IEH CORPORATION
140 58th Street
Bldg. B, Suite 8E
Brooklyn, New York 11220
PROXY STATEMENT
Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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IEH CORPORATION
(Name of the Corporation as Specified in Charter)
ROBERT KNOTH, SECRETARY
(Name of Person(s) Filing Proxy Statement)
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IEH CORPORATION
140 58th Street
Bldg. B, Suite 8E
Brooklyn, New York 11220
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on September 30, 2005
--------------------------------
To the Shareholders of
IEH CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of IEH
CORPORATION (the "Corporation") will be held at the Company's offices at 140
58th Street, Bldg. B, Suite 8E, Brooklyn, New York 11220 on September 30, 2005
at 9:00 a.m., New York time, for the following purposes:
1. To elect one (1) Director to IEH's Board of Directors to hold office
for a period of two years or until his successor is duly elected and
qualified;
2. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The close of business on August 26, 2005 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you plan
to attend, please complete, date and sign the accompanying proxy and return it
promptly in the enclosed envelope to assure that your shares are represented at
the meeting. If you do attend, you may revoke any prior proxy and vote your
shares in person if you wish to do so. Any prior proxy will automatically be
revoked if you execute the accompanying proxy or if you notify the Secretary of
IEH, in writing, prior to the Annual Meeting of Shareholders.
By Order of the Board of Directors
Robert Knoth,
Secretary
Dated: August 31, 2005
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
IEH CORPORATION
140 58th Street
Building B, Suite 8E
Brooklyn, New York 11220
PROXY STATEMENT FOR THE IEH CORPORATION
ANNUAL MEETING OF STOCKI1OLDERS
TO BE HELD ON SEPTEMBER 30, 2005
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS
Why am I receiving this proxy statement?
This proxy statement describes the proposal on which our board of
directors of IEH Corporation (the "Company") would like you, as a stockholder,
to vote at the annual meeting of the stockholders of the Company, which will
take place on September 30, 2005. It also gives you information on this proposal
so that you can make an informed decision. We intend to mail this proxy
statement and accompanying proxy card on or about August 31, 2005 to all
stockholders of record entitled to vote at the annual meeting.
In this proxy statement, we refer to IEH Corporation as "IEH", the "Company",
"we", "us" or "our."
Who can vote at the annual meeting of stockholders?
Stockholders who owned shares of common stock on August 26, 2005 may
attend and vote at the annual meeting. Each share is entitled to one vote. There
were 2,303,468 shares of the Company*s common stock outstanding on August 26,
2005. All shares of common stock shall vote together as a single class.
Information about the stockholdings of our directors and executive officers is
contained in the section of this proxy statement entitled "Voting Securities and
Ownership of Certain Beneficial Owners and Management" on page ten (10) of this
proxy statement.
What is the proxy card?
The proxy card enables you to appoint Mr. Robert Knoth, Secretary of the
Company, and Michael Offerman, Chief Executive Officer as your representative at
the annual meeting. By completing and returning the proxy card, you are
authorizing these persons to vote your shares at the annual meeting in
accordance with your instructions on the proxy card. This way, your shares will
be voted whether or not you attend the annual meeting. Even if you plan to
attend the annual meeting, it is a good idea to complete and return your proxy
card before the annual meeting date just in case your plans change. If a
proposal comes up for vote at the annual meeting that is not on the proxy card,
the proxies will vote your shares, under your proxy, according to his best
judgment.
What am I voting on?
You are being asked to vote on the election of Allen B. Gottlieb to IEH's
Board of Directors at the Annual Meeting.
Although we are unaware of any possible business to be addressed at the
meeting, we will also transact any other business that properly comes before the
annual meeting.
How does the board of directors recommend that I vote?
Our board of directors unanimously recommends that the nominated person be
re-elected back to the IEH's Board of Directors as a Class II member.
What is the difference between holding shares as a stockholder of record and as
a beneficial owner?
Most of our stockholders hold their shares in an account at a brokerage
firm, bank or other nominee holder, rather than holding share certificates in
their own name. As summarized below, there are some distinctions between shares
held record and those owned beneficially.
Stockholder of Record
If on August 26, 2005, your shares were registered directly in your name
with our transfer agent, Registrar and Transfer Company, you are a stockholder
of record who may vote at the annual meeting, and we are sending these proxy
materials directly to you. As the stockholder of record, you have the right to
direct the voting of your shares by returning the enclosed proxy card to us or
to vote in person at the annual meeting. Whether or not you plan to attend the
annual meeting, please complete, date and sign the enclosed proxy card to ensure
that your vote is counted.
Beneficial Owner
If on August 26, 2005, your shares are held in an account at a brokerage
firm or at a bank or other nominee holder, you are considered the beneficial
owner of shares held "in street name," and these proxy materials are being
forwarded to you by your broker or nominee who is considered the stockholder of
record for purposes of voting at the annual meeting. As the beneficial owner,
you have the right to direct your broker on how to vote your shares and to
attend the annual meeting. However, since you are not the stockholder of record,
you may not vote these shares in person at the annual meeting unless you receive
a valid proxy from your brokerage firm, bank or other nominee holder. To obtain
a valid proxy, you must make a special request of your brokerage firm, bank or
other nominee holder. If you do not make this request, you can still vote by
using the voting instruction card enclosed with this proxy statement; however,
you will not be able to vote in person at the annual meeting.
How do I Vote?
(1) You may vote by mail.
You may vote by mail by completing, signing and dating your proxy card and
returning it in the enclosed, postage-paid and addressed envelope. If you mark
your voting instructions on the proxy card, your shares will be voted:
o as you instruct, and
o according to the best judgment of Mr. Knoth if a proposal comes up
for a vote at the annual meeting that is not on the proxy card.
If you return a signed card, but do not provide voting instructions, your
shares will be voted:
ii
o to approve the election of the nominated person to the IEH Board of
Directors, and
o according to the best judgment of Mr. Knoth if a proposal comes up
for a vote at the annual meeting that is not on the proxy card.
(2) You may vote in person at the annual meeting.
We will pass out written ballots to anyone who wants to vote at the annual
meeting. However, if you hold your shares in street name, you must bring to the
annual meeting a valid proxy from the broker, bank or other nominee holding your
shares that confirms your beneficial ownership of the shares and gives you the
right to vote your shares. Holding shares in street name means you hold them
through a brokerage firm, bank or other nominee, and therefore the shares are
not held in your individual name. We encourage you to examine your proxy card
closely to make sure you are voting all of your shares in the Company.
What does it mean if I receive more than one proxy card?
You may have multiple accounts at the transfer agent and/or with
stockbrokers. Please sign and return all proxy cards to ensure that all of your
shares are voted.
What if I change my mind after I return my proxy?
You may revoke your proxy and change your vote at any time before the
polls close at the annual meeting. You may do this by:
o sending a written notice to the Secretary of the Company, Mr. Knoth,
Secretary of the Company stating that you would like to revoke your
proxy of a particular date,
o signing another proxy card with a later date and returning it before
the polls close at the annual meeting, or attending the annual
meeting and voting in person.
Please note, however, that if your shares are held of record by a
brokerage firm, bank or other nominee, you must instruct your broker, bank or
other nominee that you wish to change your vote by following the procedures on
the voting form provided to you by the broker, bank or other nominee. If your
shares are held in street name, and you wish to attend the annual meeting and
vote at the annual meeting, you must bring to the annual meeting a legal proxy
from the broker, bank or other nominee holding your shares, confirming your
beneficial ownership of the shares and giving you the right to vote your shares.
Will my shares be voted if I do not sign and return my proxy card?
If your shares are held in street name or in your name and you do not sign
and return your proxy card, your shares will not be voted unless you vote in
person at the annual meeting.
How are votes counted?
You may vote "for," "against," or "abstain" on re-electing the board
members.
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How many stockholders are needed either in person or by proxy to hold the annual
meeting?
To hold the annual meeting and conduct business, a majority of the
Company*s outstanding shares of common stock entitled to vote, in person or
represented by proxy, must be present at the annual meeting. This is called a
quorum.
Shares are counted as present at the annual meeting if the stockholder
either:
o is present and votes in person at the annual meeting, or
o has properly submitted a proxy card.
How many votes are required to re-elect the nominated person to the Board of
Directors?
The affirmative vote of a plurality of the votes cast as the meeting of
the shareholders by the holders of shares of Common Stock entitled to vote in
the election is required to elect each director.
How many votes are required to approve other matters that may come before the
stockholders at the annual meeting?
An affirmative vote of a majority of the votes cast at the annual meeting
is required for approval of all other items being submitted to the shareholders
for their consideration.
What happens if I don*t indicate how to vote my proxy?
If you just sign your proxy card without providing further instructions,
your shares will be counted as a "for" vote for the election of the director.
Is my vote kept confidential?
Proxies, ballots and voting tabulations identifying stockholders are kept
confidential and will not be disclosed except as may be necessary to meet legal
requirements.
Where do I find the voting results of the annual meeting?
We will announce preliminary voting results at the annual meeting and will
announce the final results in a press release. We will also publish the final
results in our quarterly report on Form lO-Q for the fiscal quarter following
the results of the voting on this matter. We will file that report with the SEC,
and you can obtain a copy by calling the SEC at l-800-SEC-0330 for the location
of the nearest public reference room, or through the EDGAR system at
www.sec.gov.
Who can help answer my questions?
You can contact our corporate headquarters, at (718) 492-9673 or by sending to
Mr. Robert Knoth at 140 58th Street, Bldg. B, Suite 8E, Brooklyn, New York
11220, any questions about proposals described in this proxy statement or how to
execute your vote.
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IEH CORPORATION
140 58th Street
Bldg. B, Suite 8E
Brooklyn, New York 11220
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PROXY STATEMENT
FOR
Annual Meeting of Shareholders
To Be Held on September 30, 2005
-------------------------------------
This proxy statement and the accompanying form of proxy have been mailed
on or about August 31, 2005 to the Common Stock shareholders of record on August
26, 2005 (the "Record Date") of IEH CORPORATION, a New York corporation ("IEH")
in connection with the solicitation of proxies by the Board of Directors of IEH
for use at the Annual Meeting of shareholders to be held on September 30, 2005
at 9:00 a.m. at IEH's offices at 140 58th Street, Suite 8E, Brooklyn, New York
11220, and at any adjournment thereof.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
Shares of IEH's Common Stock represented by an effective proxy in the
accompanying form will, unless contrary instructions are specified in the proxy,
be voted (i) FOR the election of the ONE (1) person nominated by the Board of
Directors as Director; and (ii) to transact such other business as may properly
come before the Annual Meeting or any adjournment thereof.
Any such proxy may be revoked at any time before it is voted. A
shareholder may revoke this proxy by notifying the Secretary of IEH either in
writing prior to the Annual Meeting or in person at the Annual Meeting, by
submitting a proxy bearing a later date or by voting in person at the Annual
Meeting. The presence of a majority of the holders of the outstanding Shares
entitled to vote, in person or represented by proxy, will constitute a quorum
for the transaction of business. Directors shall be elected by a plurality of
the votes cast at a meeting of the shareholders by the holders of shares
entitled to vote in the election. An affirmative vote of a majority of the votes
cast at the meeting is required for approval of all other items being submitted
to the shareholders for their consideration. The term votes cast is defined as
the votes actually cast for or against the resolution. A shareholder, not
present at the Annual Meeting, voting through a proxy, who abstains from voting
on any matter which is submitted to the shareholders for a vote, including the
election of Directors, is considered to be present at the meeting for the
purpose of establishing a quorum, however, the shares are not counted as being
voted for or against the matter submitted. Brokers holding shares for beneficial
owners in "street names" must vote those shares according to specific
instructions they received from the owners of such shares. If instructions are
not received, brokers may vote the shares on all matters to be voted upon at the
Annual Meeting.
IEH will bear the cost of the solicitation of proxies by the Board of
Directors. The Board of Directors may use the services of its executive officers
and certain Directors to solicit proxies from shareholders in person
and by mail, telegram and telephone. Arrangements may also be made with
brokers, fiduciaries, custodians, and nominees to send proxies, proxy statements
and other material to the beneficial owners of IEH's Common Stock held of record
by such persons, and IEH may reimburse them for reasonable out-of-pocket
expenses incurred by them in so doing.
The Annual Report to shareholders for the fiscal year ended March 25,
2005, including financial statements, accompanies this proxy statement.
The principal executive offices of IEH are located at 140 58th Street,
Bldg. B, Suite 8E, Brooklyn, New York 11220. IEH's telephone number is (718)
492-9673.
Principal Independent Accountants and Services; Fees Paid
The Board of Directors of IEH selected Jerome Rosenberg, P.C., Certified
Public Accountant, as the independent registered auditor of IEH for the fiscal
year ending March 25, 2005. Shareholders are not being asked to approve such
selection because such approval is not required. The audit services provided by
Jerome Rosenberg, P.C. consist of examination of financial statements, services
relative to filings with the Securities and Exchange Commission, and
consultation in regard to various accounting matters. Jerome Rosenberg, P.C. or
a member of his firm is expected to be present at the meeting, will have the
opportunity to make a statement if he so desires, and will be available to
respond to appropriate questions.
Audit Fees. During the fiscal year ended March 25, 2005 and March 26,
2004, IEH paid an aggregate of $27,000 each year to Jerome Rosenberg, P.C. for
fees related to the audit of its financial statements.
Financial Systems Design and Implementation. During the fiscal year ended
March 25, 2005, no fees were paid to Jerome Rosenberg, P.C. with respect to
financial systems design or implementation.
Tax Fees. During the fiscal years ended March 25, 2005 and March 26, 2004,
the Company paid to Jerome Rosenberg CPA P.C. the sums of $3,000 and $3,000 for
tax compliance, tax advice and tax planning services.
All Other Fees. During the fiscal year ended March 25, 2005 and March 26,
2004, IEH did not pay any other fees for services to its auditor.
The Board of Directors has determined that the services provided by Jerome
Rosenberg, P.C. and the fees paid to it for such services has not compromised
the independence of Jerome Rosenberg, P.C. We do not have an Audit Committee of
the Board. Because of our small size of operations and because we are not traded
on an exchange or on the Nasdaq Stock Markets, we are not required by law or
applicable regulations to have an Audit Committee. The Board acts as a whole
with respect to matters which might otherwise be acted upon by an Audit
Committee. Further, as a result of our financial condition, and limited
financial resources to obtain directors' and officers insurance and to provide
financial incentives to Board members, we have been unable to attract qualified
persons to serve on our Board.
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VOTING SECURITIES AND SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The securities entitled to vote at the meeting are IEH's Common Stock,
$.01 par value. The presence, in person or by proxy, of a majority of shares
entitled to vote will constitute a quorum for the meeting. Each share of Common
Stock entitles its holder to one vote on each matter submitted to shareholders.
The close of business on August 26, 2005 has been fixed as the Record Date for
the determination of the shareholders entitled to notice of and to vote at the
meeting and any adjournment thereof. At that date, 2,303,468 shares of Common
Stock were outstanding. Voting of the shares of Common Stock is on a
non-cumulative basis.
The following table sets forth certain information as of August 26, 2005
with respect to (i) the persons (including any "group" as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934), known by IEH to be the
beneficial owner of more than five percent (5%) of any class of IEH's voting
securities; (ii) each Executive Officer and Director who owns Common Stock in
IEH; and (iii) all Executive Officers and Directors as a group. As of August 26,
2005, there were 2,303,468 shares of Common Stock issued and outstanding.
Amount of and
Nature of
Name and Address of Beneficial Percentage of Class
Title of Class Beneficial Owner Ownership
Common Stock Michael Offerman 946,784 41%
$.01 Par Value 140 58th Street
Brooklyn, NY 11220(1)
Murray Sennet 24,500 1.1%
1900 Manor Lane
Plano, TX 75093
Allen Gottlieb 0 0
325 Coral Way
Ft. Lauderdale, FL 33301
Robert Knoth 400 0.02%
140 58th Street
Brooklyn, NY 11220
David and Nancy Lopez 188,500 8%
171 Edge of Woods Road
Southhampton, NY 11969(2)
All Officers & Directors as a Group
(4 in number) 991,684 43.08%
----------------------
* Less than 1%.
1. 43,600 shares of Common Stock are jointly owned by Mr. Offerman and his
wife, Gail Offerman.
3
2. Based upon a Form 13d Amendment dated July 29, 2005 filed by reporting
person.
All shares set forth above are directly owned by the named individual unless
otherwise stated.
It is expected that the only matters to be considered at the Annual
Meeting will be the election of Directors.
I. ELECTION OF DIRECTORS
IEH's Certificate of Incorporation provides that the Directors of IEH are
to be elected in two (2) classes; each class to be elected to a staggered two
(2) year term. The Board of Directors currently consists of three (3) members
divided into two (2) classes. Each class should have two (2) members, but, as a
result of the death of Mr. Robert Pittman, there is now only one Class II
member. Mr. Pittman's term was due to expire in 2005, however the vacancy
created by his death will not filled at the 2005 annual meeting and the Board of
Directors shall continue to consist of three members. Under our bylaws, the
Board has the power to fill a vacancy without shareholder approval. The members
of each class are elected for a staggered term of two (2) years each and until
their successors are duly elected and qualified. The Bylaws of IEH provide that
the Board shall consist of between three and eleven persons, and the Board has
currently set the number of persons on the Board at three members. The members
of each class are elected for a staggered term of two (2) years each and until
their successors are duly elected and qualified.
The person nominated for election to IEH's Board of Directors at the
Annual Meeting is Allen B. Gottlieb who will serve as a Class II member. The
nominee currently serves on the Board of Directors.
The affirmative vote of a plurality of the votes cast at a meeting of the
shareholders by the holders of shares of Common Stock entitled to vote in the
election is required to elect each Director. All proxies received by the Board
of Directors will be voted for the election as Directors of the nominee as
indicated below if no direction to the contrary is given. In the event the
nominee is unable to serve, the proxy solicited hereby may be voted, in the
discretion of the holder of the proxy, for the election of another person in his
stead. The Board of Directors knows of no reason to anticipate this will occur.
No family relationships exist between any Director or nominee for election as a
Director.
The following table sets forth certain information as of the date hereof
with respect to all of the Directors of IEH, including the ONE (1) nominee for
election to IEH's Board of Directors at the 2005 Annual Meeting. The information
provided below indicates those Directors whose term of office expires at the
Annual Meeting and those Directors whose term of office expires in 2006. The
Directors whose terms of office expire at the Annual Meeting are those Directors
nominated for election at the 2005 Annual Meeting.
Director Position with
Name Since Age Corporation Term Expires
---- ----- --- ----------- ------------
Michael Offerman 1973 60 Chairman of the Board of 2006
Directors and President
Murray Sennet 1970 78 Director 2006
Allen B. Gottlieb 1992 60 Director 2005
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4
Michael Offerman has been a member of IEH's Board of Directors since 1973.
In May, 1987, Mr. Offerman was elected President of IEH and has held that
position since that date. Prior to his becoming President, Mr. Offerman served
as Executive Vice-President of IEH.
Murray Sennet has been a member of IEH's Board of Directors since 1968.
Mr. Sennet was the Secretary and Treasurer of IEH at the time of his retirement
in April, 1986.
Allen Gottlieb (Nominee) has been a member of the Company's Board of
Directors since 1992. Mr. Gottleib has been an attorney in private practice for
the past five (5) years.
Significant Employees
Robert Knoth joined IEH as Controller in January, 1990 and was elected
treasurer of IEH in March, 1990. Mr. Knoth was elected as Secretary of IEH in
September 1992 and Mr. Knoth has held these positions since said dates. From
1986 to January, 1990, Mr. Knoth was employed as controller by G&R Preuss, Inc.,
a company engaged in the business of manufacturing truck bodies and accessories.
Joan Prideaux joined the Company in July 1995 as National Sales Manager
and also served as a Vice President until January 2002. Ms. Prideaux resigned as
an executive officer in January 2002, but continues to serve as a National Sales
Manager.
Mark Iskin is the Director of Purchasing, a position he has held since
September 2000. Prior to joining the Company, Mr. Iskin worked as a materials
and purchasing specialist in manufacturing and distribution companies. In his
last position with an industrial distributor, Mr. Iskin was responsible for
purchasing and managing vendors for the cutting tool section of the catalog. In
addition he participated in setting up and developing the company's
forecasting/planning software related to that department procedures.
Certain Reports
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers and persons who own, directly or indirectly,
more than 10% of a registered class of IEH's equity securities, to file with the
Securities and Exchange Commission ("SEC") reports of ownership and reports of
changes in ownership of Common Stock of IEH.
Officers, directors and greater than 10% shareholders are required to
furnish the Company with copies of all Section 16(a) reports that they file.
Based solely on review of the copies of such reports received by the Company,
the Company believes that filing requirements applicable to officers, directors
and 10% shareholders were complied with during the fiscal year.
Board Meetings, Committees and Compensation
IEH does not have any nominating, audit or compensation committee of the
Board of Directors. The Board believes that because of its relatively small size
and operations, the Board is well positioned to address issues as a whole,
including the appointment of independent auditors. Each Director receives an
annual fee of $l,000 for serving as a member of the Board of Directors each
fiscal year; however, the Board of Directors did not receive any compensation
during the last three (3) fiscal years due to the Company's financial condition.
Mr. Murray Sennet has received the sum of $7,200 for consulting services
provided to IEH for each of the last three fiscal years.
5
During the fiscal year ended March 25, 2005, 2 meetings of the Board of
Directors by telephone conference were held. All Directors participated in all
meetings of the Board.
All matters relating to audit, compensation, nominations and corporate
governance are considered and acted upon by our Board of Directors. We have no
independent directors as determined under the rules of any securities exchange
such as the New York Stock Exchange or the rules of the Nasdaq Stock Market. Our
Common Stock is not traded on any exchange or on the Nasdaq.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
The Board does not have a compensation committee. There are no interlocks
between our Directors and Directors of other companies.
Audit Committee and Audit Committee Financial Expert
We do not have an Audit Committee of the Board. Because of our small size
of operations and because we are not traded on an exchange or on the Nasdaq
Stock Markets, we are not required by law or applicable regulations to have an
Audit Committee. The Board acts as a whole with respect to matters which might
otherwise be acted upon by an Audit Committee. Further, as a result of our
financial condition, and limited financial resources to obtain directors' and
officers insurance and to provide financial incentives to Board members, we have
been unable to attract qualified persons to serve on our Board. We believe that
two of our directors, Mr. Allen Gottleib and Mr. Murray Sennet, would both
qualify as "independent directors" within the meaning of the term as applied by
the Nasdaq Stock Market Rule 4200(a)(14)
Our Board of Directors has determined that we do have one person, Mr.
Murray Sennet, who qualifies as an audit committee financial expert pursuant to
Item 401 of Regulation S-B.
Nominations to the Board of Directors
We do not have a separate Nominating Committee of our Board of Directors.
Given the small size of our operations, and our lack of financial resources, we
have been unable to attract qualified persons to serve on our Board of
Directors. As a result, our Board acts as a whole with respect to the
consideration of additional candidates for service on the Board. The Board
considers candidates for election to our Board of Directors, whether recommended
by security holders or otherwise, in accordance with the following criteria,
applicable to all candidates:
o Nominees shall have a reputation for integrity, honesty and
adherence to high ethical standards.
o Nominees should have demonstrated business acumen, experience and
the ability to exercise sound judgment in matters that relate to
current and long-term objectives of IEH and should be willing and
able to contribute positively to our decision-making process.
o Nominees should have a commitment to understand IEH and its
industries and to regularly attend and participate in meetings of
the Board and its committees.
o Nominees should have the interest and ability to understand the
sometimes conflicting interests of the various constituencies of
IEH, which include stockholders, employees, customers, governmental
units, creditors and the general public, and to act in the interests
of all stockholders.
o Nominees should not have, nor appear to have, a conflict of interest
that would impair the nominees' ability to represent the interests
of all of IEH' stockholders and to fulfill
6
the responsibilities of a director.
o Nominees shall not be discriminated against on the basis of race,
religion, national origin, sex, disability or any other basis
proscribed by applicable law.
The renomination of existing directors is not viewed as automatic, but
shall be based on continuing qualification under the criteria set forth above.
In addition, the Board considers the existing directors' performance on the
Board and any committee thereof. The Board also considers the backgrounds and
qualifications of the directors considered as a group and our ability to attract
other persons to serve in light of our industry, financial condition and
financial resources. The Board desires to ensure that the Board, when taken as a
whole, should provide a significant breadth of experience, knowledge and
abilities that shall assist the Board in fulfilling its responsibilities.
Procedure to be Followed by Security Holders in Submitting Director Candidate
Recommendations
Any security holder who desires the Board to consider one or more
candidates for nomination as a director should either by personal delivery or by
United States mail, postage prepaid, deliver a written recommendation addressed
to the Chairman of the Board of Directors, at 140 58th Street Building B, Suite
8E, Brooklyn, New York 11220, not later than (i) with respect to an election to
be held at an annual meeting of stockholders, 120 days prior to the anniversary
date of the immediately preceding annual meeting; and (ii) with respect to an
election to be held at a special meeting of stockholders for the election of
directors, the close of business on the tenth day following the date on which
notice of such meeting is first given to stockholders. Each written
recommendation should set forth: (a) the name and address of the stockholder
making the recommendation and of the person or persons recommended; (b) the
consent of such person(s) to serve as a director(s) of IEH if nominated and
elected; (c) description of how the person(s) satisfy the general criteria for
consideration as a candidate referred to above and (d) a biography or similar
information regarding the person being nominated as would satisfy the
information requirements required under the rules and regulations of the SEC for
inclusion in a proxy statement.
Communications with the Board of Directors
Any shareholder who wishes to communicate with the Board of Directors
should send a written letter to the Secretary of the Company, at the Company's
principal address. Letters may be directed to the Board as a whole or to
individual members.
Code of Ethics
Our Board of Directors adopted a Code of Ethics and a copy appears as
Exhibit A to this Proxy Statement. Our Code of Ethics and Conduct covers all our
employees and Directors, including our Chief Executive Officer and Chief
Financial Officer.
The Board of Directors recommends that you vote "FOR" the nominee for Director.
Executive Compensation
The following table sets forth below the summary compensation paid or
accrued by the Corporation during the fiscal years ended March 25, 2005. March
26, 2004, and March 28, 2003 for the Corporation's Chief Executive Officer:
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Other Annual
Name and Principal Position Year Salary Bonus Compensation
-------------- -------- ----- ------------
Michael Offerman, Chief Executive
Officer, President (1) March 25, 2005 $ 96,235 1,424 0
March 26, 2004 95,500 - 0
March 28, 2003 95,500 - 0
(1) During the years ended March 25, 2005, March 26, 2004 and March 28, 2003,
the Corporation provided automobile allowances to Mr. Offerman. This does not
include the aggregate incremental cost to the Corporation of such automobile or
automobile allowances. The Corporation is unable to determine without
unreasonable effort and expense the specific amount of such benefit, however,
the Corporation has concluded that the aggregate amounts of such personal
benefit for Mr. Offerman does not exceed $25,000 or 10% of the compensation
reported as total salary and bonus reported.
There are no employment agreements between the Company and members of its
senior management, including the Chief Executive, Michael Offerman.
No other officer of the Corporation received compensation (salary and
bonus) in excess of $100,000 during the fiscal years ended March 25, 2005 or
March 26, 2004.
Pension/Benefit Incentive Plan
In 1964, the Corporation's Shareholders and Board of Directors adopted a
contributory pension plan (the "Salaried Pension Plan") effective April 1, 1964,
for salaried employees of the Corporation. The Salaried Pension Plan as revised
on April 1, 1987, provides for retirement benefits for qualified employees upon
or prior to retirement.
For early retirement, employees are eligible to receive a portion of their
retirement benefits, starting 10 years prior to the employees anticipated normal
retirement age (age 65), if the employee has completed 15 years of service to
the Corporation. The employee is eligible to receive reduced retirement benefits
based on an actuarial table for a period not exceeding ten (10) years of his
lifetime. In no event would benefits exceed $12,000 per year.
For normal retirement at the age of sixty-five (65) the employee is
entitled to receive full retirement benefits for a period not exceeding ten (10)
years of his lifetime. If the employee should die prior to the ten-year period,
his beneficiaries will continue to receive the full benefit for the remainder of
the ten-year term. In no event will benefits exceed $12,000 per year.
If payment is made on the "joint and survivor basis" as elected by the
employee, benefits will be provided to both the employee and spouse on a reduced
basis over the life of both the employee and his spouse. If the employee should
die prior to the guaranteed ten year period, the spouse will receive the
employee benefit for the remainder of the term, after which, the spouse will
received the reduced spousal benefit for the life of the spouse. In no event
will the benefits pursuant to the joint and survivor basis exceed $12,000 per
year.
On June 30, 1995, the Company applied to the Pension Benefit Guaranty
Corporation ("PBGC") to have the PBGC assume all of the Company's
responsibilities and liabilities under its Salaried Pension Plan. On April 26,
1996, the PBGC determined that the Salaried Pension Plan did not have sufficient
assets available to pay benefits which were and are currently due under the
terms of the Plan.
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The PBGC further determined that pursuant to the provisions of the
Employment Retirement Income Security Act of 1974, as amended ("ERISA"), that
the Plan must be terminated in order to protect the interests of the Plan's
participants. Accordingly, the PBGC proceeded pursuant to ERISA to have the Plan
terminated and the PBGC appointed as statutory trustee, and to have July 31,
1995 established as the Plan's termination date. The Company and the PBGC
negotiated a settlement on the entire matter and on July 2, 2001, an agreement
was reached whereby the Company's liability to the PBGC was reduced to $244,000.
The Company will make monthly payments to the PBGC as follows:
September 1, 2003 to August 1, 2004 $2,000 per month
September 1, 2004 to August 1, 2006 $3,000 per month
September 1, 2006 to August 1, 2007 $4,000 per month
In addition, to the above referenced monthly payments, the Company will make
balloon payments of $25,000 each on the following dates:
January 1, 2004
May 1, 2004
May 1, 2005
January 1, 2006
The Company also granted the PBGC a lien on the Company's machinery and
equipment, subject to the pre-existing liens in favor of the UDC.
As a result of this agreement the amount due the PBGC was restated to $244,000,
$56,000 was paid during the year ended March 25, 2005, $39,000 was paid during
the year ended March 26, 2004. The balance of $149,000 is reported as follows:
$86,000 as a current liability and $63,000 as a long-term liability.
Stock Option Plan.
On September 21, 2001 the Company's shareholders approved the adoption of
the Company's 2002 Employees Stock Option Plan to provide for the grant of
options to purchase up to 750,000 shares of the Company's common stock to all
employees, including senior management. Options granted to employees under this
plan may be designated as options which qualify for incentive stock option
treatment under Section 422A of the Internal Revenue Code, or option which do
not so qualify.
Under this plan, the exercise price of an option designated as an
Incentive Stock Option shall not be less than the fair market value of the
Company's common stock on the day the option is granted. In the event an option
designated as an incentive stock option is granted to a ten percent (10%) share
holder, such exercise price shall be at least 110 Percent (110%) of the fair
market value or the Company's common stock and the option must not be
exercisable after the expiration of five years from the day of the grant.
Exercise prices of non incentive stock options may be less than the fair market
value of the Company's common stock.
The aggregate fair market value of shares subject to options granted to a
participants, which are designated as incentive stock options, and which become
exercisable in any calendar year, shall not exceed $100,000. As of March 25,
2004 no options had been granted under the plan.
Cash Bonus Plan
In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for
Executive Officers. Contributions to the Bonus Plan are made by the Company only
after pre-tax operating profits exceed $150,000 for a fiscal year, and then to
the extent of 10% of the excess of the greater of $150,000 of 25% of pre-tax
operating profits. There were no
9
contributions to the Bonus Plan for the fiscal years ended March 26, 2004 and
March 28, 2003. For the fiscal year ended March 25, 2005 the contribution was
$4,188.
FINANCIAL INFORMATION
A COPY OF IEH'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED MARCH 25, 2005 HAS
BEEN FURNISHED WITH THIS PROXY STATEMENT TO SHAREHOLDERS. A COMPLETE COPY OF
IEH'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED MARCH 25, 2005 AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MAY BE OBTAINED WITHOUT CHARGE
BY SHAREHOLDERS UPON WRITTEN REQUEST SENT TO ROBERT KNOTH, SECRETARY, IEH
CORPORATION, 140 58TH STREET, SUITE 8E, BROOKLYN, NEW YORK, 11220 SHAREHOLDERS
MAY RECEIVE, FOR A NOMINAL FEE, A COPY OF THE EXHIBITS. Each such request must
set forth a good faith representation that as of August 26, 2005, the person
making the request was the beneficial owner of Common Shares of IEH entitled to
vote at the 2005 Annual Meeting of Shareholders.
IV. OTHER BUSINESS
As of the date of this proxy statement, the items discussed herein contain
the only business which the Board of Directors intends to present, and is not
aware of any other matters which may come before the meeting. If any other
matter or matters are properly brought before the Annual Meeting, or any
adjournments thereof, it is the intention of the persons named in the
accompanying form of proxy to vote the proxy on such matters in accordance with
their judgment.
Shareholder Proposals
Proposals of Shareholders intended to be presented at IEH's 2005 Annual
Meeting of Shareholders must be received by IEH on or prior to May 1, 2006 to be
eligible for inclusion in IEH's proxy statement and form of proxy to be used in
connection with the 2005 Annual Meeting of Shareholders.
By Order of the Board of Directors.
Robert Knoth,
Secretary
Dated: August 31, 2005.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND
RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF
IT IS MAILED IN THE UNITED STATES OF AMERICA.
10
IEH CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
September 30, 2005
PROXY
The undersigned hereby appoints ROBERT KNOTH and MICHAEL OFFERMAN and each
of them, proxies, with full power of substitution to each, to vote all Common
Shares of IEH CORPORATION owned by the undersigned at the Annual Meeting of
Shareholders of IEH CORPORATION to be held on September 30, 2005 at 9:00 am
(eastern standard time) and at any adjournments thereof, hereby revoking any
proxy heretofore given. The undersigned instructs such proxies to vote:
I. ELECTION OF DIRECTORS
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to vote for all nominees
to the contrary below) [_] listed below [_]
(Instruction: Please check appropriate box. To withhold authority for any
individual nominee, strike a line through the nominee's name in the list below)
NOMINEE FOR DIRECTOR
Allen B. Gottlieb
AND TO VOTE UPON ANY OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF, all as described in the Proxy Statement
dated on or about August 31, 2005 receipt of which is hereby acknowledged.
Either of the proxies, who shall be present and acting, shall have and may
exercise all the powers hereby granted and to vote to adjourn the meeting.
Unless contrary instructions are given, the shares represented by this
proxy will be voted (a) for the Election of the two (2) Directors nominated and
(b) to vote upon any other business as may properly come before the meeting or
any adjournment thereof. Please sign exactly as name appears hereon. Joint
Owners should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
Said proxies will use their discretion with respect to any other matters
which properly come before the meeting.
This proxy is solicited on behalf of the Board of Directors.
Please sign and return the proxy in the enclosed envelope.
Dated: _________________________________, 2005
--------------------------------------------------------
Signature
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Print Name
(Please date and sign exactly as name appears at left.
For joint accounts, each joint owner should sign,
executors, administrators, trustees, etc., should also
so indicate when signing.)