IEH CORPORATION
140 58th Street
Bldg. B, Suite 8E
Brooklyn, New York 11220
PROXY STATEMENT
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IEH CORPORATION
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(Name of the Corporation as Specified in Charter)
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ROBERT KNOTH, SECRETARY
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(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 29, 2006
To the Shareholders of
IEH CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of IEH
CORPORATION (the "Company") will be held at the Company's offices at 140 58th
Street, Bldg. B, Suite 8E, Brooklyn, New York 11220 on September 29, 2006 at
9:00 a.m., New York time, for the following purposes:
1. To elect two (2) Directors to IEH's Board of Directors to hold
office for a period of two years or until their successors are
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 28, 2006 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 Corporation, in writing, prior to the Annual Meeting of Shareholders.
By Order of the Board of Directors
Robert Knoth,
Secretary
Dated: August 30, 2006
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 SHAREHOLDERS
TO BE HELD ON SEPTEMBER 29, 2006
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 ("IEH" or the "Company") would like you, as a
shareholder, to vote at the Annual Meeting of the Shareholders of the Company,
which will take place on September 29, 2006 at 9:00 a.m. at the Company's
offices. 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 30, 2006 to all shareholders 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 Shareholders?
Shareholders who owned shares of common stock on August 28, 2006 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 28,
2006. All shares of common stock shall vote together as a single class.
Information about the shareholdings of our directors and executive officers is
contained in the section of this proxy statement entitled "Voting Securities and
Security Ownership of Certain Beneficial Owners and Management" on page 8 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 proxies and
representatives 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 their best
judgment.
What am I voting on?
At the annual meeting you are being asked to vote on the election of
Michael Offerman and Murray Sennet to the Board of Directors of IEH Corporation.
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
persons be re-elected to the Board of Directors of IEH Corporation as a Class I
members.
What is the difference between holding shares as a shareholder of record and as
a beneficial owner?
Most of our shareholders hold their shares beneficially 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.
Shareholder of Record
If on August 28, 2006, your shares were registered directly in your
name with our transfer agent, Registrar and Transfer Company, you are a
shareholder of record who may vote at the annual meeting, and we are sending
these proxy materials directly to you. As the shareholder 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 28, 2006, 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
shareholder 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
shareholder 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.
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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 Messrs. Offerman and Knoth,
as your representatives and proxies, 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:
o to approve the election of the nominated persons to the
Company's Board of Directors, and
o according to the best judgment of Messrs. Offerman and Knoth,
as your representatives and proxies, 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, stating that you would like to revoke your proxy of a
particular date,
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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.
How many shareholders 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 shareholder
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 persons to the Board of
Directors?
The affirmative vote of a plurality of the votes cast at 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
shareholders 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.
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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 shareholders 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. We
will also publish the final results in our quarterly report on Form l0-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.
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Who can help answer my questions?
You can contact our corporate headquarters at (718) 492-4440 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
PROXY STATEMENT
FOR
Annual Meeting of Shareholders
To Be Held on September 29, 2006
This proxy statement and the accompanying form of proxy have been
mailed on or about August 30, 2006 to the holders of record on August 28, 2006
(the "Record Date") of the common stock, par value $.01 per share ("Common
Stock") of IEH CORPORATION, a New York corporation ("IEH" or the "Company") 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 29, 2006 at
9:00 a.m., New York time, 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 TWO (2) persons nominated by the Board of
Directors as Directors; 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 of
Common Stock 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
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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 31,
2006, 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)
492-4440.
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 31, 2006. 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 years ended March 31, 2006 and March 25,
2005, IEH paid an aggregate of $30,000 and $27,000, respectively, 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 years
ended March 31, 2006 and 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 31, 2006 and March 25,
2005, the Company paid to Jerome Rosenberg CPA P.C. the sums of $3,000 and
$3,000, respectively, for tax compliance, tax advice and tax planning services.
All Other Fees. During the fiscal year ended March 31, 2006 and March
25, 2005, IEH
7
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 all matters which might otherwise be acted upon
by an Audit Committee.
VOTING SECURITIES AND SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The securities entitled to vote at the meeting are IEH's Common Stock.
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 28, 2006 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 28,
2006 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 28,
2006, 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 923,784 40%
$.01 Par Value 140 58th Street
Brooklyn, NY 11220(1)
Murray Sennet 24,500 1.1%
1900 Manor Lane
Plano, TX 75093
0 0
Allen Gottlieb
325 Coral Way
Ft. Lauderdale, FL 33301
8
Robert Knoth 400 *
140 58th Street
Brooklyn, NY 11220
David and Nancy Lopez 188,500 8.2%
171 Edge of Woods Road
Southhampton, NY 11969(2)
All Officers & Directors as a Group
(4 in number) 948,684 41.19%
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* Less than 1%.
(1) 43,600 shares of Common Stock are jointly owned by Mr. Offerman and his
wife, Gail Offerman.
(2) Based upon a Form 13d Amendment dated August 5, 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.
PROPOSAL 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 in 2004, who was then a
director of the Company, 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 was
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 persons nominated for election to IEH's Board of Directors at the
Annual Meeting are Michael Offerman and Murray Sennet who will serve as a Class
I members of the Board. The nominees currently serve 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
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Director. All proxies received by the Board of Directors will be voted for the
election as Directors of the nominees as indicated below if no direction to the
contrary is given. In the event that either 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 TWO (2)
nominees for election to IEH's Board of Directors at the 2006 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 2007. The Directors whose terms of office expire at the Annual Meeting are
those Directors nominated for election at the 2006 Annual Meeting.
Director Position with
Name Since Age Corporation Term Expires
---- ----- --- ----------- ------------
Michael Offerman 1973 65 Chairman of the Board of 2006
Directors and President
Murray Sennet 1970 83 Director 2006
Allen B. Gottlieb 1992 65 Director 2007
--------------------
Michael Offerman (Nominee) 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 (Nominee) 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 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 April 1994, as Director of Sales
and Marketing. She also served as a Vice President until January 2002. Ms.
Prideaux resigned as an executive officer in January 2002.
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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.
David Offerman joined IEH in September 2004 as the National Sales
Manager. Prior to joining IEH, David worked as an account executive and sales
manager in the telecommunication industry.
Robert Romeo serves as Vice President of Engineering for IEH; a post he
has held since October 2005. Robert has corporate responsibility for engineering
products and driving product enhancements to satisfy the demanding application
requirements of IEH customers. In addition, Robert is tasked with engineering
new product developments in the IEH connector offerings to broaden the market
base of potential customers. These new connectors will introduce the traditional
IEH quality and value to industries that specify exceptional reliability and
performance in electrical and electronic equipment.
Before joining IEH, Robert worked for more than twenty years in
positions of increasing responsibility for major national manufacturers of
electrical and electronic goods for residential, industrial, government and OEM
markets.
Paul Tzetzos joined IEH in November, 2005 as a Quality Assurance
Director. Paul has over 20 years of experience in the field of Quality
Assurance; with the last 15 years as Director/Manager. A degreed Engineer; with
diversified knowledge in developing, implementing, maintaining, and improving
Quality Systems, such as, ISO 9001:2000, EECS, MIL-Q-9858A, ETC. A certified
Lead and Internal Auditor, Paul has a great deal of knowledge concerning
military and industry specifications and standards.
Certain Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended,
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.
11
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 such
compensation for the fiscal year ended March 26, 2004 due to the Company's then
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.
During the fiscal year ended March 31, 2006, one (1) meeting of the
Board of Directors was held by telephone conference. All Directors participated
in such meeting of the Board.
All matters relating to audit, compensation, nominations and corporate
governance are considered and acted upon by our Board of Directors.
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 our shares of Common Stock 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
Gottlieb 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)(15).
Our Board of Directors has determined that we do have one current
director, 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 other 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
12
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 shareholders, employees,
customers, governmental units, creditors and the general
public, and to act in the interests of all shareholders.
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 shareholders and to fulfill 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 shareholders, 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 shareholders for the election of
directors, the close of business on the 10th day following the date on which
notice of such meeting is first given to shareholders. Each written
recommendation should set forth: (a) the name and address of the shareholder
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
13
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.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE TWO (2)
NOMINEES FOR DIRECTORS.
EXECUTIVE COMPENSATION
The following table sets forth below the summary compensation paid or
accrued by the Company during the fiscal years ended March 31, 2006, March 25,
2005 and March 26, 2004, for the Company's Chief Executive Officer:
Other Annual
Name and Principal Position Year Salary Bonus Compensation
--------------------------- -------------- -------- ------ ------------
Michael Offerman, Chief Executive
Officer, President (1) March 31, 2006 $100,000 24,000 0
March 25, 2005 96,235 1,424 0
March 26, 2004 95,500 - 0
(1) During the years ended March 31, 2006, March 25, 2005 and
March 26, 2004, the Company provided automobile allowances to
Mr. Offerman. This does not include the aggregate incremental
cost to the Company of such automobile or automobile
allowances.
There are no employment agreements between the Company and members of
its senior management, including the Chief Executive Officer and President of
the Company, Michael Offerman.
No officer of the Company received compensation (salary and bonus) in
excess of $100,000 during the fiscal years ended March 25, 2005 or March 26,
2004. For the fiscal year ended March 31, 2006, Michael Offerman, Chief
Executive Officer and President of the Company, received aggregate compensation
of $124,000.
Pension/Benefit Incentive Plan
In 1964, the Company's shareholders and Board of Directors adopted a
contributory pension plan (the "Salaried Pension Plan") effective April 1, 1964,
for salaried employees of the Company. The Salaried Pension Plan as revised on
April 1, 1987, provides for retirement
14
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 Company. The employee is eligible to receive reduced retirement
benefits based on an actuarial table for a period not exceeding 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 10 years
of his lifetime. If the employee should die prior to the 10-year period, his
beneficiaries will continue to receive the full benefit for the remainder of the
10-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 10-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 such Plan.
The PBGC further determined that pursuant to the provisions of the
Employment Retirement Income Security Act of 1974, as amended ("ERISA"), that
the Salaried Pension 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
Additionally, the Company has made balloon payments of $25,000 each on
the following dates: January 1, 2004, May 1, 2004, May 1, 2005 and January 1,
2006.
The Company also granted the PBGC a lien on the Company's machinery and
equipment.
As a result of this agreement the amount due the PBGC was restated to $244,000.
$86,000 was
15
paid during the year ended March 31, 2006, $56,000 was paid during the year
ended March 25, 2005, and $39,000 was paid during the year ended March 26, 2004.
The balance of $63,000 is reported as follows: $43,000 as a current liability
and $20,000 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. To date, no options have been granted
under the 2002 Employees Stock Option Plan.
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%) shareholder, 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 participant, which are designated as incentive stock options, and which become
exercisable in any calendar year, shall not exceed $100,000. As of March 31,
2006, 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 Cash 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 or 25% of pre-tax
operating profits. There were no contributions to the Bonus Plan for the fiscal
year ended March 26, 2004. For the fiscal year ended March 25, 2005 the
contribution was $4,188. The contribution for the year ended March 31, 2006 was
$75,500.
FINANCIAL INFORMATION
A COPY OF IEH'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED MARCH 31, 2006
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 31, 2006 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
16
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 28, 2006, the person making the request was the beneficial owner of
shares of Common Stock of IEH entitled to vote at the 2006 Annual Meeting of
Shareholders.
Please read all the sections of this proxy statement carefully. We are
subject to the informational requirements of the Exchange Act and in accordance
therewith, file reports, proxy statements and other information with the SEC.
These reports, proxy statements and other information filed by us with the SEC
may be inspected without charge at the public reference section of the SEC at
100 F Street, NE, Washington, DC 20549, Office of Investor Education and
Assistance, as well as at the regional offices of the SEC. Copies of this
material also may be obtained from the SEC at prescribed rates. The SEC also
maintains a website that contains reports, proxy and information statements and
other information regarding public companies that file reports with the SEC.
Copies of these materials may be obtained from the SEC's website at
http://www.sec.gov.
------------------
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 2006 Annual
Meeting of Shareholders must be received by IEH on or prior to May 1, 2007 to be
eligible for inclusion in IEH's proxy statement and form of proxy to be used in
connection with the 2007 Annual Meeting of Shareholders.
By Order of the Board of Directors.
Robert Knoth,
Secretary
Dated: August 30, 2006
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.
17
IEH CORPORATION
ANNUAL MEETING OF SHAREHOLDERS - SEPTEMBER 29, 2006
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of IEH CORPORATION, a New York corporation,
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 29, 2006 at 9:00 am (New York 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) o listed below o
(Instruction: Please check appropriate box. To withhold authority for
any individual nominee, strike a line through the nominee's name in the list
below)
NOMINEES FOR DIRECTORS
Michael Offerman Murray Sennet
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 30, 2006 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, including, without limitation, 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.
Please sign, date and return this proxy immediately in the enclosed
envelope.
Dated: _____________________, 2006
-----------------------------------
Signature
-----------------------------------
Print Name
-----------------------------------
Print Name (if joint)
(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.)