SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
INVESTORS CAPITAL HOLDINGS, LTD.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction: -----------------
(5) Total fee paid: ---------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] 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: ---------------------------------
Notice of 2004 Annual Meeting
and
Proxy Statement
July 1, 2004
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Meeting") of Investors Capital Holdings, Ltd. (the "Company") to be held on
Tuesday, August 10, 2004, at 10:00 a.m. local time, at the Eastern Point Yacht
Club located at 125 Eastern Point Boulevard, Gloucester, Massachusetts. Your
Board of Directors and management look forward to greeting those stockholders
who are able to attend.
The Notice of Annual Meeting of Stockholders and Proxy Statement containing
information pertaining to the business to be transacted at the Meeting appear on
the following pages.
Whether or not you plan to attend, it is important that your shares be
represented and voted at the Meeting. Please complete, sign, date, and mail the
enclosed proxy card at your earliest convenience.
On behalf of the Board of Directors and management I would like to thank
you for your interest and participation in the affairs of the Company.
Sincerely,
Theodore E. Charles
Chairman of the Board and Chief Executive Officer
INVESTORS CAPITAL HOLDINGS, LTD.
230 Broadway
Lynnfield, Massachusetts 01940
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, AUGUST 10, 2004
July 1, 2004
To the Stockholders:
NOTICE IS HEREBY GIVEN, that the Annual Meeting of Stockholders (the
"Meeting") of Investors Capital Holdings, Ltd. (the "Company") will be held at
10:00 a.m. local time on Tuesday, August 10, 2004 at the Eastern Point Yacht
Club located at 125 Eastern Point Boulevard, Gloucester, Massachusetts for the
following purposes:
* To elect five directors, each to serve for a term of one year or until
their successors are elected and qualified;
* To ratify the appointment by the Board of Directors, of independent
auditors to audit the Company's books and records for the fiscal year
ending March 31, 2005; and
* To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
Only holders of common shares of record as of the close of business on July
6, 2004 will be entitled to notice of, and to vote at, the Meeting, or any
adjournments or postponements thereof.
Stockholders are cordially invited to attend the Meeting. It is important
that your shares be represented and voted at the Meeting. Because many of our
stockholders cannot personally attend the Meeting, it is necessary that a large
number be represented by proxy. Therefore, if you do not expect to attend the
Meeting, but wish your stock to be voted for the business to be transacted
thereat, please complete, sign and date the enclosed proxy card and return it by
mailing it in the accompanying postage-paid envelope.
By Order of the Board of Directors,
Steven C. Preskenis, Esq.
Assistant Secretary
PROXY STATEMENT
General
This Proxy Statement and the accompanying Proxy Card are being furnished in
connection with the solicitation by the Board of Directors (the "Board") of
Investors Capital Corporation, Ltd., a Massachusetts corporation (the
"Company"), of proxies to be voted at the Annual Meeting of Stockholders of the
Company (the "Meeting") to be held on Tuesday, August 10, 2004 at 10:00 a.m.
local time at the Eastern Point Yacht Club located at 125 Eastern Point
Boulevard, Gloucester, Massachusetts, or any adjournments or postponements
thereof, for the purposes set forth in the attached Notice of Annual Meeting of
Stockholders.
Only the holders of record of the Company's Common Stock, par value $.01
per share, as of the close of business on July 6, 2004 (the "Record Date"), are
entitled to notice of, and to vote on, all matters properly brought before the
Meeting or any adjustments or postponements thereof. As of June 15, 2004, there
were 5,731,921 common shares outstanding.
Voting and Proxy Procedures
Each stockholder is entitled to one vote for each share of common stock
held by him or her at the close of business on the Record Date. Pursuant to the
Company's Bylaws, to constitute a quorum for the transaction of business at any
meeting of stockholders, there must be present, in person or by proxy, the
holders of a majority of the voting power of the issued and outstanding shares
of voting stock of the Company. Once a share is represented for any purpose at
the meeting, it is deemed present for quorum purposes for the remainder of the
meeting. A plurality of the votes cast by the shares of stock entitled to vote,
in person or by proxy, at the Meeting will elect directors as long as a quorum
is present. If a quorum exists, action on each other question to be voted upon
will be approved if votes, in person or by proxy, cast by stockholders favoring
the action exceed the vote cast by stockholders opposing the action. When
proxies in the enclosed form are returned properly executed, the shares
represented thereby will be voted at the Meeting and, where instructions have
been given by the stockholder, will be voted in accordance therewith. If the
stockholder does not otherwise specify, the stockholder's shares will be voted
FOR each of the nominees for director and FOR the proposal to ratify the
appointment of the independent auditors, all as set forth in this Proxy
Statement. As to any other business, which may come before the Meeting, the
proxy holders will vote in accordance with their best judgment. Votes will be
counted manually.
Abstentions and broker "non-votes" are not counted for purposes of the
election of a director. On all other proposals, abstentions will be considered
as a vote against the proposal, and broker non-votes will not be counted at all.
A stockholder executing the accompanying proxy has the power to revoke it at any
time prior to the exercise thereof by appearing at the Meeting and voting in
person or by filing with the Secretary or Assistant Secretary of the Company,
(i) a properly executed, later-dated proxy, or (ii) a written instrument
revoking the proxy.
This Proxy Statement and the accompanying Proxy Card are first being mailed
to stockholders on or about July 16, 2004. A copy of the Company's Annual Report
for the year ended March 31, 2004, is included with this Proxy Statement.
The solicitation of proxies in the accompanying form is made by, and on
behalf of, the Board of Directors. We have engaged the services of Computershare
Trust Company, Inc., the Company's Transfer Agent, to assist us in the
distribution of proxies, for which a fee of approximately $450 will be paid.
There will be no solicitation by officers and employees of the Company. The
Company will make arrangements with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of proxy materials to the beneficial
owners of shares held of record by such persons, and such persons will be
reimbursed for reasonable expenses incurred by them in connection therewith.
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PROPOSAL 1 - ELECTION OF DIRECTORS
Five directors are to be elected at the Meeting to hold office until the
next Meeting or until their successors have been duly elected and qualified. It
is the intention of the persons named in the accompanying Proxy Card to vote FOR
the election of the five persons named in the table below as directors of the
Company, unless authority to do so is withheld. All of the nominees are
currently directors of the Company. All of the nominees have consented to being
nominated and named herein, and to serve as directors if elected at the Meeting.
In the event that any of the below listed nominees for director should become
unavailable for election for any presently unforeseen reason, the persons named
in the accompanying Proxy Card have the right to use their discretion to vote
for a substitute.
The Bylaws of the Company provide that the number of Directors shall be
determined by vote of the stockholders or the Board of Directors, but shall
consist of not less than three Directors. Each director presently is elected for
a one-year term at each annual meeting of the stockholders. Officers are elected
by, and serve at the pleasure of, the Board of Directors.
Directors: Theodore E. Charles
Timothy B. Murphy
David R. Smith
C. Troy Shaver, Jr.
Stephen Parker
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES AS DIRECTOR.
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For each nominee, and for each executive officer of the Company other than
such nominees, there follows a brief listing of their principal occupation for
at least the past five years, other major affiliations, and age as of July 1,
2004.
Nominees:
Theodore E. Charles, director of the Company since July 1995. Founder of
Investors Capital Holdings in July of 1995, serves as chairman of the board,
chief executive officer and president. Mr. Charles also serves as the chief
executive officer of our subsidiaries, Investors Capital Corporation and Eastern
Point Advisors, Inc. Mr. Charles served on the Board of Directors of Revere
Savings Bank of Massachusetts and currently serves on the Advisory Board of
Danvers Savings Bank. Mr. Charles currently holds various securities licenses,
including the series 6, 63, 7 and 24. Mr. Charles is a member of the Financial
Planning Association and has been since 1985. He was formerly Chairman of the
Shareholder Advisory Board of Life USA Insurance Company. Age - 61.
Timothy B. Murphy, director of the Company since July 1995. Also a July
1995 founder of the Company and currently serves as executive vice president,
treasurer, chief financial officer and a director. Since August of 1994, Mr.
Murphy has also served as president of our subsidiary, Investors Capital
Corporation. In addition, since January of 1995 Mr. Murphy has been president of
our subsidiary, Eastern Point Advisors, Inc. He entered the securities industry
in May of 1991 as an operations manager in the Boston regional office of Clayton
Securities. From February through August of 1994, he was a compliance officer of
Baybanks Brokerage in Burlington, Massachusetts and a vice president of G.R.
Stuart & Company, a brokerage firm located in Maynard, Massachusetts. Mr. Murphy
holds various securities licenses, including the series 4, 7, 24, 27, 53, 63 and
65. Age - 39.
David R. Smith, director of the Company since August 2000. Is a founding
partner and Managing Director of Charter Financial Publishing Network in
Shrewsbury, New Jersey. Founded in March 2000, CFPN publishes, markets and
distributes information for the financial services industry. He is co-founder
of, and currently oversees sales, marketing and circulation for Financial
Advisor magazine, along with other newsletters, books and investment charts
distributed by CFPN. He was previously Senior Vice President of Dow Jones
Financial Publishing Corporation, where he served as Publisher of Dow Jones
Investment Advisor and Associate Publisher of Dow Jones Asset Management
magazines since October of 1987. Age - 42.
C. Troy Shaver, Jr., director since February 2001. Currently is President
of Dividend Growth Advisors, LLC. He was the Vice Chairman of GoldK, Inc., a
full-service retirement company and a leading provider of online retirement
plans. He was also the former President and CEO of GoldK Investment Services,
Inc., the division that enables GoldK to offer a self-directed brokerage option
in a 401(k) plan. Prior to joining GoldK, Mr. Shaver was President of State
Street Research Investment Services Inc., President and CEO of John Hancock
Funds, Inc. and Executive Vice President and Director of Oppenheimer Management
Corporation. He held similar roles at State Street Research, Hancock and
Oppenheimer dealing with mutual funds and the development and restructuring of
strategies for sales, marketing, distribution and customer service. Age - 57.
Stephen Parker, director of the Company since February 2001. Currently
serves as a consultant to the Company. Prior to his recent retirement, Mr.
Parker had worked for Allmerica Financial, a Fortune 500 financial services firm
located in Worcester, Massachusetts for the past ten years. Mr. Parker
previously served as vice president and managing director of sales distribution
at Allmerica and was president of Allmerica Investment Management Company, the
registered investment advisory entity of Allmerica. Prior to joining Allmerica
Financial, Mr. Parker served as chairman and chief executive officer of Freedom
Capital Management Corporation, a subsidiary of John Hancock with, at that time,
almost $3 billion under management. Mr. Parker has also served as a director of
the Securities Industry Association and has served on many securities industry
committees. Age - 69.
Other Executive Officers
Janice M. Charles, clerk since July 1995. Also a 1995 founder of the
Company and director through 2000. She also serves as treasurer of our
subsidiary, Eastern Point Advisors, Inc. and, since 1987, has been vice
president of Investors Marketing Services, Inc., an insurance brokerage firm
located in Danvers, Massachusetts. Age - 53.
Susan A. McCraine, vice president since September 2002. Currently heading
our Compliance Department, Ms. McCraine has compiled a successful record in
multiple positions during her ten years in the financial services industry at
Investors Capital. She currently holds the NASD series 7, 24, and 66 licenses.
She also currently serves on various boards and retains membership in several
securities associations. Age - 51.
Steven C. Preskenis, Esq., Assistant Secretary and Chief Legal Counsel of
the Company since May 2003. General Counsel of our broker-dealer subsidiary,
Investors Capital Corporation, since April 2003. Legal Counsel of our
subsidiary, Investors Capital Corporation, from 2000 through 2003. ADR attorney
with John Hancock Insurance Co. of Boston, Massachusetts from 1998 through 2000.
Age - 34.
Meetings and Committees of the Board of Directors
During fiscal year ending March 31, 2004, (hereinafter referred to as
"fiscal 2004") the Board held four meetings with a quorum being present at each
meeting held. During fiscal 2004, the Board had two ongoing committees: an Audit
Committee and a Compensation Committee.
The Audit Committee, consisting of directors Smith, Shaver and Parker
consults with the independent auditors and management with respect to the
adequacy of internal controls, the Company's audited financial statements and,
where appropriate, the Company's interim financial statements before they are
made public, and to make a recommendation to the Board of Directors regarding
the appointment of independent auditors for the following year. The Audit
Committee held one meeting subsequent to fiscal 2004 to review the Company's
financial statements with the auditor.
The Compensation Committee, consisting of directors Troy Shaver and David
Smith determines the compensation and benefits of the chief executive officer
and reviews and approves, or modifies if deemed appropriate, the recommendations
of the chief executive officer with respect to the compensation and benefits of
the other executive officers. The Compensation Committee also approves the
issuance of grants pursuant to the Company's equity incentive plan. The
Compensation Committee met once during fiscal 2004. Assuming the reelection of
nominees of Troy Shaver and David Smith as directors of the Company, immediately
following the Meeting, the Board intends that these two directors will be the
sole members of the Compensation Committee.
Compensation of Directors
Directors who are not employees receive $1,500 in cash compensation for
their attendance in person at each meeting of the Board of Directors.
Executive Compensation
The following table summarizes all compensation paid by the Company during
the fiscal years ended March 31 2003 and March 31, 2004 for our Chief Executive
Officer and our executive officers whose annual compensation exceeded $100,000.
The aggregate amount of perquisites and other personal benefits did not exceed
the lesser of $50,000 or 10% of the total of Messrs. Charles' and Murphy's
annual salary and bonus. Other Annual Compensation is the Company's matching
401(k) contributions. All Other Compensation is personal life insurance premiums
paid by the Company.
Summary Compensation Table
Annual Compensation Long Term Compensation
Name and Principal Fiscal Salary Bonus Other Annual Restricted Options All Other
position Year ($) ($) Compensation Stock Awards($) (#) Compensation
Theodore E. Charles 2004 $400,000 $15,385 $32,877 $3,150 1,666 $4,163
Chairman of the Board, 2003 $400,000 $4,788 1,666 $6,635
Chief Executive Officer,
President and Director
Timothy B. Murphy 2004 $200,000 $7,692 $6,088 $3,150 1,666 $1,397
Executive Vice President, 2003 $200,000 $3,000 1,666 $1,265
Treasurer, Chief Financial
Officer and Director
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PRINCIPAL SHAREHOLDERS
The following table presents information regarding beneficial ownership of
our common stock as of June 1, 2003 by: (1) each person who owns beneficially
more than five percent (5%) of our outstanding common stock, (2) each of the
named executive officers, (3) each director, and (4) all directors and executive
officers as a group. The persons named in table below have sole voting and
dispositive power over all shares of common stock shown as beneficially owned by
them, except as otherwise indicated in the footnotes to this table. Mr. Murphy
holds options for 150,000 shares of common stock of the Company at an exercise
price of $1.00 per share. In addition each of our directors currently owns
options for 1,666 shares of common stock of the Company exercisable at the rate
of 20% per year over the next 5 years at the then-current market price. The
shares underlying these options are reflected in the numbers below. The business
address of Mr. Charles, Mr. Murphy, Mr. Parker and Ms. McCraine is c/o Investors
Capital Holdings, Ltd., 230 Broadway, Lynnfield, Massachusetts 01940. The
business address of Ms. Charles is c/o Investors Marketing Services, Inc., 168
Centre Street, Danvers, Massachusetts 01923. The business address of Mr. Smith
is c/o Charter Financial Publishing Network, 600 Broad Street, Shrewsbury, New
Jersey 07702. The business address of Mr. Twadell is c/o Investors Capital
Corporation, 2 Charles Street, Providence, Rhode Island 02904. The business
address of Mr. Shaver is c/o Dividend Growth Advisors, LLC, 108 Traders Cross,
Suite 105, Bluffton, S.C. 29910.
Name and Address of Number of Shares Percent Beneficially
Beneficial Owner Beneficially Owned Owned
---------------- ------------------ -----
Theodore E. Charles 3,587,666 62.6%
Timothy B. Murphy 284,566 4.9%
Janice M. Charles 0 0.0%
David R. Smith 31,666 0.5%
Stephen Parker 7,666 0.1%
C. Troy Shaver, Jr. 6,000 0.0%
James F. Twaddell 2,000 0.0%
Susan A. McCraine 1,000 0.0%
Steven C. Preskenis, Esq. 0 0.0%
All directors and executive 3,920,564 68.4%
officers as a group (9
Persons)
Employment Agreements
On August 8, 2000 the Company entered into full-time employment agreements
with Theodore E. Charles and Timothy B. Murphy. For each, the term of employment
is three years, which, on the third anniversary of the commencement date,
automatically extends for a three-year period unless earlier terminated. Under
the employment agreements, Messrs. Charles and Murphy are entitled to receive an
annual base salary of $400,000 and $200,000, respectively. Adjustments to the
annual base salary amounts are at the discretion of the board of directors,
taking into account appropriate cost of living adjustments and general
compensation increases based on performance.
Also, Messrs. Charles and Murphy may present to the Compensation Committee
proposals as to an annual bonus or incentive program, which proposals may or may
not be accepted by the board of directors, acting in good faith, and at their
discretion.
If the Company fails to renew the employment term or terminates the
employment either with or without cause of Mr. Charles or if there is a "change
in control," he is entitled to receive sixty months' base salary at the time of
termination plus, to the extent earned and not already paid, any bonus payable
for the prior fiscal year plus an amount equal to any bonus payable with respect
to the current fiscal year. The base salary is payable in installments on such
dates on which it would be paid if Mr. Charles had not been terminated. The
bonus payment is payable in a lump-sum within thirty days of termination.
If the Company fails to renew the employment term or terminates the
employment either with or without cause of Mr. Murphy or if there is a "change
in control," he is entitled to receive thirty-six months' base salary at the
time of termination plus, to the extent earned and not already paid, any bonus
payable for the prior fiscal year plus an amount equal to any bonus payable with
respect to the current fiscal year. The base salary is payable in installments
on such dates on which it would be paid if Mr. Murphy had not been terminated.
The bonus payment is payable in a lump-sum within thirty days of termination.
A "change in control" shall be deemed to have taken place if a person
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 75% or more of the total number of votes that may be cast
for the election of the directors of the company or as the result of, or in
connection with, any tender or exchange offer, merger, consolidation or other
business combination, sale of assets or one or more contested elections, or any
combination of the foregoing transactions in which the persons who were
directors immediately prior to the transaction shall cease to constitute a
majority of the board of directors of the Company or of any successor.
The employment agreements also contain a provision that neither Mr. Charles
nor Mr. Murphy will compete or engage in a business competitive with our current
or anticipated business during the term of the employment agreement and for a
period of six months thereafter. A state court may determine not to enforce this
provision or to otherwise limit its enforceability.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Investors Marketing Services, Inc.
Investors Marketing Services, Inc. is jointly owned by our principal
shareholder, Theodore E. Charles and his spouse, Janice M. Charles. This entity
performs a fulfillment function for our subsidiaries by preparing, collating and
mailing registration kits to registered representatives and creates graphics and
other art work for various marketing materials produced for these subsidiaries.
It also prepares the assembly, shipping and postage of literature pertaining to
the subsidiaries. The rates charged for these services are comparable to rates
charged by other non-affiliated companies for performing the same or similar
services. For the fiscal year ending March 31, 2004 the cost for these services
was $60,038.
Other Related Transactions
David R. Smith, one of our directors, is the managing director of Charter
Financial Publishing Network in Shrewsbury, New Jersey which publishes Financial
Advisor magazine. Our broker-dealer subsidiary places recruiting advertisements
in this magazine, among others, and incurs costs therefor. The aggregate dollar
amount of these costs for the fiscal year ended March 31, 2004 was significantly
less than 5% of our consolidated revenues for the period.
C. Troy Shaver, Jr., one of our directors, was until recently the Vice
Chairman of GoldK, Inc., a full-service retirement company and a leading
provider of online retirement plans. The Company, through its broker-dealer
subsidiary, markets, among others, the no-cost 401(k) plan administration
services available through GoldK. As a result, our broker-dealer subsidiary will
receive finder's fees and 12(b)-1 fees from the mutual fund companies who make
their products available on the GoldK platform. The aggregate dollar amount of
these finders' fees and 12(b)-1 fees paid to our broker-dealer subsidiary during
the fiscal year ended March 31, 2004 was significantly less than 5% of our
consolidated revenues for the period.
Our principal executive offices are located in a 9,432 square foot facility
at 230 Broadway, Lynnfield, Massachusetts. This facility is comprised of several
office condominiums owned by different entities, which lease the office space to
the Company. We rent approximately 6,822 square feet of our principal executive
offices from Arlsburg Trust and Investors Realty, LLC of which our principal
shareholder, Theodore E. Charles is the trustee and a member, respectively. The
current annual rent for this portion of our space is $192,423, which is
comparable to current market rates for similar space in our geographic area. In
addition, the Company leases office space from the Arlsburg Trust for its
investment center in Topsfield, Massachusetts. Rent expense for the investment
center was $36,000 for the year ended March 31, 2004, which is comparable to
current market rates for similar space in the geographic area.
As of March 31, 2004, we had loaned a combined total of $64,400 to Theodore
E. Charles, our principal shareholder and Timothy B. Murphy, our executive vice
president, treasurer and chief financial officer. There are no formal repayment
terms and the amount loaned accrues interest at the rate of 4% per year.
Controlled Company Status
As defined in Section 801(a) of the AMEX Company Guide, a "controlled
company" is a company in which over 50% of the voting power is held by an
individual, a group or another company. Investors Capital Holdings, Ltd. is a
"controlled company" as that term is defined in section 801(a) of the AMEX
Company Guide, by virtue of the fact that the Company's principal shareholder,
Theodore E. Charles, is the beneficial owner of 62.6% of common shares
outstanding.
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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of its Audit Committee, has
appointed the firm of Brown & Brown, LLP of Boston, Massachusetts to serve as
our independent public accountants for the fiscal year ending March 31, 2005.
Although stockholder ratification is not required, the Board of Directors has
directed that such appointment be submitted to the stockholders of the Company
for ratification at the Annual Meeting. Brown & Brown, LLP has served as our
independent public accountants for the majority of the past fiscal year and is
considered to be well-qualified by our management. If the stockholders do not
ratify the appointment of Brown & Brown, LLP, the Board of Directors may
reconsider the appointment.
Audit Fees. Brown & Brown, LLP billed aggregate fees of $83,780 for
professional services rendered for (i) the audit of the Company's financial
statements for the year ended March 31, 2004, (ii) the review of the financial
statements included in the Company's quarterly reports on Form IO-Q filed with
the Securities and Exchange Commission, and (iii) the appropriate income tax
services. There were no fees for anything but audit and audit-related matters.
All audit services provided by Brown & Brown, LLP are approved by the
Company's Audit Committee, which considers whether the provision of non-audit
services is compatible with maintaining the independence of Brown & Brown, LLP.
Representatives of Brown & Brown, LLP will be present at the Annual
Meeting. They will have an opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions from stockholders.
Assuming the presence of a quorum, ratification of the appointment of Brown
& Brown, LLP requires the affirmative vote of a majority of the total shares of
Common Stock present in person or represented by proxy and entitled to vote.
Abstentions will have the same effect as votes against this proposal. Broker
nonvotes will not be included in the vote totals and, therefore, will have no
effect on the outcome of this proposal. Proxies will be voted for or against
such approval in accordance with specifications marked thereon, and if no
specification is made, the proxies will be voted for such approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE
APPOINTMENT OF BROWN & BROWN, LLP AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE
COMPANY FOR THE FISCAL YEAR ENDING MARCH 31, 2005.
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REPORT OF THE AUDIT COMMITTEE
The Board of Directors of the Company has appointed an Audit Committee
composed of three directors.
During the course of the past fiscal year and in return for business
consulting services, the Company paid consulting fees to a director who also
served as a member of the Company's Audit Committee. This action may have
compromised the director independence standards specified in Section 121A of the
American Stock Exchange (AMEX) Company Guide and Rule 10A-3 under the Securities
and Exchange Act of 1934. ("independence standards") The Company is currently
reviewing the facts of the foregoing and is simultaneously in discussions with
the AMEX in order to resolve any determined issue. As soon as practicable, the
Company intends to replace the abovementioned Audit Committee member with a
director who satisfies the aforementioned independence standards.
The Board of Directors has adopted a written charter for the Audit
Committee. The Audit Committee will review and assess the adequacy of the
charter on an annual basis. The Audit Committee's job is one of oversight as set
forth in its Charter. It is not the duty of the Audit Committee to prepare the
Company's financial statements, to plan or conduct audits, or to determine that
the Company's financial statements are complete and accurate and are in
accordance with accounting principles generally accepted in the United States of
America. The Company's management is responsible for preparing the Company's
financial statements and for maintaining internal controls. The independent
auditors are responsible for auditing the financial statements and for
expressing an opinion as to whether those audited financial statements fairly
present the financial position, results of operations, and cash flows of the
Company in conformity with accounting principles generally accepted in the
United States of America.
The Audit Committee has reviewed and discussed the Company's audited
consolidated financial statements with management and with Brown & Brown, LLP
(the "Auditors"), the Company's independent auditors for fiscal 2004.
The Audit Committee has discussed with the Auditors the matters required to
be discussed by Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees."
The Audit Committee has received from the Auditors a formal written
statement describing all relationships between the Auditors and the Company that
might bear on the Auditors' independence consistent with Independence Standards
Board Standard No. 1, "Independence Discussions with Audit Committees,"
discussed with the Auditors any relationships that may impact their objectivity
and independence and satisfied itself as to the Auditors' independence.
Based on the review and discussions referred to above, the Audit Committee
has recommended to the Board of Directors that the audited consolidated
financial statements be included in the Company's Annual Report on Form 10- K
for the fiscal year ended March 31, 2004 for filing with the Securities and
Exchange Commission.
AUDIT COMMITTEE
David R. Smith, C. Troy Shaver, Jr., Stephen Parker
ANNUAL REPORT/FORM 10-K
The Company's 2004 Annual Report to its stockholders is a reproduction of
its Form 10-K filed with the SEC, excluding the Index to Exhibits and any filed
exhibits or financial statement schedules, and is being mailed to all
stockholders concurrently with this Proxy Statement. Additional copies of the
company's form 10-K (without exhibits or financial statement schedules) as filed
with the SEC may be obtained at no cost by writing to the corporate clerk,
Investors Capital Holdings, Ltd. 230 Broadway, Lynnfield, Massachusetts 01940.
The company's Form 10-K may also be accessed on the internet at
http://www.investorscapital.com. Exhibits or financial statement schedules
listed in the company's form 10-K are available upon request to the corporate
secretary at a nominal charge for printing and mailing.
PROPOSALS FOR NEXT ANNUAL MEETING
No person who intends to present a proposal for action at a forthcoming
annual stockholders' meeting of the Company may seek to have the proposal
included in the proxy statement or form of proxy for such meeting unless that
person (a) is a record or beneficial owner of at least 1% or $2,000 in market
value of shares of Common Stock, has held such shares for at least one year at
the time the proposal is submitted, and such person shall continue to own such
shares through the date and the dates upon which he acquired such shares with
documentary support for a claim of beneficial ownership, (e) notifies the
Company of his intention to appear personally at the meeting or by a qualified
representative under Massachusetts law to present his proposal for action, and
(d) submits his proposal timely. A proposal to be included in the proxy
statement and form of proxy for the Company's next annual meeting of
stockholders will be submitted timely only if the proposal has been received at
the Company's principal executive office no later than February 1, 2005. If the
date of such meeting is changed by more than 30 calendar days from August 12,
2005, or if the proposal is to be presented at any meeting other than the next
annual meeting of stockholders, the proposal must be received at the Company's
principal executive office at a reasonable time before the solicitation of
proxies for such meeting is made.
Even if the foregoing requirements are satisfied, a person may submit only
one proposal with a supporting statement of not more than 500 words, and under
certain circumstances enumerated in the Securities and Exchange Commission's
rules relating to the solicitation of proxies, the Company may be entitled to
omit the proposal and any statement in support thereof from its proxy statement
and form of proxy.
The Company will be permitted to vote proxies in its discretion for any
proposal for inclusion in the Company's proxy statement for its next annual
meeting of stockholders that is not timely submitted on or before February 1,
2005, if the Company:
o receives notice of the proposal before the close of business on May
15, 2005 and advises stockholders in such proxy statement about the
nature of the matter and how the Company intends to vote on such
matter, or
o does not receive notice of the proposal prior to the close of business
on May 15, 2005.
Notices of intention to present proposals at the Company's next annual
stockholders meeting should be addressed to the Company's Secretary, Janice M.
Charles, Investors Capital Holdings, Ltd., 230 Broadway, Lynnfield, MA 01940.
OTHER MATTERS
As of the date of this Proxy Statement, the Board knows of no other
business to be presented at the Meeting. However, if any other matters properly
come before the Meeting, the persons named in the enclosed form of proxy are
expected to vote the proxy in accordance with their best judgment on such
matters.
By order of the Board of Directors,
THEODORE E. CHARLES
Chairman of the Board and Chief Executive Officer