receives reports from members of our senior management team responsible for oversight of material risk to the Company.
The full board focuses on the strategic, financial and execution risks associated with the annual operating plan, significant legal matters, acquisitions and senior management succession planning.
As part of its risk oversight responsibilities, our board of directors and its committees review the processes that management uses to manage our risk exposure. In doing so, the board and its committees monitor our overall risk function and senior management’s establishment of appropriate systems and processes for managing areas of material risk to our Company, including, but not limited to, operational, financial, legal, regulatory and strategic risks.
Board Meetings and Attendance
During Fiscal 2016,2019, our board held four in-person or telephonicfive meetings.
During Fiscal 2016,2019, each incumbent director attended at least 75% of the meetings of the board, and of those committees upon which such director served, held during the period that he served.
Director Attendance at Annual Meetings
Board members are expected to attend the Company’s annual meeting of stockholders each year. All of our directors attended our 20162019 annual meeting of stockholders.
Board Committees
Our board has three standing committees to assist in the discharge of its responsibilities: the audit committee, the compensation committee, and the nominating and governance committee. The following table indicates the committee(s) on which each director serves or served, the identity of the chair of each committee, and the number of times each committee met during Fiscal 2016:
2019:
| | | Director: | Audit | Compensation | Nominating and Governance | | Audit | | Compensation | | Nominating and Governance |
| Keith M. Butler | — | x | — | | — | | x | | x |
| Charles P. Hadeed | Chair | — | Chair | | Chair | | — | | Chair |
| Lynn J. Hartrick | — | Chair | x | |
| Andrew M. Laurence | x | — | | x | | — | | — |
| Jeremy R. Nowak | x | — | | x | | x | | — |
| Michael W. Osborne | | | — | | Chair | | x |
| Jeffrey T. Schlarbaum | — | | — | | — | | — |
| Eric B. Singer | — | x | |
| Total Meetings in Fiscal 2016: | 4 | 2 | |
| Total Meetings in Fiscal 2019: | | | 4 | | 4 | | 2 |
Each committee acts pursuant to a written charter adopted by the board. The charter of each of the audit, compensation and nominating and governance committees complies with the NYSE MKTNasdaq corporate governance listing standards. The committees regularly report their activities and actions to the full board at the next board meeting. Each committee’s charter is available on our website at www.iec-electronics.com under the heading, “Investors” and the subheading, “Corporate Governance.”
Audit Committee
The audit committee oversees our corporate accounting and financial reporting processes and the audits of our financial statements. The audit committee is a separately-designated standing committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended.Act. Its responsibilities include:
the appointment, retention, termination, compensation and oversight of our independent auditors, including an evaluation of the qualifications, performance and independence of the independent auditors;
the review and discussion with management and the independent auditors of the financial statements and related disclosures included in our annual reports on Form 10-K and quarterly reports on Form 10-Q;
the oversight of management’s implementation of internal controls and procedures and disclosure controls and procedures;
the establishment of procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, including procedures for the confidential and anonymous submission by employees regarding questionable accounting or auditing matters;
administration and oversight of our Code of Business Conduct and Ethics; and
the review and approval of related persons transactions.
The audit committee has authority to engage independent counsel and other advisers as necessary to carry out its responsibilities. In addition, the audit committee has sole authority to determine the fees payable to such independent counsel and advisers, which fees shall be paid by the Company.
The board of directors has determined that each member of the audit committee meets the independence and financial literacy requirements applicable to audit committee members under the NYSE MKT Company Guide.Nasdaq listing standards. The board of directors has further determined that Mr. Hadeed qualifies as an “audit committee financial expert” in accordance with the applicable rules and regulations of the SEC.
Compensation Committee
The compensation committee assists the board in its discharge of responsibilities with respect to executive and director compensation. Its responsibilities include:
the oversight and development and administration of our executive compensation plans;
the review and approval of the compensation for all executive officers other than the chief executive officer;
the recommendation to the independent members of the board of the compensation of the chief executive officer;
the evaluation of the chief executive officer;
the review and recommendation to the board of the terms of any employment, severance, change in control, termination or retirement arrangements for all executive officers;
the review and recommendation to the board of the compensation paid to directors; and
the assessment of the independence of any compensation consultant, independent legal counsel or other adviser retained by the committee.
The compensation committee approves equity awards for our other employees, including the delegation of authority to our chief executive officer to award up to a specified number of stock options to non-executive employees for special performance or recruitment to the Company.
The compensation committee has sole authority, in its discretion, to retain or obtain advice of a compensation consultant, independent legal counsel or other adviser to assist the compensation committee in carrying out its responsibilities. The compensation committee is responsible for the appointment, oversight and compensation of any compensation consultant, independent legal counsel or other adviser it retains. We are responsible for paying such compensation as determined by the compensation committee. The compensation committee retainedWe did not retain a compensation consultant The Burke Group, forin Fiscal 2016. The Burke Group conducted a review and analysis of our executive compensation program in order to validate our current compensation strategy. The Burke Group reviewed senior executive team positions and provided summary reports on current trends for executive compensation in similar companies, established the peer group, assessed base salaries, annual cash incentive compensation and long term incentives against published survey data and peer group data and provided observations and recommendations for all components of our executive compensation program.2019.
The board of directors has determined that each member of the compensation committee meets the independence requirements applicable to compensation committee members under the NYSE MKT Company Guide.Nasdaq listing standards.
Nominating and Governance Committee
The nominating and governance committee identifies and recommends to the board individuals to serve as directors and as nominees for election as directors of the Company and develops, recommends and reviews corporate governance principles applicable to the Company. The nominating and governance committee’s responsibilities include:
the development and recommendation to the board of director qualification criteria;criteria for directors;
the development and periodic review of corporate governance principles;
the oversight of the board’s self-evaluation process; and
development of the board’s chief executive officer succession policies.
The board of directors has determined that each member of the nominating and governance committee meets the director independence requirements of the NYSE MKT Company Guide.Nasdaq listing standards.
Nominating Process
The process followed by the nominating and governance committee to identify and evaluate candidates includes requests to board members, the chief executive officer, and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and their qualifications, and interviews of selected candidates. The nominating and governance committee also will consider director candidates recommended by stockholders on the same basis it considers other potential candidates. Stockholders who wish to recommend a prospective nominee for the nominating and governance committee’s consideration should submit the candidate’s name and qualifications to: Corporate Secretary, IEC Electronics Corp., 105 Norton Street, Newark, New York 14513.
In evaluating the suitability of candidates to serve on the board of directors, including stockholder recommendations, the nominating and governance committee seeks candidates who are independent pursuant to the NYSE MKTNasdaq independence standards and meet certain selection criteria established by the committee. The specific criteria required for the selection of each board member will be determined from time to time within the context of the current member composition of the board of directors and the evolving needs of the Company based on business strategy and current senior management competencies. The committee also considers an individual’s skills, character and professional ethics, judgment, leadership experience, business experience and acumen, familiarity with relevant industry issues, and other relevant criteria that may contribute to our success. This evaluation is performed in light of the skill set and other characteristics that would most complement those of the current directors, including the diversity, maturity, skills and experience of the board as a whole. We do not have a formal policy regarding board diversity in the identification of nominees, but diversity is one of several factors that the nominating and governance committee takes into account when evaluating candidates. The committee believes that diversity includes perspective gained from different educational, cultural and business backgrounds and life experiences.
Nominations of persons for election to our board may be made at a meeting of stockholders only (i) by or at the direction of the board; or (ii) by any stockholder who has complied with the notice procedures set forth in our by-lawsbylaws and in the section entitled “Questions and Answers About This Proxy Material and Voting – When are stockholder proposals and director nominations due for next year’s annual meeting?”.
Code of Ethics and Whistleblower Policy
We have a Code of Business Conduct and Ethics, which applies to all of our directors, officers (including our principal executive officer, principal financial officer, principal accounting officer and other executive officers) and employees. It is a statement of our high standards for ethical behavior, legal compliance and financial disclosure. We also maintain a whistleblower policy,Whistleblower Policy, which encourages our employees to report illegal activities and business conduct that would damage our good name, business interests and relationships with stockholders, suppliers, residents and the community at large. The Code of Business Conduct and Ethics and the Whistleblower Policy are distributed to all of our employees who in turn acknowledge, in writing, receipt of this information.
Availability of Corporate Governance Documents
We make available to the public a variety of corporate governance information on our website (www.iec-electronics.com) under the heading “Investors” and the subheading, “Corporate Governance”.Governance.” Information on our website includes our Code of Business Conduct and Ethics, our Corporate Governance Guidelines, the Audit Committee Charter, the Compensation Committee Charter, the Nominating and Governance Committee Charter, our Related Person Transactions Policies and Procedures, and our Whistleblower Policy. Information regarding any amendment to, or waiver from, the Code of Business
Conduct and Ethics that applies to our principal executive officer, principal financial officer or principal accounting officer will also be posted in that section of our website.
Communications with the Board of Directors
Stockholders and other parties may communicate directly with the board of directors or the relevant board member by addressing communications to:
[Name of director(s) or Board of Directors]
IEC Electronics Corp.
c/o Corporate Secretary
105 Norton Street
Newark, New York 14513
All stockholder correspondence will be compiled by our Corporate Secretary and forwarded as appropriate.
PROPOSAL 2
RATIFICATION OF THE SELECTION OF THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 20172020
The audit committee has selected the accounting firm of Crowe HorwathDeloitte & Touche LLP (“Crowe Horwath”Deloitte”) to serve as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 20172020 (“Fiscal 2017”2020”). The stockholders are being asked to ratify the audit committee’s selection of Crowe Horwath.Deloitte.
Stockholder ratification of the selection of Crowe HorwathDeloitte is not required by our by-lawsbylaws or otherwise. However, the board is submitting the selection of our independent registered accounting firm to the stockholders for ratification as a matter of good corporate governance. If the stockholders fail to ratify this appointment, the audit committee may, but is not required to, reconsider whether to retain Crowe Horwath.Deloitte. Even if the appointment is ratified, the audit committee in its discretion may direct the appointment of a different accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders. Representatives of Crowe HorwathDeloitte will be present at the annual meeting,Annual Meeting, will be given the opportunity to make statements if they so desire and will be available to respond to appropriate questions.
The following table shows the fees that were billed by Crowe HorwathDeloitte for professional services listed below related to our last two fiscal years, Fiscal 20162019 and the fiscal year ended September 30, 20152018 (“Fiscal 2015”2018”):
| | | Description of Fees | | Fiscal 2016 | | Fiscal 2015 | | Fiscal 2019 | | Fiscal 2018 |
| Audit Fees | | $ | 240,000 |
| | $ | 314,500 |
| | 353,828 |
| | 342,400 |
|
| Audit Related Fees | | | 7,500 |
| | 42,903 |
|
| Tax Fees | | | — |
| | — |
|
| All Other Fees | | | 2,047 |
| | 42,046 |
|
| Total Fees | | | $ | 363,375 |
| | $ | 427,349 |
|
Audit fees represent amounts billed for the audit of our annual consolidated financial statements for the fiscal year and the reviews of financial statements included in our quarterly reports on Form 10-Q for the fiscal year. Audit Related Fees in Fiscal 2019 were for filing of our Form S-8 during the fiscal year. Audit Related Fees in Fiscal 2018 were for audit services related to our 401(k) employee savings plan. There were no audit-related fees, tax fees or other fees paid to Crowe HorwathTax Fees billed by Deloitte during Fiscal 2016 or2019 and Fiscal 2015.2018. All Other Fees in Fiscal 2019 were for an accounting research tool subscription. All Other Fees in Fiscal 2018 were for an accounting research tool subscription and fees related to the implementation of Financial Accounting Standards Board (“FASB”) Accounting Standard Update No. 2014-09, “Revenue from Contracts with Customers.”
Pre-Approval of Fees by Audit Committee
In accordance with applicable laws, rules and regulations, our audit committee charter and pre-approval policies established by the audit committee require that the audit committee review in advance and pre-approve all audit and permitted non-audit fees for services provided to us by our independent registered public accounting firm. The audit committee pre-approved all services performed by, and all fees to be paid to, Crowe HorwathDeloitte in Fiscal 2016.2019 and Fiscal 2018.
Independence Analysis by Audit Committee
The audit committee has considered whether the provision of the services described above was compatible with maintaining the independence of Crowe HorwathDeloitte and determined that it was compatible with the firm’s independence. For Fiscal 20162019 and Fiscal 2015, Crowe Horwath2018, Deloitte provided no services other than those services described above.
Required Vote
The affirmative vote of the holders of a majority of the shares of common stock present in person or represented by proxy at the annual meetingAnnual Meeting and entitled to vote at the meetingthereon is needed to ratify the appointment of Crowe HorwathDeloitte as our independent registered public accounting firm for the fiscal year ending September 30, 2017.2020. An abstention will have the same effect as a vote against the proposal.
Unless you specify otherwise, the persons named in the proxy card intend to vote shares as to which proxies are received for the approval of ratification of the selection of Crowe HorwathDeloitte as our independent registered public accounting firm for the fiscal year ending September 30, 2017.2020.
The audit committee and our board of directors unanimously recommend that the stockholders vote FOR the ratification of the appointment of Crowe HorwathDeloitte as our independent registered public accounting firm for the fiscal year ending September 30, 20172020.
AUDIT COMMITTEE REPORT
In connection with our financial statements for the fiscal year ended September 30, 2016,2019, the audit committee has (1) reviewed and discussed the audited financial statements with management; (2) discussed with the independent registered public accounting firm (the “Auditors”) the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301, Communications with Audit Committees;Standards; and (3) received the written disclosures and the letter from the Auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the Auditors’ communications with the audit committee concerning independence, and has discussed with the Auditors their independence.
Based on the review and discussions referred to in items (1) through (3) of the above paragraph, the audit committee recommended to the board of directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2016,2019, for filing with the Securities and Exchange Commission.
Charles P. Hadeed, Chair
Andrew M. Laurence
Jeremy R. Nowak
PROPOSAL 3
ADVISORY VOTE TO APPROVE THE COMPENSATION PAID TO
THE COMPANY’S NAMED EXECUTIVE OFFICERS
General
In accordance with Section 14A of the Securities Exchange Act, of 1934, as amended, we are requesting that our stockholders approve on a non-binding, advisory basis the compensation paid to our named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC, including the compensation tables and narrative discussion in this proxy statement under the caption “Compensation“Compensation of Named Executive Officers” of this proxy statement.Officers.”
The board of directors requests that stockholders approve the following advisory resolution:
RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402(m)-(q) of Regulation S-K, including the compensation tables and narrative discussion, is hereby APPROVED.
At our 20132019 annual meeting of stockholders, we recommended, and our stockholders approved, that we hold this non-binding, advisory vote on executive compensation on an annual basis. The next required vote on frequency will occur at our 20192025 annual meeting of stockholders.
We urge stockholders to read the section entitled “Compensation“Compensation of Named Executive Officers” of this proxy statement, including the compensation tables and narrative included within that section, which provideprovides detailed information on IEC’sthe compensation of our named executive officers.
Each named executive officer is a party to an employment agreement with us. We believe these agreements and other incentives granted to these named executive officers align our named executive officers’ interests with those of our stockholders. Our compensation committee and board of directors continue to evaluate our executive compensation program with a view toward motivating our named executive officers to meet our strategic operational and financial goals in the best interests of our stockholders.
Non-Binding Vote
This advisory vote, commonly referred to as a “say-on-pay” vote, is not binding on the Company, the board of directors or the compensation committee of the board of directors, and may not be construed as overruling any decision made by the board. However, the board and the compensation committee will take the voting results into account when evaluating our executive compensation program and considering future compensation arrangements.
Required Vote
The affirmative vote of the holders of a majority of the shares of common stock present in person or represented by proxy at the annual meetingAnnual Meeting and entitled to vote at the meetingthereon is needed to approve the compensation paid to our named executive officers. Abstentions and broker non-votes will count as votes against this proposal. Broker non-votes will not be counted and will not impact the outcome of the vote on this proposal.
The board of directors unanimously recommends that the stockholders vote FOR the approval of the compensation paid to our named executive officers.
COMPENSATION OF NAMED EXECUTIVE OFFICERS
Named Executive Officers
The following tables and related narrative contain information regarding the compensation paid to our named executive officers for our two most recently completed fiscal years, which ended on September 30, 20162019 and September 30, 2015. 2018.
Our named executive officers for Fiscal 2019 are our chief executive officer and our two other most highly compensated executive officers serving at the end of Fiscal 2016:as follows:
Jeffrey T. Schlarbaum - President and Chief Executive Officer
Michael T. WilliamsThomas L. Barbato - Senior Vice President Finance and Chief Financial Officer
Jens Hauvn - Senior Vice President, Operations
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning total compensation earned or paid to our named executive officers for Fiscal 20162019 and Fiscal 2015.2018. We present more detailed information regarding these items of compensation in the footnotes and in the narrative that follows the table.
| | Name and Principal
Position | | Year | | Salary (1) | | Bonus (2) | | Stock
Awards
(3) (4) | | Option
Awards (5) | | Non-Equity
Incentive
Plan
Compensation (6) | | All Other
Compensation (7) | | Total | | Year | | Salary (1) | | Bonus | | Stock
Awards
(2) (3) | | Option
Awards | | Non-Equity
Incentive Plan
Compensation | | All Other
Compensation (4) | | Total |
| Jeffrey T. Schlarbaum | | 2016 | | $ | 352,692 |
| | $ | — |
| | $ | 433,076 |
| | $ | — |
| | $ | 351,273 |
| | $ | 1,801 |
| | $ | 1,138,842 |
| | 2019 | | $ | 395,493 |
| | $ | — |
| | $ | 476,745 |
| | $ | — |
| | $ | 325,813 |
| | $ | 3,880 |
| | $ | 1,201,931 |
|
| CEO | | 2015 | | 222,865 |
| | 50,000 |
| | — |
| | 602,263 |
| | 95,000 |
| | — |
| | $ | 970,128 |
| | 2018 | | 376,335 |
| | — |
| | 313,125 |
| | — |
| | 97,461 |
| (5) | 5,232 |
| | 792,153 |
|
| Michael T. Williams | | 2016 | | 205,000 |
| | — |
| | 176,793 |
| | — |
| | 141,568 |
| | 2,720 |
| | $ | 526,081 |
| |
| Thomas L. Barbato | | | 2019 | | 237,405 |
| | — |
| | 193,380 |
| | — |
| | 132,188 |
| | 991 |
| | 563,964 |
|
| CFO | | 2015 | | 197,748 |
| | 15,000 |
| | — |
| | — |
| | 25,000 |
| | 4,001 |
| | $ | 241,749 |
| | 2018 |
| 9,068 |
| | — |
| | — |
| | 543,000 |
| (6) | 326 |
| (7) | — |
| | 552,394 |
|
| Jens Hauvn | | 2016 | | 220,000 |
| | 5,700 |
| | 173,249 |
|
| 83,363 |
| | 151,927 |
| | 3,046 |
| | $ | 637,285 |
| |
| Senior VP, Operations | | 2015 | | 175,639 |
| | 9,500 |
| | 70,650 |
| | 69,233 |
| | — |
| | 2,688 |
| | $ | 327,710 |
| |
| |
(1) | The “Salary” column reflects the base salary earned by each of our named executive officers during the applicable fiscal year, which may differ from the salary described in “Compensationthe narrative below under “Elements of Named Executive Officers - Compensation -- Base Salary Compensation”” due to effective dates for increases that do not fall on the first day of the fiscal year and pay periods that may overlap fiscal years. |
| |
(2) | Amounts reflect cash sign-on bonuses for Messrs. Schlarbaum and Hauvn (portions of which were paid in Fiscal 2016 and Fiscal 2015), and a cash payment to Mr. Williams in connection with his acceptance of his employment agreement. |
| |
(3)
| In April 2016,May 2019, we granted Messrs. Schlarbaum Williams and HauvnBarbato time-vesting restricted stock units covering 12,258 shares, 4,9708,966 shares and 5,3343,637 shares, respectively, and performance-vesting restricted stock units covering 49,030 shares, 19,88135,962 shares and 21,33614,546 shares, respectively, pursuant to the 2019 Stock Incentive Plan (the “2019 Plan”). In March 2018, we granted Mr. Schlarbaum time-vesting restricted stock units covering 14,232 shares and performance-vesting restricted stock units covering 58,928 shares, pursuant to the 2010 Omnibus Incentive Compensation Plan (the “2010 Plan”). In June 2016, we granted restricted stock awards to Messrs. Schlarbaum and Williams of 7,500 shares and 3,580 shares, respectively, pursuant to the 2010 Plan. We granted restricted stock awards in Fiscal 2015 to Mr. Hauvn upon his hiring as an inducement award. This award automatically vested upon the election of our new board of directors at our 2015 annual meeting of shareholders. |
| |
(4)(3)
| The amounts shown reflect the aggregate grant date fair value computed in accordance with FASB ASC 718 (“ASC 718”). Under ASC 718, the fair value of such stock awards is determined as of the date of grant using the closing market price of our common stock on the date of grant. For awards subject to performance conditions, the amounts included in this column are calculated based on the probable satisfaction of the performance conditions at the grant date, which represents the highest level of performance achievement. These amounts reflect our accounting for these awards and do not correspond to the actual values that may be realized by the named executive officers and do not represent actual cash compensation paid to the recipient. Pursuant to SEC rules, we disregarded the estimates of forfeitures related to service-based vesting conditions. |
| |
(4) | Amounts shown in Fiscal 2019 and Fiscal 2018 for Mr. Schlarbaum and in Fiscal 2019 for Mr. Barbato include the Company match portion of the 401(k) employee savings plan, as described below. |
| |
(5) | In August 2016, we granted Mr. Hauvn an option to purchase 50,000 shares under the 2010 Plan as part of a relocation award under his employment agreement after the compensation committeeSchlarbaum waived the requirementannual performance bonus for the year ended September 30, 2017 (“Fiscal 2017”), to allow instead for a management incentive plan payout that Mr. Hauvn relocate to the greater Rochester, New York area. Inlooked at performance over a two year period (Fiscal 2017 and Fiscal 2015, we granted an inducement option award for 16,145 shares to Mr. Schlarbaum, and we also granted option awards to Messrs. Schlarbaum and Hauvn for 400,000 shares and 50,000 shares, respectively, in connection with their appointments as executive officers of the Company. Valuation assumptions used to determine grant date fair value as required by ASC 718 are disclosed in Note 11- Stock-Based Compensation to our consolidated financial statements included in our annual report on Form 10-K for Fiscal 2016.2018). |
| |
(6) | For Fiscal 2016, Mr. Schlarbaum earned $351,273, Mr. Williams earned $141,568Barbato joined the Company in September 2018 and Mr. Hauvn earned $151,927 in connection with the annual management incentive plan payout as described in the “Narrative to Summary Compensation Table” section below. For Fiscal 2015, Mr. Schlarbaum earned an annual cash incentive of $95,000 pursuant to his employment agreement. Asagreement provided for a conditionone-time sign-on award of a stock option to his employment bypurchase 100,000 shares of the Company's common stock under the 2010 Plan. In accordance with ASC 718 (Stock Compensation), compensation expense is recognized for equity awards based on fair value as of the date of grant. For stock options, the Company Mr. Williams was guaranteed a minimum $25,000 payout if he remained employed on July 15, 2014, and an additional $25,000 payout if he remained employed atuses the timeBlack-Scholes pricing model to estimate grant date fair value. Costs associated with stock awards are recorded over requisite service periods, generally the Form 10-K for Fiscal 2015 was filed. He was employed on each of such dates. Thus, the first $25,000 payout was earned in the fiscal year ended September 30, 2014 (“Fiscal 2014”) and the remaining payout was earned in Fiscal 2015.vesting period. |
| |
(7) | Amounts shown in Fiscal 2016 and Fiscal 2015 for Messrs. Schlarbaum, Williams and Hauvn includeMr. Barbato joined the Company match portionin 2018 and received a pro rata share of the 401(k) Employee Savings Plan, as described below. Amounts shownmanagement incentive plan award for Mr. Williams forthe time he was employed by the Company during Fiscal 2015 also include $895 in insurance premiums paid with respect to policies of life insurance maintained for his benefit.2018. |
NARRATIVE TO SUMMARY COMPENSATION TABLE
Elements of Compensation
Our compensation program for the named executive officers consists of the following elements:
Base salary;
Annual cash incentive; and
Long-term equity incentive.
Our named executive officers are also entitled to participate in a 401(k) employee savings plan, described below.
Base Salary
Base salaries for our named executive officers generally are set forth in their employment agreements with the Company and are subject to review for increases. For named executive officers other than the chief executive officer, the chief executive officer makes recommendations for salary increases to the compensation committee. The compensation committee reviews the chief executive officer’s base salary and makes recommendations to the board of directors for increases.
The compensation committee set Mr. Schlarbaum’s base salary at $350,000 when he joined the Company in February 2015. Mr. Schlarbaum’sinitial base salary was set by his employment agreement in 2015 and, following prior adjustments, effective January 2019, was further adjusted in May 2016 to $357,000$401,100 to reflect a 2% costthe scope of living adjustment. his responsibilities and performance, and consideration was given to his current salary level and amounts paid to peers at peer group companies.
Pursuant to theirhis employment agreementsagreement entered into with the Company in September 2015,2018, Mr. Hauvn’sBarbato’s annual base salary was set at $220,000 and Mr. Williams’ base$235,000. This salary was set as $205,000. Before taking the positionbased on an executive compensation analysis done in Fiscal 2017 and reflects Mr. Barbato's scope of Senior Vice President, Operations in September 2015, Mr. Hauvn’s baseresponsibilities and performance. Consideration was also given to his salary was $180,000.level and amounts paid to peers at peer group companies.
Annual Cash Incentive Awards
Our named executive officers generally are eligible for annual cash incentive awards under our annual management incentive plan, which we refer to as the MIP. Our named executive officers earn their MIP awards based on achievement of performance goals for the fiscal year. The compensation committee generally sets target incentive award opportunities based on a percentage of each executive officer’s base salary during the fiscal year.
For Fiscal 2016,2019, the annual award target for Messrs. Schlarbaum and Barbato was 65% and 45% of plan salary, respectively. For Fiscal 2019, the compensation committee set certain performance goals related to sales as(as disclosed in the Form 10-K for Fiscal 2016,2019), EBITDA defined(defined for purposes of the MIP as earnings before interest, taxes, depreciation and amortization,amortization), and cash flows defined(defined for purposes of the MIP as the reduction in debt, net of cash year over year,year), as a precondition for payment of any MIP awards. The annual award target during Fiscal 2016 for Messrs. Schlarbaum, Williams and Hauvn was 65 % of plan salary, 45% of plan salary, and 45% of plan salary, respectively.
The following table sets forth the Fiscal 20162019 goals at the threshold, target and maximum performance levels, as well as actual amounts achieved, as well as the weight given each performance measure.
| | | Performance Measure | | Weight | | Threshold | | Target | | Maximum | | Actual | | Weight | | Threshold | | Target | | Maximum |
| ($in millions) | | | | | | | | | | | | | | |
| Sales | | 30% | | $ | 121.0 |
| | $ | 128.0 |
| | $ | 135.7 |
| | $ | 127.0 |
| | 40% | | $ | 140.0 |
| | $ | 147.0 |
| | $ | 154.0 |
|
| EBITDA | | 40% | | 8.1 |
| | 8.5 |
| | 9.5 |
| | 9.2 |
| | 45% | | 8.8 |
| | 11.7 |
| | 13.9 |
|
| Cash Flow | | 30% | | 6.7 |
| | 7.0 |
| | 8.0 |
| | 11.8 |
| | 15% | | 4.0 |
| | 6.0 |
| | 7.5 |
|
A reconciliation of EBITDA for Fiscal 2019 follows:
|
| | | |
| | Year Ended |
| | September 30, 2016 |
| (in thousands) | |
| Net income (loss) | $ | 4,786 |
|
| Provision for/(benefit from) income taxes | 70 |
|
| Depreciation and amortization expense | 3,106 |
|
| Interest expense | 1,392 |
|
| EBITDA | $ | 9,354 |
|
Using its discretion, the compensation committee reduced EBITDA used in the calculation of MIP for certain expenses incurred in Fiscal 2017 that the compensation committee determined should be reflected in Fiscal 2016 for purposes of the MIP calculation. |
| | | | |
| | | Year Ended |
| | | September 30, 2019 |
| (in thousands) | | |
| Net income | | $ | 4,747 |
|
| Provision for income taxes | | 1,176 |
|
| Depreciation and amortization expense |
| 2,757 |
|
| Interest expense | | 1,645 |
|
| EBITDA |
| $ | 10,325 |
|
The threshold, target and maximum goals are subject to an adjustment factor of 10%, 100% and 200%, respectively, resulting from our actual performance between the target and the respective goal.
The compensation committee evaluates achievement of performance goals after fiscal year end and may increase or decrease payouts by up to 25%, subject to the approval of the independent members of the board of directors with respect to the chief executive officer’s incentive award. No adjustments were made to the payouts in Fiscal 2016. The payment of MIP awards generally will be made within 15 days after receipt of the audited financial statements for the fiscal year. Generally, in order to receive awards under the MIP, participants must be employed at the time the awards are paid.
In the event of an accounting restatement, participating employees may be required to reimburse us for all or any part of the amount of any payment under the MIP. Forfeitures and clawbacks of payments will also be required to the extent necessary to comply with applicable laws or regulations.
The compensation committee reservedreserves the right in its discretion to modify or waive categories or goals, however other than the EBITDA adjustments described above, no such modifications or waivers were made duringgoals.
Based on applicable Fiscal 2016. For Fiscal 20162019 MIP performance measures, Messrs. Schlarbaum and Barbato each had an achievement level of 125%, and we paid awardsan award of $351,273, $141,568$325,813 and $151,927$ 132,188 to Messrs. Schlarbaum, Williams and Hauvn, respectively, based on the results for Fiscal 2016 under the MIP performance measures.
For Fiscal 2015, Mr. Schlarbaum earned an annual cash incentive of $95,000 pursuant to his employment agreement with the Company. Under his employment agreement, he earned $47,500 when the Company met its deadline of May 11, 2015 for filing its amended annual report on Form 10-K for Fiscal 2014 and quarterly reports on Forms 10-Q for the fiscal quarters ended December 26, 2014 and March 27, 2015. He also received $47,500 in Fiscal 2015 pursuant to his employment agreement.Mr. Barbato, respectively.
The compensation committee established a minimum of Net Income Before Taxes of $900,000 for Fiscal 2015 as a precondition for payment of any MIP awards. This threshold was not met for Fiscal 2015, so the Company did not pay any annual incentive plan awards under the MIP with respect to Fiscal 2015.
Long-Term Equity Incentive Awards
Long-term incentives in the form of equity are a significant part of our compensation program for our named executive officers. The objective of these long-term incentives is to retain and motivate our named executive officers, and to encourage long-term performance by enabling our named executive officers to participate in the long-term growth and financial success of the Company. For Fiscal 2016, we changedGrants pursuant to the long-term incentive portion of our compensation program byare generally making grantsmade in the form of restricted stock units instead of restricted stock, and by using average annual EBITDA as the performance goal for performance-vesting awards.
Messrs. Schlarbaum Williams and HauvnBarbato received grants of performance-vesting restricted stock units covering 49,030 shares, 19,88135,962 shares and 21,33614,546 shares, respectively under the 20102019 Plan in Fiscal 2016,2019, which reflected a number of shares with a grant date value of approximately 65% of base salary for Mr. Schlarbaum, and approximately 45% of base salary each for Messrs. Williams and Hauvn. Mr. Barbato. These percentages were approved by the compensation committee based on a review of current trends for executive compensation in similar companies.
Subject to continued employment, these restricted stock units generally vest based upon the level of achievement of the performance goal set forth on an exhibit to the applicable award agreements, which is based on the Company’s average annual EBITDA, for the period from October 1, 20152018 to September 30, 2018.2021. The threshold, target and maximum average annual EBITDA levels under the performance goal are $7,600,000, $9,500,000$7.7 million, $8.8 million and $11,875,000,
$9.5 million, respectively. Our EBITDA for Fiscal 2019 was $10.3 million. Achievement of the performance goal at threshold, target or maximum would cause 50%, 100% or 150% of the shares, respectively, to vest, with the percentage of shares that vest based on achievement between threshold and target or between target and maximum determined using straight line interpolation. These restricted stock units are intended to create an incentive for the retention of our named executive officers and to encourage long-term performance.
In addition, in Fiscal 2019 we awarded time-vesting restricted stock units to Messrs. Schlarbaum Williams and HauvnBarbato covering 12,258 shares, 4,9708,966 shares and 5,3343,637 shares, respectively, under the 2010 Plan in Fiscal 2016.2019 Plan. For each named executive officer, the performance-vesting restricted stock units and the time-vesting restricted stock units reflected 80% and 20%, respectively, of the total number of shares underlying all of the restricted stock units granted during Fiscal 2016.2019. These percentages were approved by the compensation committee based on a review of current trends for executive compensation in similar companies. Subject to
continued employment, these restricted stock units generally vest on the third anniversary of the grant date and are intended to create an incentive for the retention of our named executive officers.
Messrs. Schlarbaum and Williams also received grants of 7,500 shares and 3,580 shares, respectively, of time-vesting restricted stock awards under the 2010 Plan in Fiscal 2016. Subject to continued employment, these awards of restricted stock generally vest one-quarter upon the first, second, third and fourth anniversary of their respective grant dates and are intended to provide additional one-time compensation in recognition of the services provided by Messrs. Schlarbaum and Williams.
In addition, Mr. Hauvn received an option to purchase 50,000 shares of the Company’s common stock under the 2010 Plan in Fiscal 2016. This option was intended as payment of a relocation award under Mr. Hauvn’s employment agreement after the Company’s compensation committee waived the requirement that Mr. Hauvn relocate to the greater Rochester, New York area. Subject to continued employment, the option generally vests and becomes exercisable with respect to 10%, 30%, 60% and 100% of the covered shares on August 9, 2017, August 9, 2018, August 9, 2019 and August 9, 2020, respectively. During Fiscal 2015, we granted option awards to Messrs. Schlarbaum and Hauvn for 400,000 shares and 50,000 shares, respectively, in connection with their appointments as executive officers of the Company.
The long-term incentive plan for Fiscal 2015, which we refer to as the LTIP, provided for awards of time-vesting restricted stock under the 2010 Plan. The LTIP measured Company performance over a one-year fiscal period and any restricted stock awards would have been granted, if at all, at the end of the fiscal year based on the attainment of company-wide performance goals. For Fiscal 2015, the compensation committee established revenue growth as the single performance goal. No awards were granted during Fiscal 2015 because the threshold performance measure was not met.
Perquisites and Personal Benefits
Pursuant to the terms of our employment agreements with Messrs. Schlarbaum Williams and Hauvn,Barbato, we are not obligated to pay any perquisites or personal benefits to our current named executive officers. We previously paid the premiums for life insurance policies maintained by Mr. Williams.
Retirement Benefits
All employees, including our named executive officers, are eligible to participate in the Company’s 401(k) Employee Savings Planemployee savings plan (the “Savings Plan”)., pursuant to the eligibility requirements of the Savings Plan. The Savings Plan is a defined contribution tax-qualified retirement savings plan pursuant to which employees are able to contribute a portion of their eligible cash compensation to the Savings Plan. The Company matches up to 1.5% of contributions made by participating employees. None of our named executive officers is covered by a pension plan or non-qualified deferred compensation plan.
Employment Agreements and Other Arrangements
The employment agreementsagreement we entered into in Fiscal 2015 with Messrs.Mr. Schlarbaum Williams and Hauvnthe employment agreement we entered into in Fiscal 2018 with Mr. Barbato, contain clawback provisions for recovering certain compensation in the event of an accounting restatement resulting from the executives’ willful or grossly negligent conduct or financial dishonesty.
Jeffrey T. Schlarbaum, President and Chief Executive Officer
On March 20, 2015, we entered into a three-yearan employment agreement with Mr. Schlarbaum in connection with his election to the office of President and Chief Executive Officer on February 6, 2015. Mr. Schlarbaum’s employment agreement entitles him to anset his initial annual base salary, of $350,000, which the compensation committee will reviewreviews for increases. In Mayincreases and has so increased in 2016, the compensation committee increased2017 and 2018. Effective January 2019, Mr. Schlarbaum’s base salary was further adjusted to $401,100, to reflect a 2% costthe scope of living adjustment.his responsibilities and performance, and consideration was given to his current salary level and amounts paid to peers at peer group companies. The employment agreement also entitles Mr. Schlarbaum to earn annual and long-term incentive awards on the terms established by the compensation committee for the applicable fiscal year. Mr. Schlarbaum’s employment agreement provided for a one-time sign-on award of a stock option to purchase shares of the Company’s common stock equal to four percent of the Company’s
common stock outstanding on the date of grant. Thus, on March 20, 2015, we granted Mr. Schlarbaum an option to purchase 400,000 shares of our common stock under the 2010 Plan and an option to purchase 16,145 shares as an inducement award outside of the 2010 plan, each at an exercise price of $4.10 per share. One-fourth of the sign-on option (representing the option to purchase 104,036 shares of our common stock) vested on March 20, 2016 and the remaining portion vests and becomes exercisable in equal installments on each of the second, third and fourth anniversaries of March 20, 2015, the date of the employment agreement.share, which has fully vested.
In the event of Mr. Schlarbaum’s termination without “cause” by us or by Mr. Schlarbaum for “good reason,” as such terms are defined in his employment agreement, we will pay or provide the following termination benefits:
salary continuation at his base salary then in effect for one year following termination;
a pro rata annual incentive award;
accelerated vesting of his sign-on option;
accelerated vesting of any outstanding long-term incentive awards; and
continued coverage under our health insurance plan for twelve months following termination.
In the event of Mr. Schlarbaum’s termination without “cause” by us or by Mr. Schlarbaum for “good reason” within two years of a “change-in-control,” as such terms are defined in his employment agreement, we will pay or provide all of the compensation and benefits referred to immediately above, except that continued coverage under our health insurance plan will continue for twenty-four months following termination.
In connection with his joining the Company in Fiscal 2015, Mr. Schlarbaum also received a cash sign-on bonus of $50,000.
Michael T. Williams,Thomas L. Barbato, Senior Vice President Finance and Chief Financial Officer
In September 2015,2018, we entered into an at-will employment agreement with Mr. Williams that superseded his prior employment agreement with us dated February 11, 2014. In consideration for entering into the employment agreement, Mr. Williams received a one-time cash payment of $15,000.Barbato to serve as our Senior Vice President and Chief Financial Officer. The employment agreement entitles Mr. Williams’Barbato to a base salary of $205,000.$235,000. The chief executive officer periodically will review Mr. Williams’periodically the salary and make recommendations to the compensation committee regarding any increases. We may notcannot decrease Mr. Williams’Barbato’s base salary as provided under the employment agreement except as necessary to enforce the clawback provisions. Mr. Barbato’s employment agreement provided for a one-time sign-on award of a stock option to purchase 100,000 shares of the Company’s common stock under the 2010 Plan. One-fourth of the sign-on option vested or will vest on each of the first four anniversaries of September 10, 2018, the date of the grant.
Pursuant to the terms of the employment agreement, in the event of Mr. William’s terminationBarbato is terminated without “cause” by us or by Mr. WilliamsBarbato for “good reason,” as such terms are defined in his employment agreement, we will pay or provide the following termination benefits:
salary continuation at his base salary then in effect for one yearsix months following termination;
a pro rata annual incentive award;
accelerated vesting of any outstanding long-term incentive awards, with any options (if applicable) to be exercised before the earlier of the option expiration date and one year following the employment termination date; and
continued coverage under our health insurance plan for six months following termination.
In the event of Mr. Williams’ termination without “cause” by us or by Mr. Williams for “good reason” within two years of a “change-in-control,” as such terms are defined in his employment agreement, we will pay or provide all of the compensation and benefits referred to immediately above, except that vesting of any of Mr. Williams’ outstanding long-term incentive awards will be accelerated.
Mr. WilliamsBarbato participates in our benefit plans generally applicable to other employees and executives. In addition, the employment agreement entitles Mr. WilliamsBarbato to receive annual and long-term incentive awards, generally on the terms established by the compensation committee for the applicable fiscal year.
Jens Hauvn, Senior Vice President, Operations
On September 8, 2015, we entered into an at-will employment agreement with Mr. Hauvn to serve as our Senior Vice President, Operations. Mr. Hauvn’s employment agreement entitles him to an annual base salary of $220,000, which the chief executive officer periodically will review for increases. We may not decrease Mr. Hauvn’s base salary as provided under the employment agreement except as necessary to enforce the clawback provisions. The employment agreement also entitles Mr. Hauvn to earn annual and long-term incentive awards on the terms established by the compensation committee for the applicable fiscal year. Mr. Hauvn’s employment agreement provided for one-time awards of (i) a stock option to purchase 50,000 shares of the Company’s common stock, (ii) a stock option to purchase 50,000 shares of the Company’s common stock upon Mr. Hauvn’s relocation of his primary residence to the greater Rochester, New York area, and (iii) a cash signing bonus of $9,500. On August 9, 2016, the compensation committee waived the requirement that Mr. Hauvn relocate to the greater Rochester, New
York area to receive the option to purchase 50,000 shares. Accordingly, on such date, Mr. Hauvn was granted an option to purchase 50,000 shares of common stock at $5.25 per share under the 2010 Plan. Subject to his continuous employment, the option vests and becomes exercisable as follows: 10% on August 9, 2017, 20% on August 9, 2018, 30% on August 9, 2019 and 40% on August 9, 2020.
Mr. Hauvn participates in Company benefit plans generally applicable to other senior executives.
In the event of Mr. Hauvn’s termination without “cause” by the Company or by Mr. Hauvn for “good reason,” as such terms are defined in his employment agreement, the Company will pay or provide the following termination benefits:
salary continuation at his base salary then in effect for six months following termination;
a pro rata annual incentive award;
the right to exercise any vested option(s) before the option’s expiration date and one year following termination, whichever is earlier;
accelerated vesting of any outstanding long-term incentive awards; and
continued coverage under our health insurance plan for six months following termination.
As of September 30, 2016, Mr. Hauvn did not utilize health insurance coverage through the Company.
Change in Control Provisions
Our 2001 Stock Option and Incentive Plan, our 20102019 Plan and the stock option, restricted stock award and restricted stock unit award agreements executed thereunder, or under our prior 2010 Plan, provide that upon a change in control, as defined in the plans, unless the board otherwise determines, all outstanding options and restricted stock will immediately become fully vested and exercisable.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table sets forth information concerning stock options and stock awards held by the named executive officers at September 30, 2016.2019.
| | | | | Option Awards | | Stock Awards | | Option Awards | | Stock Awards | |
| Name | | Number of securities underlying unexercised options (#) exercisable | | Number of securities underlying unexercised options (#) unexercisable (1) | | Option exercise price ($) | | Option expiration date | | Number of Shares or Units of Stock That Have Not Vested (#) (2) (3) | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)(4) | | Equity Incentive plan awards: Market of payout value of unearned shares, units or other rights that have not vested ($) | | Number of securities underlying unexercised options (#) exercisable | | Number of securities underlying unexercised options (#) unexercisable | | Option exercise price ($) | | Option expiration date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)(3) | | Equity Incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) | |
| Jeffrey T. Schlarbaum | | 100,000 |
| | 300,000 |
| | $ | 4.10 |
| | 3/20/2025 |
| | — |
| | — |
| | — |
| | — |
| | 400,000 |
| | — |
| | $ | 4.10 |
| | 3/20/2025 |
| | — |
| | — |
| | — |
| | — |
| |
| | | 4,036 |
| | 12,109 |
| | $ | 4.10 |
| | 3/20/2025 |
| | — |
| | — |
| | — |
| | — |
| | 16,145 |
| | — |
| | $ | 4.10 |
| | 3/20/2025 |
| | — |
| | — |
| | — |
| | — |
| |
| | | — |
| | — |
| | — |
| | — |
| | 7,500 |
| | 35,775 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,875 |
| (1) | $ | 12,956 |
| | — |
| | — |
| |
| | | — |
| | — |
| | — |
| | — |
| | 12,258 |
| | 58,471 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 17,015 |
| (2) | $ | 117,574 |
| | — |
| | — |
| |
| | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 49,030 |
| | 233,873 |
| | — |
| | — |
| | — |
| | — |
| | 14,232 |
| (2) | $ | 98,343 |
| | — |
| | — |
| |
| Michael T. Williams | | — |
| | — |
| | — |
| | — |
| | 3,580 |
| | 17,077 |
| | — |
| | — |
| |
| | | — |
| | — |
| | — |
| | — |
| | 4,970 |
| | 23,707 |
| | — |
| | — |
| |
| | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 19,881 |
| | 94,832 |
| |
| Jens Hauvn | | 5,000 |
| | 45,000 |
| | 4.25 |
| | 9/8/2022 |
| | — |
| | — |
| | — |
| | — |
| |
| | | — |
| | 50,000 |
| | 5.25 |
| | 8/9/2023 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 8,966 |
| (2) | $ | 61,955 |
| | — |
| | — |
| |
| | | — |
| | — |
| | — |
| | — |
| | 5,334 |
| | 25,443 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 68,059 |
| (6) | $ | 470,288 |
| (6) |
| | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 21,336 |
| | 101,773 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 58,928 |
| | $ | 407,192 |
| |
| | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 35,962 |
| | $ | 248,497 |
| |
| Thomas L. Barbato | | | 25,000 |
| | 75,000 |
| (4) | $ | 5.43 |
| | 9/10/2025 |
| | — |
| | — |
| | — |
| | — |
| |
| | | | — |
| | — |
| | — |
| | — |
| | 3,637 |
| (5) | $ | 25,132 |
| | — |
| | — |
| |
| | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 14,546 |
| | $ | 100,513 |
| |
| |
(1) | Option awards included in the above table to reflect awards granted in Fiscal 2016. Awards are subject to the following vesting periods: |
| |
a. | Mr. Schlarbaum’s stock options were granted on March 20, 2015 and vests on the dates shown below: |
|
| | |
Vesting Dates | | Amounts |
March 20, 2017 | | 104,036 shares |
March 20, 2018 | | 104,036 shares |
March 20, 2019 | | 104,037 shares |
| |
b. | Mr. Hauvn’s stock options were granted on September 8, 2015 and August 9, 2016 and vest on the dates shown below: |
|
| | |
Vesting Dates | | Amounts |
September 8, 2017 | | 10,000 shares |
September 8, 2018 | | 15,000 shares |
September 8, 2019 | | 20,000 shares |
August 9, 2017 | | 5,000 shares |
August 9, 2018 | | 15,000 shares |
August 9, 2019 | | 30,000 shares |
(2) Stock awards included in the above table reflect awards granted in Fiscal 2016. Awards are subject to the following vesting periods:
| |
a. | Mr. Schlarbaum's restricted stock award was granted on June 7, 2016 and vests with respect to these 1,875 shares on the dates shown below:June 7, 2020. |
|
| | |
Vesting Dates(2) | The awards to Mr. Schlarbaum of 17,015, 14,232, and 8,966 vest on March 16, 2020, March 15, 2021 and May 3, 2022, respectively, assuming he continues his service through such date. |
| Amounts |
June 7,(3) | Equity incentive plan awards included in the above table reflect restricted stock unit awards granted in Fiscal 2018 and Fiscal 2017 | | 1,875 shares |
June 7, using the target payout range, as defined in the applicable award agreements. These awards were granted on May 3, 2019, March 15, 2018 | | 1,875 shares |
June 7, and March 16, 2017 for Mr. Schlarbaum and, subject to continued employment will have a three-year cliff vest based upon the level of achievement of the performance goal set forth on an exhibit to the applicable award agreements, which is based on the Company’s average annual EBITDA, for the period from October 1, 2018 to September 30, 2021, October 1, 2017 to September 30, 2020, and October 1, 2016 to September 30, 2019, | | 1,875 shares |
June 7, 2020 | | 1,875 shares respectively. These awards were granted on May 3, 2019 for Mr. Barbato and subject to continued employment will have a three-year cliff vest based upon the level of achievement of the performance goal set forth on an exhibit to the applicable award agreements, which is based on the Company’s average annual EBITDA, for the period from October 1, 2018 to September 30, 2021. See the table above under “Annual Cash Incentive Awards” for a reconciliation of EBITDA to net income. |
| |
b.(4) | Mr. William’s restrictedBarbato’s stock award wasoptions were granted on June 14, 2016,September 10, 2018 and vestsvest with respect to one-fourth of the award (25,000 shares) on each of the dates shown below:first four anniversaries of the date of grant. |
|
| | |
Vesting Dates(5) | Mr. Barbato’s restricted stock units vest on the May 3, 2022, assuming his continued service through such date. |
| Amounts |
June 14, 2017(6) | | 895 shares |
June 14, 2018 | | 895 shares |
June 14, 2019 | | 895 shares |
June 14, 2020 | | 895 sharesThe performance measures were not achieved and this award was forfeited. |
(3) The awards to Messrs. Schlarbaum, Williams and Hauvn of 12,258, 4,970 and 5,344 restricted stock units, respectively, vest on April 18, 2019, assuming such named executive officer continues his service through such date.
(4) Equity incentive plan awards included in the above table reflect restricted stock unit awards granted in Fiscal 2016 using the target payout range, as defined in the applicable award agreements. These awards were granted on April 18, 2016 and subject to continued employment will have a three-year cliff vest based upon the level of achievement of the performance goal set forth on an exhibit to the applicable award agreements, which is based on the Company’s average annual EBITDA, for the period from October 1, 2015 to September 30, 2018. See the table above under “Annual Cash Incentive Awards” for a reconciliation of EBITDA to net income.
DIRECTOR COMPENSATION
Cash Compensation Paid to Non-Employee Directors
Director fees for Fiscal 20162019 were as follows:
|
| | |
Annual Board Retainer (1) | | $32,000,42,000, payable in cash or stock (5) |
Annual Committee Chair Retainer (2) | | $8,000, payable in quarterly installments in cash |
Board Meeting Fee (3) | | $4,000 payable in quarterly installments at the end of each quarter in cash or stock (5) |
Supplemental Fee (4) | | $1,000, payable in cash at the end of the fiscal year |
| Reimbursement for expenses incurred in attending board meetings | | |
| |
(1) | Payable in quarterly installments at the beginning of each quarter. In May 2019, the annual board retainer was increased by $10,000 annually. |
| |
(2) | Payable in $2,000 installments at the beginning of each quarter. |
| |
(3) | Payable in $1,000 installments in connection with each regular quarterly meeting actually attended. |
| |
(4) | The supplemental paymentfee will be paid in cash, at the end of the fourth quarter of each fiscal year. |
| |
(5) | Non-employee directors may elect to receive payment of their annual board retainer and quarterly meeting fees in cash or in shares of the Company’s common stock. |
Equity Compensation Paid to Non-Employee Directors
We provide each non-employee director with an annual grant of restricted stock, with a grant-date fair value of $25,000. We make these grants pursuant to the 20102019 Plan. The grant date typically coincides with our annual meeting of stockholders. The restrictions will lapse and the shares will vest in three equal installments as follows: 1/3 on the first anniversary of the date of grant, 1/3 on the second anniversary of the date of grant, and the balance on the third anniversary of the date of grant.
On March 8, 2016,April 25, 2019, each of the non-employee directors received the annual restricted share award of 5,7603,477 shares at a market value of $4.34$7.19 per share, which was the closing price of the Company’s common stock on the grant date as reported on the NYSE MKT.American stock exchange, the exchange upon which our common stock was then listed.
Director Compensation Table
The following table summarizes the cash and equity compensation earned by non-employee directors during Fiscal 2016.2019. | | Name(1) | | Fees Earned or Paid in Cash ($)(2) | | Stock Awards
($) (3)(4) | | All Other Compensation
($)(5) | | Total ($) | | Fees Earned or Paid in Cash ($) (2) | | Stock Awards
($) (3)(4) | | All Other Compensation
($) (5) | | Total ($) |
| Keith M. Butler | | 37,000 |
| | 24,999 |
| | 52 |
| | 62,051 |
| | 39,500 |
| | 25,000 |
| | 62 |
| (6) | 64,562 |
|
| Charles P. Hadeed | | 53,000 |
| | 24,999 |
| | 52 |
| | 78,051 |
| | 55,500 |
| | 25,000 |
| | 52 |
| | 80,552 |
|
| Lynn J. Hartrick | | 45,000 |
| | 24,999 |
| | 52 |
| | 70,051 |
| |
| Andrew M. Laurence | | 37,000 |
| | 24,999 |
| | 52 |
| | 62,051 |
| | 39,500 |
| | 25,000 |
| | 52 |
| | 64,552 |
|
| Jeremy R. Nowak | | 37,000 |
| | 24,999 |
| | 52 |
| | 62,051 |
| | 39,500 |
| | 25,000 |
| | 52 |
| | 64,552 |
|
| Eric B. Singer | | 37,000 |
| | 24,999 |
| | 52 |
| | 62,051 |
| |
| Michael W. Osborne | | | 41,500 |
| | 25,000 |
| | 52 |
| | 66,552 |
|
| |
(1) | Due to his role as an executive officer of the Company, Jeffrey T. Schlarbaum did not receive compensation for his service as a director. We report his compensation for Fiscal 20162019 in the section “Compensation“Compensation of Named Executive Officers”Officers” of this proxy statement. |
| |
(2) | The fees set forth in this column reflect compensation paid in cash to each director in respect of Fiscal 20162019 for board retainers, committee chair retainers, supplemental fees and meeting fees. Directors have the ability to elect to receive their board retainer and committee chair paymentmeeting fee payments in stock, but during Fiscal 20162019 each director elected to receive the board retainer and committee chair retainermeeting fee payments in cash. Payments for board meetings were paid in cash in Fiscal 2016. Each of Messrs. Hadeed and HartrickOsborne received annual retainers for serving as a committee chair during Fiscal 2016.2019. |
| |
(3) | The amounts shown reflect the aggregate grant date fair value computed in accordance with ASC 718. Under ASC 718, the fair value of such stock awards is determined as of the date of grant using the closing market price of our common stock on the date of grant. These amounts reflect our accounting for these awards and do not correspond to the actual values that may be realized by the directors and do not represent actual cash compensation paid to the directors. Pursuant to SEC rules, we disregarded the estimates of forfeitures related to service-based vesting conditions. The closing market price on the grant date was $4.34$7.19 per share on March 8, 2016.April 25, 2019. |
| |
(4) | The aggregate number of unvested restricted stock awards at the end of Fiscal 20162019 for each non-employee director was: |
|
| | | |
| Keith M. Butler | | 9,7209,615 |
|
| Charles P. Hadeed | | 9,720 |
|
Lynn J. Hartrick | | 9,7209,615 |
|
| Andrew M. Laurence | | 9,7209,615 |
|
| Jeremy R. Nowak | | 9,7209,615 |
|
Eric B. SingerMichael W. Osborne | | 9,7207,372 |
|
| |
(5) | Reflects the dollar value of insurance premiums paid by the Company during Fiscal 20162019 in connection with the policy of term life insurance provided to each non-employee director in the amount of $50,000. |
| |
(6) | Amount also includes nominal fees for participation as an executive coach under our Executive Mentoring Program. |
Deferred Compensation Plan
Effective January 1, 2009, the board established the IEC Electronics Corp. Board of Directors Deferred Compensation Plan (“Directors Deferred Plan”) which allows the non-employee directors of the Company the opportunity to defer all or part of their cash compensation. No director elected to participate in the Directors Deferred Plan in Fiscal 2016.2019.
EQUITY COMPENSATION PLAN INFORMATION |
| | | | | | | | | | | | | |
| Plan Category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted-average exercise price of outstanding options, warrants and rights | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) | |
| | | | (a) | | | (b) | | (c) | |
| Equity compensation plans: | | | | | | | | |
| Approved by shareholders | | 896,331 |
| (1) | | $ | 4.68 |
| | 816,476 |
| (2) (3) |
| Not approved by shareholders | | 16,145 |
| (4) | | $ | 4.10 |
| | — |
| |
| Total | | 912,476 |
| | | $ | 4.67 |
| | 816,476 |
| |
(1) Represents shares and restricted stock units issuable upon exercise of awards granted under the 2010 Plan, which was approved by IEC stockholders in January 2011.
(2) Excludes shares reflected in first column. Includes 726,775 shares remaining available for issuance under the 2019 Plan.
(3) Includes 89,701 shares available for issuance under the Employee Stock Purchase Plan.
(4) This is an inducement option award granted to our President and Chief Executive Officer, Jeffrey T. Schlarbaum, on March 20, 2015 with an exercise price of $4.10 per share. The option vested in equal amounts on the first four anniversaries of the date of grant and expires ten years from the date of grant.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Policies and Procedures for Review, Approval or Ratification of Related Person Transactions
Our board has adopted a written policy addressing the Company’s procedures with respect to the review, approval and ratification of transactions with related persons that are required to be disclosed pursuant to SEC rules. The policy provides that any transaction, arrangement or relationship with a “related person” (as defined in the policy) in which the Company participates and in which the related person has or will have a direct or indirect material interest and in which the amount involved is expected to exceed $90,000 in any fiscal year, will be subject to the prior review and approval or ratification by the audit committee.
OTHER MATTERS
The board of directors knows of no other matters that will be presented for consideration at the annual meeting,Annual Meeting, but if other matters properly come before the meeting, the persons named as proxies in the enclosed proxy will vote on such matter in their discretion according to their best judgment. Stockholders are urgedencouraged to date and sign the enclosed proxy and to mail it promptly in the enclosed postage-paid envelope.vote.
Dated: January 26, 201723, 2020 By Order of the Board of Directors
Newark, New York Jennifer M. Brown, Corporate Secretary
Jeffrey T. Schlarbaum, President and Chief Executive Officer
|
|
We will make available at no cost, upon your written request, a copy of our annual report on Form 10-K for the fiscal year ended September 30, 20162019 (without exhibits) as filed with the Securities and Exchange Commission. Copies of exhibits to our Form 10-K will be made available, upon your written request and payment to us of the reasonable costs of reproduction and mailing, if any. Written requests should be made to: Michael T. Williams,Thomas L. Barbato, Senior Vice President and Chief Financial Officer, IEC Electronics Corp., 105 Norton Street, Newark, New York 14513. |
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| | |
IEC ELECTRONICS CORP.
105 NORTON STREET
NEWARK, NY 14513
| | VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on Monday, March 6, 2017 (the day before the meeting date). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
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| ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
|
| | VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on Monday, March 6, 2017 (the day before the meeting date). Have your proxy card in hand when you call and then follow the instructions.
|
| | VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:x
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| | M98767-P71713 | | KEEP THIS PORTION FOR YOUR RECORDS |
| | | | |
| | | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED |
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| | | | | | | | | | | | | | | | |
| | IEC ELECTRONICS CORP. | | | | To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. | | | | | |
| | | | | | | | For All | Withhold All | For All Except | | | | | |
| | | The Board of Directors recommends you vote FOR all the nominees listed. | ¨ | ¨ | ¨ | | | | | | |
| | | 1. | Election of Directors | | | | | | | | | | | |
| | | | Nominees: | | | | | | | | | | | |
| | | | 01) | Keith M. Butler | 05) | Jeremy R. Nowak | | | | | | | | | |
| | | | 02) | Charles P. Hadeed | 06) | Jeffrey T. Schlarbaum | | | | | | | | | |
| | | | 03) | Lynn J. Hartrick | 07) | Eric B. Singer | | | | | | | | | |
| | | | 04) | Andrew M. Laurence | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | The Board of Directors recommends you vote FOR proposals 2 and 3. | | | | | | |
| | | | | | | | | | | | | For | Against | Abstain | |
| | | 2. | To ratify the selection of Crowe Horwath LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2017 | | ¨ | ¨ | ¨ | |
| | | | | | | | | | | | | | | | |
| | | 3. | To approve, on an advisory basis, the compensation paid to our named executive officers. | | ¨ | ¨ | ¨ | |
| | | | | | | | | | | | | | | | |
| | | NOTE: In their discretion, and in accordance with applicable law, the named proxies may vote upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. | | | | | |
| | | | | | | | | | | | | | | | |
| | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | | | | | |
| | | | | | | | | | | | | | | | |
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| | | Signature [PLEASE SIGN WITHIN BOX] | Date | | | Signature (Joint Owners) | | Date | | |
| | | | | | | | | | | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be held on March 7, 2017:
The Notice and Proxy Statement and Annual Report with Form 10-K are available at www.proxyvote.com.
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| | M98768-P71713 |
| | | |
| | | |
| IEC ELECTRONICS CORP. | |
| Annual Meeting of Stockholders | |
| March 7, 2017 at 9:00 AM | |
| This proxy is solicited by the Board of Directors and each matter to be voted on at the
Annual Meeting has been proposed by the Board of Directors of the Company.
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| | | |
| The undersigned hereby appoints Jeremy R. Nowak and Jeffrey T. Schlarbaum, and each of them, each with power of substitution, as proxies to attend the Annual Meeting of Stockholders of IEC Electronics Corp. to be held at the offices of Harter Secrest & Emery LLP located at 1600 Bausch & Lomb Place, 13th Floor, Rochester, NY 14604, on Tuesday, March 7, 2017 at 9:00 a.m., Eastern Time, and any adjournment thereof, and to vote as directed by the undersigned on the reverse side of this proxy, the number of shares the undersigned would be entitled to vote if personally present at such meeting.
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| l | This proxy will be voted as specified by you, and it revokes any prior proxy given by you. | |
| l | Unless you withhold authority to vote for one or more of the nominees according to the instruction on the reverse side of this proxy, your signed proxy will be voted FOR the election of the seven director nominees listed on the reverse side of this proxy and described in the accompanying proxy statement. | |
| l | Unless you specify otherwise, your signed proxy will be voted FOR Proposals 2 and 3 listed on the
reverse side of this proxy and described in the accompanying proxy statement.
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| l | You acknowledge receipt with this proxy of a copy of the notice of annual meeting and proxy statement
dated January 26, 2017, describing more fully the proposals listed in this proxy.
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| | Continued and to be signed on reverse side | |
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