UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of
1934 (Amendment No.___________ )
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IEC Electronics Corp.
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(Name of Registrant as Specified in Its Charter)
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IEC ELECTRONICS CORP.
105 NORTON STREET
NEWARK, NEW YORK 14513
(315)331-7742
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On
January 25, 2006
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
IEC Electronics Corp. The meeting will be held on Wednesday, January 25, 2006 at
9:00 a.m. local time at our offices, 105 Norton Street, Newark, New York for the
following purposes:
1. To elect six (6) directors to serve until the 2007 Annual Meeting of
Stockholders and until their successors are duly elected and
qualified.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The record date for the annual meeting is December 9, 2005. Only
stockholders of record at the close of business on that date may vote at the
meeting or any adjournment thereof. Our transfer books will not be closed.
By Order of the Board of Directors
Martin S. Weingarten,
Secretary
DATED: December 16, 2005
Newark, New York
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You are cordially invited to attend the meeting in person. Whether or not you
expect to attend the meeting, please complete, date, sign and return the
enclosed proxy as promptly as possible in order to ensure your representation at
the meeting. Your vote is important, no matter how many shares you owned on the
record date. A return envelope is enclosed for your convenience and needs no
postage if mailed in the United States. Even if you have voted by proxy, you may
still vote in person if you attend the meeting. Please note, however, that if
your shares are held of record by a broker, bank or other nominee and you wish
to vote at the meeting, you must obtain a proxy issued in your name from that
record holder.
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IEC ELECTRONICS CORP.
105 NORTON STREET
NEWARK, NEW YORK 14513
(315)331-7742
PROXY STATEMENT
FOR 2006 ANNUAL MEETING OF STOCKHOLDERS
QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why am I receiving these materials?
We are sending you this proxy statement and the enclosed proxy card
because the board of directors of IEC Electronics Corp. ("IEC", the "Company",
"we", "our", "us") is soliciting your proxy to vote at the 2005 Annual Meeting
of Stockholders. We invite you to attend the annual meeting and request that you
vote on the proposals described in this proxy statement. The meeting will be
held on Wednesday, January 25, 2006 at 9 a.m. local time at our office, 105
Norton Street, Newark, New York. However, you do not need to attend the meeting
to vote your shares. Instead, you may simply complete, date, sign and return the
enclosed proxy card.
We are mailing this proxy statement, the accompanying proxy card, and our
Annual Report to Stockholders for the fiscal year ending September 30, 2005
("Fiscal 2005") on or about December 16, 2005 to all stockholders of record
entitled to vote at the annual meeting.
Who can vote at the annual meeting?
Only stockholders of record at the close of business on December 9, 2005,
the record date for the meeting, will be entitled to vote at the annual meeting.
On November 28, 2005, there were 7,888,837 shares of common stock outstanding
and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If on December 9, 2005, your shares of IEC common stock were registered
directly in your name with our transfer agent, Mellon Investor Services, LLC,
then you are a stockholder of record. As a stockholder of record, you may vote
in person at the meeting or vote by proxy. Whether or not you plan to attend the
meeting, we urge you to fill out and return the enclosed proxy card to ensure
your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
t 6 0 If on December 9, 2005, your shares of IEC common stock were held in
an account at a brokerage firm, bank, dealer or other similar organization, then
you are the beneficial owner of shares held in "street name" and these proxy
materials are being forwarded to you by that organization. The organization
holding your account is considered the stockholder of record for purposes of
voting at the annual meeting. As a beneficial owner, you have the right to
direct your broker or other agent on how to vote the shares in your account. You
are also invited to attend the annual meeting. However, since you are not the
stockholder of record, you may not vote your shares in person at the meeting
unless you request and obtain a signed letter or other valid proxy from your
broker or other agent.
What am I voting on?
There is only one matter scheduled for a vote: the election of six
directors to serve until the 2007 Annual Meeting of Stockholders. Our board of
directors does not intend to bring any other matters before the meeting and is
not aware of anyone else who will submit any other matters to be voted on..
However, if any other matters properly come before the meeting, the people named
on the proxy card, or their substitutes, will be authorized to vote on those
matters in their own judgment.
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How many votes do I have?
On each matter to be voted upon, you have one vote for each share of
common stock you owned as of December 9, 2005.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum
will be present if at least a majority of the outstanding shares entitled to
vote are present at the meeting. Your shares are counted as present at the
meeting if:
o You are present and vote in person at the meeting; or
o You have properly submitted a proxy card.
Your shares will be counted towards the quorum only if you submit a valid
proxy vote or vote at the meeting. Abstentions and broker non-votes will be
counted towards the quorum requirement. If there is no quorum, a majority of the
votes present at the meeting may adjourn the meeting to another date.
How do I vote?
The procedures for voting are set forth below:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in person at the annual
meeting or vote by proxy using the enclosed proxy card. Whether or not you plan
to attend the meeting, we urge you to vote by proxy to ensure your vote is
counted. You may still attend the meeting and vote in person if you have already
voted by proxy.
o To vote in person, come to the annual meeting and we will give you a
ballot when you arrive.
o To vote using the proxy card, simply complete, date and sign the
enclosed proxy card and return it promptly in the envelope provided.
If you return your signed proxy card to us before the annual
meeting, we will vote your shares as you direct.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you hold your shares in "street name" and thus are a beneficial owner
of shares registered in the name of your broker, bank or other agent, you must
vote your shares in the manner prescribed by your broker or other nominee. Your
broker or other nominee has enclosed or otherwise provided a voting instruction
card for you to use in directing the broker or nominee how to vote your shares.
Check the voting form used by that organization to see if it offers internet or
telephone voting. To vote in person at the annual meeting, you must obtain a
valid proxy from your broker, bank or other agent. Follow the instructions from
your broker or bank included with these proxy materials, or contact your broker
or bank to request a proxy form.
How are votes counted?
You may either vote "FOR" or "WITHHOLD" authority to vote for each nominee
for the board of directors. You may vote "FOR", "AGAINST" or "ABSTAIN" on any
other proposals.
If you submit your proxy but abstain from voting or withhold authority to
vote on one of more matters, your shares will be counted as present at the
meeting for the purpose of determining a quorum. Your shares also will be
counted as present at the meeting for the purpose of calculating the vote on the
particular matter with respect to which you abstained from voting or withheld
authority to vote.
If you abstain from voting on a proposal, your abstention has the same
effect as a vote against that proposal, except, however, an abstention has no
effect on the election of directors.
If you hold your shares in street name and do not provide voting
instructions to your broker or other nominee, your shares will be considered to
be "broker non-votes" and will not be voted on any proposal on which your broker
or
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other nominee does not have discretionary authority to vote under the rules
applicable to a nominee holder. Shares that constitute broker non-votes will be
counted as present at the meeting for the purpose of determining a quorum, but
will not be considered entitled to vote on the proposal in question. This
effectively reduces the number of shares needed to approve the proposal, making
it more likely that the proposal will be approved. Under rules applicable to a
nominee holder, if your broker does not receive voting instructions from you, it
is permitted to vote your shares on Proposal 1 (election of directors) in its
discretion.
How many votes are needed to elect directors?
Directors are elected by a plurality of the votes cast at the meeting in
person or by proxy.
This means that the six director nominees receiving the greatest number of
votes will be elected as directors. Withheld votes, abstentions and broker
non-votes will have no effect.
What if I return a proxy card but do not make specific choices?
If you return a signed and dated proxy card without marking any voting
selections, the persons named as proxy holders on the proxy card will vote in
accordance with the recommendation of the board of directors. The board
recommends that you vote for election of the nominated state of directors (see
Proposal 1).
With respect to any other matter that properly comes before the meeting,
the proxy holders will vote as recommended by the board of directors or, if no
recommendation is given, in their own discretion.
Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the
meeting. If you are a stockholder of record, you may revoke your proxy in any
one of three ways:
o You may submit another properly completed proxy card with a later
date.
o You may send a written notice that you are revoking your proxy to
Secretary, IEC Electronics Corp., 105 Norton Street, Newark, NY
14513.
o You may attend the annual meeting and vote in person. Simply
attending the meeting will not, by itself, revoke your proxy.
If you hold your shares in street name, contact your broker or other
nominee regarding how to revoke your proxy and change your vote.
How can I find out the results of the voting at the annual meeting?
Preliminary voting results will be announced at the annual meeting. Final
voting results will be published in our quarterly report on Form 10-Q for the
second quarter ending March 31, 2006.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, your shares are registered in
more than one name or are registered in different accounts. Please complete,
date, sign and return each proxy card to ensure that all of your shares are
voted.
Who is paying for this proxy solicitation?
IEC will pay for the entire cost of soliciting proxies. In addition to
these mailed proxy materials, our directors, officers and employees may also
solicit proxies in person, by telephone, or by other means of communication. We
will not pay our directors, officers and employees any additional compensation
for soliciting proxies. We may also reimburse brokerage firms, banks and other
agents for the cost of forwarding proxy materials to beneficial owners.
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When are stockholder proposals due for next year's annual meeting?
At our annual meeting each year, our board of directors submits to
stockholders its nominees for election as directors. In addition, the board of
directors may submit other matters to the stockholders for action at the annual
meeting.
Our stockholders also may submit proposals for inclusion in the proxy
material. These proposals must meet the stockholder eligibility and other
requirements of the Securities and Exchange Commission (the "Commission"). To be
considered for inclusion in next year's proxy materials, you must submit your
proposal in writing by August 22, 2006 to our Secretary, IEC Electronics Corp.,
105 Norton Street, Newark, NY 14513.
In addition, our by-laws provide that a stockholder may present from the
floor a proposal that is not included in the proxy statement if the stockholder
delivers written notice to our Secretary not less than 90 days prior to the date
of the meeting. The notice must set forth your name, address and number of
shares of stock you hold, a representation that you intend to appear in person
or by proxy at the meeting to make the proposal, a description of the business
to be brought before the meeting, the reasons for conducting such business at
the annual meeting, any material interest you have in the proposal, and such
other information regarding the proposal as would be required to be included in
a proxy statement. We have received no such notice for the 2006 annual meeting.
For the 2007 Annual Meeting of Stockholders, written notice must be delivered to
our Secretary at our principal office, 105 Norton Street, Newark, NY 14513, no
later than October 27, 2006.
Our by-laws also provide that if a stockholder intends to nominate a
candidate for election as a director, the stockholder must deliver written
notice of such intent to our Secretary. The notice must be delivered not less
than 90 days before the date of a meeting of stockholders. The notice must set
forth your name and address and number of shares of stock you own, the name and
address of the person to be nominated, a representation that you intend to
appear in person or by proxy at the meeting to nominate the person specified in
the notice, a description of all arrangements or understandings between such
stockholder and each nominee and any other person (naming such person) pursuant
to which the nomination is to be made by such stockholder, the nominee's
business address and experience during the past five years, any other
directorships held by the nominee, the nominee's involvement in certain legal
proceedings during the past five years and such other information concerning the
nominee as would be required to be included in a proxy statement soliciting
proxies for the election of the nominee. In addition, the notice must include
the consent of the nominee to serve as a director if elected. We have received
no such notice for the 2006 Annual Meeting. For the 2007 Annual Meeting of
Stockholders, written notice must be delivered to our Secretary at our principal
office, 105 Norton Street, Newark, NY 14513, no later than October 27, 2006.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the amount of IEC's common stock beneficially
owned as of November 28, 2005 by (i) each person who is known by us to
beneficially own more than 5% of our common stock, (ii) each of our directors
and director nominees, (iii) each of our executive officers named in the Summary
Compensation Table, and (iv) all of our directors, director nominees and
executive officers as a group. The information as to each person has been
furnished by such person, and, except as noted, each person named in the table
has sole voting and investment power with respect to the shares of common stock
indicated as beneficially owned.
Shares Percent of Shares
Name of Beneficially Beneficially
Beneficial Owner Owned(1) Owned(1)
--------------------------------------------- ---------------- -------------------
David J. Beaubien* 85,420 (2) 1.08%
W. Barry Gilbert* 329,782 (3) 4.06%
Robert P. B. Kidd* 106,576 (2) 1.35%
Eben S. Moulton* 359,186 (2) 4.54%
James C. Rowe* 401,533 (4) 5.07%
Justin L. Vigdor* 236,381 (2) 2.99%
Jerold L. Zimmerman** 35,000 (5) +
Brian H. Davis 65,000 (6) +
Donald S. Doody 30,000(7) +
Jeffrey T. Schlarbaum 117,000(8) 1.46%
All directors, director nominees and 1,765,878 (9) 20.97%
executive officers as a group (10 persons)
* Current member of board of directors of IEC
** Nominee to the board of directors
+ Less than 1%
(1) The number and percentage of shares beneficially owned are based on
7,888,837 shares outstanding and entitled to vote on November 28,
2005, adjusted as required by rules promulgated by the Securities
and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that
person, shares of common stock issuable pursuant to options held by
that person that are currently exercisable or exercisable within 60
days of November 28, 2005 ("options currently exercisable") are
deemed to be outstanding and beneficially owned by the person
holding the options. Such shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership
of any other person.
(2) Includes 27,334 shares subject to options currently exercisable.
(3) Includes 103,782 shares held by Mr. Gilbert's wife and 224,000
shares subject to options currently exercisable.
(4) Includes 276,231 shares held by Mr. Rowe's 401(k) plan, 78,600
shares held by a family trust for which Mr. Rowe is sole trustee and
may be deemed a beneficial owner, and 27,334 shares subject to
options currently exercisable.
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(5) Includes 35,000 shares owned by Mrs. Jerold L. Zimmerman.
(6) Includes 45,000 shares subject to options currently exercisable.
(7) Includes 25,000 shares subject to options currently exercisable.
(8) Includes 17,000 shares held by Mr. Schlarbaum's wife in her 401(k)
plan and 100,000 shares subject to options currently exercisable.
(9) Includes 530,670 shares subject to options currently exercisable.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than 10% of a
registered class of our equity securities, to file with the Commission reports
of ownership and changes in ownership of common stock and our other equity
securities. Officers, directors and greater than 10% stockholders are required
by Commission regulation to furnish the Company with copies of all Section 16(a)
forms they file.
SEC regulations require the Company to identify any one who filed a
required report late during the most recent fiscal year. Based solely on review
of the copies of such reports furnished to the Company and written
representations that no other reports were required during the fiscal year ended
September 30, 2005, we believe that, during Fiscal 2005, all of our directors
and executive officers complied with the reporting requirements of Section
16(a), except that each of Messrs. Beaubien, Kidd, Moulton, Rowe and Vigdor
filed a late Form 4 (by one day) to reflect a board meeting fee payable in stock
and Mr. Moulton also filed two late reports (by four days and three days,
respectively), each report covering one transaction.
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ELECTION OF DIRECTORS
(Proposal 1)
The number of directors is established by the board and is currently fixed
at seven. Dermott O'Flanagan, who was elected as a director at the last annual
meeting, resigned from the board effective as of April 11, 2005 because of a
potential conflict of interest. His seat has not been filled and accordingly
there are currently six persons on the board.
Robert P.B. Kidd, who currently serves as a director, will retire from the
board at the upcoming annual meeting, pursuant to the Company's retirement
policy for directors, and therefore is not being nominated for reelection. Mr.
Kidd has served as a director since the formation of IEC in 1966 and the Company
is indebted to him for his 39 years of service and support.
At this annual meeting, six persons will be nominated as directors. All
the nominees for director, except for Jerold L. Zimmerman, are incumbent
directors and were elected at the last annual meeting. Dr. Zimmerman is being
nominated as a director for the first time.
Following the annual meeting, there will remain one vacancy on the board.
The board intends to consider potential candidates to fill the vacancy and,
accordingly, has not taken any action to reduce the size of the board.
It is intended that the accompanying proxy will be voted in favor of the
six persons listed below to serve as directors unless the stockholder indicates
to the contrary on the proxy. All nominees have consented to serve if elected.
We expect that each of the nominees will be available for election, but if any
of them is not a candidate at the time the election occurs, it is intended that
such proxy will be voted for the election of another nominee to be designated by
the board to fill any such vacancy.
For the election of directors, only proxies and ballots marked "FOR all
nominees", "WITHHELD for all nominees" or specifying that votes be withheld for
one or more designated nominees are counted to determine the total number of
votes cast; votes that are withheld are excluded entirely from the vote and will
have no effect. Abstentions will have no effect on the vote for the election of
directors. Directors are elected by a plurality of the votes cast. This means
that the six nominees will be elected if they receive more affirmative votes
than any other nominees.
The term of office of each person elected as a director will continue
until the next annual meeting or until his successor has been elected and
qualified, or until the director's death, resignation or removal.
The Board of Directors unanimously recommends a vote FOR the election as
directors the nominees listed below.
Nominees for Election as Directors
The names of the nominees, their ages as of December 9, 2005, and certain
information about them are set forth below.
David J. Beaubien, 71, a director since October 1990, has been a director
and chairman of Yankee Environmental Systems, Inc., Turners Falls,
Massachusetts, a manufacturer of Solar Radiation Monitoring Instruments, since
1990. Prior thereto, he was Senior Vice President of EG & G, Inc., Wellesley,
Massachusetts, a manufacturer of Scientific Instruments and manager of U.S.
Government facilities from 1967 until his retirement in January 1991. He is also
an independent director of the UBS Global Asset Management Mutual Funds, New
York, New York.
W. Barry Gilbert, 59, has served as our Chief Executive Officer since
January 2004 and served as Acting Chief Executive Officer from June 2002 until
that time. He has been a director of the Company since February 1993 and
Chairman of the Board since February 2001. He is also an adjunct faculty member
at the William E. Simon Graduate School of Management of the University of
Rochester. From 1991 until 1999, he was President of the Thermal Management
Group of Bowthorpe Plc. (now known as Spirent Plc) of Crawley, West Sussex,
England. Prior to that time he was corporate Vice President and President,
Analytical Products Division of Milton Roy Company, a manufacturer of analytical
instrumentation. Mr. Gilbert is also on the advisory boards of several
privately-held companies.
Eben S. Moulton, 59, a director since November 1992, has served as
President of Seacoast Capital Corporation, Danvers, Massachusetts, an investment
firm, since 1994 and as President of Signal Capital Corporation, Danvers,
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Massachusetts, a financial services corporation, since 1988. Mr. Moulton is a
director of Seacoast Capital Corporation and Unitil Corporation, Hampton, New
Hampshire, a utility company. He is also a director of several privately-held
companies.
James C. Rowe, 57, a director since January 7, 2000, has served as
President of Rowe & Company LLC, Milwaukee, Wisconsin, a merchant banking firm,
since April 1994. From April 1972 through March 1994, Mr. Rowe was a director
and Vice President of Lubar & Co., Incorporated, Milwaukee, Wisconsin, a
merchant banking firm. Mr. Rowe is a director of several privately held
companies.
Justin L. Vigdor, 76, is our Assistant Secretary and has served as a
director since 1968. He has been an attorney since 1951 and is senior counsel to
the law firm of Boylan, Brown, Code, Vigdor & Wilson, LLP, Rochester, New York,
our counsel.
Jerold L. Zimmerman, 58, is being nominated as a director for the first
time. Dr. Zimmerman is the Ronald L. Bittner Professor of Business
Administration at the William E. Simon School of Business Administration at the
University of Rochester, where he has taught finance, accounting and economics
since 1974. He has published numerous books and papers, and is a founding editor
of the Journal of Accounting and Economics. Dr. Zimmerman has a Ph.D. in
Business Administration from the University of California, Berkeley and a B.S.
in Finance from the University of Colorado. He is a director of CPAC, Inc.,
Leicester, NY, and chairs that company's audit committee.
Information Regarding the Board and its Committees
Board Meeting and Attendance
During Fiscal 2005, our board held four in-person regular meetings. In
addition, the directors considered Company matters and had frequent
communication with the chairman of the board and others apart from the formal
meetings.
During Fiscal 2005, each incumbent director attended 100% of the meetings
of the board and more than 75% of the meetings of the committees upon which such
director served.
Board Independence
The board of directors has determined that each of our directors, except
Mr. Gilbert, who is an executive officer of the Company, is independent as
defined in Rule 4200(a)(15) of the National Association of Securities Dealers
("NASD") listing standards.
Board Committees
Our board has an audit committee, a compensation committee and an
executive committee. We have no standing nominating committee; its functions are
the responsibility of the executive committee.
The audit committee oversees our corporate accounting and financial
reporting processes. In Fiscal 2003, the audit committee recommended and the
board approved an Amended and Restated Audit Committee Charter (the "Charter").
A copy of the Charter was included as an appendix to the Company's Proxy
Statement for the annual meeting held on January 21, 2004. Pursuant to the
Charter, the audit committee is responsible for the appointment, dismissal,
compensation and oversight of our independent auditors, including the engagement
of our auditors for the next fiscal year, the review with the independent
auditors and approval of the plan of the auditing engagement, the review with
the independent auditors of the results of their audit, the review of the scope
and results of the evaluation of our procedures for internal auditing, the
inquiry as to the adequacy of our internal accounting controls and our
disclosure controls and procedures, the approval of audit and non-audit services
to be provided to us by the independent auditors, and overseeing compliance
matters for us. The audit committee also reviews with financial management and
the independent auditors our annual report on Form 10-K and the interim
financial statements prior to the filing of our quarterly reports on Form 10-Q.
The audit committee also monitors compliance with our Code of Business Conduct
and Ethics, our conflict of interest policy and our policy concerning trading in
our securities. The minutes of audit committee meetings, as well as all of the
recommendations of the audit committee, are submitted to the full board. In
Fiscal 2005, the audit committee, whose current members are Messrs. Rowe
(Chairman) and Kidd, held four meetings. Mr. O'Flanagan was a member of the
audit committee until his resignation as a director on April 11, 2005. The board
of directors in its business judgment has determined that each member of the
audit committee is "independent" as defined in Rule 4200(a)(15) of the NASD
listing
9
standards and that Mr. Rowe qualifies as an audit committee financial expert in
accordance with the applicable rules and regulations of the SEC.
The compensation committee reviews and approves our compensation
philosophy covering executive officers and other key management employees,
reviews the competitiveness of our total compensation practices, reviews and
approves the terms and conditions of proposed incentive plans applicable to
executive officers and other key employees, approves and administers our stock
option plans, reviews and makes recommendations with respect to management
compensation, including salaries and bonus awards, examines the impact and
effect of various benefits and incentive plans and reviews and recommends
changes or amendments to such programs to the board, and reviews and approves
hiring and severance arrangements with executive officers. In Fiscal 2005, the
compensation committee held six meetings and acted by unanimous written consent
three times. The current members of the compensation committee are Messrs.
Beaubien (Chairman) and Moulton. Mr. O'Flanagan was a member of the compensation
committee until his resignation as a director on April 11, 2005.
The executive committee exercises the powers of the board in the interval
between regular meetings of the full board, performs the function of a
nominating committee, and performs various corporate governance functions. In
Fiscal 2005, the executive committee, whose current members are Messrs. Moulton
(Chairman), Gilbert, Rowe and Vigdor, held one regular meeting and several
informal telephonic meetings. The executive committee has prepared a written
charter which will be submitted to the board for approval at its next regular
meeting. Upon approval, the charter will be added to our website.
Nominating Process
Nominations of persons for election to our board may be made at a meeting
of stockholders only (i) by or at the direction of the board or (ii) by any
stockholder who has complied with the notice procedures set forth in our bylaws
and in the section entitled "Questions and Answers About This Proxy Material and
Voting - When are stockholder proposals due for next year's annual meeting?". In
addition, stockholders who wish to recommend a prospective nominee for the
executive committee's consideration should submit the candidates' name and
qualifications to Secretary, IEC Electronics Corp., 105 Norton St., Newark, NY
14513.
Compensation of Directors
In Fiscal 2005, each incumbent non-employee director received the
following compensation:
o An annual retainer fee of $8,000, payable in cash.
o A board meeting fee of $1000 for every board meeting attended,
payable in stock; in Fiscal 2005, there were four such meetings; no
fees are paid for telephonic board meetings.
o Reimbursement for expenses incurred in attending board meetings.
In addition, the chairman of the audit and compensation committees each
received an additional $3,000.
In Fiscal 2005, an aggregate of $66,000 was paid to the incumbent
non-employee directors in cash and shares of common stock. In addition, Mr.
O'Flanagan received an aggregate of $5,000 in cash and shares of common stock as
director's compensation for that portion of Fiscal 2005 in which he was a
director.
All of our directors, except Mr. Gilbert, are non-employee directors. Mr.
Gilbert is not compensated for his service on the board or on committees of the
board.
The fees for the first quarter of Fiscal 2003 together with the fees for
Fiscal 2002, which had not previously been paid to the non-employee directors,
were deferred by the directors and were evidenced by our promissory notes dated
in December 2002. These deferred fees are payable in twenty-four equal monthly
installments, which commenced in January 17, 2003. In Fiscal 2005, the
non-employee directors received an aggregate of $10,506 pursuant to this payment
arrangement.
Our 2001 Stock Option and Incentive Plan (the "2001 Plan") authorizes the
granting of non-statutory stock options to the non-employee directors in such
amounts and at such times as may be determined by the board of directors.
Pursuant to the 2001 Plan, a non-statutory stock option ("NSO") for 5,000 shares
was granted to each of the non-employee directors on January 19, 2005 at an
exercise price of $0.59 per share (the fair market value of our shares on the
10
date of grant). Said NSOs vest in three equal installments on July 19, 2005,
January 19, 2006 and January 19, 2007, respectively, and terminate on January
18, 2010.
In Fiscal 2005, the Board of Directors approved the acceleration of
vesting of most out-of-the-money stock options held by directors, executive
officers and employees. See "REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
OF DIRECTORS ON EXECUTIVE COMPENSATION - Equity Based Incentives".
Corporate Governance and Related Matters
Code of Ethics
For a number of years, we have had, in one form or another, a code of
ethics for our employees, officers and directors. During Fiscal 2004, we adopted
a revised version of our code of ethics, the Code of Business Conduct and
Ethics, which applies to all of our directors, officers (including our Chief
Executive Officer, Chief Financial Officer and other senior financial officers)
and employees. In Fiscal 2004, we also adopted a whistleblower policy.
We make available to the public various corporate governance information
on our website (www.iec-electronics.com) under "Investor Relations - Corporate
Governance". Information on our website includes our Code of Business Conduct
and Ethics, the Audit Committee Charter, and our Whistleblower Policy.
Information regarding any amendments to, or waiver from, the Code of Business
Conduct and Ethics will also be posted on our website.
Communications with the Board of Directors
Although we do not have a formal policy regarding communications with the
board of directors, stockholders and other parties may communicate directly with
the board of directors by addressing communications to:
[Name of director(s) or Board of Directors]
IEC Electronics Corp.
c/o Secretary
105 Norton Street
Newark, NY 14513
Director Attendance at Annual Meetings
We typically schedule a board of directors meeting in conjunction with our
annual meeting of stockholders and, while we do not have a formal policy
regarding attendance at annual meetings, we as a general matter expect that the
directors will attend the annual meeting. Each of our incumbent directors
attended the 2005 Annual Meeting of Stockholders.
11
EXECUTIVE OFFICER COMPENSATION
Summary Compensation Table
The following table shows for the fiscal years ended September 30, 2005,
2004 and 2003, compensation awarded or paid to, or earned by, (i) our Chief
Executive Officer, and, (ii) each of our other three executive officers
(collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
All Other
Annual Compensation Long-Term Compensation Compensation($)
------------------- ---------------------- ---------------
Awards
Securities
Name & Principal Other Annual Underlying
Position Year Salary($) Bonus($) ($)(2) Options(#)
-------- ---- --------- -------- ------ ----------
W. Barry Gilbert (a) 2005 $ 176,460 -- -- 100,000 --
Chief Executive
Officer 2004 127,577 -- -- -- --
& Chairman of the
Board 2003 118,501 $ 57,500 -- 375,000 --
Brian H. Davis (b) 2005 $ 138,733 -- -- 60,000 --
Vice President, Chief 2004 118,538 $ 30,000 (1) -- 35,000 --
Financial Officer &
Controller 2003 55,288 4,000 -- 40,000 --
Jeffrey T. Schlarbaum
(c) 2005 $ 176,955 -- $ 49,595 150,000 --
Vice President of
Sales and 2004 70,615 $ 30,000 (1) -- 100,000 --
Marketing
Donald S. Doody (d) 2005 $ 130,440 $ 36,000 (1) $ 21,592 160,000 --
Vice President of
Operations
(1) These amounts represent sign-on bonuses awarded to the named individuals
pursuant to their respective hiring arrangements. No incentive awards were
granted to any of the Named Executive Officers in Fiscal 2005 or Fiscal
2004.
(2) Except as noted above, none of the Named Executive Officers received
personal benefits in excess of the lesser of $50,000 or 10% of such
individual's reported salary and bonus for Fiscal 2005, 2004 and 2003. The
amount reported for Mr. Schlarbaum for Fiscal 2005 represents $43,595 for
the payment of relocation expenses and $6,000 as an automobile allowance.
The amount reported for Mr. Doody for Fiscal 2005 represents payment of
relocation expenses.
(a) Mr. Gilbert was elected Chief Executive Officer on January 21, 2004,
having served as Acting Chief Executive Officer since June 2002. He has
been Chairman of the Board since February 2001.
(b) Mr. Davis joined us in March 2003 as Vice President, Chief Financial
Officer and Controller.
(c) Mr. Schlarbaum joined us in May 2004 as Vice President of Sales and
Marketing.
(d) Mr. Doody joined us in November 2004 as Vice President of Operations.
12
Options and Stock Appreciation Rights
We grant options to our officers and employees under our 2001 Stock Option and
Incentive Plan. The following tables show for the fiscal year ended September
30, 2005, certain information regarding options granted to, exercised by and
held at year-end by the Named Executive Officers.
OPTION GRANTS IN FISCAL 2005
Potential Realizable
Value
at Assumed Annual
Rates
of Stock Price
Appreciation
Individual Grants for Option Term (1)
-------------------------------------------------------------------------- ---------------------
Number of Percent of Total
Securities Options Granted to Exercise or
Underlying Options Employees in Base Price Expiration
Name Granted (#) Fiscal 2005(2) ($/Share)(3) Date(4) 5% ($) 10% ($)
---- ----------- -------------- ------------ ------- ------ -------
W. Barry Gilbert 100,000 16.313% $0.55 7/12/11 $18,705 $42,436
Brian H. Davis 60,000 9.788% $0.53 5/10/11 $10,815 $24,536
Jeffrey T.
Schlarbaum 150,000 24.470% $0.53 5/10/11 $27,038 $61,339
Donald S. Doody 110,000 17.945% $0.53 5/10/11 $19,828 $44,982
50,000 8.157% 0.51 11/14/11 $ 8,672 $19,675
(1) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately
prior to the expiration of their term, assuming the specified compounded
rates of appreciation on our shares over the term of the options. This
hypothetical value is based entirely on assumed annual growth rates of 5%
and 10% in the value of our stock price over the term of the options
granted in Fiscal 2005. The assumed rates of growth were selected by the
Securities and Exchange Commission for illustration purposes only, and are
not intended to predict future stock prices, which will depend upon market
conditions and the our future performance and prospects. These numbers do
not take into account provisions of certain options providing for
termination of the option following termination of employment,
nontransferability or vesting over various periods.
(2) Percentage indicated is based upon a total of 613,000 options granted to
employees, including the Named Executive Officers.
(3) The option exercise price per share is 100% of the fair market value of
our shares on the date of grant and may be paid in our shares which are
owned by the executive officer, in cash, or by a combination of these
methods.
(4) Each of the options to Messrs. Gilbert, Davis, Schlarbaum and Doody
(except the option to Mr. Doody for 50,000 shares) is a performance-based
option and vests on the attainment of certain net sales and net income
performance goals. See "REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
OF DIRECTORS ON EXECUTIVE COMPENSATION - Equity Based Incentives". The
option to Mr. Doody for 50,000 shares vests in four equal annual
installments commencing on the date of grant (11/15/04).
13
AGGREGATED OPTION EXERCISES IN FISCAL 2005 AND
FISCAL 2005 YEAR-END OPTION VALUES
Value of
Unexercised
Number of Securities Underlying In-the-Money
Unexercised Options Options At
At September 30, 2005 (#) September 30, 2005 ($) (1)
------------------------- --------------------------
Shares Acquired
on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
W. Barry Gilbert 0 0 224,000 265,000 $68,350 $ 19,000
Brian H. Davis 20,000 $5,800 45,000 70,000 $ 5,300 $ 17,900
Jeffrey T.
Schlarbaum 0 0 100,000 150,000 -0- $ 31,500
Donald S. Doody 0 0 12,500 147,500 $ 2,875 $ 31,725
(1) The closing price for our shares as reported in the Over the Counter
Bulletin Board on September 30, 2005 was $0.74. Value is calculated
on the basis of the difference between the option price and $0.74
multiplied by the number of shares underlying the option. An option
is in-the-money if the market value of the shares subject to the
option exceeds the option price.
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth information concerning the Company's equity
compensation plans as of September 30, 2005.
Number of securities
remaining available for
Number of Securities to be future issuance under
issued upon exercise of Weighted-average exercise equity compensation plans
outstanding options, price of outstanding (excluding securities reflected in
Plan Category warrants and rights options, warrants and rights column (a))
------------- ------------------- ---------------------------- ----------------------------------
(a) (b) (c)
Equity compensation plans
approved by security holders
1,626,129 $0.74 464,497
Equity compensation plans
not approved by security -- N/A --
holders
Total 1,626,129 $0.74 464,497
Employment, Severance and Change in Control Arrangements
In November 2004, IEC entered into an Offer Letter Agreement with Donald
S. Doody pursuant to which he was employed as Vice President of Operations,
received an initial base annual salary of $140,000, a hiring bonus of $36,000,
and an initial grant of 50,000 options. In addition, we agreed to reimburse Mr.
Doody for certain relocation expenses. The Agreement also contains a provision
relating to non-competition. Mr. Doody's employment with IEC is "at will" and
may be terminated by us at any time, with or without cause.
We do not have any employment, severance or change in control arrangements
with any of the Named Executive Officers, except that in the Offer Letter
Agreement with Brian Davis, dated March 2003, we agreed that if we terminate Mr.
Davis' employment without cause, we will pay Mr. Davis his current base salary
and health benefits for a period of six months. In addition, our 2001 Stock
Option and Incentive Plan provides that upon a change in control, unless the
board otherwise determines, all outstanding options will immediately become
fully vested and exercisable.
14
Certain Transactions
Justin L. Vigdor, a director and our Assistant Secretary, is senior
counsel to Boylan, Brown, Code, Vigdor & Wilson, LLP, and Martin S. Weingarten,
our Corporate Secretary, is of counsel to that firm, which provided legal
services to us in Fiscal 2005.
We have entered into indemnity agreements with certain officers and
directors which provide, among other things, that we will indemnify such officer
or director, under the circumstances and to the extent provided for in those
agreements, for expenses, damages, judgments, fines and settlements he may be
required to pay in actions or proceedings which he is or may be made a party by
reason of his position as one of our directors, officers or other agents, and
otherwise to the fullest extent permitted under Delaware law and our bylaws.
Any transactions we enter into with our officers, directors, affiliates or
controlling stockholders will be on terms no less favorable than could be
obtained from unaffiliated third parties, and must be approved by a majority of
our directors, including a majority of our independent disinterested directors.
CORPORATE PERFORMANCE GRAPH
The following graph and table show a comparison of cumulative total
stockholder return for our common stock, the NASDAQ Market Index and a Peer
Group Index for the year indicated as prescribed by SEC rules.
COMPARISON OF CUMULATIVE TOTAL RETURN (1)
AMONG IEC ELECTRONICS CORP.,
NASDAQ MARKET INDEX AND PEER GROUP INDEX (2)
[GRAPHIC OMITTED]
2000 2001 2002 2003 2004 2005
Company 100.00 33.91 4.78 52.54 33.43 35.34
NASDAQ 100.00 40.81 31.91 48.65 51.65 58.58
Peer Index 100.00 30.20 14.21 29.90 26.67 27.97
(1) Assumes $100 invested on September 30, 2000, in our common stock, the NASDAQ
Market Index, and our constructed Peer Group Index.
(2) We constructed a Peer Group consisting of Solectron Corp., Sanmina-SCI
Corporation, Plexus Corp., and Benchmark Electronics Inc.
The information contained in the above Performance Graph and table shall not be
deemed "soliciting material" or "filed" with the SEC, or subject to the
liabilities of Section 18 of the Securities Exchange Act of 1934, except to the
extent that we specifically incorporate it by reference into such filings.
15
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
OF DIRECTORS ON EXECUTIVE COMPENSATION
The compensation committee is comprised of Messrs. Beaubien and Moulton.
Mr. O'Flanagan was a member of the Compensation Committee until his resignation
as a director on April 11, 2005. The committee is responsible for setting and
administering policies governing compensation of executive officers.
The goals of our compensation policy are (i) to support the attainment of
our long and short-term strategic and financial objectives; (ii) to provide a
competitive total compensation program that enables us to attract, motivate and
retain the key executives needed to accomplish our goals; (iii) to provide
variable compensation opportunities that are directly related to our
performance; (iv) to align executive compensation with growth in stockholder
value; and (v) to recognize and reward executives for their contributions and
commitment to our growth and profitability. We believe this policy is generally
best accomplished by providing a competitive total compensation package, a
significant portion of which is variable and at risk and related to established
performance goals.
To assist us in developing and maintaining a competitive level of
compensation, we periodically utilize the services of an independent
compensation consultant who provides us with an analysis of compensation
information for companies similar in size and in our industry. We engaged such
consultants in Fiscal 2003 and Fiscal 2005.
Our compensation program for executive officers is comprised of the
following key elements: base salary, annual cash incentives and equity based
incentives. Salary and annual incentive payments are mainly designed to reward
current and past performances. Equity based incentives are primarily designed to
provide strong incentives for long-term future performance. The components of
the compensation program for executives are described below.
Base Salary
Base salaries and increases for executive officers, other than for the
Chief Executive Officer, are determined by the Chief Executive Officer within
the guidelines established by the committee and are based upon the officer's
current performance, experience, the scope and complexity of his position and
the external competitive marketplace for comparable positions at peer companies.
Base salaries are normally reviewed annually. In structuring the compensation
package, it has been our policy to emphasize bonuses based upon our performance
rather than increases in base salary. Accordingly, the base salaries of the
executive officers generally remain below the market median. The base salaries
for Messrs. Schlarbaum and Doody reflect the rates set forth in their respective
offer letters. For the compensation paid to the Named Executive Officers in
Fiscal 2005, see "EXECUTIVE OFFICER COMPENSATION - Summary Compensation Table".
Annual Incentive
A substantial portion of each executive officer's compensation is variable
and tied to Company performance. The board adopted a new Management Incentive
Plan ("MIP") for Fiscal 2005 which was based upon the achievement of a certain
minimum net income and the attainment of certain performance goals based upon
certain measurements: On Time Delivery, Net Income, Return on Net Assets, Sales,
Inventory Turns and Gross Profits. Since the Company did not meet its
performance targets for Fiscal 2005, no bonus payments were made under the MIP.
In accordance with the terms of his offer letter, Mr. Doody received a hiring
bonus of $36,000 in Fiscal 2005.
Equity Based Incentives
The committee strongly believes that equity ownership by executive
officers provides incentives to build stockholder value and align the interests
of executive officers with the stockholders. Executive officers and other key
employees receive grants of stock options pursuant to our 2001 Stock Option and
Incentive Plan. Stock option grants are discretionary and reflect the current
performance and continuing contribution of the individual to our success. The
committee is responsible for determining, subject to the terms of the Plan, the
individuals to whom grants should be made, the time of grants and the number of
shares subject to each option. Stock options are granted with an exercise price
equal to the fair market value of our shares on the day of grant. Any value
received by the executive from an option grant depends completely upon increases
in the price of our shares. Consequently, the full value of an executive's
compensation package cannot be realized unless an appreciation in the price of
the shares occurs over a period of years.
16
There is no established grant cycle for executive officers; rather, option
grants are made on an intermittent basis reflecting a discretionary assessment
of future contributions to our longer term growth and the need to provide a
competitive retention incentive.
After assessing comparative compensation information and reviewing the
recommendations from an independent compensation consultant, the committee and
the board, believing it essential to establish a long-term retention policy and
to align IEC's executive officers with the interests of IEC's stockholders,
granted Challenge Award stock options in Fiscal 2005 to the Named Executive
Officers and certain other key employees. The Challenge Award stock options are
issued under our 2001 Stock Option and Incentive Plan and are performance-based
options that vest upon attainment of certain net sales and net income
performance goals, rather than on the basis of time. In addition, shares
acquired upon the exercise of a Challenge Award stock option are subject to a
restriction on transfer. For the stock option grants, including Challenge Award
stock options, made to the Named Executive Officers in Fiscal 2005, see
"EXECUTIVE OFFICER COMPENSATION - Option Grants in Fiscal 2005".
During Fiscal 2005, the board of directors approved the acceleration of
vesting of most out-of-the-money stock options held by executive officers,
directors and employees. An option was considered out-of-the-money if the stated
option exercise price was $0.90 or higher. As a result, options to purchase
184,000 shares of common stock became exercisable immediately. The board took
this action in light of certain new accounting regulations, believing that it
was in the best interests of the Company's stockholders as it will reduce the
Company's reported compensation expense in future periods. In addition, because
these options have exercise prices in excess of current market values (closing
price on the date of the board action was $0.65), they are not achieving their
original objectives of incentive compensation and employee retention. Shares
received upon the exercise of accelerated options are subject to the restriction
that they may not be sold or otherwise transferred prior to the earlier of the
original vesting date set forth in the option or the termination of employment
or service of the individual.
Chief Executive Officer Compensation
Effective upon Mr. Gilbert's appointment as Acting Chief Executive Officer
on June 6, 2002, the board established his salary at the annual rate of
$130,000. In accordance with the salary reductions effective for all employees
as of July 12, 2002, Mr. Gilbert's salary was likewise reduced to an annual rate
of $118,501. There was no change in Mr. Gilbert's base salary in Fiscal 2003.
Upon his election as Chief Executive Officer in January 2004, the board
increased Mr. Gilbert's salary to $157,000. In December 2004, noting that Mr.
Gilbert's salary was still significantly below the median base salary for chief
executive officers in companies similar in size to IEC and in the same industry,
the Board increased Mr. Gilbert's salary to an annual rate of $200,000. Based
upon the report from our outside compensation consultant in Fiscal 2003, Mr.
Gilbert's salary rate in Fiscal 2005 is approximately 4% less than what was the
market median in 2003.
Since the Company did not meet the performance targets set forth in the
MIP, no bonus was paid to Mr. Gilbert in Fiscal 2005. In July 2005, Mr. Gilbert
was granted a Challenge Award stock option for 100,000 shares of common stock at
an exercise price of $0.55, the fair market value of our common stock on the
date of grant. The Challenge Award stock option is a performance-based option
that vests upon attainment of certain net sales and net income performance
goals, rather than on the basis of time. See "EXECUTIVE OFFICER COMPENSATION -
Option Grants in Fiscal 2005".
As noted above, in Fiscal 2005, the board of directors approved the
acceleration of vesting of most out-of-the-money stock options. However, an
out-of-the-money stock option held by Mr. Gilbert, where vesting is based on
certain performance criteria, was not accelerated by the board because the board
believed that the existing stated performance criteria should be met before any
of such options were accelerated.
Mr. Gilbert receives no extra remuneration as a director or as chairman of
the board.
Tax Considerations
Section 162(m) of the Internal Revenue Code generally limits the corporate
tax deduction for compensation paid to the Named Executive Officers to
$1,000,000 each. However, compensation is exempt from this limit if it qualifies
as "performance based compensation." The committee has carefully considered the
impact of this tax code provision and our normal practice is to take such action
as is necessary to preserve our tax deduction. Our 2001 Stock Option and
Incentive Plan complies with the provisions of Section 162(m). Accordingly, any
gains realized upon the exercise of
17
stock options granted under the Plan will qualify as "performance-based
compensation" and will be fully deductible by us. We believe that all of our
compensation expense for Fiscal 2005 will be deductible for federal income tax
purposes.
Although we will continue to consider deductibility under Section 162(m)
with respect to future compensation arrangements with executive officers,
deductibility will not be the sole factor used in determining appropriate levels
or methods of compensation. Since our objectives may not always be consistent
with the requirements for full deductibility, we may enter into compensation
arrangements under which payments are not deductible under Section 162(m). It is
not expected that the compensation of any executive officer will exceed
$1,000,000 in Fiscal 2006.
Compensation Committee:
David J. Beaubien, Chairman
Eben S.Moulton
The information contained in the above Compensation Committee Report shall not
be deemed "soliciting material" or "filed" with the SEC, or subject to the
liabilities of Section 18 of the Securities Exchange Act of 1934, except to the
extent that we specifically incorporate it by reference into such filings.
Compensation Committee Interlocks and Insider Participation
The members of the compensation committee consist of Messrs. Beaubien
(Chairman) and Moulton. Each member is a non-employee director and does not have
any direct or indirect material interest in or relationship with us outside of
his position as director.
18
AUDIT COMMITTEE REPORT
Membership and Role of Audit Committee
The audit committee of our board is responsible for providing independent,
objective oversight and review of our accounting functions, internal controls
and financial reporting process. The audit committee is comprised of Messrs.
Rowe and Kidd. Mr. O'Flanagan was a member of the Audit Committee until his
resignation as a director on April 11, 2005. The Audit Committee operates
pursuant to a written charter adopted by the board of directors which was
amended and restated in August 2003 and may be found on our public website
www.iec-electronics.com under the "Investor Relations-Corporate Governance"
section. We believe that each of the members of the audit committee is
independent as defined by applicable laws and regulations.
Management has the primary responsibility for the financial statements and
the reporting process, including our system of internal controls, and for the
preparation of the consolidated financial statements in accordance with
generally accepted accounting principles. Our independent accountants are
responsible for performing an independent audit of those financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The audit committee's responsibility is to monitor and oversee these
processes on behalf of the board. The members of the audit committee are not
professional accountants or auditors and their functions are not intended to
duplicate or certify the activities of management and the independent auditors.
Review of our Audited Financial Statements
In fulfilling its oversight responsibilities, the audit committee reviewed
the audited financial statements in our Annual Report on Form 10-K with
management and discussed the quality and acceptability of our accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in our financial statements.
The audit committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality and acceptability of our accounting principles and
such other matters as are required to be discussed with the committee under
generally accepted auditing standards, including the Statement on Auditing
Standards No. 61 (Communications with Audit Committees). In addition, the audit
committee has discussed with the independent auditors the auditors' independence
from management and us, including the matters in the written disclosures
required by Independence Standards Board Standard No. 1 (Independent Discussions
with Audit Committees), which were submitted to us, and considered the
compatibility of non-audit services with the auditors' independence.
The audit committee discussed with our independent auditors the overall
scope and plans for their audit. The audit committee met with the independent
auditors, with and without management present, to discuss the results of their
examination, their evaluation of our internal controls, and the overall quality
of our financial reporting.
In reliance on the reviews and discussions referred to above, the audit
committee recommended to our board of directors (and our board has approved)
that our audited financial statements for the fiscal year ended September 30,
2005 be included in the Annual Report on Form 10-K for the year ended September
30, 2005 for filing with the Securities and Exchange Commission.
Audit Committee:
James C. Rowe, Chairman
Robert P.B. Kidd
The information contained in the above Audit Committee Report shall not be
deemed "soliciting material" or "filed" with the SEC, or subject to the
liabilities of Section 18 of the Securities Exchange Act of 1934, except to the
extent that we specifically incorporate it by reference into such filings.
19
INDEPENDENT PUBLIC ACCOUNTANTS
Rotenberg & Co., LLP has been IEC's public accountant since May 2002 and
the audit committee has selected Rotenberg & Co., LLP as our independent
auditors for Fiscal 2005.
The audit committee has determined that the rendering of non-audit
services by Rotenberg and Co., LLP is compatible with maintaining the auditor's
independence.
A representative of Rotenberg & Co., LLP is expected to attend the annual
meeting, will have the opportunity to make a statement if he or she so desires,
and will be available to respond to appropriate questions from stockholders.
Fees paid to Rotenberg & Co., LLP
The following table shows the fees that were billed by Rotenberg & Co.,
LLP for professional services rendered in Fiscal 2005 and Fiscal 2004.
Fiscal Fiscal
2005 2004
Audit Fees $69,000 $69,500
Audit-Related Fees 18,000 -0-
Tax Fees 7,000 8,000
All Other Fees 5,200 5,200
------- -------
$99,200 $82,700
Total Rotenberg & Co., LLP Fees
Audit Fees primarily represent amounts billed for the audit of our annual
consolidated financial statements for such fiscal years and the reviews of the
financial statements included in our Form 10-Q quarterly reports for such fiscal
years.
Audit-Related fees for Fiscal 2005 are related to the review of internal
control documentation and compliance with Section 404 of the Sarbanes-Oxley Act
of 2002.
Tax fees consist of professional services rendered by Rotenberg & Co., LLP
primarily in connection with IEC's tax compliance activities and the preparation
of federal and state income tax returns.
All Other Fees in Fiscal 2005 and Fiscal 2004 are for audit services
related to our 401(k) plan.
OTHER MATTERS
The board of directors knows of no other matters that will be presented
for consideration at the annual meeting, but if other matters properly come
before t 6 0 the meeting, the persons named as proxies in the enclosed proxy
will vote according to their best judgment. Stockholders are requested to date
and sign the enclosed proxy and to mail it promptly in the enclosed postage-paid
envelope. If you attend the annual meeting, you may revoke your proxy at that
time and vote in person, if you wish. Otherwise your proxy will be voted for
you.
By Order of the Board of Directors
Martin S. Weingarten,
Secretary
DATED: December 16, 2005
Newark, New York
--------------------------------------------------------------------------------
We will make available at no cost, upon your written request, a copy of our
annual report on Form 10-K for the Fiscal Year ended September 30, 2005 (without
exhibits) as filed with the Securities and Exchange Commission. Copies of
exhibits to our Form 10-K will be made available, upon your written request and
payment to us of the reasonable costs of reproduction and mailing. Written
requests should be made to: Brian H. Davis, Vice President and Chief Financial
Officer, IEC Electronics Corp., 105 Norton Street, Newark, NY 14513.
--------------------------------------------------------------------------------
20
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED Please Mark Here
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED for Address Change
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY or Comments |_|
WILL BE VOTED FOR ELECTION OF THE NOMINEES FOR SEE REVERSE SIDE
SPECIFIED IN THE PROXY STATEMENT.
1. Election of seven (6) directors FOR WITHHOLD AUTHORITY 2. Transaction of such
all nominees listed to vote for other business as may
to the left (except all nominees listed to the left properly come before
01 David J. Beaubien as marked to the contrary) |_| the meeting or any
02 W. Barry Gilbert |_| adjustments thereof.
03 Eben S. Moulton
04 James C. Rowe
05 Justin L. Vigdor
06 Jerold L. Zimmerman
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, PLEASE STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST ABOVE.)
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS.
Dated:
-------------------------------------------------------
--------------------------------------------------------------
Signature
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Signature
IMPORTANT: Sign the Proxy exactly as your name or names
appear on your Common Stock certificate; in the case of
Common Stock held in joint tenancy, each joint tenant must
sign. Fiduciaries should indicate their full titles and the
capacity in which they sign. Please complete, sign, date and
return this Proxy promptly in the enclosed envelope.
PROXY PROXY PROXY
IEC ELECTRONICS CORP.
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, JANUARY 25, 2006
The undersigned, revoking all prior proxies, hereby appoints W. Barry Gilbert
and Justin L. Vigdor, and either one of them with full power of substitution, as
proxy or proxies to vote for the undersigned, in the name of the undersigned,
all of the Common Stock of IEC Electronics Corp. (the "Company") of the
undersigned, as if the undersigned were personally present and voting at the
Company's Annual Meeting of Stockholders to be held at the office of the
Company, 105 Norton Street, Newark, New York on January 25, 2006 at 9:00 a.m.
(the "Annual Meeting"), and at any and all adjournments thereof, upon the
following matters:
(Continued and to be signed on reverse side)
You can now access your IEC Electronics account online.
Access your IEC Electronic stockholder account online via Investor
ServiceDirect(R) (ISD).
Mellon Investor Services LLC, Transfer Agent for IEC Electronics shareholder,
now makes it easy and convenient to get current information on your stockholder
account.
o View account status
o View payment history for dividends
o View certificate history
o Make address changes
o View book-entry information
o Obtain a duplicate 1099 tax form
o Establish/change your PIN
Visit us on the web at http://www.melloninvestor.com/isd
For Technical Assistance Call 1-877-978-7778 between 9am-7pm Monday-Friday
Eastern Time
Investor ServiceDirect(R) is a registered trademark of Mellon
Investor Services LLC