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. )
| Filed by the Registrant x | |
| Filed by a Party other than the Registrant o | |
| Check the appropriate box: | |
| o Preliminary Proxy Statement | |
| o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| x Definitive Proxy Statement | |
| o Definitive Additional Materials | |
| o Soliciting Material Pursuant to §240.14a-12 |
IEH Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| x No fee required. | |
| o Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
| 1) Title of each class of securities to which transaction applies: |
| 2) Aggregate number of securities to which transaction applies: |
| 3) 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): |
| 4) Proposed maximum aggregate value of transaction: |
| 5) Total fee paid: |
| o Fee paid previously with preliminary materials. |
| o 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. |
| 1) Amount Previously Paid: |
| 2) Form, Schedule or Registration Statement No.: |
| 3) Filing Party: |
| 4) Date Filed: |
| SEC 1913 (02-02) | Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
IEH CORPORATION
140 58th Street, Bldg. B, Suite 8E
Brooklyn, New York 11220
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on Tuesday, November 19, 2019
To the Shareholders of IEH CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of IEH CORPORATION (“IEH” or the "Company") will be held at the offices of OTC Markets Group, 300 Vesey Street, 12th Floor, New York, New York 10282 on Tuesday, November 19, 2019 at 10:00 a.m. (Eastern Standard Time), New York time, for the following purposes:
| 1. | To elect three (3) Class II Directors to IEH's Board of Directors to hold office for a period of two years or until their successors are duly elected and qualified; |
| 2. | To hold a non-binding advisory vote on the compensation of our named executive officers; |
| 3. | To ratify the appointment of Marcum LLP, as our independent registered public accounting firm; and |
| 4. | To transact such other business as may properly come before the Annual Meeting or any adjournment thereof. |
The close of business on Monday, October 21, 2019 has been fixed as the Record Date for the determination of shareholders entitled to notice of, and to vote at, the Annual Meeting and any adjournment thereof.
Whether or not you plan to attend, to ensure that your shares are represented and voted at the meeting, please either vote your shares: (i) by completing and returning your proxy card mailed to you together with this Proxy Statement; or (ii) electronically over the Internet or by telephone. Voting instructions are printed on your proxy card and included in the accompanying Proxy Statement. Please vote as promptly as possible in order to ensure your representation at the meeting. Submitting your instructions by any of these methods will not affect your right to attend the meeting and vote in person. If you do attend the Annual Meeting, you may revoke any prior proxy and vote your shares in person if you wish to do so. Please note, however, that if your shares are held of record by a broker, bank or other agent and you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from that record holder. Any prior proxy will automatically be revoked if you execute the accompanying proxy or if you notify the secretary of the corporation, in writing, prior to the annual meeting of shareholders.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders on Tuesday, November 19, 2019
The Proxy Statement and Our Annual Report to Shareholders for the Fiscal Year Ended
March 30, 2019 are available at:http://www.investorvote.com/IEHC
| By Order of the Board of Directors | |
| /s/ ROBERT KNOTH | |
| Robert Knoth | |
| Chief Financial Officer and Corporate Secretary |
Dated: October 23, 2019
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IEH CORPORATION
140 58th Street
Building B, Suite 8E
Brooklyn, New York 11220
PROXY STATEMENT FOR THE IEH CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, NOVEMBER 19, 2019
This proxy statement and the accompanying form of proxy have been mailed on or about October 23, 2019 to the holders of record on Monday, October 21, 2019 (the “Record Date”) of the common stock, par value $.01 per share (“Common Stock”) of IEH CORPORATION, a New York corporation (“IEH” or the “Company”) in connection with the solicitation of proxies by the Board of Directors of IEH for use at the Annual Meeting of Shareholders to be held on Tuesday, November 19, 2019 at 10:00 a.m. (Eastern Standard Time), New York time, at the offices of the OTC Markets Group, 300 Vesey Street, 12th Floor, New York, New York 10282, and at any adjournment thereof.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
On Monday, October 21, 2019, the Record Date, there were issued and outstanding 2,331,751 shares of the Company’s Common Stock. Only holders of Common Stock of record at the close of business on the Record Date are entitled to receive notice of and to vote at the Annual Meeting and postponement thereof. Each share of Common Stock is entitled to one vote on each matter submitted to shareholders. Shares of IEH's Common Stock represented by an effective proxy in the accompanying form will, unless contrary instructions are specified in the proxy, be voted:
| 1. | FOR the election of the Three (3) persons nominated by the Board of Directors to serve as Class II Directors (Proposal 1); |
| 2. | FORthe resolution approving the compensation of the named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC (Proposal 2); |
| 3. | FOR the ratification of Marcum LLP as our independent registered public accounting firm for the fiscal year ending March 27, 2020 (Proposal 3); and |
| 4. | FORsuch other matters as may properly come before the Annual Meeting (including any vote to adjourn the meeting) or any adjournment thereof and for which the persons named on the enclosed proxies determine, in their sole discretion, to vote in favor. |
Any such proxy may be revoked at any time before it is voted. A shareholder may revoke this proxy by notifying the Secretary of IEH either in writing prior to the Annual Meeting or in person at the Annual Meeting, by submitting a proxy bearing a later date or by voting in person at the Annual Meeting.
MAILING OR INTERNET AVAILABILITY OF PROXY MATERIALS
We are furnishing proxy materials to our shareholders both by mailing printed copies of those materials to each shareholder and by making such materials available by the Internet. On or about October 23, 2019, we mailed to our shareholders our proxy materials, including our proxy statement and our annual report. Set forth below are instructions to our shareholders on how to access their proxy card to vote through the Internet or by telephone.
For the 2019 Annual Meeting, the Company will furnish printed copies of our proxy materials to our record shareholders and make available additional copies for beneficial holders of the Company’s Common Stock. In the future, the Company may elect to furnish proxy materials to our shareholders primarily via the Internet, instead of mailing printed copies, and only furnish printed copies of proxy materials upon shareholder request.
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The presence of a majority of the holders of the outstanding shares of Common Stock entitled to vote, in person or represented by proxy, will constitute a quorum for the transaction of business. Shares are counted as present at the Annual Meeting if you are present in person at the Annual Meeting, or if you have properly submitted a proxy. In addition, abstentions and broker non-votes are counted as present at the Annual Meeting for the purpose of determining the presence of a quorum. A “broker non-vote” occurs when a broker, bank or other nominee holding shares for a beneficial owner in “street name” does not vote on a particular proposal because the broker, bank or other nominee does not have discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner.
Election of Directors (Proposal 1) is by a plurality of the votes cast at a meeting of the shareholders by the holders of shares entitled to vote in the election with the three (3) nominees receiving the highest vote totals to be elected as a Class II Directors of IEH. Broker non-votes and properly executed proxies marked “WITHHOLD” with respect to the election of a director will not be voted with respect to the director indicated. Votes that are withheld and broker non-votes will not affect the outcome of the election of directors.
The affirmative vote of a majority of the shares of Common Stock represented in person or by proxy and entitled to vote is required to approve the advisory vote on executive compensation in Proposal 2. Because this vote is advisory and is not binding on our Board of Directors, the directors will take into account the outcome of the vote when considering future executive compensation arrangements as it deems appropriate. Abstentions will have the same effect as voting against the resolution. Because broker non-votes are not counted as votes for or against this resolution, they will have no effect on the outcome of the vote.
The ratification of the appointment of Marcum LLP, as our independent registered public accounting firm for the fiscal year ending March 27, 2020 (Proposal 3) requires the affirmative vote by holders of at least a majority of the shares of IEH’s Common Stock who attend the Annual Meeting in person or are represented at the meeting by proxy and who cast votes. Abstentions will have the effect of a vote against this proposal, while broker non-votes will not be taken into account in determining the outcome of the vote on this proposal.
Any other matter properly submitted to the shareholders will require the affirmative vote of a majority of the shares represented and entitled to vote, in person or by proxy, at the Annual Meeting, unless a greater percentage is required either through law or by our amended certificate of incorporation or bylaws. If you “abstain” from voting on any of these matters, your abstention will be considered as present and entitled to vote for purposes of determining the presence of a quorum, but will have the effect of a vote against the particular matter. In addition, the proxy confers discretionary authority to the persons named in the proxy authorizing those persons to vote, in their discretion, on any other matters properly presented at the Annual Meeting of shareholders. The Board of Directors is not currently aware of any such other matters. If any other matter does properly come before the Annual Meeting, the Board of Directors intends that the persons named in the enclosed form of proxy will vote on such matter in accordance with their judgment. The persons named as proxies may propose one or more adjournments of the Annual Meeting to permit further solicitations of proxies or for other reasons. Any such adjournment would require the affirmative vote of the majority of the outstanding shares present in person or represented by proxy at the Annual Meeting.
Voting by Proxy – Shareholders of Record
If your shares are registered directly in your name with our transfer agent, Computershare, you are considered a “shareholder of record” and you may vote in person by attending the meeting, or by mailing a marked, signed and dated proxy card delivered with these proxy materials and returning it in the postage-paid envelope provided, or by voting your shares by proxy over the Internet or by telephone by following the instructions provided below and pursuant to the instructions provided in the proxy card. Instructions for voting by mail and via the Internet, by telephone are summarized below.
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By Mail - Mark, sign and date proxy card and return it in the postage-prepaid envelope provided to you.
By Internet -If you have Internet access, you may submit your proxy by using the Internet or a Mobile Phone to vote your proxy by accessingwww.Investorvote.com/IEHC. Have your proxy card available when you access the above website. Follow the prompts to vote your shares.
By Telephone - You may submit your proxy via telephone by calling1-800-652-8683 (VOTE)within the U.S.A., U.S. Territories and Canada using a touchtone telephone. Have your proxy card available when you call. Follow the voting instructions to vote your shares.
If you are a shareholder of record, your shares will be voted in the manner that you indicate in your proxy card or via the Internet or by telephone. If you return a signed proxy card but do not indicate how you wish to vote your shares, your shares will be voted:
| • | FOR election of the three (3) nominees for Class II Director (Proposal 1); |
| • | FOR the resolution approving the compensation of the named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC (Proposal 2); |
| • | FOR the ratification of Marcum LLP, as our independent registered public accounting firm for fiscal year 2020 (Proposal 3). |
If any other business properly comes before the shareholders for a vote at the annual meeting, or at any adjournments or any postponements of the meeting, your shares will be voted according to the discretion of the holders of the proxy.
Voting by Proxy – Shares held in Street Name
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name.” Most beneficial owners whose stock is held in the name of a broker, bank or other nominee receive instructions for granting proxies from their brokers, banks or nominees, rather than our proxy card. Telephone and Internet voting are usually available to shareholders owning shares through certain brokers, banks and nominees. You can vote your shares held through a broker, bank or nominee by following the voting instructions sent to you by that institution. If Internet or telephone voting is unavailable from your bank or brokerage firm, please complete and return the enclosed voting instruction card in the addressed, postage paid envelope provided. If you provide specific voting instructions, your shares will be voted as you instruct. If you sign but do not provide instructions, your shares will be voted as described below. If you hold your shares in “street name” through a broker or other nominee, then the broker who holds your shares has the authority under the applicable stock exchange rules to vote on certain items when they have not received instructions from you. However, as explained above, if you hold your shares in street name you must cast your vote if you want it to count for Proposals 1, 2, or 3; no votes will be cast on your behalf on such proposals if you hold your shares in street name and you do not instruct your bank or broker how to vote. Your bank or broker will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of the Company’s independent registered public accounting firm (Proposal 3 of this proxy statement).
Voting In Person at the Annual Meeting
If you choose to vote in person, you can attend the Annual Meeting and cast your vote in person. Whether or not a shareholder plans to attend the meeting, the shareholder should vote by proxy to ensure his or her vote is counted. A shareholder may still attend the Annual Meeting and vote in person if he or she has already voted by proxy. To vote in person, a shareholder of record may come to the meeting and we will provide the shareholder with a ballot. Shareholders who hold their shares through a broker, bank or nominee and wish to vote at the Annual Meeting must bring to the Annual Meeting a legal proxy from the broker, bank or nominee issued in the shareholder’s name and confirming their beneficial ownership of the shares to be voted.
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Any proxy may be revoked at any time before it is voted at the Annual Meeting. A shareholder may revoke a proxy by submitting a proxy bearing a later date or by notifying the Secretary of IEH either in writing prior to the Annual Meeting or in person at the Annual Meeting. Revocation is effective only upon receipt of such notice by the Corporate Secretary of IEH. Shareholders who hold their shares through a broker, bank or other nominee and wish to vote at the Annual Meeting must bring to the meeting a letter from the broker, bank or other nominee confirming their beneficial ownership of the shares to be voted.
IEH will bear the cost of the solicitation of proxies by the Board of Directors. The Board of Directors may use the services of its executive officers and certain directors to solicit proxies from shareholders in person and by mail, telegram and telephone. Arrangements may also be made with brokers, fiduciaries, custodians and nominees to send proxies, proxy statements and other material to the beneficial owners of IEH’s Common Stock held of record by such persons, and IEH may reimburse them for reasonable out-of-pocket expenses incurred by them in so doing.
Rules adopted by the Securities and Exchange Commission (“SEC”) allow companies to send shareholders a “notice of Internet availability of proxy materials” rather than mail them full sets of proxy materials. This year, we chose to mail full packages of materials to our shareholders. However, in the future, we may take advantage of this new distribution option. If, in the future, we choose to send such notices, they would contain instructions on how shareholders can access our Notice of Annual Meeting and proxy statement and vote via the Internet or telephone. It would also contain instructions on how shareholders could request to receive their materials electronically or in printed form on a one-time or ongoing basis. For this year’s Annual Meeting, the Company will offer voting via the Internet and by telephone.
The Annual Report to Shareholders on Form 10-K for the fiscal year ended March 29, 2019, including financial statements, accompanies this proxy statement. Any reference in this proxy statement to the “year” or the “fiscal year” means IEH’s fiscal year commencing March 31, 2018 to and including March 29, 2019, unless otherwise specifically indicated. This proxy statement and the Annual Report to Shareholders for the fiscal year ended March 29, 2019, are available at:http://www.investor vote.com/IEHC.
The principal executive offices of IEH are located at 140 58th Street, Bldg. B, Suite 8E, Brooklyn, New York 11220. IEH's telephone number is (718) 492-4440.
Recommendation of the Board of Directors
The recommendations of our Board of Directors are set forth in the description of the matters to be acted on in this proxy statement. In summary, our Board of Directors recommends a vote:
| · | FOR election of the three (3) nominees for Class II Director (See Proposal 1); |
| · | FORthe resolution approving the compensation of the named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC (See Proposal 2); and |
| · | FOR the ratification of Marcum LLP, as our independent registered public accounting firm for fiscal year 2020 (See Proposal 3). |
With respect to any other matter that properly comes before the Annual Meeting, including any motion to adjourn the Annual Meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, they will vote in their own discretion. If you sign and return your proxy card but do not specify how you want to vote your shares, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board of Directors.
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QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS
Why am I receiving this proxy statement?
This proxy statement describes the proposals on which our Board of Directors of IEH Corporation would like you, as a shareholder, to vote at the Annual Meeting of the Shareholders of the Company, which will take place on Tuesday, November 19, 2019 at 10:00 a.m. at the offices of the OTC Markets Group, 300 Vesey Street 12th Floor, New York, New York 10282. It also gives you information on these proposals so that you can make an informed decision. We intend to mail this proxy statement and accompanying proxy card on or about October 23, 2019 to all shareholders of record entitled to vote at the Annual Meeting as of Monday, October 21, 2019, the Record Date.
In this proxy statement, we refer to IEH Corporation as “IEH,” the “Company,” “we,” “us” or “our.”
Who can vote at the Annual Meeting of Shareholders?
Shareholders who owned shares of Common Stock on Monday, October 21, 2019, the Record Date, may attend and vote at the Annual Meeting. Each share is entitled to one vote. There were 2,331,751 shares of the Company’s Common Stock issued and outstanding on Monday, October 21, 2019. All shares of Common Stock shall vote together as a single class. Information about the shareholdings of our directors and executive officers is contained in the section of this proxy statement entitled “Voting Securities and Security Ownership of Certain Beneficial Owners and Management” on pages 21 through 22 of this proxy statement.
What is the proxy card?
The proxy card enables you to appoint: (i) Robert Knoth, our Chief Financial Officer and Corporate Secretary; and (ii) David Offerman, our President and Chief Executive Officer, as your representatives at the Annual Meeting. By completing and returning the proxy card, you are authorizing each of these persons to vote your shares at the Annual Meeting in accordance with your instructions on the proxy card. This way, your shares will be voted whether or not you attend the Annual Meeting. Even if you plan to attend the Annual Meeting, it is a good idea to complete and return your proxy card before the Annual Meeting date just in case your plans change. If a proposal comes up for vote at the Annual Meeting that is not on the proxy card, the proxies will vote your shares, under your proxy, according to their best judgment.
What am I voting on?
At the Annual Meeting you are being asked to vote on three (3) specific items as follows:
First is the election of Gerald E. Chafetz, Allen Gottlieb and David Offerman, as Class II Directors on the Board of Directors of IEH. Each of Gerald E. Chafetz, Allen Gottlieb and David Offerman are currently directors of the Company.
Second, you are being asked to vote on and approve a resolution approving the compensation of the named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC.
Third, at the Annual Meeting you are also being asked to ratify Marcum LLP, as our independent registered public accounting firm for the fiscal year ending March 27, 2020.
We are unaware of any other possible business to be addressed at the Annual Meeting; however, we will also transact any other business that properly comes before the Annual Meeting in accordance with our By-Laws.
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How does the Board of Directors recommend that I vote?
Our Board of Directors unanimously recommends a vote FOR election of the nominees for Class II Director (See Proposal 1).
Our Board of Directors unanimously recommends a vote FOR the resolution approving the compensation of the named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC (See Proposal 2).
Our Board of Directors unanimously recommends a vote FOR the ratification of Marcum LLP as our independent registered public accounting firm for fiscal the year ending March 27, 2020 (See Proposal 3).
With respect to any other matter that properly comes before the Annual Meeting, the proxy holders (Robert Knoth and David Offerman) will vote as recommended by the Board of Directors, or if no recommendation is given, they will vote in their own discretion. If you sign and return your proxy card but do not specify how you want to vote your shares, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board of Directors.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
Most of our shareholders hold their shares beneficially in an account at a brokerage firm, bank or other nominee holder, rather than holding share certificates in their own name. As summarized below, there are some distinctions between shares held record and those owned beneficially.
Shareholder of Record
If on Monday, October 21, 2019 the Record Date, your shares were registered directly in your name with our new transfer agent, Computershare, you are a shareholder of record who may vote at the Annual Meeting, and we are sending these proxy materials directly to you. As the shareholder of record, you have the right to direct the voting of your shares by returning the enclosed proxy card to us or to vote in person at the Annual Meeting or over the telephone or via Internet. Whether or not you plan to attend the Annual Meeting, please complete, date and sign the enclosed proxy card to ensure that your vote is counted.
Beneficial Owner
If on Monday, October 21, 2019, the Record Date, your shares are held in an account at a brokerage firm or at a bank or other nominee holder, you are considered the beneficial owner of shares held “in street name,” and these proxy materials are being forwarded to you by your broker, bank or other nominee holder who is considered the shareholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares and to attend the Annual Meeting. If your shares are registered in the name of a bank, other nominee holder or brokerage firm you will receive instructions from your holder of record that must be followed in order for the record holder to vote the shares per your instructions. If you provide specific voting instructions your shares will be voted as you instruct. If you sign but do not provide instructions, your shares will be voted as described below. Many banks and brokerage firms have a process for their beneficial holders to provide instructions over the telephone or via the Internet. If Internet or telephone voting is unavailable from your bank or brokerage firm, please complete and return the enclosed voting instruction card in the addressed, postage paid envelope provided. If you hold your shares “in street name” through a broker, bank or other nominee holder, then the broker, bank or other nominee holder who holds your shares has the authority under the applicable stock exchange rules to vote on certain items when they have not received instructions from you. If you hold your shares “in street name” it is critical that you cast your vote, if you want it to count in the election of directors (Proposal 1) and with respect to Proposal 2 (advisory vote on executive compensation). In the prior years, if you held your shares “in street name” and you did not indicate how you wanted your shares voted in the election of directors, your bank, broker or other nominee was allowed to vote your shares on your behalf in the election of directors as they felt appropriate. Recent changes in regulation were made to take away the ability of your bank, broker or other nominee to vote your uninstructed shares in the election of directors on a discretionary basis. Thus, if you hold your shares “in street name” and you do not instruct your bank, broker or other nominee how to vote in the election of directors, no votes will be cast on your behalf. Your bank, broker or other nominee will, however, continue to have discretion to vote your uninstructed shares on the ratification of the appointment of the Company’s independent registered public accounting firm (Proposal 3).If you are a beneficial owner, please complete the voting instruction card and return it as instructed to your brokerage firm, bank or other nominee holder so your shares of Common Stock will be counted toward a quorum and voted at the Annual Meeting.
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How do I vote?
There are four methods to vote at the Annual Meeting - by mail, over the telephone, via the Internet, or by attending the meeting in person.
(1) You may vote by mail.
You may vote by mail by completing, signing and dating your proxy card and returning it in the enclosed, postage-paid and addressed envelope. If you mark your voting instructions on the proxy card, your shares will be voted:
| · | as you instruct; and |
| · | according to the best judgment of Messrs. Robert Knoth or David Offerman if a proposal comes up for a vote at the Annual Meeting that is not on the proxy card. |
If you return a signed card, but do not provide voting instructions, your shares will be voted:
| · | to approve the election of the nominated persons as Class II Directors to the Company’s Board of Directors; |
| · | to approve the resolution approving the compensation of the named executive officers, as disclosed on this proxy statement pursuant to the compensation disclosure rules of the SEC; |
| · | to ratify the appointment of the Company’s independent registered public accounting firm for the fiscal year ending March 27, 2020; and |
| · | according to the best judgment of Messrs. Robert Knoth and David Offerman if a proposal comes up for a vote at the Annual Meeting that is not on the proxy card. |
(2) You may vote over the telephone by calling1-800-652-8683 (VOTE) within the U.S.A., U.S. territories and Canada using a touchtone telephone
(3) You may vote via the Internet by accessingwww.Investorvote.com.
(4) You may vote in person at the Annual Meeting.
We will pass out written ballots to anyone who wants to vote at the Annual Meeting. However, if you hold your shares in street name, you must bring to the Annual Meeting a valid proxy from the broker, bank or other nominee holding your shares that confirms your beneficial ownership of the shares and gives you the right to vote your shares. Holding shares in street name means you hold them through a brokerage firm, bank or other nominee, and therefore the shares are not held in your individual name. We encourage you to examine your proxy card closely to make sure you are voting all of your shares in the Company.
What does it mean if I receive more than one proxy card?
You may have multiple accounts at the transfer agent and/or with stockbrokers. Please sign and return all proxy cards to ensure that all of your shares are voted.
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What if I change my mind after I return my proxy?
You may revoke your proxy and change your vote at any time before the polls close at the Annual Meeting. You may do this by:
| · | sending a written notice to the Corporate Secretary of the Company, Mr. Robert Knoth, stating that you would like to revoke your proxy of a particular date; and |
| · | signing another proxy card with a later date and returning it before the polls close at the Annual Meeting, or attending the Annual Meeting and voting in person. |
Please note, however, that if your shares are held of record by a brokerage firm, bank or other nominee, you must instruct your broker, bank or other nominee that you wish to change your vote by following the procedures on the voting form provided to you by the broker, bank or other nominee. If your shares are held in street name, and you wish to attend the Annual Meeting and vote at the Annual Meeting, you must bring to the Annual Meeting a legal proxy from the broker, bank or other nominee holding your shares, confirming your beneficial ownership of the shares and giving you the right to vote your shares.
Will my shares be voted if I do not sign and return my proxy card?
If your shares are held in street name or in your name and you do not sign and return your proxy card, your shares will not be voted unless you vote in person at the Annual Meeting. Therefore, we urge you to fully execute you proxy card and return it so your vote will be counted.
How are votes counted?
You may vote “For” or “Withhold Authority” on electing the nominated persons to be Class II Directors on the Board of Directors (Proposal 1), and “For” or “Against” or “Abstain” with respect to the: (i) non-binding advisory vote on the compensation of our named executive officers (Proposal 2); and (ii) ratification of Marcum LLP, as our independent registered public accounting firm for the fiscal year ending March 27, 2020 (Proposal 3).
How many shareholders are needed either in person or by proxy to hold the Annual Meeting?
To hold the Annual Meeting and conduct business, a majority of the Company’s outstanding shares of Common Stock entitled to vote, in person or represented by proxy, must be present at the Annual Meeting. This is called a quorum.
Shares are counted as present at the Annual Meeting if the shareholder either:
| · | is present and votes in person at the Annual Meeting; or |
| · | has properly submitted a proxy card. |
How many votes are required to elect the nominated persons to be Class II Directors on the Board of Directors?
The affirmative vote of a plurality of the votes cast at the Annual Meeting of the shareholders by the holders of shares of Common Stock entitled to vote in the election is required to elect each director.
How many votes are required to approve other matters that may come before the shareholders at the Annual Meeting?
An affirmative vote of a majority of the votes cast at the Annual Meeting is required for approval of all other items being submitted to the shareholders for their consideration.
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What happens if I don’t indicate how to vote my proxy?
If you just sign your proxy card without providing further instructions, your shares will be counted as a “FOR” vote for the election of the persons nominated to be Class II Directors (See Proposal 1). Your shares will also be counted as a “FOR” vote: (i) to approve the resolution approving the non-binding advisory vote on the compensation of the named executive officers (See Proposal 2); and (ii) to ratify the appointment of the Company’s independent registered public accounting firm for the fiscal year ending March 27, 2020 (See Proposal 3).
Is my vote kept confidential?
Proxies, ballots and voting tabulations identifying shareholders are kept confidential and will not be disclosed except as may be necessary to meet legal requirements.
Where do I find the voting results of the Annual Meeting?
We will announce preliminary voting results at the Annual Meeting. We will also publish the final results in our quarterly report on Form l0-Q for the fiscal quarter following the results of the voting on this matter. We will file that report with the SEC or by filing a report on Form 8-K with the SEC. You can obtain a copy by calling the SEC at l-800-SEC-0330 for the location of the nearest public reference room, or through the EDGAR system atwww.sec.gov.
Who can help answer my questions?
You can contact our corporate headquarters at (718) 492-4440 or by sending to Mr. Robert Knoth, Corporate Secretary, at 140 58th Street, Bldg. B, Suite 8E, Brooklyn, New York 11220, any questions about proposals described in this proxy statement or how to execute your vote.
ELECTION OF DIRECTORS
IEH's Certificate of Incorporation provides that the directors of IEH are to be elected in two (2) classes; each class to be elected to a staggered two (2) year term and until their successors are duly elected and qualified. The Board of Directors currently consists of six (6) members divided into two (2) classes with three Class I Members and three Class II Members. The Bylaws of IEH provide that the Board shall consist of between three and eleven persons, and the Board has currently set the number of persons on the Board at six (6) members. The Class II Members of the Board are scheduled to be elected at the Company’s 2019 Annual Meeting. All officers are elected by and serve at the discretion of the Board of Directors.
The persons nominated for election to IEH's Board of Directors at the 2019 Annual Meeting are Gerald E. Chafetz, Allen Gottlieb and David Offerman who will each serve, if elected, as Class II Directors of the Board. Each of the nominees currently serves on the Board of Directors.
The affirmative vote of a plurality of the votes cast at a meeting of the shareholders by the holders of shares of Common Stock entitled to vote in the election is required to elect each Director. All proxies received by the Board of Directors will be voted for the election as Directors of the nominee as indicated below if no direction to the contrary is given. In the event that the nominee is unable to serve, the proxy solicited hereby may be voted, in the discretion of the holder of the proxy, for the election of another person in his stead. The Board of Directors knows of no reason to anticipate this will occur. No family relationships exist between any Director or nominee for election as a Director.
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THE BOARD OF DIRECTOR RECOMMENDS THAT YOU VOTE “FOR” THE THREE (3) NOMINEES FOR CLASS II DIRECTORS AS DESCRIBED IN THIS PROPOSAL 1.
The following table sets forth certain information as of the date hereof with respect to all of the Directors of IEH, including the three (3) nominees for election as Class II Directors to IEH's Board of Directors at the Annual Meeting. The information provided below indicates the Directors whose terms of office expire at the Annual Meeting and the Directors whose term of office expires in 2020. The Directors whose terms of office expire at the Annual Meeting are the persons nominated to be Class II Directors for election at the Annual Meeting.
| Name | DirectorSince | Age | Position with Company | Term Expires |
David Offerman |
2016 |
44 | Chairman of the Board of Directors and President |
2019 |
| Allen Gottlieb | 1992 | 78 | Director | 2019 |
| Gerald E. Chafetz | 2009 | 76 | Director | 2019 |
| Eric C. Hugel | 2016 | 48 | Director | 2020 |
| Dr. Sonia Marciano | 2016 | 56 | Director | 2020 |
| Michael E. Rosenfield | 2018 | 36 | Director | 2020 |
________________
Allen Gottlieb (Nominee) has been a member of IEH’s Board of Directors since 1992. Mr. Gottlieb is retired. Mr. Gottlieb was previously engaged in the practice of law for 40 years, specializing in Labor-Management Relations.
Gerald E. Chafetz(Nominee) has been a member of IEH’s Board of Directors since 2009. He is the President of GEC Enterprises, LLC which he founded in April 2010. GEC Enterprises LLC provides consulting services to property management companies and a group of window and door retain stores. Prior to April 2010, Mr. Chafetz had been the President of Capitol City Companies since 1989. Capitol City Companies is a property management and home improvement business headquartered in Hartford, Connecticut. Prior to founding Capitol City Companies, he had an extended 22-year executive career in the textile industry with several knitwear and high fashion companies.
David Offerman (Nominee) has been a member of IEH’s Board of Directors since July 15, 2016. On March 26, 2017, David was elected by the Board of Directors to replace his father, Michael Offerman, as Chairman of the Board, President and Chief Executive Officer of the Company following Michael Offerman’s passing on March 24, 2017. Previously David was the Vice President - Sales and Marketing of the Company. He joined the Company in September 2004 as the National Sales Manager and was appointed to Vice-President – Sales and Marketing in April 2011. Prior to joining IEH, David worked as an account executive and sales manager in the telecommunication industry. David graduated from the University of Michigan in 1993 with a Bachelor of Arts in film and communications. In 2016 he received an MBA from the NYU Stern School of Business with a concentration in leadership and management.
Dr. Sonia Marcianohas been a member of IEH’s Board of Directors since July 15, 2016. She is a clinical professor at the NYU Stern School of Business since July 2007 where she teaches courses and manages academic programs. She graduated from the University of Chicago in 1984 with a Bachelor of Arts degree. In 2000, Dr. Marciano received from the University of Chicago her MBA in Economics and Finance and her PhD in Business Economics.
Eric C. Hugel has been a member of IEH’s Board of Directors since July 15, 2016. He is the Co-Chief Executive Officer and Chief Financial Officer of Deb’s Buried Treasure, an online retailer, since July 2014. He is also the owner of Eric C. Hugel, CPA, CFA, a business that provides tax and business advisory services. From March 2013 to February 2014, Mr. Hugel held the position of Senior Institutional Specialist in U.S. Fundamental Equity Research Analyst at McGraw Hill Financial – S&P Capital IQ providing investment advisory services. In particular he provided research and analysis in the U.S. aerospace and defense and industrial conglomerates sectors. From July 2002 through June 2012 he was a managing director at Stephens Inc. providing investment banking services in the U.S. aerospace and defenses sectors. Mr. Hugel graduated from Lehigh University in 1993 with a Bachelor of Science in accounting.
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Michael E. Rosenfieldis a co-founder and principal of Olive Tree Holdings LLC, a real estate private equity company based in New York, NY and Atlanta, GA since 2017. Olive Tree is an owner-operator of value-added multifamily assets across the Southern U.S. From 2013-2016 he was Vice President and Chief of Staff at Bert E. Brodsky & Associates, Inc., a private investment firm with a diverse portfolio of companies across several industries. Prior to that from 2006-2013, he served as Vice President of Business Development of Mobile Health Management Services, Inc., a subsidiary of Bert Brodsky & Associates, Inc. Mr. Rosenfeld received his Bachelor of Arts in Political Science from Emory University in 2006, and his Master of Business Administration (MBA) in Corporate Finance from the New York University Stern School of Business in 2016.
Robert Knoth joined IEH as Controller in January, 1990 and was elected Treasurer and Chief Financial Officer of IEH in March, 1990. Mr. Knoth was elected as Corporate Secretary of IEH in September 1992 and Mr. Knoth has held these positions since said dates. From 1986 to January, 1990, Mr. Knoth was employed as controller by G&R Preuss, Inc., a company engaged in the business of manufacturing truck bodies and accessories.
Mark Iskin is the Director of Purchasing, a position he has held since September 2000. On April 14, 2011, the Board of Directors appointed Mark to the position of Vice-President – Operations. Prior to joining the Company, Mr. Iskin worked as a materials and purchasing specialist in manufacturing and distribution companies. In his last position with an industrial distributor, Mr. Iskin was responsible for purchasing and managing vendors for the cutting tool section of the catalog. In addition, he participated in setting up and developing the Company’s forecasting and planning software related to that department’s procedures.
Robert Romeo serves as Vice President of Engineering for IEH, a position he has held since October 2005. Robert has corporate responsibility for engineering products and driving product enhancements to satisfy the demanding application requirements of IEH customers. In addition, Robert is tasked with engineering new product developments in the IEH connector offerings to broaden the market base of potential customers. These new connectors will introduce the traditional IEH quality and value to industries that specify exceptional reliability and performance in electrical and electronic equipment. Before joining IEH, Robert worked for more than 20 years in positions of increasing responsibility for major national manufacturers of electrical and electronic goods for residential, industrial, government and OEM markets.
Sherif Mahdi joined IEH in October, 2014 as Director of Quality. Sherif has 22 years of progressive professional experience in total quality management/operations and engineering management, most notably, with a multinational manufacturing organization and distribution client. He has managed accounts in the aviation, space, government, commercial, medical, telecommunication, retail, construction, and automotive industries. His expertise encompasses development, implementation and auditing of quality systems such as ISO9001, AS9100/AS9120, ISO13485, QS9000, TE Supplement, ISO20000, ISO14000, TS16949 and design for Six Sigma, Lean Six Sigma Black Belt directives impacting the lifecycle of plant and corporate operations including affiliated business and developmental concerns. His background is strengthened by significant experience as an industrial engineer. Sherif holds a Master of Science Degree in Engineering Management and a Master of Business Administration Degree.
Alexa Maldonado is the Director of Human Resources for IEH, a position she has held since July, 2018. Alexa has responsibility for policy implementation, handling employee relations, health and welfare benefit, administration, staffing and compliance training, payroll and supervisory training. She became employed by the Company on a full-time basis in March 2016. Prior to joining IEH, she worked for The New York Stock Exchange for 10 years in various human resources capacities and responsibilities including as a Human Resources Generalist, Benefits Administration and Staffing Coordinator.
Atiqur Mufti joined IEH as a consultant in February, 2016 and was promoted to be the Controller of IEH on May 1, 2019 replacing Mr. Knoth. He has eight (8) years of SAP ECC and SAP Business One implementation experience. Prior to joining IEH, he worked as an independent contractor as well as worked as a Financial Consultant at Accenture, Inc. located in Accenture’s New York City office. Mr. Mufti has successfully implemented three (3) life cycles of SAP in FICO (financial controlling) and FICA (finance contract accounting). He has two (2) Master Degrees in Finance and Accounting from Stony Brook University and SUNY College at Old Westbury respectively.
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Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company’s directors and officers and persons who own, directly or indirectly, more than 10% of a registered class of IEH’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock of IEH.
Officers, directors and greater than 10% shareholders are required under federal law to furnish the Company with copies of all Section 16(a) reports that they file. Based solely on review of the copies of such reports received by the Company, the Company believes that filing requirements applicable to officers, directors and 10% shareholders were complied with during the year ended March 29, 2019.
Director Independence; Meetings of Directors; Corporate Governance; Committees of the Boards
Our Board of Directors currently consists of six (6) individuals. We believe that five (5) of our directors, Allen Gottlieb, Gerald Chafetz, Eric C. Hugel, Sonia Marciano and Michael E. Rosenfield would both qualify as “independent directors” within the meaning of the term as applied by the Nasdaq Stock Market Rule 4200(a)(15). Our shares of Common Stock are not listed on the Nasdaq Stock Market.
During the fiscal year ended March 29, 2019, the Board of Directors held eight (8) meetings by telephone conference call. All Directors participated in such meeting of the Board. In addition, during the fiscal year ended March 29, 2019, the Board of Directors took action by unanimous written consent on one occasion.
During the fiscal year ended March 29, 2019, the Chief Executive Officer and the Chief Financial Officer made an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. They concluded that our disclosure controls and procedures were not effective during the period covered by the fiscal year ended March 30, 2018. In response to such determination, management immediately undertook steps to correct the deficiencies in our internal controls over financial reporting. They recommended, in part, to the Board of Directors that the Board approve the formation of an audit committee and a compensation committee. Each such committee would initially have three (3) members consisting of independent directors. At its meeting of December 11, 2018, the Board of Directors approved the formation of an audit committee and a compensation committee and nominated the following directors to each such committee: (i) Audit Committee – Eric Hugel (Chair), Allen Gottlieb and Michael E. Rosenfeld; and (ii) Compensation Committee – Gerald Chafetz (Chair), Michael E. Rosenfeld and Dr. Sonia Marciano. Each of these Board committees has a written charter approved by the Board of Directors. Each of the charters of these Board committees is available at the Company’s website,www.iehcorp.com(click on “Investors”, then on “Corporate Governance”.
For the fiscal year ended March 29, 2019, a general description of the duties of the committees were as follows:
Audit Committee. Our Audit Committee will act to: (i) review with management the finances, financial condition and interim financial statements of the Company; (ii) review with our independent registered public accounting firm the year-end financial statements; (iii) review implementation with the independent registered public accounting firm and management of any action recommended by the independent registered public accounting firm; and (iv) retain and terminate our independent registered public accounting firm. Mr. Hugel, the Chair of the Audit Committee was also designated as our Audit Committee Financial Expert. During the 2018 fiscal year, all of the members of our Audit Committee were “independent” within the definition of that term as provided by the OTCQX Marketplace Rules. During the fiscal year ended March 29, 2019, the Audit Committee held its initial meeting on February 6, 2019 and was scheduled to meet additionally in the first fiscal quarter of the fiscal year ending as of March 27, 2020.
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Compensation Committee. The Compensation Committee will act to: (i) review, approve and administer
compensation arrangements for our executive officers; (ii) administer our equity-based compensation plans, (iii) establish and review general policies relating to the compensation and benefits of our executive officers and other personnel, (iv) evaluate the relationship between executive officer compensation policies and practices and corporate risk management to confirm those policies and practices do not incentivize excessive risk-taking, and (iv) evaluate and makes recommendations to our Board of Directors regarding the compensation of our non-employee directors. During the fiscal year ended March 29, 2019, the Compensation Committee did not yet hold its initial meeting but was scheduled to hold such initial meeting in April 2019.
The Board did not adopt any modifications to the procedures by which security holders may recommend
nominees to its Board of Directors.
Director Compensation
Non-executive directors will be compensated as follows:
| ● | the annual director fee for our non-executive directors will be $5,000, payable quarterly; |
| ● | each director will receive an annual fee of $5,000 for service on each committee, payable quarterly; and |
| ● | the chairman of each committee will receive an additional annual fee of $2,500, payable quarterly |
Nominations to the Board of Directors
Given the small size of our operations, we do not have a separate Nominating Committee of our Board of Directors. As a result, our Board acts as a whole with respect to the consideration of additional candidates for service on the Board. The Board considers candidates for election to our Board of Directors, whether recommended by security holders or otherwise, in accordance with the following criteria, applicable to all candidates:
| · | Nominees shall have a reputation for integrity, honesty and adherence to high ethical standards; |
| · | Nominees should have demonstrated business acumen, experience and the ability to exercise sound judgment in matters that relate to current and long-term objectives of IEH and should be willing and able to contribute positively to our decision-making process; |
| · | Nominees should have a commitment to understand IEH and its industries and to regularly attend and participate in meetings of the Board and its committees; |
| · | Nominees should have the interest and ability to understand the sometimes conflicting interests of the various constituencies of IEH, which include shareholders, employees, customers, governmental units, creditors and the general public, and to act in the interests of all shareholders; |
| · | Nominees should not have, nor appear to have, a conflict of interest that would impair the nominees’ ability to represent the interests of all of IEH shareholders and to fulfill the responsibilities of a director; and |
| · | Nominees shall not be discriminated against on the basis of race, religion, national origin, sex, disability or any other basis proscribed by applicable law. |
The renomination of existing directors is not viewed as automatic, but is based on continuing qualification under the criteria set forth above. In addition, the Board considers the existing directors’ performance on the Board and any committee thereof. The Board also considers the backgrounds and qualifications of the directors considered as a group and our ability to attract other persons to serve in light of our industry, financial condition and financial resources. The Board desires to ensure that the Board, when taken as a whole, should provide a significant breadth of experience, knowledge and abilities that shall assist the Board in fulfilling its responsibilities. The one person standing for election at the Annual Meeting is being renominated by the Company.
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Procedure to be Followed by Shareholders in Submitting Director Candidate Recommendations
Any shareholder who desires the Board to consider one or more candidates for nomination as a director should either by personal delivery or by United States mail, postage prepaid, deliver a written recommendation addressed to the Chairman of the Board of Directors, at 140 58th Street Building B, Suite 8E, Brooklyn, New York 11220, not later than: (i) with respect to an election to be held at an Annual Meeting of Shareholders, 120 days prior to the anniversary date of the immediately preceding Annual Meeting; and (ii) with respect to an election to be held at a special meeting of shareholders for the election of directors, the close of business on the 10th day following the date on which notice of such meeting is first given to shareholders. Each written recommendation should set forth: (a) the name and address of the shareholder making the recommendation and of the person or persons recommended; (b) the consent of such person(s) to serve as a director(s) of IEH if nominated and elected; (c) description of how the person(s) satisfy the general criteria for consideration as a candidate referred to above; and (d) a biography or similar information regarding the person being nominated as would satisfy the information requirements required under the rules and regulations of the SEC for inclusion in a proxy statement.
Communications with the Board of Directors
Any shareholder who wishes to communicate with the Board of Directors should send a written letter to the Corporate Secretary of the Company, at the Company’s principal address. Letters may be directed to the Board as a whole or to individual members.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE THREE (3) NOMINEES FOR CLASS II DIRECTORS AS DESCRIBED IN THIS PROPOSAL 1.
SAY ON PAY - ADVISORY VOTE ON EXECUTIVE COMPENSATION
We are providing our shareholders the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. This proposal, which is commonly referred to as “say-on-pay,” is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 14A to the Exchange Act.
Our executive compensation programs are designed to attract, motivate, and retain our executive officers, who are critical to our success. Under these programs, our named executive officers are rewarded for the achievement of our near-term and longer-term financial and strategic goals and for driving corporate financial performance and stability. The programs contain elements of cash and equity-based compensation and are designed to align the interests of our executives with those of our shareholders.
The “Executive Compensation and Related Information” section of this proxy statement describes in detail our executive compensation programs and the decisions made by the Board of Directors with respect to the fiscal year ended March 27, 2020. As we describe in this section of the proxy statement, our executive compensation program incorporates a pay-for-performance philosophy that supports our business strategy and aligns the interests of our executives with our shareholders. The Board believes this link between compensation and the achievement of our near- and long-term business goals will help drive our performance over time. At the same time, we believe our program does not encourage excessive risk-taking by management.
Our Board of Directors is asking shareholders to approve a non-binding advisory vote on the following resolution:
RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the disclosure under “Executive Compensation and Related Information,” the compensation tables and accompanying narrative disclosure, and any related material disclosed in this proxy statement, is hereby approved.
As an advisory vote, this proposal is not binding. The outcome of this advisory vote does not overrule any decision by the Company or the Board of Directors, create or imply any change to the fiduciary duties of the Company or the Board of Directors, or create or imply any additional fiduciary duties for the Company or the Board of Directors. However, our Board of Directors values the opinions expressed by our shareholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for named executive officers.
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Vote Required and Board Recommendation
On this non-binding matter, the affirmative vote of the holders of at least a majority of the shares of Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote is required to approve this Proposal 2.THE BOARD OF DIRECTORS BELIEVES THAT VOTING FOR THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS IS IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS, AND RECOMMENDS A VOTEFOR THIS PROPOSAL 2.
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Marcum LLP has been appointed by the Board of Directors of the Company as our independent registered public accounting firm for the fiscal year March 27, 2020. The Board of Directors has further directed that management submit the selection of Manuel Reina, CPA as our independent registered public accountants for ratification by the shareholders at the Annual Meeting. Shareholder ratification of the selection of Marcum LLP as our independent registered public accounting firm, is not required by our bylaws, New York corporate law or otherwise. The Board of Directors has elected to seek such ratification as a matter of good corporate practice. Should the shareholders fail to ratify the selection of Marcum LLP as our independent registered public accounting firm, the Board of Directors will reconsider whether to retain that firm for the fiscal year 2020. Even if the selection is ratified, the Board of Directors in its discretion may direct the appointment of a different independent registered accounting firm at any time during the year if they determine that such a change would be in the best interests of our shareholders and the Company. Representatives of Marcum LLP are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they so desire, and will be available to respond to appropriate questions.
Principal Accountant Fees and Services During the Fiscal Years Ended March 29, 2019 and March 30, 2018
On August 8, 2017, Jerome Rosenberg CPA, P.C. (“Rosenberg”), the Company’s long-time principal accounting firm, sent a letter to the Company notifying David Offerman, President and Chief Executive Officer of the Company, that Rosenberg had resigned as the Company’s independent registered public accounting firm, effective immediately. Rosenberg’s reports on the Company’s financial statements for the year ended March 31, 2017 did not contain any adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles. Rosenberg’s resignation was not the result of any disagreement between the Company and Rosenberg on matters of accounting principles or practices, financial statement disclosure or auditing scope or procedures.
On November 16, 2017, the shareholders of the Company ratified the engagement of Manuel Reina CPA as the Company’s new independent registered public accounting firm for the Company’s fiscal year ending March 30, 2018. Prior to his engagement, Mr. Reina had been associated with Rosenberg and performed auditing and tax services with respect to the Company.
Thereafter, the Board of Directors of IEH selected Manuel Reina CPA as the independent auditor of IEH for the fiscal year ended March 29, 2019. The audit services provided by Manuel Reina CPA consisted of examination of financial statements, services relative to filings with the SEC, and consultation in regard to various accounting matters. At the 2018 Annual Meeting of shareholders, the shareholders of the Company ratified the engagement of Mr. Reina for the fiscal year ending March 29, 2019.
During the fiscal years ended March 29, 2019 and March 30, 2018, respectively, the total fees billed for professional audit, non-audit services and other services rendered by our independent registered public accounting firm were as follows:
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Audit Fees. During the fiscal years ended March 29, 2019 and March 30, 2018, respectively, IEH paid an aggregate of $32,000 to Jerome Rosenberg, CPA, P.C. for fees related to the audit of its financial statements. During the fiscal years ended March 29, 2019 and March 30, 2018, respectively, IEH paid an aggregate of $132,000 and $45,000, respectively, to Manuel Reina CPA for fees related to the audit of its financial statements.
Audit Related Fees. During the fiscal years ended March 29, 2019 and March 30, 2018, respectively, no fees were paid to Jerome Rosenberg, CPA, P.C. or Manuel Reina CPA with respect to financial systems design or implementation.
Tax Fees. During the fiscal years ended March 29, 2019 and March 30, 2018, the Company paid to Jerome Rosenberg, CPA, P.C. the sum of $6,000, for tax compliance and representation, tax advice and tax planning services. During the fiscal year ended March 29, 2019 and March 30, 2018, respectively, the Company did not pay Manuel Reina CPA for tax compliance and representation, tax advice and tax planning services.
All Other Fees. During the fiscal years ended March 29, 2019 and March 30, 2018, respectively, IEH did not pay any other fees for services to its auditor.
The Board of Directors has determined that the services provided by Jerome Rosenberg, CPA, P.C. and the fees paid to it for such services during the fiscal year ended March 30, 2018 have not compromised the independence of Jerome Rosenberg, CPA, P.C. The Board of Directors has further determined that the services provided by Manuel Reina CPA and the fees paid to it for such services during the fiscal years ended March 29, 2019 and March 30, 2018, respectively, have not compromised the independence of Manuel Reina CPA.
Vote Required and Board Recommendation
The affirmative vote of the holders of a majority of the votes cast at the Annual Meeting is required for the ratification of Marcum LLP as our independent registered public accounting firm for the fiscal year ending March 27, 2020.THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTEFOR THE RATIFICATION OFMARCUM LLPAS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR ENDING MARCH 27, 2020 AS DESCRIBED IN THIS PROPOSAL 3.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
The following table sets forth below the summary compensation paid or accrued by the Company during the fiscal years ended March 29, 2019 and March 30, 2018 for the Company’s Chief Executive Officer and Chief Financial Officer:
| Name and Principal Position | Year | Salary | Bonus | Other Annual Compensation | Total | |||||||||||||||
| David Offerman, Chief Executive | March 29, 2019 | $ | 305,192 | $ | 83,947 | $ | 0 | $ | 389,139 | |||||||||||
| Officer, President | March 30, 2018 | $ | 346,533 | $ | 45,000 | $ | 0 | $ | 391,533 | |||||||||||
| Robert Knoth, Chief Financial | March 29, 2019 | $ | 198,153 | $ | 40,100 | $ | 0 | $ | 238,253 | |||||||||||
| Officer | March 30, 2018 | $ | 181,122 | $ | 40,000 | $ | 0 | $ | 221,222 | |||||||||||
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Employment Agreements with Named Executive Officers
The following are summaries of the agreements with our named executive officers. The agreements provide the general framework and the specific terms for the compensation of the named executive officers.
David Offerman
On July 29, 2019, the Company entered into an agreement with David Offerman, its President and Chief Executive Officer. The employment agreement with Mr. Offerman is effective as of July 29, 2019 and will expire on December 31, 2024. Mr. Offerman serves as the Chief Executive Officer and President of the Company and as a member of its board of directors. Under the employment agreement, Mr. Offerman will receive a base salary of $395,000 per annum and be eligible to receive an annual bonus of up to 100% of base salary for each fiscal year of employment based on performance targets and other key objectives established by the Compensation Committee of the board of directors (the “Committee”).
He will also be eligible to receive additional option grants to the Company’s 2011 Equity Incentive Plan as follows: 225,000 additional options to purchase 225,000 shares of the Company’s common stock at an exercise price of $20.00 per common share for the fiscal year ended March 29, 2019, provided that one-third (75,000 shares) shall vest immediately, 75,000 shares will vest on July 29, 2020, and 75,000 shares will vest on July 29, 2021.
During the term of the agreement, he shall also be eligible to receive equity or performance awards pursuant to any long-term incentive compensation plan adopted by the Committee or the board of directors.
Robert Knoth
On September 1, 2009, the Company entered into an agreement with Robert Knoth, its Chief Financial Officer, providing for certain retirement benefits to be payable to him after termination of such officer’s active service of employment with the Company. Such agreement provides that Mr. Knoth’s employment with the Company shall be divided into an “active period” and a “retirement period”. The active period shall mean the period of time until the officer attains the age of 70 years, or further period of employment beyond such date if extended by mutual agreement of the officer and the Company. The retirement period shall mean the period beginning with the officer attaining the age of 70 years and continuing until 10 years thereafter unless the officer’s employment has been previously terminated or extended by the mutual agreement of the officer and the Company. The retirement period shall take effect only on termination of the active period. Pursuant to Mr. Knoth’s agreement, he will be entitled to receive $12,000 per annum and aggregate payments during the retirement period not to exceed $120,000. During the fiscal year ended March 29, 2019, Mr. Knoth and the Board of Directors mutually agreed to extend Mr. Knoth’s employment agreement for an additional year.
On September 1, 2017, the Company and Mr. Knoth executed an Amended and Restated Employment Agreement amending certain terms of the 2009 Employment Agreement including increasing the per annum payment to him to $25,000, payable in monthly installments of $2,083.33. While the retirement payments would be payable for up to 10 years, the aggregate payments during the retirement period were increased to a maximum not exceed $250,000. In addition, during the active period, the Company shall provide Mr. Knoth (a) group healthcare and insurance benefits as generally made available to the Company’s senior management; and (b) such other insurance benefits obtained by the Company and generally made available to the Company’s senior management. Also during the first five (5) years of the retirement period, the Company shall provide Mr. Knoth with group health insurance benefits as generally made available to the Company’s senior management. Upon expiration of such five (5) year period, Mr. Knoth shall be entitled to all applicable COBRA benefits.
On August 31, 2011, the Company’s shareholders approved the adoption of the Company’s 2011 Employees Stock Option Plan (“2011 Plan”) to provide for the grant of options to purchase up to 750,000 shares of the Company’s Common Stock to all employees, including senior management. The plan terminates on August 30, 2022.
Options granted to employees under the 2011 Plan may be designated as options which qualify for incentive stock option treatment under Section 422A of the Internal Revenue Code, or option which do not so qualify. Under the 2011 Plan, the exercise price of an option designated as an incentive stock option shall not be less than the fair market value of the Company’s Common Stock on the day the option is granted. In the event an option designated as an incentive stock option is granted to a ten percent (10%) shareholder, such exercise price shall be at least 110 percent (110%) of the fair market value or the Company’s Common Stock and the option must not be exercisable after the expiration of ten years from the day of the grant. Exercise prices of non-incentive stock options may be less than the fair market value of the Company’s Common Stock. The aggregate fair market value of shares subject to options granted to a participant, which are designated as incentive stock options, and which become exercisable in any calendar year, shall not exceed $100,000.
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On July 1, 2015, our Board of Directors granted 245,000 options to purchase shares of the Company’s Common Stock under the 2011 Plan as follows: (i) Michael Offerman, our Chief Executive Officer, was granted 75,000 options; (ii) Robert Knoth, our Chief Financial Officer, was granted 50,000 options; (iii) four non-executive officer key employees were granted 110,000 options; and (iv) each of our non-management directors, Allen Gottlieb and Gerald Chafetz, was granted 5,000 options. The stock options (i) have a ten-year term; (ii) have an exercise price equal to the fair market value of the Company’s Common Stock as determined under the 2011 Plan, as reported in the OTCBB, on the date of grant ($6.00), except that the options granted to Michael Offerman has an exercise price equal to 110% of such fair market value because he owns ten percent (10%) or greater of the Company’s issued and outstanding Common Stock; and (iii) were all immediately vested.
Effective August 15, 2016, the Board of Directors also approved the granting of stock options to purchase shares of the Company’s common stock under the 2011 Plan to each of Dr. Marciano and Mr. Hugel, the newly elected non-management directors, as follows: Each of the new non-management directors will receive a grant of options totaling 5,000 shares each subject to the following vesting schedule: (i) 1,000 shares will vest immediately (August 15, 2016); (ii) 2,000 shares will vest on August 15, 2017; and (iii) 2,000 shares will vest on August 15, 2018. The stock options: (i) have a ten-year term; and (ii) have an exercise price equal to the fair market value of the Company’s common stock as determined under the 2011 Plan, as reported in the OTCBB, on the date of grant ($5.30). In the event of the termination of each recipient’s association with the Company, the options will remain exercisable in accordance with the terms of the 2011 Plan.
On October 26, 2018, the Board of Directors of the Company elected Michael E. Rosenfeld to the Board of Directors and also approved the granting of stock options to purchase 5,000 shares of Company common stock on the same terms and conditions as the other directors of the Company.
In the event of the termination of each recipient’s employment by, or association with, the Company (as applicable), the options will remain exercisable in accordance with the terms of the 2011 Plan.
The table below summarizes the option awards for the named executive officers and non-management directors:
| Name | Stock Option Grants | |||
| David Offerman | 75,000 | |||
| Robert Knoth | 50,000 | |||
| Allen Gottlieb | 5,000 | |||
| Gerald Chafetz | 5,000 | |||
| Sonia Marciano | 5,000 | |||
| Eric Hugel | 5,000 | |||
| Michael Rosenfeld | 5,000 | (1) | ||
| (1) | As of October 23, 2019, the recipient had vested options to purchase 1,000 shares and unvested options to purchase 4,000 shares of Common Stock. |
In 1987, the Company adopted a cash bonus plan for executive officers (“Cash Bonus Plan”) for non-union, management and administration staff. Contributions to the Cash Bonus Plan are made by the Company only when the Company is profitable for the fiscal year. The Company has accrued a contribution provision for the fiscal years ended March 29, 2019 and March 30, 2018 of $324,000 and $324,00, respectively.
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VOTING SECURITIES AND SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The securities entitled to vote at the Annual Meeting are IEH's Common Stock. The presence, in person or by proxy, of a majority of shares of Common Stock issued and outstanding entitled to vote will constitute a quorum for the Annual Meeting. Each share of Common Stock entitles its holder to one (1) vote on each matter submitted to shareholders. The close of business on Monday, October 21, 2019 has been fixed as the Record Date for the determination of the shareholders entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. At that date, 2,331,751 shares of Common Stock were issued and outstanding. Voting of the shares of Common Stock is on a non-cumulative basis.
The following table sets forth certain information as of Monday, October 21, 2019 with respect to: (i) the persons (including any "group" as that term is used in Section 13(d)(3) of the Exchange Act), known by IEH to be the beneficial owner of more than five percent (5%) of any class of IEH's voting securities; (ii) each Executive Officer and Director who owns Common Stock in IEH; and (iii) all Executive Officers and Directors as a group. As of Monday, October 21, 2019, there were 2,331,751 shares of Common Stock issued and outstanding. Shares of Common Stock subject to options or warrants exercisable within 60 days from the date of this table are deemed to be outstanding and beneficially owned for purposed of computing the percentage ownership of such person but are not treated as outstanding for purposes of computing the percentage ownership of others. The figures stated below are based upon Schedules 13Ds, Schedule 13D/As, Schedule 13Gs, Schedule 13G/As, Form 3s and Form 4s filed with the Securities and Exchange Commission by the named persons.
Title of Class |
Name and Address of Beneficial Owner |
Amount of and |
Percentage of Class |
Common Stock $.01 Par Value
| David Offerman(1) c/o IEH Corporation 140 58th Street Brooklyn, NY 11220 | 129,783 | 5% |
Robert Knoth(2) c/o IEH Corporation 140 58th Street Brooklyn, NY 11220 | 52,195 | 2% | |
| Allen Gottlieb(3) c/o IEH Corporation 140 58th Street Brooklyn, NY 11220 | 5,000 | * |
Gerald E. Chafetz(3) c/o IEH Corporation 140 58th Street Brooklyn, NY 11220 | 5,000 | * | |
Dr. Sonia Marciano(3) c/o IEH Corporation 140 58th Street Brooklyn, NY 11220 | 5,000 | * | |
Eric C. Hugel(3) c/o IEH Corporation 140 58th Street Brooklyn, NY 11220 | 5,000 | * | |
Michael E. Rosenfeld (4) c/o IEH Corporation 140 58th Street Brooklyn, NY 11220 | 1,000 | * |
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All Officers & Directors as a Group (7 in number)(1) (2) (3) (4) (6)
| 202,978 | 9% | |
| 5% Shareholders | Zeff Capital LP.(5) 1601 Broadway, 12th Floor New York, NY 10019 | 325,435 | 14% |
Gail Offerman c/o IEH Corporation 140 58th Street Brooklyn, NY 11220
| 900,911
| 37% | |
__________________________
* Denotes ownership percentage of less than 1%.
All shares set forth above are owned directly by the named individual unless otherwise stated.
| (1) | Includes vested options to purchase 125,000 shares of common stock. |
| (2) | Includes vested options to purchase 50,000 shares of common stock. |
| (3) | Includes vested options to purchase 5,000 shares of common stock. |
| (4) | Includes vested options to purchase 1,000 shares of common stock but excludes unvested options to purchase 4,000 shares of common stock. |
| (5) | Based on a Schedule 13G dated January 7, 2019 filed by the reporting person. |
| (6) | Includes all shares owned and vested options to purchase shares of common stock. Excludes unvested options to purchase common stock. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Except as disclosed herein, we have not entered into any material transactions or series of similar transactions with any director, executive officer or any security holder owning 5% or more of our Common Stock. For information concerning employment agreements with, and compensation of, our executive officers and directors, see the disclosure in the section of this proxy statement captioned “Executive Compensation and Related Information.”
Messrs. Gottlieb, Chafetz, Hugel, Rosenfeld and Dr. Marciano are deemed independent directors of the Company.
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Notices of Internet Availability or other proxy materials, as applicable, with respect to two or more shareholders sharing the same address by delivering a single Notice of Internet Availability or a copy of other proxy materials, as applicable, addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies. A number of brokers with account holders who are our shareholders may be “householding” our proxy materials. This means that only one copy of the Notice of Internet Availability (or other proxy materials) may be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a Notice of Internet Availability or other proxy materials, as applicable, please notify your broker or the company. To contact us, direct your written request to Corporate Secretary, IEH Corporation., 140 58th Street, Bldg. B, Suite 8E, Brooklyn, New York 11220 or call at (718) 492-4440. If you revoke your consent, we will promptly deliver to you a separate copy of the Notice of Internet Availability and, if applicable, our other proxy materials. Shareholders who currently receive multiple copies of the Notice of Internet Availability or other proxy materials, as applicable, at their addresses and would like to request “householding” of their communications should contact their brokers or our corporate secretary. Shareholders that have previously received a single set of disclosure documents may request their own copy by contacting their bank, broker or other nominee record holder. We will also deliver a separate copy of this proxy statement to any shareholder upon written request to our Corporate Secretary at our principal executive offices.
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Eligibility to Submit a Proposal. Under Rule 14a-8 promulgated under the Exchange Act, in order to be eligible to submit a proposal, you must have continuously held at least $2,000 in market value, or 1%, of the Company’s securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal. You must continue to hold those securities through the date of the meeting.
Inclusion in Next Year’s Proxy Statement. A shareholder who desires to have his or her proposal included in next year’s proxy statement must deliver the proposal to our principal executive offices (at the address noted above) no later than the close of business on June 30, 2020.
Presentation at Meeting. Rule 14a-4(c) under the Exchange Act provides that if a proponent of a proposal fails to notify us at the address below at least 45 days prior to the month and day of mailing of the prior year’s proxy statement (or any date specified in an advance notice provision), then the management proxy holders will be allowed to use their discretionary voting authority with respect to the voting of proxies when the proposal is presented at the meeting, without any discussion of the matter in the proxy statement. With respect to our 2020 Annual Meeting of Shareholders, if we are not provided notice of a stockholder proposal, which the Shareholder has not previously sought to include in our proxy statement, by September 13, 2020, the management proxy holders will be allowed to use their discretionary authority with respect to the voting of proxies.
A COPY OF THE COMPANY’S ANNUAL REPORT ON FORM l0-K FOR THE FISCAL YEAR ENDED MARCH 29, 2019 FILED WITH THE SEC WILL BE FURNISHED WITHOUT EXHIBITS TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST SENT TO ROBERT KNOTH, CORPORATE SECRETARY, IEH CORPORATION, 140 58TH STREET, BUILDING B, SUITE 8E, BROOKLYN, NEW YORK 11220. Each request must set forth a good faith representation that as of the Record Date, the person making the request was the beneficial owner of Common Stock of IEH entitled to vote at the 2019 Annual Meeting of Shareholders. We are subject to the informational requirements of the Exchange Act, and in accordance therewith file reports, proxy and information statements and other information with the SEC. Such reports, proxy and information statements and other information we file can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. at prescribed rates. You can contact the SEC at 1-800-SEC-0330 for additional information about these facilities. The SEC maintains a web site that contains reports, proxy and information statements and other information filed through the SEC’s Electronic Data Gathering, Analysis and Retrieval System. This web site can be accessed athttp://www.sec.gov.
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As of the date of this proxy statement, the items discussed herein contain the only business which the Board of Directors intends to present, and is not aware of any other matters which may come before the Annual Meeting. If any other matter or matters are properly brought before the Annual Meeting, or any adjournments thereof, it is the intention of the persons named in the accompanying form of proxy to vote the proxy on such matters in accordance with their judgment.
| By Order of the Board of Directors | |
| /s/ ROBERT KNOTH | |
| Robert Knoth | |
| Chief Financial Officer and Corporate Secretary |
Dated: October 23, 2019
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO VOTE AS SOON AS POSSIBLE BY PROXY EITHER BY MAIL OR VIA TELEPHONE OR VIA THE INTERNET, IN ACCORDANCE WITH THE ENCLOSED VOTING INSTRUCTIONS. IF YOU VOTE BY MAIL, MARK, SIGN AND DATE THE PROXY CARD IN ACCORDANCE WITH THE INSTRUCTIONS ON THE PROXY CARD AND RETURN IT IN THE ENCLOSED PRE-ADDRESSED POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.
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IEH Corporation Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be received by 1:00 a.m., Eastern Time, on Tuesday, November 19, 2019. Online Go to www.investorvote.com/IEHC or scan the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/IEHC Annual Meeting Proxy Card • IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. • 1. Election of Directors: + For Withhold For Withhold For Withhold 01 - Gerald E. Chafetz 02 - Allen Gottlieb 03 - David Offerman For Against Abstain For Against Abstain 2. Say on Pay - An advisory vote regarding the approval of 3. Proposal to ratify the appointment of Marcum LLP, as the executive compensation. independent registered public accounting firm of IEH Corporation for the year ending March 27, 2020. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. 32DV + 034ZJA
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Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/IEHC • IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. • Proxy — IEH Corporation + Notice of 2019 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting — Tuesday, November 19, 2019 at 10:00 a.m. Local Time. ROBERT KNOTH and DAVID OFFERMAN, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of IEH Corporation to be held on Tuesday, November 19, 2019 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR Election of Directors, FOR Say on Pay – an advisory vote to approve Executive Compensation, and FOR Ratification of the appointment of Independent Registered Public Accounting Firm. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side.) Change of Address — Please print new address below. Comments — Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting. +