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TABLE OF CONTENTS
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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NUTRACEUTICAL INTERNATIONAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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Form, Schedule or Registration Statement No.:
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Date Filed:
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Nutraceutical International Corporation
1400 Kearns Boulevard, 2
nd
Floor
Park City, Utah 84060
January 8, 2010
To our Stockholders:
You are cordially invited to the 2010 Annual Meeting of Stockholders for Nutraceutical International Corporation.
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Date:
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Thursday, February 18, 2010
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Time:
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9:00 a.m.
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Place:
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St. Regis Deer Crest Resort
2300 Deer Valley Drive East
Park City, Utah 84060
Phone: (435) 655-6106
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At
the Annual Meeting, you will have the opportunity to act on the following matters:
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Election of two Class III directors, each for a term of three years;
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Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm
for the fiscal year ending September 30, 2010; and
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Any other business that may properly come before the meeting or any adjournment of the meeting.
In
addition to the formal items of business, we will review the major developments and accomplishments of fiscal 2009 and answer appropriate questions that you may have about us and our
activities.
This
letter is your notice of the Annual Meeting and is being sent to stockholders of record as of the close of business on December 28, 2009, who are the only holders entitled to
notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof.
You
will find information regarding the matters to be voted on in the attached notice of Annual Meeting of Stockholders and Proxy Statement. The Securities and Exchange Commission
recently adopted rules that permit proxy materials to be furnished over the Internet rather than in paper form. Accordingly, we are sending many of our stockholders a notice regarding the availability
of this Proxy Statement, our Annual Report on Form 10-K for fiscal 2009 and other proxy materials via the Internet. This electronic process gives you fast, convenient access to the
materials, reduces the impact on the environment and reduces our printing and mailing costs. A paper copy of these materials can be requested using one of the methods described in the materials.
It is important that your shares be represented at the Annual Meeting. Therefore, I urge you to promptly vote and submit your proxy by phone, via the Internet, or
by signing, dating and returning the enclosed proxy card or voting instruction card in the enclosed envelope, even if you plan to attend the Annual Meeting. If you do attend the Annual Meeting, you
may personally vote, which will revoke your signed proxy. You may also revoke your proxy at any time before the Annual Meeting by following the instructions in this Proxy
Statement.
If
you have any questions concerning the meeting, please contact our investor relations at 435-655-6106 or
investor@nutraceutical.com
.
Thank
you for your ongoing support and continued interest in our company. We look forward to seeing you at the Annual Meeting.
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Sincerely,
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Frank W. Gay II
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Chairman of the Board and Chief Executive Officer
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WHERE CAN I GET MORE INFORMATION?
We file annual, quarterly and special reports, proxy statements and other information (including certain press releases filed on
Form 8-K) with the SEC. Our SEC filings are available to the public over the Internet at the SEC's web site (
http://www.sec.gov
). You
may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of any document we file at
prescribed rates
by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference facilities.
Enclosed
with this Proxy Statement is a copy of our Annual Report on Form 10-K for the fiscal year ended September 30, 2009, along with the accompanying
financial statements and schedules. The Annual Report is not to be regarded as proxy soliciting material. If you would like copies of any other recently filed documents, please direct your request to
Investor Relations, Nutraceutical International Corporation, 1400 Kearns Boulevard, 2
nd
Floor, Park City, Utah 84060.
Our
SEC filings are only one of the ways that we try to reach our stockholders. Please remember that there are other sources of information available to you throughout the year,
including:
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our investor information line at 1-435-655-6106 and email at
investor@nutraceutical.com
; and
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various financial web sites, which provide copies of or links to our SEC filings and press releases, which may be accessed
from our website as well (
www.nutraceutical.com
).
The
information contained in our other SEC filings and on our website is not incorporated into this Proxy Statement.
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PROXY STATEMENT FOR THE
NUTRACEUTICAL INTERNATIONAL CORPORATION
2010 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
PROXY STATEMENT
You were sent this Proxy Statement and the enclosed proxy card or voting instruction card because our Board of Directors is soliciting
your proxy to vote at the 2010 Annual Meeting of Stockholders. This Proxy Statement summarizes the information that you will need in order to vote at the Annual Meeting. However, you need not attend
the Annual Meeting in order to vote your shares. You may instead vote your shares by phone, via the Internet or by completing, signing, dating and returning the enclosed proxy card or voting
instruction card.
This
Proxy Statement, the enclosed proxy card and our Annual Report on Form 10-K have been or will be sent on or about January 11, 2010 to all stockholders who
owned our common stock at the close of business on December 28, 2009, the record date, who are the only stockholders entitled to vote at the Annual Meeting. For ten days prior to the Annual
Meeting, a list of our stockholders will be open for examination at our headquarters by any stockholder for any reason relating to the meeting. As of the record date, there were 10,421,352 shares of
our common stock issued, outstanding and entitled to vote.
NUMBER OF VOTES
Each share of our common stock entitles you to one vote on each proposal at the Annual Meeting. Your proxy card indicates the number of
shares of our common stock that you own.
QUORUM REQUIREMENT
At the Annual Meeting, the Inspector of Election will determine whether a quorum is present. A quorum is required to conduct any
business at the Annual Meeting. For a quorum to be present, the holders of a majority of the issued and outstanding shares of common stock on the record date and entitled to vote must be present in
person or by proxy. If you mark your proxy card "ABSTAIN," or if your proxy vote is held in street name by your broker and it is not voted on all proposals, your proxy vote will nonetheless be counted
as present for purposes of determining a quorum.
VOTING METHODS
This Proxy Statement is furnished in connection with the solicitation of proxies by Nutraceutical on behalf of the Board of Directors
for the 2010 Annual Meeting of Stockholders.
You
can vote your shares using one of the following methods:
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Vote through the Internet at
www.proxyvote.com
using the instructions
included in the notice regarding the Internet availability of proxy materials, the proxy card or voting instruction card;
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Vote by telephone using the instructions on the proxy card or voting instruction card if you received a paper copy of the
proxy materials;
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Complete and return a written proxy or voting instruction card using the proxy card or voting instruction card if you
received a paper copy of the proxy materials; or
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Attend and vote at the meeting.
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Internet
and telephone voting are available 24 hours a day, and if you use one of those methods, you do not need to return a proxy or voting instruction card. Unless you are planning to vote at
the meeting, your vote must be received by 11:59 p.m., Eastern Standard Time, on February 17, 2010.
VOTING BY PROXY
Whether or not you plan to attend the Annual Meeting, please vote your shares by phone, via the Internet or by completing, signing,
dating and returning the enclosed proxy card or voting instruction card in the envelope provided. Submitting your proxy now will not affect your right to attend the Annual Meeting and vote in person.
The last vote that you submit chronologically prior to or at the Annual Meeting will supersede your prior vote(s).
Voting
by the Internet or telephone is fast, convenient, and your vote is immediately confirmed and tabulated. Most important, by using the Internet or telephone, you help us reduce
postage and proxy tabulation costs. If you fill out your proxy card properly and return it in time to vote, your shares will be voted as you have directed. If you sign the proxy card but do not make
any specific indications of how you wish to vote, a proxy representative will vote your shares:
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"FOR" the election of two Class III directors; and
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"FOR" ratifying the appointment of PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") as our independent
registered public accounting firm for the fiscal year ending September 30, 2010.
Presently,
we know of no matters to be addressed at the Annual Meeting beyond those described in this Proxy Statement. Under our bylaws, the deadline has passed for stockholders to
notify us of any proposals or director nominations to be presented for action at the Annual Meeting.
REVOKING YOUR PROXY
If you give a proxy, you may revoke it at any time before it is exercised. You may revoke your proxy in the following
ways:
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You may send in another proxy with a later date, before the Annual Meeting;
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You may notify us of your proxy revocation in writing, before the Annual Meeting; or
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You may attend the Annual Meeting, advise the Inspector of Election of your revocation, and then vote in person.
Written
submissions of another proxy with a later date or of a proxy revocation should be delivered to the Nutraceutical Legal Department at 1400 Kearns Boulevard,
2
nd
Floor, Park City, UT 84060, at least one business day prior to the Annual Meeting, or they may be delivered to the Inspector of Election at the Annual Meeting.
VOTING IN PERSON
If you plan to attend the Annual Meeting and vote in person, you may deliver your completed proxy card or you may obtain a ballot when
you arrive. However, if your shares are held in the name of your broker, bank, or other nominee, you must bring an account statement or letter from the nominee indicating that you are the beneficial
owner of the shares on December 28, 2009, the record date for voting. Even if you are planning to attend the Annual Meeting, we encourage you to submit your proxy in advance to ensure the
representation of your shares at the Annual Meeting.
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APPROVING THE PROPOSALS
PROPOSAL I: ELECTING TWO CLASS III DIRECTORS
At
the Annual Meeting, the two nominees for director receiving the greatest number of votes cast in person or by proxy, whether or not a majority of the total
votes cast, will be elected. If you are present and do not vote, or if you send in your proxy card marked "WITHHOLD AUTHORITY," your vote will have no impact on the election of those directors as to
whom you have withheld votes.
PROPOSAL II: RATIFYING THE APPOINTMENT OF PRICEWATERHOUSECOOPERS AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 30,
2010
The
ratification of the appointment of an independent registered public accounting firm requires the affirmative vote of a majority of the shares voting at the
Annual Meeting, cast either in person or by proxy. If you attend the Annual Meeting but do not vote, or if you send in your proxy card marked "ABSTAIN," your abstention will have no impact on the
ratification of the appointment of the independent registered public accounting firm.
EFFECT OF BROKER NON-VOTES
Under the rules of The Nasdaq Stock Market ("Nasdaq"), where our common stock is listed for trading, if your broker holds your shares
in its name, the broker will be entitled to vote your shares on the proposals even if it does not receive instructions from you. If your broker does not vote your shares on any of the proposals, such
"broker non-votes" will not be counted for purposes of determining whether the proposal has received enough affirmative votes to be approved.
COST OF SOLICITING PROXIES
We will bear all of the costs of soliciting these proxies on behalf of our Board of Directors. In addition to mailing proxy
solicitation material, our directors, officers and employees may also solicit proxies in person, by telephone or by other means of communication. We will not compensate these directors, officers and
employees additionally for this solicitation, but we may reimburse them for any out-of-pocket expenses that they incur in the process of soliciting proxies. We reserve the
right to retain other outside agencies for the purpose of soliciting proxies. We will arrange for brokers and other custodians, nominees and fiduciaries to forward the solicitation materials to their
principals, and, as required by law, we will reimburse them for any out-of-pocket expenses that they reasonably incur in the process of forwarding solicitation materials.
STOCKHOLDERS SHARING THE SAME LAST NAME AND ADDRESS
We are sending only one copy of the notice regarding the Internet availability of proxy materials or set of 2010 Annual Meeting
materials to stockholders who share the same last name and address, unless they have notified us that they want to continue receiving multiple packages. This practice, known as "householding," is
intended to eliminate duplicate mailings, conserve natural resources and help us reduce our printing and mailing costs.
If
you received a householded mailing this year and you would like to receive a separate copy of the notice of Internet availability of proxy materials or of the proxy materials, we will
deliver a copy promptly upon your request in one of the following manners:
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Email
investor@nutraceutical.com
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Send your request by mail to Investor Relations, Nutraceutical International Corporation, 1400 Kearns Boulevard,
2
nd
Floor, Park City, UT 84060
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Call our investor information line at 1-435-655-6106
You
may also download a copy of any of these materials at
https://materials.proxyvote.com/67060Y
.
To
opt out of householding for future mailings, you should mark the "No" box next to the householding election when you vote your proxy, or notify us using the contacts for our Investor
Relations department described above.
If
you received multiple copies of the Annual Meeting materials and would prefer to receive a single copy in the future, please mark the "Yes" box next to the householding election when
you vote your proxy.
Householding
for bank and brokerage accounts is limited to accounts within the same bank or brokerage firm. For example, if you and your spouse share the same last name and address, and
you and your spouse each have two accounts containing Nutraceutical stock at two different brokerage firms, your household will receive two copies of our Annual Meeting materialsone from
each brokerage firm.
DIRECTIONS TO THE MEETING
You may request directions to the Annual Meeting via email at
investor@nutraceutical.com
or call 1-435-655-6106.
NOTICE OF ELECTRONIC AVAILABILITY OF PROXY MATERIALS
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on
February 18, 2010. The Proxy Statement and Annual Report on Form 10-K are available at https://materials.proxyvote.com/67060Y.
As
permitted by rules recently adopted by the SEC, we are making our proxy material available to our stockholders electronically via the Internet. We have mailed many of our stockholders
a notice containing instructions on how to access this Proxy Statement and our Annual Report and vote online. If you received a notice by mail, you will not receive a printed copy of the proxy
materials in the mail. Instead, the notice instructs you on how to access and review all of the important information contained in the Proxy Statement and Annual Report. The notice also instructs you
on how you may submit your voting instructions over the Internet or by telephone. If you received a notice by mail and would like to receive a printed copy of our proxy materials, you should follow
the instructions for requesting such materials included in the notice.
PROPOSALS
Our Board of Directors (referred to collectively as the "Board") is soliciting your vote with respect to each of the following
proposals. We do not expect any other matters to come before the meeting; however, if another matter is voted upon, your shares will be voted in accordance with your proxy representative's best
judgment. The Board recommends that you vote "FOR" each of the following proposals:
PROPOSAL I: ELECTING TWO CLASS III DIRECTORS
The Nominating Committee, comprised of the members of the Board, has nominated Frank W. Gay II and Gregory M. Benson as
Class III directors to be elected at the Annual Meeting. Messrs. Gay and Benson did not participate in the nomination process. Certain information regarding these nominees and each of
the other directors is set forth below under the caption "The Board of Directors." If you elect them, Messrs. Gay and Benson will hold office until the 2013 Annual Meeting or until their
earlier death, resignation or removal.
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We
know of no reason why either of these nominees may be unable to serve as a director. If a nominee is unable to serve, your proxy representative may vote for another nominee proposed
by the Board. If any director resigns, dies or is otherwise unable to serve out a complete term, or if the Board increases the number of directors, the Board may fill each vacancy by following the
procedures outlined in the section of this Proxy Statement entitled "Director Nomination Process."
PROPOSAL II: RATIFYING THE APPOINTMENT OF PRICEWATERHOUSECOOPERS AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2010
The Audit Committee has selected PricewaterhouseCoopers as our independent registered public accounting firm, and the Board is asking
stockholders to ratify that selection. PricewaterhouseCoopers audited our financial statements for the year ended September 30, 2009. We expect representatives of PricewaterhouseCoopers to
attend the Annual Meeting, where they will have the opportunity to make a statement if they wish, and where they will be available to answer any relevant questions that you may have.
Although
current laws, rules and regulations, as well as the written charter of the Audit Committee, require our independent registered public accounting firm to be engaged, retained and
supervised by the Audit Committee, the Board considers the selection of an independent registered public accounting firm to be an important matter of stockholder concern and considers a proposal for
stockholders to ratify such selection to be an important opportunity for stockholders to provide direct feedback to the Board on an important issue of corporate governance.
If
the appointment of PricewaterhouseCoopers as our independent registered public accounting firm for fiscal 2010 is not ratified by stockholders, the adverse vote will be considered a
directive to the Audit Committee to consider other accountants for next year. However, because of the difficulty in making any substitution of an independent registered public accounting firm so long
after the beginning of the current fiscal year, the appointment for fiscal 2010 will stand unless the Audit Committee finds other good reason for making a change.
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THE BOARD OF DIRECTORS
The Board oversees our business and other affairs and monitors the performance of management. In accordance with corporate governance
principles, the Board does not involve itself in our day-to-day operations. Board members keep themselves informed through discussions and interaction with our chairman,
executive officers and other employees, as well as the Board's and our principal outside advisors (such as legal counsel, independent registered public accounting firm and other consultants). Board
members regularly review, analyze and discuss financial, legal, regulatory and similar information about us and our business. Board members also stay informed through participation in Board meetings,
committee meetings and in executive sessions that include only independent members of the Board and such advisors or consultants as independent Board members deem appropriate.
As
of September 30, 2009, six individuals were serving on the Board. Board members are divided into three classes, and the term of service for each class expires in a different
year, with each director serving a term of three years, or until his earlier death, resignation or removal.
The
Board held seven meetings during fiscal 2009 and did not act by unanimous written consent during this period. The independent directors meet in executive sessions, without any member
of management being present, prior to, during or immediately following regularly scheduled meetings of the Board and at such other times as they deem appropriate. All board members participated in
75 percent or more of the aggregate of (i) the total number of Board meetings held during their periods of service within the fiscal year and (ii) the total number of meetings
held by Board committees on which they served during their periods of service within the fiscal year.
Our
policy is to invite each director to attend the Annual Meeting. All of our directors attended last year's Annual Meeting.
CLASS I DIRECTORSTERM EXPIRING AT THE 2011 ANNUAL MEETING
Jeffrey A. Hinrichs,
age 52, has served as a director, executive vice president and
chief operating officer since 1994. Before he joined us, Mr. Hinrichs served as president of Solaray from 1993 to 1994. Prior to his tenure as president, Mr. Hinrichs served as chief
financial officer as well as in other management positions with Solaray from 1984 to 1993. Mr. Hinrichs received a bachelor of science degree from Weber State University.
J. Kimo Esplin,
age 47, has served as a director since 2004 and is executive vice president and chief financial officer of the Huntsman
Corporation. Mr. Esplin has served in this position since 1997. Previously, Mr. Esplin served as the treasurer of the Huntsman Companies. Prior to joining Huntsman in 1994,
Mr. Esplin was vice president in the Investment Banking Division of Bankers Trust Company, where he worked for seven years. Mr. Esplin received a master's degree in business management
from Northwestern University and a bachelor of science degree in accounting from Brigham Young University ("BYU").
CLASS II DIRECTORSTERM EXPIRING AT THE 2012 ANNUAL MEETING
Michael D. Burke,
age 65, has served as a director since 2000 and is president of MDB
Capital Ventures, a venture capital firm. Mr. Burke is Chair of the San Antonio Clean Technology Foruma major sustainability initiative he founded in early 2008. He was formerly
director, president and chief executive officer of EOTT Energy Corp., the largest independent marketer and transporter of crude oil in North America. Prior to joining EOTT Energy Corp.,
Mr. Burke served as director, president and chief executive officer of Tesoro Petroleum Corporation from 1992 to 1995. From 1980 to 1992, Mr. Burke held a number of senior executive
positions with Texas Eastern Corp., including group vice president-products and president/chief executive officer of TEPPCO Partners, L.P. Mr. Burke currently serves on the board of
Reasoning Mind, Inc. He received a master's degree in business administration
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from
the University of Texas and a bachelor of science degree in chemical engineering from Texas A&M University.
James D. Stice, Ph.D.,
age 50, has served as a director since 2000 and is the Distinguished Teaching Professor of Accounting in the School
of Accountancy at BYU. Professor Stice has been at BYU since 1988. He has co-authored three accounting textbooks and published numerous professional and academic articles. Currently,
Professor Stice is an associate dean at BYU's Marriott School of Management. In addition, Professor Stice has been involved in executive education for Ernst & Young, Bank of America
Corporation, International Business Machines Corporation, RSM McGladrey, and AngloGold Limited and has taught at INSEAD (in France) and CEIBS (in China). Professor Stice received a Ph.D. from the
University of Washington as well as master's and bachelor's degrees from BYU, all in accounting.
NOMINATED FOR RE-ELECTION
CLASS III DIRECTORSTERM EXPIRING AT THE 2013 ANNUAL MEETING
Frank W. Gay II,
age 64, has served as the chairman of the Board since its inception
and as chief executive officer since 1994. Mr. Gay received a master's degree in business administration from Harvard Business School and a bachelor of science degree from BYU.
Gregory M. Benson,
age 55, has served as a director since 2004 and is currently a Managing Director of Huntsman Gay Capital
Partners.
1
Mr. Benson was formerly a senior member of the London-based Bain Capital ("Bain") team starting up Bain's European private equity business. Mr. Benson joined
Bain in 1996 and has worked with a number of Bain's portfolio companies in various capacities. Prior to joining Bain, he served for four years as the chief financial officer of a Bain-led
buyout, American Pad and Paper Company, and headed the company's acquisition program prior to its public offering. Mr. Benson began his business career with General Electric where he served for
sixteen years in senior management positions with a wide variety of responsibilities, including those involving business startups and finance. Mr. Benson concluded his service with General
Electric as Head of Merchant Banking for GE Financial Services. Mr. Benson received a bachelor of science degree in business administration from the University of Minnesota.
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Mr. Frank
W. Gay II's brother, Robert C. Gay, is also a Managing Director of Huntsman Gay Capital Partners, which commenced business in 2008.
Mr. Frank W. Gay II is not affiliated with Huntsman Gay Capital Partners. The Board reviewed Mr. Benson's involvement with Huntsman Gay Capital Partners and Mr. Frank W. Gay II's
familial relationship and determined that they do not affect Mr. Benson's independence with respect to our Board.
COMMITTEES OF THE BOARD
The Board has three standing committees: the Audit Committee, the Compensation Committee and the Nominating Committee.
Audit Committee.
The Audit Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of
our accounting,
auditing, and reporting practices, as well as undertaking other duties as directed by the Board. The Audit Committee also selects, engages, compensates and oversees our independent registered public
accounting firm and pre-approves all services to be performed by them. The Audit Committee's primary duties include reviewing the scope and adequacy of our internal accounting and
financial controls; reviewing the independence of the independent registered public accounting firm; approving the scope of their annual audit activities; approving the audit fee; approving any
non-audit related services; reviewing the audit results; reviewing the objectivity, effectiveness and resources of our internal audit function; appraising our financial reporting
activities and the accounting standards and principles followed; and reviewing and approving our ethics and compliance policies.
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PricewaterhouseCoopers
currently serves as our independent registered public accounting firm. The Board has adopted a written charter for the Audit Committee. The Audit Committee is
currently comprised of Messrs. Burke, Esplin and Stice, with Mr. Burke acting as chairman of our Audit Committee. The Board has determined that Messrs. Burke, Esplin and Stice
each satisfy the independence standards applicable to audit committee members established under applicable law and Nasdaq listing requirements. The Board has determined that each Audit Committee
member has sufficient knowledge in financial and auditing matters to serve on the Audit Committee. The Board has designated Mr. Stice as the Audit Committee Financial Expert, within the meaning
of the current rules of the SEC. The Audit Committee met four times during fiscal 2009. The Audit Committee's written charter is posted on our web site at
www.nutraceutical.com
under the link "Investor
Relations."
Compensation Committee.
The Compensation Committee includes two Board Members who make decisions regarding salaries, incentive
compensation, stock
option grants and other matters involving our executive officers and certain key employees, including benefit plans applicable to these individuals, to ensure that the compensation arrangements meet
corporate objectives. The Compensation Committee is currently comprised of Messrs. Benson and Stice. The Board has determined that Messrs. Benson and Stice each satisfy the standards of
independence established under applicable law and Nasdaq listing requirements. The Compensation Committee met one time during fiscal 2009; however, the Compensation Committee meets and discusses
compensation issues informally at other times as well.
Nominating Committee.
The Nominating Committee is responsible for overseeing the nominations of
new members of the Board and re-election of current Board Members. The Nominating Committee selects, evaluates and recommends to the full Board qualified candidates for election,
appointment or re-election to the Board. The Nominating Committee is comprised of all of the independent members of the Board, which include Messrs. Benson, Burke, Esplin and Stice.
The Board has determined that Messrs. Benson, Burke, Esplin and Stice each satisfy the standards of independence established under applicable law and Nasdaq listing requirements. The Nominating
Committee does not have a written charter; however, the policies and processes for identifying, evaluating and selecting director candidates, including candidates recommended by stockholders, are
described in "Director Nomination Process" below. The Nominating Committee met one time during fiscal 2009.
DIRECTOR NOMINATION PROCESS
The Board has adopted a resolution that requires that vacancies on the Board and recommendations of candidates for election as
directors occur by ensuring that the selection or recommendation for nomination is either: (a) approved by a majority of the independent directors on the Board, or (b) undertaken by a
Nominating Committee comprised solely of independent directors (unless the Nominating Committee is comprised of at least three members, in which case one member need not be independent as long as the
appointment and process followed complies with Nasdaq Marketplace Rule 4350(c)(4)(C)). The nomination of Messrs. Gay and Benson for re-election to the Board was approved by
the Nominating Committee, comprised of all of the independent directors, with Mr. Benson abstaining.
In
considering whether to nominate directors who are eligible to stand for re-election, the Nominating Committee gives due consideration to all relevant factors, including
historical attendance at and participation in Board and committee meetings, compliance with the Board's and our policies, possession of necessary or desirable qualities and capabilities, input from
other directors concerning the performance and independence of each director nominee, as well as personal considerations such as available time to continue to serve. The Nominating Committee believes
that Messrs. Gay and Benson meet these requirements.
8
Table of Contents
To
be recommended for election to the Board, a nominee must meet such expectations and qualifications for directors as are established from time to time by the Board; be in compliance
with and agree to comply with all policies of the Board and Nutraceutical applicable to service as a director; not have conflicts or commitments that would impair the nominee's ability to attend
scheduled Board or committee meetings or annual stockholders meetings; and not hold positions that would result in a
violation of legal requirements, such as anti-trust prohibitions on interlocking relationships among competitors.
We
seek individuals to serve on the Board on the basis of integrity, experience, achievements, judgment, intelligence, personal character, ability to make independent analytical
inquiries, willingness to devote adequate time to Board duties, and likelihood that he/she will be available to serve on the Board for a reasonable period. Due consideration is given to the Board's
overall balance of perspectives, backgrounds and experiences, as well as the ability of a nominee to meet independence standards of Nasdaq. Furthermore, at least one director on the Board should meet
the qualifications required of an Audit Committee Financial Expert and at least three directors must meet the requirements for Audit Committee membership, as required by Nasdaq and the SEC.
Candidates
for nomination recommended by our stockholders will be considered in the same manner as other candidates, but any such recommendation must comply with our bylaws, including
specifically the requirements of Article III, Section 5 of the bylaws. If a stockholder recommendation meets the foregoing requirements and the independent members of the Board decide
that a stockholder-recommended candidate is suitable for Board membership, then the Board will include the candidate in the pool of candidates to be considered for nomination upon the occurrence of
the next Board vacancy or in connection with the next annual meeting of stockholders.
We
do not have any current contractual arrangement with any third-party to pay any fees in connection with identifying or evaluating any candidates for nomination for election as
directors, but may retain such third-parties from time to time.
INDEPENDENCE OF BOARD MEMBERS
The Board of Directors reviews the independence of its members on a periodic basis based on criteria for independence established by
Nasdaq (where our common stock is listed for trading) and other applicable laws and regulations. In its periodic review of director independence, the Board considers relevant business relationships
any director may have with us. Currently there are no such business relationships or arrangements, except that Messrs. Gay and Hinrichs are both executive officers of our Company. As a result
of its periodic review, the Board has determined that all of the directors are independent, with the exception of Messrs. Gay and Hinrichs. The Board will continue to monitor the standards for
director independence established under applicable laws or regulations as well as Nasdaq listing requirements to ensure that its criteria continues to be consistent with those standards.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or
more executive officers serving on our Compensation Committee. No interlocking relationship exists between our Board of Directors or the Compensation Committee and any other company.
COMMUNICATING WITH DIRECTORS
Our stockholders may send correspondence to the Board as a whole, the independent directors as a group, to any Board committee, to the
chairman of the Audit Committee or to any individual director. Any stockholder who wishes to send such correspondence should mail it to: Nutraceutical
9
Table of Contents
International
Corporation, 1400 Kearns Boulevard, 2
nd
Floor, Park City, Utah 84060, c/o Legal Department, indicating in writing whether it is correspondence to particular
member(s) of the Board or the Board in its entirety. All mail received will be opened and screened for security purposes. The mail will then be forwarded to the particular Director(s) in question or
to the Board in its entirety, as requested in the stockholder's correspondence in question. Trivial items will be delivered to the director(s) at the next scheduled Board meeting. Obscene or offensive
items will not be forwarded.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transactions.
Under the Nasdaq marketplace rules, we are required to conduct an appropriate review of all related party
transactions
for potential conflict of interest situations on an ongoing basis. Our management monitors related party transactions for potential conflicts of interest situations. Although we have not historically
had formal policies and procedures regarding the review and approval of related party transactions, these transactions, if they ever came up, would typically be
reviewed and approved by the Board of Directors or the Audit Committee or another independent body of the Board of Directors.
Director Relationship with Wholly-owned Subsidiary.
We have established and provided funding for a wholly-owned captive insurance
subsidiary,
American Nutritional Casualty Insurance, Inc., in Hawaii. This entity is providing coverage for certain of our product liability risks. Mr. Benson serves on the board of directors of
this subsidiary and is paid an annual cash retainer of $5,000 for his service in connection therewith.
Indemnification of Directors and Officers.
We have agreed to provide indemnification for our Board members and executive officers beyond
the
indemnification provided for in our certificate of incorporation and bylaws (see
Indemnification Agreements
under "Compensation of Directors and
Executives" below).
COMPLIANCE WITH SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and
greater-than-ten-percent stockholders to file reports with the SEC regarding changes in beneficial ownership of our common stock and to provide us with copies of
the reports. Based solely on our review of these reports, we believe that all of these reporting persons complied with applicable filing requirements for fiscal 2009.
10
Table of Contents
PRINCIPAL STOCKHOLDERS
The table below sets forth certain information regarding the beneficial ownership of our common stock as of December 28, 2009 by
(i) each person or entity known to us who beneficially owns five percent or more of the outstanding common stock, (ii) named executive officers and directors, and (iii) all our
executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules of the SEC. Unless otherwise stated, each of the persons named in the table has sole or
shared voting and investment power with respect to the securities beneficially owned.
|
|
|
|
|
|
|
|
|
|
|
SHARES OF
COMMON STOCK(a)
|
|
NAME
|
|
NUMBER OF
SHARES(b)
|
|
PERCENT OF
CLASS
|
|
Five Percent Stockholders:
|
|
|
|
|
|
|
|
|
FMR LLC(c)
|
|
|
1,549,454
|
|
|
14.9
|
|
|
Royce & Associates, LLC(d)
|
|
|
1,425,314
|
|
|
13.7
|
|
|
Dalton, Greiner, Hartman, Maher & Co LLC(e)
|
|
|
861,844
|
|
|
8.3
|
|
|
Burgundy Asset Management Ltd.(f)
|
|
|
837,571
|
|
|
8.0
|
|
|
Kiluva, S.A.(g)
|
|
|
674,126
|
|
|
6.5
|
|
Officers and Directors:
|
|
|
|
|
|
|
|
|
Frank W. Gay II
|
|
|
875,899
|
|
|
8.3
|
|
|
Jeffrey A. Hinrichs
|
|
|
268,557
|
|
|
2.6
|
|
|
Stanley E. Soper
|
|
|
101,238
|
|
|
1.0
|
|
|
Christopher B. Neuberger
|
|
|
41,370
|
|
|
*
|
|
|
Gregory M. Benson
|
|
|
33,203
|
|
|
*
|
|
|
Cory J. McQueen
|
|
|
30,431
|
|
|
*
|
|
|
Michael D. Burke
|
|
|
15,000
|
|
|
*
|
|
|
J. Kimo Esplin
|
|
|
12,444
|
|
|
*
|
|
|
James D. Stice
|
|
|
4,894
|
|
|
*
|
|
All executive officers and directors as a group (thirteen persons)
|
|
|
1,497,119
|
|
|
13.9
|
|
-
*
-
Percent
of class represents less than 1% of the total.
-
(a)
-
Calculation
of percentage of beneficial ownership assumes the exercise of all warrants and options exercisable within 60 days following
December 28, 2009 only by the respective named stockholder.
-
(b)
-
Includes
135,000, 45,150, 85,000, 35,000, 10,000, 20,500, 10,000, 10,000, and 379,650 shares of Common Stock that may be purchased within 60 days of
the date of the table upon the exercise of stock options by Messrs. Gay, Hinrichs, Soper, Neuberger, Benson, McQueen, Burke and Esplin and all executive officers and directors as a group
(thirteen persons), respectively.
-
(c)
-
Based
upon a Schedule 13G/A filed with the SEC on February 17, 2009. The business address of FMR LLC, Fidelity Management &
Research Company, Fidelity Low Priced Stock Fund and Edward C. Johnson 3d is 82 Devonshire Street, Boston, Massachusetts 02109.
-
(d)
-
Based
upon a Schedule 13G/A filed with the SEC on January 27, 2009. The business address of Royce & Associates, LLC is 1414
Avenue of the Americas, New York, New York 10019.
-
(e)
-
Based
upon a Schedule 13G filed with the SEC on January 26, 2009. The business address of Dalton, Greiner, Hartman, Maher &
Co LLC is 565 Fifth Avenue, Suite 2101, New York, New York 10017.
11
Table of Contents
-
(f)
-
Based
upon a Schedule 13G filed with the SEC on February 12, 2009. The business address of Burgundy Asset Management Ltd. is 181 Bay
Street, Suite 4510, Toronto, Ontario, Canada M5J 2T3.
-
(g)
-
Based
upon a Schedule 13G filed with the SEC on February 17, 2009 on behalf of Kiluva, S.A. and Felix Revuelta and Kiluva's
wholly-owned subsidiaries, Housediet, S.L.U., Finverki, S.L.U. and Kiluva Diet, S.L.U. The business address of Kiluva, S.A. is Pasaje Pedro Rodriguez, No. 6, 08028 Barcelona,
Spain.
12
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COMPENSATION OF DIRECTORS AND EXECUTIVES
Compensation Discussion and Analysis
This compensation discussion and analysis provides information regarding the compensation paid to the executive officers named in the
Summary Compensation Table on page 20 of this Proxy Statement (the "named executive officers") as well as corporate directors. It includes information regarding the objectives of our
compensation payments, each element of compensation that we provide, why we choose these elements, how we determine the amount of each component to pay, and our compensation decisions for fiscal 2009.
This compensation discussion and analysis should be read in conjunction with the tables and related discussion beginning on page 20 of this Proxy Statement.
We believe we are the only public company that manufactures, markets and distributes dietary supplements and related products primarily
to Health and Natural Food Stores. Most of our competitors are privately owned and are not subject to disclosure requirements and other requirements related to their compensation practices, giving
them more flexibility in their executive compensation program. We have internally grown and trained a unique and experienced senior management team to execute our business strategy, and we believe it
would be difficult and time-consuming to replace our team. Our compensation philosophy is designed to attract and retain qualified executives who will add to our long-term
success and contribute to the achievement of operational and strategic objectives. We believe pay should be commensurate with each executive's performance, level of responsibility and overall
contribution to our success. We seek to foster an environment that aligns the interests of our executive officers with the creation of long-term stockholder value. To this end, the amount
and type of executive compensation paid is strongly linked to the delivery of long-term returns to our stockholders, the achievement of strategic business objectives, individual
performance and the demonstration of competencies that are aligned with our culture and values. We also seek to find ways to incentivize executives to stay with our Company.
In
making decisions about compensation, the Compensation Committee considers the foregoing factors as well as our financial condition and our operational performance during the prior
year. Our executive compensation consists of two principal components: (i) base salary, and (ii) annual performance-based incentive payments.
We believe our executive officers are important to our ability to create long-term stockholder value. The Compensation
Committee and the Board believe that it is in the best interests of our Company, our stockholders and our other important non-stockholder constituencies to employ and train highly-talented
business leaders who are able to build, maintain and improve on our Company's performance. In order to achieve this fundamental objective, we believe that it is most appropriate to focus primarily on
each executive's total compensation opportunity, reviewed annually, and that a significant portion of each executive officer's total compensation opportunity should be a performance-based incentive
payment.
The Compensation Committee is responsible for overseeing our compensation policies, plans and programs, and reviewing and determining
the salary, performance incentive payments and other related benefits paid to our directors and executive officers.
The
Compensation Committee develops our compensation policies, plans and programs and considers a number of factors and inputs in developing these. Among other things, the Compensation
13
Table of Contents
Committee
considers the input of management (and in particular the recommendations of our Chief Executive Officer) as well other members of our Board of Directors, may consider information and
recommendations from outside advisors (see
Outside Compensation Consultants
below), and utilizes publicly available compensation data and other survey
data for national and regional companies in our industry and market. Using these primary material inputs, the Compensation Committee develops independent views as to what appropriate compensation
packages should look like for each of our executive officers. After formulating these views, only then does the Compensation Committee perform a brief customary review of total direct compensation
data (i.e., base salary, annual performance incentive payments as well as long-term equity incentive awards) compiled from other companies which it believes may have certain
similarities to our Company, whether those be in terms of size, performance, industry, and/or locale, as these companies may compete with us for executives and other employees.
While
the Compensation Committee believes benchmarking our executive compensation packages against those earned by executives at other companies is a useful tool in confirming the
appropriateness of the compensation packages developed by the Compensation Committee, it does not believe that it would be appropriate to use benchmarking as a material component of, or the exclusive
tool utilized in, setting our compensation packages due to the aspects of our business, sales philosophy and mission that may be unique to our Company. We also believe that the cost of attracting
talented executives to our size of company can prove difficult when larger companies often have stronger financial resources.
Based
on the data described above, the Compensation Committee has implemented compensation payments designed to help align the interests of executives with the creation of
long-term stockholder value.
Denver Management Advisors, Inc. was engaged by the Compensation Committee in 2006 and worked directly with members of that
committee and the Chief Executive Officer. They were asked to independently look at compensation paid to senior executives and directors at companies that they felt had similar characteristics to our
Company, looking at overall compensation in general and equity compensation in particular. The objective of the Compensation Committee in retaining this firm was to engage independent, outside
compensation specialists to assess how competitive our compensation programs are relative to market and to provide suggestions for adjustments to compensation practices for the future. Denver
Management Advisors has made several recommendations which the Compensation Committee has taken into consideration when determining executive and director compensation. The Compensation Committee
continues to consider the recommendations made by this group as well as other factors such as market data and their own research and experience. Denver Management Advisors performed no work during
fiscal 2009.
Our executive compensation program consists of the following key components:
-
-
Base salary; and
-
-
Performance-based incentive payments.
The
Compensation Committee currently believes that these two cash payments are the most effective combination in motivating and retaining talented executive officers in an industry where
limited professional management expertise is available. We believe that our current revenue size, micro-cap status, high institutional stock ownership, lack of public stock float and the
current regulatory environment makes cash compensation more attractive in retaining company executives. The Compensation Committee has a target range of 30% to 150% of an individual's base salary for
annual
14
Table of Contents
performance-based
incentive payments, which generally occur after audited fiscal year end results are received. Performance-based incentive payments remain completely discretionary but are based on a
combination of an individual's current position and responsibilities, individual performance and overall company performance. The executive officers and directors of our Company are encouraged to
purchase and hold company stock.
Base salary represents the only fixed component of our executive compensation program. We use base salary to partially compensate
executives for services rendered during the fiscal year, and to ensure that we remain competitive in attracting and retaining executive talent. Base salaries are generally set within a range of
salaries paid to peers with comparable qualifications, experience, responsibilities and performance at similar companies but may be higher if we find it necessary to attract individuals to our
Company. The Compensation Committee generally tries to set these base salaries within a reasonable range from the median of peers.
The
Compensation Committee reviews base salaries annually as part of our performance review and appraisal process. Base salary increases, if any, are based primarily on each executive's
job performance for the prior year, as well as a review of competitive market data, the executive's compensation relative to other executive officers, and the importance of the executive's continued
service with our Company. The Compensation Committee may also review an executive's base salary from time to time upon a promotion or other change in job responsibility.
Our discretionary performance-based incentive payments are designed to promote the interests of our Company and its stockholders by
providing executive officers with
substantial opportunity to receive annual cash incentive payments based upon the achievement of individual and corporate objectives and to assist us in attracting and retaining executive talent.
Performance-based incentive payments are generally established to cover or approximate a range of compensation types paid by peer companies to individuals with comparable qualifications, experience,
responsibilities and performance, including cash bonus incentives, stock incentives (such as options and restricted stock awards) and other incentives paid by peers.
Corporate
objectives we seek to encourage with our performance-based incentive payments include encouraging maintenance and improvement of growth and profitability of our Company (with a
primary focus on earnings before interest, taxes, depreciation, amortization and goodwill and intangible asset impairment, or Adjusted EBITDA, performance), the completion of acquisitions or other
milestones and other important projects that are considered to be critical to the achievement of our long-term strategic goals. Individual objectives we seek to encourage with our
performance-based incentive payments focus on contributions which are consistent with and support the corporate objectives or are otherwise intended to contribute to the success of our Company. We do
not typically use or set hard or fixed targets but instead leave the decision to the Compensation Committee and our Board of Directors.
For
fiscal 2009, we accrued and expensed on a monthly basis discretionary performance-based incentives amounting to 8% of Adjusted EBITDA. For each fiscal year, we set an Adjusted EBITDA
target, which normally ranges between 15% and 22% of forecasted net sales. This target is based upon our assessment of the competitive, economic and operational cost environments as well as the timing
of acquisitions completed or anticipated. Acquisitions remain a critical component of company growth and successful acquisition integration is essential to Adjusted EBITDA performance.
The
payout of these accrued performance-based incentive payments is discretionary. Actual decisions about payments are based on the Compensation Committee's assessment of our Company's
15
Table of Contents
fiscal
year end results. After the end of each fiscal year and based on the audited financial statements, the Chief Executive Officer evaluates the degree of achievement of corporate and individual
performance objectives and submits his performance-based incentive payment recommendations, excluding himself, to the Compensation Committee, which determines the final performance-based incentive
payment, if any, for each executive officer. Performance-based incentive payments are generally paid in December of each year for results obtained during the prior fiscal year.
Perquisites for executive officers are limited in scope and value and are generally consistent with those provided to other employees.
We enter into indemnification agreements with each of our directors and executive officers. These indemnification agreements provide,
among other things, that we will indemnify our directors and executive officers for certain expenses, including attorneys' fees, judgments, fines and settlement amounts, incurred by any such person in
any action or proceeding by reason of their position as a director, officer, employee, agent or fiduciary of our Company, any subsidiary of our Company or any other company or enterprise to which such
executive officer or director serves at the Company's request. We purchase director and officer insurance ("D&O insurance") for the benefit of our directors and executive officers. We believe that
indemnification agreements and this D&O insurance are necessary to attract and retain qualified persons as directors and executive officers.
We maintain a health insurance plan for the benefit of all eligible employees, including our executive officers. This plan requires the
employee to pay a portion of the premiums, and we pay the remainder of the premiums. These benefits are offered on the same basis to all employees. We also maintain a qualified 401(k) retirement
savings plan that is available to all eligible employees. For fiscal 2009, we matched 100% on the employee's first 4% contribution based on eligible pay. Both the employee and the employer matching
contributions are subjected to the statutory limits. Executives are eligible to participate in the 401(k) plan up to these limits. No supplementary non-qualified plan is available to
executives. We also provide long-term disability insurance coverage to all eligible employees and premiums are paid in full by us. The above benefits are available to our executive
officers on the same basis as all other eligible employees.
The key compensation determinations for the named executive officers during fiscal 2009 were as follows:
Mr. Gay's compensation for fiscal 2009 was determined by the Compensation Committee and based on the same factors used for
establishing the fiscal 2009 compensation of executive officers generally, including our fiscal 2009 operating performance.
In
addition, the Compensation Committee considered the status of Mr. Gay as our most senior officer, a review of the compensation for chief executive officers of comparable
companies, and the important role he performed in achieving overall corporate objectives. No particular weight was assigned to any factor in setting his fiscal 2009 compensation.
16
Table of Contents
For
fiscal 2009, Mr. Gay's base salary was $410,000, a 1.1% increase from his fiscal 2008 base salary. For fiscal 2009, Mr. Gay's performance-based cash incentive payment
was $620,000, a 40.9% increase from his fiscal 2008 incentive payment. Mr. Gay's bonus was substantially larger than other named executive officers because he serves as the chief executive
officer of our Company with substantially greater responsibilities.
Mr. Gay
does not receive separate compensation for serving as a director and Chairman of the Board.
Mr. McQueen's compensation for fiscal 2009 was determined by the Compensation Committee and based on the same factors used for
establishing the fiscal 2009 compensation of executive officers generally, including our fiscal 2009 operating performance.
In
addition, the Compensation Committee reviewed the compensation for similar officers of comparable companies and considered the important role he performed in achieving overall
corporate objectives. No particular weighting was assigned to any factor in setting his fiscal 2009 compensation.
For
fiscal 2009, Mr. McQueen's base salary was $215,385, a 10.2% increase from his fiscal 2008 base salary. For fiscal 2009, Mr. McQueen's performance-based cash incentive
payment was $150,000, a 114.3% increase from his fiscal 2008 incentive payment.
Jeffrey A. HinrichsExecutive Vice President, Chief Operating Officer and Secretary
Mr. Hinrich's compensation for fiscal 2009 was determined by the Compensation Committee and based on the same factors used for
establishing the fiscal 2009 compensation of executive officers generally, including our fiscal 2009 operating performance.
In
addition, the Compensation Committee considered the status of Mr. Hinrichs as our chief operating officer and the executive with the longest experience at our Company (or its
predecessors), a review of the compensation for chief operating officers of comparable companies, and the important role he performed in achieving overall corporate objectives. No particular weighting
was assigned to any factor in setting his fiscal 2009 compensation.
For
fiscal 2009, Mr. Hinrich's base salary was $272,000, a 1.3% increase from his fiscal 2008 base salary. For fiscal 2009, Mr. Hinrich's performance-based cash incentive
payment was $280,000, a 47.4% increase from his fiscal 2008 incentive payment.
Mr. Hinrichs
does not receive separate compensation for serving as a member of the Board.
Stanley E. SoperVice President, Legal Affairs
Mr. Soper's compensation for fiscal 2009 was determined by the Compensation Committee and based on the same factors used for
establishing the fiscal 2009 compensation of executive officers generally, including our fiscal 2009 operating performance.
In
addition, the Compensation Committee reviewed the compensation for similar officers of comparable companies and considered the important role he performed in achieving overall
corporate objectives. No particular weighting was assigned to any factor in setting his fiscal 2009 compensation.
For
fiscal 2009, Mr. Soper's base salary was $255,000, a 2.3% increase from his fiscal 2008 base salary. For fiscal 2009, Mr. Soper's performance-based cash incentive
payment was $240,000, a 33.3% increase from his fiscal 2008 incentive payment.
17
Table of Contents
Christopher B. NeubergerVice President, Marketing and Sales
Mr. Neuberger's compensation for fiscal 2009 was determined by the Compensation Committee and based on the same factors used for
establishing the fiscal 2009 compensation of executive officers generally, including our fiscal 2009 operating performance.
In
addition, the Compensation Committee reviewed the compensation for similar officers of comparable companies and considered the important role he performed in achieving overall
corporate objectives. No particular weighting was assigned to any factor in setting his fiscal 2009 compensation.
For
fiscal 2009, Mr. Neuberger's base salary was $223,077, a 14.0% increase from his fiscal 2008 base salary. For fiscal 2009, Mr. Neuberger's performance-based cash
incentive payment was $190,000, a 46.2% increase from his fiscal 2008 incentive payment.
Effective October 1, 2005, we adopted the authoritative guidance issued by the Financial Accounting Standards Board , which
requires companies to record compensation expense for the value of all outstanding and unvested share-based payments, including stock options and similar awards. We terminated all existing stock
option plans on September 30, 2005 and have no unvested stock options outstanding. However, vested stock options granted prior to the termination of these stock option plans are still
outstanding and exercisable.
We
structure cash incentive bonus compensation so that it is taxable to our employees at the time it becomes available to them.
Section 162(m)
of the Internal Revenue Code of 1986 limits us to a deduction for federal income tax purposes of up to $1 million of compensation paid to certain named
executive officers in a taxable year. The exercise of a nonqualified stock option results in a compensation deduction that is included in this analysis to the extent that the trading price of the
stock subject to the option upon exercise exceeds the exercise price of the option. Compensation above $1 million may be deducted under Section 162(m) if it is "performance-based
compensation." Accordingly, our compensation deduction, if any, resulting from the exercise of such options may not be fully deductible, depending on whether the optionee is a named executive officer
at the time of exercise and on whether the total non-exempt compensation paid to such optionee exceeds $1 million in the year of such option exercise. To maintain flexibility in
compensating executive officers in a manner designed to promote varying corporate goals, our Compensation Committee has not adopted a policy requiring all compensation to be deductible. Our
Compensation Committee intends to continue to evaluate the effects of the compensation limits of Section 162(m) and to grant compensation awards in the future in a manner consistent with the
best interests of our Company and our stockholders.
18
Table of Contents
DIRECTOR COMPENSATION
We reimburse all directors for reasonable expenses incurred in attending Board meetings or its committees and related activities.
Directors who are our employees do not receive a salary or retainer for their services. We pay non-employee directors a quarterly cash retainer of $11,000 for service on the Board of
Directors, a quarterly cash retainer of $2,000 for each committee membership (excluding the Nominating Committee), and each non-employee director was granted options to purchase 10,000
shares of common stock under our 1998 Non-Employee Director Stock Option Plan at the time of election to the Board. Directors do not currently receive any additional compensation for
chairing any committees. Directors do not receive meeting fees either.
2009 DIRECTOR COMPENSATION
The following table provides information concerning the 2009 compensation of our non-employee directors who served on our
Board of Directors in fiscal 2009.
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned or
Paid in Cash
($)(a)
|
|
All Other
Comp.
($)
|
|
Total
($)
|
|
Michael D. Burke
|
|
|
52,000
|
|
|
|
|
|
52,000
|
|
Gregory M. Benson
|
|
|
52,000
|
|
|
5,000
|
(b)
|
|
57,000
|
|
J. Kimo Esplin
|
|
|
52,000
|
|
|
|
|
|
52,000
|
|
James D. Stice
|
|
|
60,000
|
|
|
4,000
|
(c)
|
|
64,000
|
|
-
(a)
-
All
non-employee directors receive a quarterly cash retainer of $11,000 for service on the Board of Directors. In addition, Messrs. Burke
and Esplin each receive a quarterly cash retainer of $2,000 for their service on the Audit Committee. Mr. Benson receives a quarterly cash retainer of $2,000 for his service on the Compensation
Committee. Mr. Stice receives a quarterly cash retainer of $2,000 for his service on the Audit Committee as well as $2,000 for his service on the Compensation Committee.
-
(b)
-
Mr. Benson
serves on the board of directors of our wholly-owned subsidiary, American Nutritional Casualty Insurance, Inc. and is paid an
annual cash retainer of $5,000 for his service in connection therewith.
-
(c)
-
Mr. Stice
is the designated Audit Committee Financial Expert and receives an additional $1,000 per quarter for his service in connection therewith.
Since
the Compensation Committee terminated the option plans on September 30, 2005, no additional stock awards or stock option awards have been granted.
19
Table of Contents
MANAGEMENT COMPENSATION
GENERAL
Summary Compensation Table
Our Section 16 officers are appointed by and serve at the discretion of the Board. The following table shows for the fiscal year
ended September 30, 2009, compensation paid to our Principal Executive Officer, Principal Financial Officer and our three other most highly compensated executive officers at
September 30, 2009 (collectively, the "named executive officers").
SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Fiscal
Year
|
|
Salary
($)(a)
|
|
Non-
equity
Incentive
Compensation
($)
|
|
All Other
Compensation
($)(b)
|
|
Total
($)
|
|
Frank W. Gay II
|
|
|
2009
|
|
|
410,000
|
|
|
620,000
|
|
|
9,800
|
|
|
1,039,800
|
|
|
Chief Executive Officer
|
|
|
2008
|
|
|
405,385
|
|
|
440,000
|
|
|
9,200
|
|
|
854,585
|
|
|
|
|
2007
|
|
|
386,538
|
|
|
420,000
|
|
|
9,000
|
|
|
815,538
|
|
Cory J. McQueen
|
|
|
2009
|
|
|
215,385
|
|
|
150,000
|
|
|
8,615
|
|
|
374,000
|
|
|
Vice President and Chief
|
|
|
2008
|
|
|
195,385
|
|
|
70,000
|
|
|
7,815
|
|
|
273,200
|
|
|
Financial Officer
|
|
|
2007
|
|
|
142,615
|
|
|
60,000
|
|
|
5,354
|
|
|
207,969
|
|
Jeffrey A. Hinrichs
|
|
|
2009
|
|
|
272,000
|
|
|
280,000
|
|
|
9,200
|
|
|
561,200
|
|
|
Executive Vice President and Chief
|
|
|
2008
|
|
|
268,539
|
|
|
190,000
|
|
|
9,438
|
|
|
467,977
|
|
|
Operating Officer
|
|
|
2007
|
|
|
254,692
|
|
|
190,000
|
|
|
9,092
|
|
|
453,784
|
|
Stanley E. Soper
|
|
|
2009
|
|
|
255,000
|
|
|
240,000
|
|
|
9,200
|
|
|
504,200
|
|
|
Vice President, Legal Affairs
|
|
|
2008
|
|
|
249,231
|
|
|
180,000
|
|
|
9,731
|
|
|
438,962
|
|
|
|
|
2007
|
|
|
226,538
|
|
|
170,000
|
|
|
9,062
|
|
|
405,600
|
|
Christopher B. Neuberger
|
|
|
2009
|
|
|
223,077
|
|
|
190,000
|
|
|
8,923
|
|
|
422,000
|
|
|
Vice President, Marketing & Sales
|
|
|
2008
|
|
|
195,615
|
|
|
130,000
|
|
|
7,825
|
|
|
333,440
|
|
|
|
|
2007
|
|
|
179,615
|
|
|
120,000
|
|
|
7,185
|
|
|
306,800
|
|
-
(a)
-
Includes
amounts earned in a fiscal year but deferred at the named executive officer's election pursuant to our 401(k) plan.
-
(b)
-
Represents
matching contributions made by us under our 401(k) plan.
The
foregoing compensation table does not include certain fringe benefits that are, in the aggregate, less than $10,000 or are generally made available on a
non-discriminatory basis to all our U.S. employees. These fringe benefits include group health insurance, dental insurance, and long-term disability insurance, which we
consider to be ordinary and incidental business costs and expenses. See the "Compensation Discussion and Analysis" beginning on page 13 of this Proxy Statement for further information on the
compensation and benefits provided to our named executive officers.
In
addition, we also provide life insurance coverage to all eligible employees and premiums are paid in full by us and the benefit is available to our executive officers on the same
basis as all other eligible employees. The average cost of this benefit is $38 per employee per year.
20
Table of Contents
GRANTS OF PLAN-BASED AWARDS IN LAST FISCAL YEAR
There were no option grants or stock awards to named executive officers or directors during fiscal 2009 since the Compensation
Committee terminated all of our existing option plans on September 30, 2005.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table provides information concerning stock options held by the named executive officers at September 30, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(a)
|
|
Option
Exercise
Price ($)
|
|
Option
Expiration Date
|
|
Frank W. Gay II
|
|
|
75,000
|
|
|
3.50
|
|
|
12/13/2011
|
|
|
|
|
60,000
|
|
|
12.32
|
|
|
12/17/2013
|
|
Cory J. McQueen
|
|
|
6,000
|
|
|
3.50
|
|
|
12/13/2011
|
|
|
|
|
7,000
|
|
|
12.32
|
|
|
12/17/2013
|
|
|
|
|
7,500
|
|
|
14.22
|
|
|
9/30/2015
|
|
Jeffrey A. Hinrichs
|
|
|
25,150
|
|
|
3.50
|
|
|
12/13/2011
|
|
|
|
|
20,000
|
|
|
12.32
|
|
|
12/17/2013
|
|
Stanley E. Soper
|
|
|
20,000
|
|
|
2.44
|
|
|
3/5/2011
|
|
|
|
|
10,000
|
|
|
3.50
|
|
|
12/13/2011
|
|
|
|
|
30,000
|
|
|
12.32
|
|
|
12/17/2013
|
|
|
|
|
25,000
|
|
|
14.22
|
|
|
9/30/2015
|
|
Christopher B. Neuberger
|
|
|
10,000
|
|
|
3.50
|
|
|
12/13/2011
|
|
|
|
|
5,000
|
|
|
12.32
|
|
|
12/17/2013
|
|
|
|
|
20,000
|
|
|
14.22
|
|
|
9/30/2015
|
|
-
(a)
-
All
option awards are fully vested.
There
were no outstanding stock awards to named executive officers at September 30, 2009. There were no unexercisable options unexercised and no unexercised unearned options at
September 30, 2009.
21
Table of Contents
OPTION EXERCISES IN LAST FISCAL YEAR
The following table shows information regarding stock option exercises for the named executive officers during fiscal 2009.
|
|
|
|
|
|
|
|
|
|
Option Awards(a)
|
|
Name
|
|
Number of
Shares
Acquired on
Exercise (#)
|
|
Value
Realized on
Exercise ($)
|
|
Frank W. Gay II
|
|
|
25,000
|
|
|
61,125
|
|
Cory J. McQueen
|
|
|
|
|
|
|
|
Jeffrey A. Hinrichs
|
|
|
9,000
|
|
|
17,515
|
|
Stanley E. Soper
|
|
|
|
|
|
|
|
Christopher B. Neuberger
|
|
|
5,000
|
|
|
37,615
|
|
-
(a)
-
The
value realized on exercise represents the difference between the exercise price and the fair market value of the common stock on the date of exercise.
PENSION BENEFITS
There were no pension benefits for the named executive officers at September 30, 2009.
NONQUALIFIED DEFERRED COMPENSATION
We have not entered into any deferred compensation agreements with any employees, including any named executive officer.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
We do not have any agreements with any employees, including the named executive officers, that would provide for the payment of any
severance benefits upon termination or change of control.
CANCELLED STOCK OPTION PLANS
Although options are still outstanding under the following stock option plans, no additional awards will be granted under these plans
since the Compensation Committee terminated these plans on September 30, 2005.
1998 Stock Incentive Plan.
Our 1998 Stock Incentive Plan provided for the issuance of the following types of incentive awards: stock
options, stock
appreciation rights, restricted stock, performance grants and other types of awards that the Compensation Committee deemed consistent with the purposes of the 1998 Stock Incentive Plan. The 1998 Stock
Incentive Plan was administered by the Compensation
Committee. Certain of our employees, advisors and consultants were eligible to participate in the 1998 Stock Incentive Plan. The Compensation Committee selected the participants and determined the
terms and conditions of the awards under the 1998 Stock Incentive Plan.
Options
granted under the 1998 Stock Incentive Plan could be either incentive stock options or nonqualified stock options, as determined by the Compensation Committee. The options were
subject to time vesting and certain other restrictions at the sole discretion of the Compensation Committee.
In
aggregate, 1,050,000 shares of our common stock were reserved for issuance under the 1998 Stock Incentive Plan. The 1998 Stock Incentive Plan limited each participant to receiving
awards of no more than 100,000 shares of common stock per year. As of September 30, 2009, nonqualified options to purchase an aggregate of 427,917 shares of common stock were outstanding under
the 1998 Stock Incentive Plan.
22
Table of Contents
1998 Non-Employee Director Stock Option Plan.
Our 1998 Non-Employee Director Stock Option Plan was intended to encourage
stock ownership by certain directors, to provide those individuals with an additional incentive to increase stockholder value and to provide a form of compensation that would attract and retain highly
qualified individuals as members of the Board.
Under
the 1998 Non-Employee Director Stock Option Plan, the Compensation Committee or the full Board made discretionary grants of options and determined the terms and
conditions of such options. The 1998 Non-Employee Director Stock Option Plan provided for the granting of options to non-employee directors, as defined, for up to an aggregate
of 150,000 shares of our common stock, subject to certain adjustments reflecting changes in our capitalization. As of September 30, 2009, nonqualified options to purchase an aggregate of 30,000
shares of common stock were outstanding under the 1998 Non-Employee Director Stock Option Plan.
Although
each member of the Compensation Committee was eligible to participate in the 1998 Non-Employee Director Stock Option Plan, the full Board was required to approve
grants made to a member of the Compensation Committee, with the involved member abstaining from the vote. We are under no obligation to retain as a director any director to whom it has granted an
option.
401(K) PLAN
We have a 401(k) defined contribution profit sharing plan that covers substantially all employees. Under the 401(k) plan, employees may
contribute up to 15% of their compensation subject to certain exceptions and limitations. We make matching contributions of up to the first 4% of employee contributions to the 401(k) plan and we are
also permitted to make discretionary contributions under the 401(k) plan. The amount that we contributed to the 401(k) plan during fiscal 2009 was $760 thousand.
UNDER
THE RULES OF THE SEC, THE COMPENSATION AND AUDIT COMMITTEE REPORTS THAT FOLLOW ARE NOT DEEMED TO BE INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING THIS PROXY
STATEMENT BY REFERENCE INTO ANY FILINGS WITH THE SEC.
23
Table of Contents
AUDIT COMMITTEE REPORT
The Audit Committee assists the Board of Directors in fulfilling its responsibility for oversight of the quality and integrity of
Nutraceutical's financial reporting process. The Audit Committee's responsibilities are more fully described in its written charter, which is posted on Nutraceutical's web site at
www.nutraceutical.com
under the link "Investor Relations."
The
Audit Committee reviews with Nutraceutical's independent registered public accounting firm the scope and timing of their audit services and any other services they are asked to
perform, the audit report on Nutraceutical's consolidated financial statements following completion of the audit and an audit report on Nutraceutical's internal control over financial reporting. The
Audit Committee is currently comprised of Messrs. Burke, Esplin and Stice. The Audit Committee held four meetings during fiscal 2009.
In
fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed the audited financial statements of Nutraceutical for fiscal 2009 with management and has
discussed with Nutraceutical's independent registered public accounting firm, among other things, the methods used to account for significant unusual transactions, the effect of significant accounting
policies in emerging
areas, the process used by management in formulating sensitive accounting estimates and other matters required under Statement on Auditing Standards No. 61,
Communication with Audit Committee
. In
addition, the Audit Committee has received written disclosures and a letter from PricewaterhouseCoopers regarding
their independence as an independent registered public accounting firm required by Public Company Accounting Oversight Board Rule 3526,
Communication with Audit
Committees Concerning Independence
, and has discussed with PricewaterhouseCoopers the status of their independence. Based upon this review of the above-mentioned issues, the
Audit Committee recommended to the Board of Directors that the audited consolidated financial statements of Nutraceutical for fiscal 2009 be included in Nutraceutical's Annual Report on
Form 10-K for the Fiscal Year Ended September 30, 2009 for filing with the Securities and Exchange Commission.
MICHAEL
D. BURKE
J. KIMO ESPLIN
JAMES D. STICE
24
Table of Contents
COMPENSATION COMMITTEE REPORT
The Compensation Committee was established by the Board in February 1998 in connection with Nutraceutical's initial public offering.
The Compensation Committee is currently comprised of Messrs. Benson and Stice.
The
Compensation Committee oversees Nutraceutical's executive and director compensation programs on behalf of the Board of Directors. The Compensation Committee develops Nutraceutical's
compensation policies, plans and programs and considers a number of factors and inputs in developing these. Among other things, the Compensation Committee considers the input of management (and in
particular the recommendations of the Chief Executive Officer), information and recommendations from outside advisors, utilizes available compensation data and other survey data for national and
regional companies in Nutraceutical's industry and market, and reviews other companies which have certain similarities to Nutraceutical, whether those be in terms of size, performance and/or locale.
Nutraceutical's
compensation philosophy is designed to attract and retain qualified executives who will add to the long-term success of Nutraceutical, contribute to the
achievement of operational and strategic objectives, and we believe pay should be commensurate with each executive's
performance, level of responsibility and overall contribution to Nutraceutical's success. We seek to foster an environment that aligns the interests of Nutraceutical's executive officers with the
creation of long-term stockholder value. To this end, the amount and type of executive compensation paid is strongly linked to the delivery of long-term returns to
Nutraceutical's stockholders, the achievement of strategic business objectives, individual performance and the demonstration of competencies that are aligned with Nutraceutical's culture and values.
We also seek to find ways to incentivize executives to stay with Nutraceutical.
The
Compensation Committee has the authority to independently retain outside advisors and has in the past received and considered input from Denver Management Advisors, Inc. They
were asked to independently look at compensation paid to senior executives and directors at companies that they felt had similar characteristics to Nutraceutical, looking at overall compensation in
general and equity compensation in particular. Our objective in retaining this firm was to engage independent, outside compensation specialists to assess how competitive Nutraceutical's compensation
programs were relative to market practices and to provide suggestions for adjustments to compensation practices for the future. Denver Management Advisors made several recommendations which the
Compensation Committee has taken into consideration when determining executive and director compensation. The Compensation Committee continues to consider the recommendations made by this group as
well as other factors such as market data and our own research and experience. Denver Management Advisors performed no work for Nutraceutical during fiscal 2009.
The
Compensation Committee reviewed and discussed the Compensation Discussion and Analysis report included in this Proxy Statement with management. Based on our review and discussions,
the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
GREGORY
M. BENSON
JAMES D. STICE
25
Table of Contents
FEES PAID TO PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers serves as our independent registered public accounting firm. In addition to retaining PricewaterhouseCoopers to
audit our financial statements, we engage the firm from time to time to perform other services. The following table presents fees for professional audit services rendered by PricewaterhouseCoopers for
the audit of our consolidated financial statements for the years ended September 30, 2008 and 2009, as well as fees billed for other services rendered by PricewaterhouseCoopers during those
periods.
|
|
|
|
|
|
|
|
|
|
Year Ended
September 30,
|
|
|
|
2008
|
|
2009
|
|
Audit Fees(1)
|
|
$
|
345,592
|
|
$
|
362,467
|
|
Audit-Related Fees(2)
|
|
|
8,500
|
|
|
1,500
|
|
Tax Fees
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
354,092
|
|
$
|
363,967
|
|
|
|
|
|
|
|
-
(1)
-
Consists
of fees billed for professional services rendered in connection with the integrated audits of the consolidated financial statements and internal
control over financial reporting (SOX 404) as well as the related reviews of the quarterly financial statements.
-
(2)
-
Consists
of fees billed for other services not explicitly related to the audit of our financial statements.
The
Audit Committee has adopted a policy requiring pre-approval by the committee of all services (audit and permissible non-audit) to be provided to us by our
independent registered public accounting firm. The Audit Committee pre-approves audit services to be performed following a review of the independent registered public accounting firm's
audit plan. The Audit Committee may also approve, for up to a year in advance, permissible non-audit services, including tax and due diligence, subject to specific budgets. In cases where
service needs arise that have not been pre-approved by the Audit Committee, the Audit Committee's Financial Expert has the delegated authority to pre-approve the provision of
such services, which pre-approvals are then communicated to the full Audit Committee. In accordance with these policies, the Audit Committee pre-approved the audit and
permissible non-audit services provided by our independent registered public accounting firm for fiscal 2008 and 2009.
26
Table of Contents
SUBMISSION OF STOCKHOLDERS' PROPOSALS AND ADDITIONAL INFORMATION
Our bylaws provide the mechanism for a stockholder to present a nomination for election of a director or to bring any other matter
before an annual meeting of stockholders. Any stockholder interested in making such a nomination or proposal should request a copy of the relevant provisions of our bylaws from our corporate
secretary.
If
a stockholder wishes to bring a proposal or other business before the next annual meeting (other than a proposal to nominate a candidate for election as a director), and wishes that
matter to be eligible for inclusion in our Proxy Statement and proxy card relating to our 2011 Annual Meeting of Stockholders, the proposal or other business must be received by us on or before the
close of business on November 30, 2010. Nominations for director must meet the deadlines described in Article III, Section 5 of our bylaws. The submission should include a
description of the proposal or other business and a brief statement of the reasons for submitting it, the name and address of the stockholder (as they appear in our stock transfer records), the number
of shares of our common stock beneficially owned by the stockholder and a description of any material direct or indirect financial or other interest that the stockholder (or any affiliate or
associate) may have in the proposal or other business. Any proposal or other business submitted by a stockholder must comply with our bylaws and with applicable law. Merely submitting a proposal or
other business by the deadline does not guarantee that the proposal or other
business will be brought before the next annual meeting. Stockholders wishing to bring a proposal or other business before our 2011 Annual Meeting are urged to review relevant provisions of our bylaws
and of applicable law. Proposals and other business should be addressed to: Corporate Secretary, c/o Legal Department, Nutraceutical International Corporation, 1400 Kearns Boulevard,
2
nd
Floor, Park City, Utah 84060.
Annual Report on Form 10-K
A copy of our Annual Report on Form 10-K (without exhibits) for the Fiscal Year Ended September 30, 2009 is
available at
https://materials.proxyvote.com/67060Y
or the report (with exhibits) is available at the website maintained by the Securities and Exchange
Commission (
www.sec.gov
). You may submit a request for a printed version in one of the following manners:
-
-
Email to
investor@nutraceutical.com
-
-
Send your request by mail to Investor Relations, Nutraceutical International Corporation, 1400 Kearns Boulevard,
2
nd
Floor, Park City, Utah 84060.
-
-
Call 1-435-655-6106
The
Annual Report is not to be regarded as proxy soliciting material.
27
Appendix A
|
|
|
|
|
|
|
|
|
|
PROXY
|
|
NUTRACEUTICAL INTERNATIONAL CORPORATION
|
|
PROXY
|
Proxy for the Annual Meeting of Stockholders to be held on February 18, 2010
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
NUTRACEUTICAL INTERNATIONAL CORPORATION
The undersigned, revoking all prior proxies, hereby appoint(s) Jeffrey A. Hinrichs and Cory J. McQueen, and each of them, with full
power of substitution, as proxies to represent and vote, as designated herein, all shares of common stock of Nutraceutical International Corporation that the undersigned would be entitled to vote if
personally present at the 2010 Annual Meeting of Stockholders to be held at the St. Regis Deer Crest Resort, 2300 Deer Valley Drive East, Park City, Utah 84060 on Thursday,
February 18, 2010 at 9:00 a.m., local time, and at any adjournment thereof.
ý
Please mark your vote as in this example.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
To elect two Class III Directors:
|
|
FOR
|
|
WITHHOLD
AUTHORITY
|
|
ABSTAIN
|
|
|
Frank W. Gay II (Class III)
|
|
o
|
|
o
|
|
o
|
|
|
Gregory M. Benson (Class III)
|
|
o
|
|
o
|
|
o
|
2.
|
|
To ratify the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
for the fiscal year ending September 30, 2010.
|
|
o
|
|
o
|
|
o
|
|
|
In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the meeting or any adjournment of the meeting.
|
|
|
This proxy, when properly executed, will be voted in the manner directed by the undersigned shareholder(s).
If no direction is given, this proxy will be voted "FOR" Proposals 1 and
2
. Attendance of the undersigned at the meeting or any adjournment thereof will not be deemed to revoke this proxy unless the undersigned shall revoke this proxy in writing or affirmatively indicate the intent to vote in
person.
|
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|
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|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
SIGNATURE
|
|
|
|
DATE
|
|
|
|
,
|
|
2010
|
SIGNATURE
|
|
IF HELD JOINTLY
|
|
DATE
|
|
|
|
,
|
|
2010
|
-
NOTE:
-
Please
sign exactly as name appears on this card. When shares are held by joint owners, both should sign. When signing as an attorney, executor,
administrator, trustee or guardian, please give title as such. If a corporation or a partnership, please sign by authorized person.
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