Provided,
however, that with respect to any termination by executive pursuant to the
foregoing, executive shall have first provided notice to us of the existence of
the condition proposed to be relied upon within 90 days of the initial
existence of the condition, and shall have given us a period of 30 days during
which we may remedy the condition and we shall have failed to do so during such
period.
The
change in control provisions that we use contain a double trigger
requirement, meaning that for an executive to receive a payment under the
change of control provision, there must be both a change of control, as defined
in the applicable agreement, and an involuntary termination of the executives
employment. The double trigger requirement was chosen to prevent us from having
to pay substantial payments in connection with a change in control where an
executive had not suffered any adverse employment consequences. However, all
stock options will vest and become immediately exercisable upon a change of
control, regardless of whether the executive is involuntarily terminated.
Disability
Benefits for Certain Named Officers
. We provide all of our full-time
salaried employees with short-term disability benefits for six months. We also
maintain a disability insurance policy on behalf of certain members of our
senior management, including Messrs. Gorder, Binnix, Geraci and Gonsior, that
is in addition to the disability benefits that we maintain for our salaried
employees. In the event that any of these executives became disabled, as
provided in their respective policies, was unable to return to the performance
of their duties after six months and was terminated as an employee effective as
of December 31, 2008, they would be paid monthly benefits until age 65 as
follows: Mr. Gorder - $8,370 per month; Mr. Binnix - $4,480 per month; Mr.
Geraci - $6,450 per month; Mr. Gonsior - $5,860 per month; Mr. Conger - $3,000
per month; Mr. Gruenhagen - $6,935 per month; and Mr. Longval $3,250 per month.
Equity
Plans
. Our Named Officers hold unvested stock options
under our 2001 Stock Option Plan and our 2006 Equity Incentive Plan. Under the
2001 Stock Option Plan, upon the death, disability, retirement or change of
control of us, the holder of an option generally can exercise only options that
have vested as of the date of such event. In addition, that plan gives the
Compensation Committee the authority to accelerate the vesting of any unvested
options.
Under
our 2006 Equity Incentive Plan, all unvested options will automatically
accelerate and become vested upon the death, disability, retirement of the
holder or upon a change of control of us, as defined in that Plan.
Under
both the 2001 Stock Option Plan and 2006 Equity Incentive Plan, options held by
an employee whose employment is terminated for cause, as defined in those
plans, will terminate immediately. In addition, under both such plans, the
voluntary resignation of employment by an employee will not result in the
acceleration of unvested options.
CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS
Mr.
Gorder, our president, chief executive officer and a director, is a general
partner (with a one-third interest) of Arden Partners I, L.L.P., a
Minnesota limited liability partnership, referred to as Arden, that owns and
leases to our subsidiary, Resistance Technology, Inc., referred to as RTI,
property under a lease entered into November 31, 1991, and amended and restated
on November 1, 1996. The leased property is one of RTIs two manufacturing
facilities. In 2002, the lease was renewed with a term of October 31, 2011.
Under the lease, RTI pays Arden a base monthly rent of approximately $30,667.
In 2008, we paid Arden approximately $477,000 for rent, taxes and other
charges. Mr. Gorders interest in such payment was approximately $159,000.
27
We
use the law firm of Blank Rome LLP for legal services. A partner of that firm,
David A. Dorey, is the son-in-law of the Chairman of our Board of Directors,
Mr. McKenna; however, the legal services are provided by other attorneys
at that firm and not by Mr. Dorey. In 2008, we paid that firm approximately
$235,000 for legal services and costs. The interest of Mr. Dorey in such amount
is not determinable.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF AUDITOR
The
Corporations independent registered public accounting firm for the fiscal year
ended December 31, 2008 was the firm of Virchow, Krause & Corporation, LLP,
referred to as Virchow Krause. Services provided to the Corporation and its
subsidiaries by Virchow Krause in 2008 are described below under Independent
Registered Public Accounting Firm. The Audit Committee of the Board of
Directors has appointed Virchow Krause to serve as the independent registered
public accounting firm for the year ending December 31, 2009. Shareholders will
be asked to ratify this appointment. Although action by the shareholders on
this matter is not required, the Audit Committee believes it is appropriate to
seek shareholder ratification of the appointment of the independent registered
public accounting firm to provide a forum for shareholders to express their
views with regard to the Audit Committees appointment. If the shareholders do
not ratify the appointment of Virchow Krause, the selection of independent
registered public accounting firm may be reconsidered by the Audit Committee;
provided however, the Audit Committee retains the right to continue to engage
Virchow Krause. Notwithstanding the ratification of Virchow Krause as the
Corporations independent registered public accounting firm for the year ending
December 31, 2009, the Audit Committee retains the right to replace Virchow Krause
at any time without shareholder approval. A representative of Virchow Krause is
expected to be present at the annual meeting and to be available to respond to
appropriate questions. The representative will have the opportunity to make a
statement if he or she so desires.
Independent
Registered Public Accounting Fee Information
Fees
for professional services provided by Virchow Krause, the Corporations
independent auditor, for the fiscal years ended December 31, 2008 and 2007 in
each of the following categories were:
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Services
Rendered (1)
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2008
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2007
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|
|
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Audit Fees
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$
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267,842
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$
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257,529
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Audit-Related
Fees
|
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14,100
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15,400
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Tax Fees
|
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43,450
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45,270
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All Other
Fees
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5,000
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|
|
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|
|
|
|
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Total
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$
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330,392
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$
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318,199
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|
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(1)
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The aggregate fees
included in Audit Fees are fees billed
for
the fiscal years. The aggregate fees included in each of the other categories
are fees billed
in
the fiscal
years. Virchow Krause was engaged as independent auditor beginning in August
2005. Does not include: audit fees of $24,713 and $18,011 billed for 2008 and
2007, respectively, by Baker Tilly International, an affiliate of Virchow
Krause, for audits of the Corporations foreign subsidiaries.
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28
Audit
Fees
. The audit fees for 2008 and 2007 include fees
for professional services rendered for the audit of the Corporations annual
financial statements and the review of the financial statements included in the
Corporations Form 10-K Reports and the review of the financial statements
included in the Corporations Form 10-Q Reports.
Audit-Related
Fees.
The audit-related fees for 2008 and 2007 include
fees for professional services rendered for audits of the Corporations
employee benefit plan.
All
Other Fees.
All other fees for 2008 include fees for
professional services rendered for a required review of one of the
Corporations royalty arrangements.
Tax
Fees
. The tax fees for 2008 and 2007 include fees for
professional services rendered for tax compliance, tax advice and tax planning.
Auditor Independence
The
Audit Committee has considered the nature of the above-listed services provided
by Virchow, Krause & Company, LLP and determined that the provisions of the
services are compatible with maintaining its independence.
Pre-Approval Policy
The
Audit Committee has established pre-approval policies and procedures pursuant
to which the Audit Committee pre-approved the foregoing audit and permissible
non-audit services provided by Virchow, Krause & Company, LLP in 2008.
29
Audit Committee
Report
The
Audit Committee has prepared the following report on its activities with
respect to the Corporations audited consolidated financial statements for the
year ended December 31, 2008, which is referred to herein as the Corporations
audited consolidated financial statements:
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The Audit
Committee has reviewed and discussed the audited consolidated financial
statements with management.
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The Audit
Committee has discussed with Virchow, Krause & Company, LLP, the
Corporations independent auditors, the matters required to be discussed by
Statements on Auditing Standards No. 61, as amended, as adopted by the Public
Company Accounting Oversight Board in Rule 3200T.
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The Audit
Committee has received the written disclosures and the letter from Virchow,
Krause & Company, LLP required by applicable requirements of the Public
Company Accounting Oversight Board regarding the independent accountants
communications with the Audit Committees concerning independence, and has
discussed with Virchow, Krause & Company, LLP their independence.
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Based on the
review and discussions referred to above, the Audit Committee has recommended
to the Board of Directors that the audited consolidated financial statements
be included in the Corporations Annual Report on Form 10-K for the year
ended December 31, 2008, for filing with the Securities and Exchange
Commission.
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The Audit Committee
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Nicholas A. Giordano, Chairman
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Robert N. Masucci
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Michael J. McKenna
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The
Board of Directors recommends that stockholders vote for ratification of the
appointment of Virchow Krause as
the Corporations independent auditor for
2009.
30
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a)
of the Securities Exchange Act of 1934 requires the Corporations executive
officers and directors and persons who own more than ten percent of a
registered class of the Corporations equity securities (collectively, the
reporting persons) to file reports of ownership and changes in ownership with
the Securities and Exchange Commission and to furnish the Corporation with
copies of these reports.
Based
on the Corporations review of the copies of these reports received by it and
written representations, if any, received from reporting persons with respect
to the filing of reports of Forms 3, 4 and 5, the Corporation believes
that all filings required to be made by the reporting persons for fiscal year
2008 (unless otherwise noted) were made on a timely basis except: Mr. Binnix
reported late on a Form 4 the sale of Common Shares and Mr. Masucci reported
late on a Form 4 two purchases of Common Shares.
SHAREHOLDER PROPOSALS FOR 2010 ANNUAL MEETING
Under
the Corporations bylaws, shareholder proposals with respect to the 2010 Annual
Meeting of Shareholders, including nominations for directors, which have not
been previously approved by the Board of Directors, must be submitted to the
Secretary of the Corporation no later than November 13, 2009. Any such
proposals must be in writing and sent either by personal delivery, nationally
recognized express mail or United States mail, postage prepaid to Corporate
Secretary, IntriCon Corporation, 1260 Red Fox Road, Arden Hills, Minnesota
55112. Each nomination or proposal must include the information required by the
bylaws. All late or nonconforming nominations and proposals may be rejected by
the officer presiding at the meeting.
Shareholder
proposals for the 2010 Annual Meeting of Shareholders must be submitted to the
Corporation by November 13, 2009 to receive consideration for inclusion in the
Corporations Proxy Statement relating to the 2009 annual meeting of shareholders.
Any such proposal must also comply with SEC proxy rules, including SEC Rule
14a-8, and any applicable requirements set forth in the bylaws.
In
addition, shareholders are notified that the deadline for providing the
Corporation timely notice of any shareholder proposal to be submitted outside
of the Rule 14a-8 process for consideration at the Corporations 2010 Annual
Meeting of Shareholders is November 13, 2009. As to all such matters which the
Corporation does not have notice on or prior to November 13, 2009,
discretionary authority shall be granted to the persons designated in the
Corporations Proxy related to the 2010 annual meeting of shareholders to vote
on such proposal.
ANNUAL REPORT TO SHAREHOLDERS
A
copy of the Corporations 2008 Annual Report on Form 10-K for the year ended
December 31, 2008 as filed with the SEC is being mailed to each shareholder
with this Proxy Statement.
The
Corporation files reports and other information with the Securities and Exchange
Commission, referred to as the SEC. Copies of these documents may be obtained
at the SECs public reference room in Washington, D.C. The Corporations SEC
filings are also available on the SECs web site at http://www.sec.gov.
31
EACH
SHAREHOLDER CAN OBTAIN A COPY OF THE CORPORATIONS ANNUAL REPORT ON FORM 10-K,
INCLUDING FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES FOR THE YEAR ENDED
DECEMBER 31, 2008 AS FILED WITH THE SEC, WITHOUT CHARGE EXCEPT FOR EXHIBITS TO
THE REPORT, BY SENDING A WRITTEN REQUEST TO: INTRICON CORPORATION, 1260 RED FOX
ROAD, ARDEN HILLS, MINNESOTA 55112 ATTN: SCOTT LONGVAL.
HOUSEHOLDING
In
order to reduce printing costs and postage fees, the Corporation has adopted
the process called householding for mailing its annual report and proxy
statement to street name holders, which refers to shareholders whose shares
are held in a stock brokerage account or by a bank or other nominee. This means
that street name holders who share the same last name and address will receive
only one copy of the Corporations annual report and proxy statement, unless
the Corporation receives contrary instructions from a street name holder at
that address. the Corporation will continue to mail a proxy card to each
shareholder of record.
If you prefer
to receive multiple copies of the Corporations proxy statement and annual
report at the same address, you may obtain additional copies by writing to
IntriCon Corporation. Attention: Scott Longval, Chief Financial Officer, 1260
Red Fox Road, Arden Hills, Minnesota 55112 or by calling (651) 604-9526.
Eligible shareholders of record receiving multiple copies of the annual report
and proxy statement can request householding by contacting The Corporation in
the same manner.
OTHER MATTERS
The
Corporation is not presently aware of any matters (other than procedural
matters) that will be brought before the Meeting which are not reflected in the
attached Notice of the Meeting. The enclosed proxy confers discretionary
authority to vote with respect to any and all of the following matters that may
come before the Meeting: (i) matters which the Corporation did not receive
notice by November 24, 2008 were to be presented at the Meeting; (ii) approval
of the minutes of a prior meeting of shareholders, if such approval does not
amount to ratification of the action taken at the meeting; (iii) the election
of any person to any office for which a bona fide nominee named in this Proxy
Statement is unable to serve or for good cause will not serve; (iv) any
proposal omitted from this Proxy Statement and the form of proxy pursuant to
Rules 14a-8 or 14a-9 under the Securities Exchange Act of 1934; and (v) matters
incident to the conduct of the Meeting. In connection with such matters, the
persons named in the enclosed proxy will vote in accordance with their best
judgment.
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Scott
Longval
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Chief
Financial Officer, Secretary,
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and
Treasurer
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32
INTRICON CORPORATION
ARDEN HILLS, MINNESOTA 55112
This Proxy is Solicited on Behalf of the
Board of Directors
The
undersigned, revoking all prior proxies, hereby appoints SCOTT LONGVAL and
WARREN M. BECKER with full power of substitution, as proxies and hereby
authorizes them to represent and to vote all the Common Shares of IntriCon
Corporation held of record by the undersigned on March 6, 2009, at the annual
meeting of shareholders to be held on April 15, 2009, or any postponement or
adjournment thereof.
All
proxy agents present and acting in person or by their substitutes (or, if only
one is present and acting, then that one) may exercise all of the powers
conferred by this proxy.
Discretionary
authority is conferred by this proxy with respect to certain matters, as
described in IntriCon Corporations proxy statement.
x
Please mark your votes as in
this example.
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1.
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To elect the
following director nominees to hold office for three years until his
respective successor has been duly elected and qualified, as more fully
described in the accompanying proxy statement.
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01. Nicholas
A. Giordano
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o
FOR
NOMINEE
|
o
WITHHOLD
AUTHORITY
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02. Philip
N. Seamon
|
o
FOR
NOMINEE
|
o
WITHHOLD
AUTHORITY
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2.
|
To ratify
the appointment of Virchow, Krause & Company, LLP as the Corporations
independent auditor for fiscal year 2009.
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o
FOR
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o
AGAINST
|
o
ABSTAIN
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3.
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In their
discretion, the Proxies are authorized to vote upon such other business as
may properly come before the annual meeting.
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THE SHARES REPRESENTED BY THIS PROXY, DULY
EXECUTED, WILL BE VOTED AS INSTRUCTED ABOVE. IF INSTRUCTIONS ARE NOT GIVEN,
THEY WILL BE VOTED FOR THE ELECTION OF THE DIRECTOR NOMINEE AND FOR THE
RATIFICATION OF THE APPOINTMENT OF VIRCHOW, KRAUSE & COMPANY, LLP AS THE
CORPORATIONS INDEPENDENT AUDITOR FOR FISCAL YEAR 2009. WITH RESPECT TO SUCH
OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND ANY
ADJOURNMENTS OR POSTPONEMENTS THEREOF, SAID PROXY IS AUTHORIZED TO VOTE IN
ACCORDANCE WITH ITS BEST JUDGMENT.
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By signing this proxy, you hereby acknowledge receipt of the 2008
Annual Report to Shareholders, Notice of the Corporations 2009 Annual
Meeting of Shareholders and the Corporations Proxy Statement
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____________________________ Date ________, 2009
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Signature
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____________________________ Date ________, 2009
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Signature
(if joint account)
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NOTE: Please
sign and date and return in the pre-paid envelope provided.
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Your
signature should appear exactly as your name appears in the space to the
left.
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For joint
accounts, any co-owner may sign. When signing as attorney, executor,
administrator, or fiduciary, please give your full title as such.
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PLEASE SEE REVERSE FOR PROXY VOTING IN
INSTRUCTIONS
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YOUR VOTE IS IMPORTANT
VOTE TODAY IN ONE OF THREE WAYS:
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1.
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VOTE BY INTERNET:
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Log-on to
www.votestock.com
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Enter your
control number printed below
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Vote your
proxy by checking the appropriate boxes
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Click on
Accept Vote
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OR
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2.
|
VOTE BY TELEPHONE:
After
you call the phone number below, you will be asked to enter the control
number at the bottom of the page. You will need to respond to only a few
simple prompts. Your vote will be confirmed and cast as directed.
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Call
toll-free in the U.S. or Canada at
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1-866-578-5350
on
a touch-tone telephone
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OR
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3.
|
VOTE BY MAIL:
If
you do not wish to vote over the Internet or by telephone, please complete,
sign, date and return the above proxy card in the prepaid envelope provided.
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YOUR CONTROL NUMBER IS:
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You may vote by Internet or
telephone 24 hours a day, 7 days a week. Internet and telephone voting is
available through 11:59 p.m., eastern daylight time, on
April 14, 2009
Your Internet
or telephone vote authorizes the named proxies to vote in the same manner as if
you marked, signed and returned your proxy card.
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