def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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TABLE OF CONTENTS
IKONICS CORPORATION
4832 Grand Avenue
Duluth, Minnesota 55807
(218) 628-2217
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be held at the Canal
Park Lodge located at 250 Canal Park Drive, Duluth, Minnesota, at 1:30 p.m., Central Time, on
April 29, 2010.
The Secretarys Notice of Annual Meeting and the Proxy Statement which follow describe the
matters to come before the meeting. During the meeting, we will also review the activities of the
past year and items of general interest about the Company.
We hope that you will be able to attend the meeting in person and we look forward to seeing
you. Please mark, date and sign the enclosed proxy and return it in the accompanying envelope as
quickly as possible, even if you plan to attend the Annual Meeting. You may revoke the proxy and
vote in person at that time if you so desire.
Sincerely,
William C. Ulland
Chairman of the Board
March 23, 2010
IKONICS CORPORATION
Notice of Annual Meeting of Shareholders
to be held on April 29, 2010
The Annual Meeting of Shareholders of IKONICS Corporation will be held at the Canal
Park Lodge located at 250 Canal Park Drive, Duluth, Minnesota, at 1:30 p.m., Central Time, on
April 29, 2010 for the following purposes:
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To elect seven directors to serve until the next annual meeting of
shareholders or until their successors are duly elected and qualified. |
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To transact such other business as may properly come before the Annual
Meeting, or any adjournment or adjournments thereof. |
The Board of Directors has fixed March 9, 2010 as the record date for the meeting, and only
shareholders of record at the close of business on that date are entitled to receive notice of and
vote at the meeting.
Your proxy is important to ensure a quorum at the meeting. Even if you own only a few shares,
and whether or not you expect to be present at the meeting, please mark, date and sign the enclosed
proxy and return it in the accompanying postage-paid reply envelope as quickly as possible. You
may revoke your proxy at any time prior to its exercise and returning your proxy will not affect
your right to vote in person if you attend the meeting and revoke the proxy.
By Order of the Board of Directors,
Jon Gerlach
Secretary
Duluth, Minnesota
March 23, 2010
PROXY STATEMENT
GENERAL INFORMATION
The enclosed proxy is being solicited by the Board of Directors of IKONICS Corporation,
a Minnesota corporation (IKONICS or the Company), for use in connection with the Annual Meeting
of Shareholders to be held on April 29, 2010 at the Canal Park Lodge located at 250 Canal Park
Drive, Duluth, Minnesota, at 1:30 p.m., Central Time, and at any adjournments thereof. Only
shareholders of record at the close of business on March 9, 2010 will be entitled to vote at such
meeting or adjournment. Proxies in the accompanying form which are properly signed, duly returned
to the Company and not revoked will be voted in the manner specified. A shareholder executing a
proxy retains the right to revoke it at any time before it is exercised by notice in writing to the
Secretary of the Company of termination of the proxys authority or a properly signed and duly
returned proxy bearing a later date.
The address of the principal executive office of the Company is 4832 Grand Avenue, Duluth,
Minnesota 55807 and the telephone number is (218) 628-2217. The mailing of this Proxy Statement
and the Board of Directors form of proxy to shareholders will commence on or about March 23, 2010.
This Proxy Statement is available at http://ir.10kwizard.com/files.php?source=638.
The Company will pay the cost of soliciting proxies in the accompanying form. In addition to
solicitation by the use of the mails, certain directors, officers and employees of the Company may
solicit proxies by telephone, regular or electronic mail, or personal contact, and have requested
brokerage firms and custodians, nominees and other record holders to forward soliciting materials
to the beneficial owners of stock of the Company and will reimburse them for their reasonable
out-of-pocket expenses in so forwarding such materials.
The Common Stock of the Company, par value $.10 per share, is the only authorized and issued
voting security of the Company. At the close of business on March 9, 2010 there were 1,967,057
shares of Common Stock issued and outstanding, each of which is entitled to one vote. Holders of
Common Stock are not entitled to cumulate their votes for the election of directors.
A plurality of the votes cast is required for election of the director nominees listed under
Election of Directors in this Proxy Statement. A shareholder voting through a proxy who abstains
with respect to any matter is considered to be present and entitled to vote on such matter at the
meeting. A shareholder (including a broker) who does not give authority to vote, or withholds
authority to vote, on any proposal shall not be considered present and entitled to vote on such
proposal.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth, as of March 9, 2010, the number of shares of Common Stock
beneficially owned by each person who is a beneficial owner of more than 5% of the Common Stock
issued and outstanding, by each executive officer named in the Summary Compensation Table, by each
director, and by all officers and directors as a group. All persons have sole voting and
dispositive power over such shares unless otherwise indicated.
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Name and Address |
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Number |
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Percentage of |
of Beneficial Owner(1) |
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Of Shares |
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Outstanding Shares |
Directors and executive officers: |
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William C. Ulland |
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238,502 |
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12.12 |
% |
Charles H. Andresen |
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26,289 |
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1.34 |
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Gerald W. Simonson |
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115,473 |
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5.87 |
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David O. Harris |
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89,012 |
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4.53 |
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Rondi Erickson |
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13,398 |
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* |
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Lockwood Carlson |
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* |
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Leigh Severance |
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175,079 |
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8.90 |
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Claude P. Piguet |
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21,675 |
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1.10 |
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Jon Gerlach |
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11,250 |
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* |
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All directors and executive
officers (11 persons, including
those named above) |
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700,596 |
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35.62 |
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Additional Beneficial Owners
> 5% |
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Joseph R. Nerges |
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363,610 |
(2) |
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18.48 |
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* |
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Less than one percent. |
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The address for each of the persons listed below is 4832 Grand Avenue, Duluth,
Minnesota 55807, except for Mr. Nerges, whose address is 1726 Bundy Street, Scranton,
Pennsylvania 18508. |
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Based solely on information contained in filings made by Mr. Nerges with the
Securities and Exchange Commission on or prior to March 11, 2010. |
2
ELECTION OF DIRECTORS
The business of the Company is managed under the direction of a Board of Directors, with the
number of directors fixed from time to time by the Board of Directors. The Board of Directors has
fixed at seven the number of directors to be elected to the Board at the 2010 Annual Meeting of
Shareholders and has nominated the seven persons named below for election as directors, each to
serve until the 2011 Annual Meeting of Shareholders. Proxies solicited by the Board of Directors
will, unless otherwise directed, be voted to elect the seven nominees named below.
Each of the nominees is a current director of the Company and each has indicated a willingness
to serve as a director until the 2011 Annual Meeting of Shareholders. In case any nominee is not a
candidate for any reason, the proxies named in the enclosed form of proxy may vote for a substitute
nominee in their discretion.
All nominees for director, except for Mr. Ulland, meet the independence requirements of The
Nasdaq Stock Market, the stock exchange on which the Companys shares trade.
Following is certain information regarding the nominees for the office of director:
William C. Ulland, age 69
Mr. Ulland is Chairman, President and Chief Executive Officer of the Company. He was named
IKONICS Chief Executive Officer in February of 2000 and President in December of 2000. He has
been a member of the Companys Board of Directors since 1972 and has served as its Chairman since
1976. Mr. Ulland earned a degree in Geophysical Engineering from the Colorado School of Mines in
1963 and a Master of Science degree in Industrial Administration from Purdue University in 1965.
Prior to becoming the Companys Chief Executive Officer, he was involved in mineral development and
evaluation as Managing Partner of the American Shield Company and President of Geomines Inc.
Charles H. Andresen, age 69
Mr. Andresen was elected as a director of the Company in 1979. Mr. Andresen has been a
shareholder in the law firm of Andresen & Butterworth, P.A., in Duluth, Minnesota for more than the
past five years. Prior to being a shareholder in Andresen & Butterworth, P.A., Mr. Andresen was a
shareholder in the law firm of Andresen, Haag, Paciotti, & Butterworth, P.A. in Duluth, Minnesota.
Gerald W. Simonson, age 79
Mr. Simonson was elected as a director of the Company in 1978. He has been the President of
Omnetics Connector Corporation, a manufacturer of microminiature connectors for the electronics
industry located in Minneapolis, Minnesota, for more than the past five years.
David O. Harris, age 75
Mr. Harris was elected a director of the Company in 1965. He has been President of David O.
Harris, Inc., a manufacturers representative firm in Minneapolis, Minnesota, for more than the
past five years.
3
Rondi C. Erickson, age 62
Ms. Erickson was elected as a director of the Company in 2000. She is the co-owner of Nokomis
Restaurant & Bar in Duluth, Minnesota. From October 1999 to February 2006, she was the Chief
Executive Officer and a director of Apprise Technologies Inc., a company that develops and sells
optical and electronic-based sensor technologies. Prior to joining Apprise, in 1995, Ms. Erickson
founded American Science Corporation, a registered FDA manufacturing establishment that provided
contract manufacturing and research and development support for a dental pharmaceutical company.
Prior to founding American Science, Ms. Erickson founded Bay West, Inc., an environmental services
firm, in 1974 and served as its Chief Executive Officer.
H. Leigh Severance, age 70
Mr. Severance was elected as a director of the Company in 2000. Mr. Severance has over forty
years investment experience as a portfolio manager and security analyst with advisory organizations
and a mutual fund, including his own firm, Severance Capital Management, which was founded in 1984
to specialize in micro and small capitalization companies and quantitative portfolio management
strategies. He also co-founded Jefferson Capital Management, a large capitalization quantitative
investment management company. Prior to 1984, Mr. Severance was a portfolio manager with Cambiar
Investors, H.L. Severance, Inc., Founders Asset Management, and J.M. Hartwell & Company. Mr.
Severance received a Masters in Business Administration from the University of Chicago in 1963.
He serves on the Board of Directors of Credo Petroleum Corporation and served on the Board of
Directors of Lifeline Therapeutics, a publicly traded company, until 2007.
Lockwood Carlson, age 66
Dr. Carlson was appointed as a director of the Company in February 2009. Dr. Carlson is
President of Carlson Consulting Group, a Minneapolis-based consulting firm that he founded in 2002
and that provides strategic development foresight to organizations with a concentration in
technical products and services. Dr. Carlson holds the James Renier Chair in Technological
Leadership at the Center for the Development of Technological Leadership at the University of
Minnesota, where he is on the faculty and teaches in the Management of Technology program. Dr.
Carlson received his Ph.D. in Physics in 1971 from the University of Wyoming and is retired from 3M
Company where he served as Corporate Scientist. Dr. Carlson also serves on the Board of Directors
of several private companies and non-profit organizations.
Each nominee brings unique experience and skills to the Board of Directors. The Board of
Directors believes the nominees as a group have the experience and skills in areas such as
technology, manufacturing, finance and management that are necessary to effectively oversee the
Companys operations and growth strategies. The following is a summary of the experience and
skills that the Board of Directors believes makes each nominee a strong choice to serve as a
director of the Company:
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Mr. Ulland has been our chief executive officer for more than 10 years and has been a
director of the Company for more than 35 years. The Board of Directors believes his
knowledge of the Company and its business gained from this lengthy term of leadership
position him well to formulate and execute our business plans and growth strategies. |
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Mr. Andresen has deep institutional knowledge of the Company gained from his service on
the Board of Directors for more than 20 years. His legal knowledge acquired from
practicing law for more than 40 years also is a valuable resource to the Board of
Directors. |
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Mr. Simonson has deep institutional knowledge of the Company gained from his service on
the Board of Directors for more than 20 years. His professional experience in the
manufacturing sector also is a valuable resource to the Company. The Board of
Directors determined that Mr. Simonson is an audit committee financial expert under
applicable rules of the Securities and Exchange Commission based on his financial and
accounting experience and knowledge. |
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Mr. Harriss institutional knowledge of the Company based on his service on the
Board of Directors for more than 40 years and his professional experience in the
manufacturing sector make him a valuable resource to the Companys management and Board of
Directors. |
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Ms. Ericksons experience in the technology sector and her general management experience
are useful resources for the Board of Directors and the Companys management. She served
as Chief Executive Officer of Apprise Technologies, a company that develops and sells
optical and electronic-based sensor technologies, for six years. Ms. Erickson also founded
and managed several businesses prior to joining Apprise Technologies. |
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Mr. Severance has more than 40 years of experience analyzing and managing investments.
This investment experience is a valuable resource for the Companys other directors. |
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Mr. Carlson has significant technological and leadership experience gained through his
professional and academic background. He founded and serves as President of a consulting
firm that provides strategic advice primarily to technology companies and teaches in the
Management of Technology program at the University of Minnesota. He also previously worked
at 3M Company, a diversified technology company in the Fortune 100. His technological and
leadership skills are a valuable resource to the Board of Directors and the Companys
management. |
Committees of the Board of Directors and Meeting Attendance
The Board of Directors met five times during fiscal 2009. All incumbent directors attended at
least 75% of the meetings of the Board and of the committees on which they served held during the
periods for which they served as a director. The Company currently has an Audit Committee, a
Compensation Committee and a Nominating Committee.
The following is a description of the functions performed by each of the Committees:
Audit Committee
The Companys Audit Committee presently consists of Messrs. Simonson (Chairman), Andresen,
Carlson, Harris, Severance and Ms. Erickson. All of the members of the Audit Committee are
independent as that term is defined in the applicable listing standards of The Nasdaq Stock
Market and Rule 10A-3 promulgated under the Securities Act of 1934, as amended (the Exchange
Act). In addition, the Board of Directors has determined that Mr. Simonson is an audit committee
5
financial expert as defined by applicable regulations of the Securities and Exchange Commission.
The Audit Committee provides assistance to the Board of Directors in fulfilling the Boards duties
relating to corporate accounting, reporting practices of the Company and the quality and integrity
of the Companys financial reports. Among other things, the Audit Committee selects and appoints
the Companys independent registered public accounting firm, meets with the independent registered
public accounting firm and financial management to review the scope of the audit and the audit
procedures and reviews annually the responsibilities of the Audit Committee and recommends to the
Board of Directors any changes to these responsibilities. The responsibilities of the Audit
Committee are set forth in the Audit Committee Charter, adopted by the Companys Board of Directors
on February 23, 2004. A copy the Audit Committee Charter is included as Exhibit A to this Proxy
Statement. The Audit Committee met four times during fiscal 2009, once each quarter.
Compensation Committee
The Companys Compensation Committee presently consists of Messrs. Andresen (Chairman),
Simonson, Harris, Severance, Carlson and Ms. Erickson. All of the members of the Compensation
Committee are independent as that term is defined in the applicable listing standards of The
Nasdaq Stock Market. The Compensation Committee annually reviews and acts upon a compensation
package for the Chief Executive Officer and the Companys other executive officers, and sets
compensation policy for the other employees of the Company. In addition, the Compensation
Committee acts upon management recommendations concerning employee stock options, bonuses and other
compensation and benefit plans. The Compensation Committee also administers the IKONICS
Corporation 1995 Stock Incentive Plan. The responsibilities of the Compensation Committee are set
forth in the Compensation Committee Charter, adopted by the Companys Board of Directors on
February 23, 2004. Pursuant to the Compensation Committee Charter, the Committee has authority to
delegate any of its responsibilities to subcommittees as the Committee may deem appropriate,
provided that the subcommittees are composed entirely of independent directors. A copy of the
Compensation Committee Charter is included as Exhibit B to this Proxy Statement. The Compensation
Committee met three times during fiscal 2009.
Nominating Committee
The Companys Nominating Committee presently consists of Ms. Erickson (Chairperson) and
Messrs. Andresen, Simonson, Harris, Severance, and Carlson. All of the members of the Nominating
Committee are independent as that term is defined in the applicable listing standards of The
Nasdaq Stock Market. The purposes of the Nominating Committee are to identify individuals
qualified to become Board members and to approve director-nominees to be considered for election by
shareholders and for election by the Board to fill any vacancy or newly created directorship. The
responsibilities of the Nominating Committee are set forth in the Nominating Committee which was
included as Exhibit A to the Proxy Statement for the 2008 Annual Meeting of Shareholders. The
Nominating Committee met three times during fiscal 2009.
The Nominating Committee has established a policy with regard to the consideration of any
director candidates recommended by the Companys shareholders. The Nominating Committee will
consider director candidates recommended by a Company shareholder provided that the shareholder
sends the Company a written notice received by the Secretary of the Company that (i) states the
name and address of the shareholder identifying the candidate as that
information appears on the Companys
6
books and records and the number of shares of the Company owned by the recommending
shareholder and (ii) provides the following information about the candidate:
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name, age, and business and residential addresses; |
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2. |
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principal occupation or employment; |
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3. |
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number of shares of the Company beneficially owned; |
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4. |
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statement of the persons citizenship; and |
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5. |
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any other information that must be disclosed about nominees in proxy
solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (including the candidates written consent to be named as a nominee and to
serve as a director if elected). |
The Company may require any proposed candidate to furnish such other information as may
reasonably be required by the Nominating Committee to determine the eligibility of the proposed
nominee to serve as a director. Provided a shareholder satisfies the requirements described above,
the Nominating Committee will consider director candidates recommended by shareholders in the same
manner that it considers all other director candidates. All director candidates must meet certain
minimum qualifications established by the Nominating Committee from time to time, and the
Nominating Committee will assess the experience, integrity, competence, diversity, skills, and
dedication to the Company of all director candidates. The Nominating Committee does not have an
independent policy with regard to considering the diversity of the Companys directors. The
Nominating Committee will consider a number of features when evaluating diversity, including age,
gender, ethnicity and professional experiences. As indicated above, diversity is one factor in the
total mix of information the Board of Directors considers when evaluating director candidates.
Shareholders who wish to suggest qualified candidates should write to the Office of the Corporate
Secretary of IKONICS Corporation, at 4832 Grand Avenue, Duluth, Minnesota 55807, stating the
information described above and any other relevant details concerning the candidates
qualifications for consideration by the Nominating Committee.
Board Leadership Structure and Role in Risk Oversight
Mr. Ulland has served in the combined roles of Chairman and Chief Executive Officer since
2000. Mr. Ullands combined service as Chairman and Chief Executive Officer creates unified
leadership for the Company. This leadership structure, which is common among U.S.-based
publicly-traded companies, demonstrates to customers and shareholders that the Company is under
strong leadership and minimizes the potential duplication of efforts among management and the
directors. The Board of Directors does not have a lead independent director and does not believe
that one is necessary in light of the Companys size and the lengthy experience the majority of the
directors have working with Mr. Ulland. The Board of Directors believes its leadership structure
allows the Company to operate most efficiently and is in the best interests of the Company and its
shareholders.
The Companys management is responsible for day-to-day risk management of the Company.
Management reports to the Board of Directors on the material risks the Company faces when
management determines that the Companys risk profile materially changes. The Board of
7
Directors
uses managements reports to evaluate the Companys exposure to risks in light of the Companys
business plan and growth strategies. The Board of Directors primarily focuses on risks in the
areas of operations, liquidity and regulatory changes and compliance, which the Board of Directors
believes are the areas most likely to potentially impact on the Company in a material way.
Director Compensation
Each non-employee director of the Company receives a quarterly retainer of $2,000, plus per
meeting fees of $2,000 for each meeting of the Board of Directors. Fees are not paid for committee
meetings. From time to time, the Companys non-employee directors have been awarded options to
purchase the Companys Common Stock under the 1995 Stock Incentive Plan and Mr. Ulland has been
awarded stock options under such plan in connection with his position as Chairman, President and
Chief Executive Officer. No such grants of stock options have been made since 2003. The following
table sets forth the total compensation paid to each director for fiscal 2009. Mr. Ulland did not
receive separate compensation for his service as a director during fiscal 2009.
DIRECTOR COMPENSATION
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Name |
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Fees Earned or Paid in Cash |
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Total |
Charles H. Andresen |
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$ |
18,000 |
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$ |
18,000 |
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Gerald W. Simonson |
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$ |
18,000 |
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$ |
18,000 |
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David O. Harris |
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$ |
16,000 |
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$ |
16,000 |
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Rondi C. Erickson |
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$ |
18,000 |
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$ |
18,000 |
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H. Leigh Severance |
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$ |
16,000 |
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$ |
16,000 |
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Lockwood Carlson |
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$ |
14,000 |
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$ |
14,000 |
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Shareholder Communication with the Board of Directors and Director Attendance at Annual
Meetings
The Board provides a process for shareholders to send communications to the Board or any of
the directors. Shareholders may send written communications to the Board of Directors or specified
individual directors by addressing their communication to Chief Financial Officer,
IKONICS Corporation, 4832 Grand Avenue, Duluth, Minnesota 55807, by U.S. mail. The
communications will be collected by the Chief Financial Officer and delivered, in the form
received, to the Board or, if so addressed, to a specified director.
The Company does not have a formal policy regarding attendance by members of the Board of
Directors at the Companys Annual Meetings of Shareholders. The Company has always encouraged its
directors to attend its annual meeting of shareholders and expects to continue this policy. In
2009, five Company directors attended the Companys Annual Meeting of Shareholders.
8
REPORT OF THE AUDIT COMMITTEE
The role of the Companys Audit Committee, which is composed of six independent non-employee
directors, is one of oversight of the Companys management and the Companys outside auditors in
regard to the Companys financial reporting and the Companys controls with respect to accounting
and financial reporting. In performing its oversight function, the Audit Committee relied upon
advice and information received in its discussions with the Companys management and independent
registered public accounting firm.
The Audit Committee has (i) reviewed and discussed the Companys audited financial statements
for the fiscal year ended December 31, 2009 with the Companys management; (ii) discussed with the
Companys independent registered public accounting firm the matters required to be discussed by
Statement on Auditing Standards No. 61, as amended, regarding communication with audit committees
(Codification of Statements on Auditing Standards, AU sec. 380); (iii) received the written
disclosures and the letter from the Companys independent registered public accounting firm
required by applicable requirements of the Public Company Accounting Oversight Board regarding the
independent registered public accounting firms communications with the Audit Committee concerning
independence; and (iv) discussed with the independent registered public accounting firm the
independent registered public accounting firms independence.
Based on the review and discussions with management and the Companys independent registered
public accounting firm referred to above, the Audit Committee recommended to the Board of Directors
that the audited financial statements be included in the Companys Annual Report on Form 10-K for
the fiscal year ended December 31, 2009 for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
Gerald W. Simonson, Chairman
Charles H. Andresen
Lockwood Carlson
David O. Harris
Rondi C. Erickson
H. Leigh Severance
Independent Registered Public Accounting Firm Fees
The following table presents fees for professional audit services rendered by McGladrey &
Pullen, LLP for the audit of the Companys annual financial statements for 2009 and 2008, and fees
billed for other services rendered by McGladrey & Pullen, LLP and their affiliate RSM McGladrey,
Inc. for those years.
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2009 |
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2008 |
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Audit Fees(1) |
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$ |
103,000 |
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$ |
83,500 |
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Audit-Related Fees(2) |
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14,599 |
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1,950 |
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Tax Fees(3) |
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20,025 |
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|
|
31,036 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
137,624 |
|
|
$ |
116,486 |
|
|
|
|
|
|
|
|
9
|
|
|
(1) |
|
Audit Fees consist of fees for professional services rendered for the audit of the
Companys financial statements and review of financial statements included in the Companys
quarterly reports and filings with the Securities and Exchange Commission and fees related to
the 2009 audit of internal controls prior to the deferral of Sarbanes-Oxley Section 404(b),
which eliminated the requirement for an independent audit of the Companys internal controls
for that year. |
|
(2) |
|
Audit-Related Fees are fees principally for professional services rendered for the
review procedures performed in connection with the registration of additional shares on Form
S-8, and consultations regarding response to an SEC comment letter. |
|
(3) |
|
Tax Fees consist of compliance fees for the preparation of tax returns. Tax fees
for 2009 also include consultations for state and local tax queries and an audit by the
Minnesota Department of Revenue ($9,300). In 2008 fees include a cost segregation analysis
for the new facility ($10,011) as well the preparation of returns regarding the State of
Michigan ($8,150), and general state tax and foreign operation consulting ($2,375). |
The Audit Committees current practice on pre-approval of services performed by the
independent registered public accounting firm is to approve annually all audit services and, on a
case-by-case basis, all permitted non-audit services to be provided by the independent registered
public accounting firm during the fiscal year. The Audit Committee reviews each non-audit service
to be provided and assesses the impact of the service on the auditors independence. In addition,
the Audit Committee may pre-approve other non-audit services during the year on a case-by-case
basis.
Relationship with Independent Registered Public Accounting Firm
The Audit Committee has selected McGladrey & Pullen, LLP to serve as the Companys independent
registered public accounting firm for the fiscal year ending December 31, 2010. It is the judgment
of the Audit Committee that McGladrey & Pullen, LLP has and will conduct its affairs in an
appropriate manner and warranted selection as the Companys independent registered public
accounting firm. The Board of Directors is not required to submit the selection of McGladrey &
Pullen, LLP for ratification by the Companys shareholders and is not doing so for ease of
administration and to maintain the Audit Committees flexibility to select an independent
registered public accounting firm that it believes is best suited to serve the Company. A
representative of McGladrey & Pullen, LLP is not expected to be present at the Annual Meeting of
Shareholders or be afforded an opportunity to make a statement or respond to questions during the
meeting.
EXECUTIVE OFFICERS
Following is certain information regarding the current executive officers of the Company other
than William C. Ulland:
Claude P. Piguet, age 52
Mr. Piguet was named Executive Vice President on December 19, 2000. Previously, he was the
Companys Vice President of Operations beginning in May 1994. He was the Companys Director of
Operations from January 1992 to May 1994. Mr. Piguet joined the Company in 1990 and holds a
diploma of Engineer ETS/HTL from the Ecole DIngenieurs de lEtat de Vaud in Switzerland.
10
Jon Gerlach, age 43
Mr. Gerlach was named Chief Financial Officer, Vice President Finance and Secretary on August
5, 2003. Previously he served as the Finance Manager for Sappi Limited Cloquet. Prior to
working for Sappi, Mr. Gerlach served in various positions with Potlatchs Minnesota Pulp and Paper
Division from 1994 to 2002. His most recent position at Potlatch was the Division Manager of
Business Planning. Mr. Gerlach has also worked as a Financial Analyst with Maurices Incorporated
and with Ernst & Young LLP in their audit department. Mr. Gerlach earned a Masters in Business
Administration from the University of Minnesota Duluth in 2001 and a B.S. in Accounting from St.
Johns University in 1989.
Robert D. Banks, Jr., age 58
Mr. Banks has been the Companys Vice President of International Sales since February 1997.
Previously, he was the Companys Director of International Sales and Marketing from 1989 to 1997.
His prior experience includes positions with Marshall and Ilsley Bank, H & H Exports and the Boy
Scouts of America. He received a B.A. in both Economics and Environmental Studies from Northland
College in 1976.
Parnell Thill, age 45
Mr. Thill has been the Companys Vice President of Marketing since January 2005. Previously,
he served as the Companys Marketing Director beginning in 2001. Prior to joining IKONICS, Mr.
Thill worked as a marketing executive at The Stanley Works in the Industrial Tools Division. Mr.
Thill earned a Masters in Business Administration from St. Thomas University in 2001, a Bachelors
in Education from the University of Minnesota Duluth in 1991, and a Bachelors in English from St.
Johns University in 1987.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation for the fiscal years
ended December 31, 2009 and December 31, 2008, provided to the Chief Executive Officer and the
two other most highly compensated executive officers who received remuneration exceeding $100,000
during fiscal 2009 and 2008 (the Named Executive Officers).
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan |
|
All Other |
|
|
|
|
|
|
|
|
Salary |
|
Compensation |
|
Compensation |
|
Total |
Name and Principal Position |
|
Year |
|
($) |
|
($) |
|
($) |
|
($) |
William C. Ulland |
|
|
2009 |
|
|
|
214,200 |
|
|
|
|
|
|
|
10,710 |
|
|
|
224,910 |
|
Chairman, President
and Chief Executive Officer |
|
|
2008 |
|
|
|
210,000 |
|
|
|
1,731 |
|
|
|
10,587 |
|
|
|
222,318 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claude P. Piguet |
|
|
2009 |
|
|
|
128,600 |
|
|
|
|
|
|
|
6,430 |
|
|
|
135,030 |
|
Executive Vice
President |
|
|
2008 |
|
|
|
126,000 |
|
|
|
1,154 |
|
|
|
6,358 |
|
|
|
133,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jon Gerlach |
|
|
2009 |
|
|
|
119,500 |
|
|
|
|
|
|
|
5,975 |
|
|
|
125,475 |
|
Chief Financial
Officer and Vice President
Finance |
|
|
2008 |
|
|
|
117,000 |
|
|
|
577 |
|
|
|
5,879 |
|
|
|
123,456 |
|
The Company has not entered into employment agreements with any of the Named Executive
Officers. The amounts portrayed in the table above under All Other Compensation represent the
Companys contribution to its salary deferral plan adopted under Section 401(k) of the Internal
Revenue Code. The Companys executive officers are eligible to participate in a 401(k) defined
contribution plan. In any plan year, the Company will contribute to each participant up to 5% of
the participants compensation into the 401(k) plan. All of the Named Executive Officers
participated in the 401(k) plan during fiscal 2009 and 2008 and received contributions.
Amounts shown in the Non-Equity Incentive Plan Compensation column represent payments
pursuant to the Companys bonus program for the applicable fiscal year. Under the program,
executive officers were eligible to receive cash bonuses equal to a percentage of the years bonus
pool. The fiscal 2009 and fiscal 2008 bonus pools were set at 10% of the amount by which net
income before income taxes (as adjusted for unusual items of income or expense) (EBT) for the
applicable fiscal year exceeded the EBT target for that fiscal year. For fiscal 2009 and fiscal
2008, Mr. Ulland was eligible to receive a bonus equal to 30% of the pool, and Mr. Piguet, the
Companys Executive Vice President, was eligible to receive a bonus equal to 20% of the pool. Each
of the Companys other executive officers was eligible to receive bonuses equal to 10% of the pool
for each year. The Committee did not allocate 20% of the pool in 2009 and 2008.
The Company did not make any grants of stock options to the Named Executive Officers during
fiscal 2009 or fiscal 2008.
OUTSTANDING EQUITY AWARDS
AT FISCAL YEAR-END
As of the end of fiscal 2009, none of the Named Executive Officers had any unexercised stock
options, stock that had not vested or equity incentive plan awards.
12
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information with respect to the Companys Common Stock that may
be issued under its 1995 Stock Incentive Plan as of December 31, 2009. The 1995 Stock Incentive
Plan is the only equity compensation plan of the Company in existence as of December 31, 2009 and
has been approved by the Companys shareholders.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities |
|
|
|
|
|
|
|
|
|
|
|
remaining available for |
|
|
|
|
|
|
|
|
|
|
|
future issuance under |
|
|
|
Number of securities to |
|
|
Weighted-average |
|
|
equity compensation |
|
|
|
be issued upon exercise |
|
|
exercise price of |
|
|
plans |
|
|
|
of outstanding options, |
|
|
outstanding options, |
|
|
(excluding securities |
|
Plan Category |
|
warrants and rights |
|
|
warrants and rights |
|
|
reflected in column 1) |
|
Equity compensation
plans approved by
shareholders |
|
|
45,500 |
|
|
$ |
5.91 |
|
|
|
129,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation
plans not approved
by shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
45,500 |
|
|
$ |
5.91 |
|
|
|
129,073 |
|
|
|
|
|
|
|
|
|
|
|
EMPLOYMENT CONTRACTS; TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company does not have any employment agreements with any members of its executive
management team, but has entered into confidentiality and non-competition agreements with such
persons. These agreements generally provide that the executive will not solicit any other employee
of the Company to leave the Company during the executives employment with the Company and for two
years following such employment, will not compete with the Company during the executives
employment and for one year thereafter, and will protect the proprietary information of the Company
during and following such executives employment.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Companys directors, executive officers
and persons who own more than ten percent of the Companys Common Stock file initial reports of
ownership of the Companys Common Stock and changes in such ownership with the Securities and
Exchange Commission. To the Companys knowledge based solely on a review of copies of forms
submitted to the Company during and with respect to fiscal 2009 and on written representations from
the Companys directors and executive officers, all required reports were filed on a timely basis
during fiscal 2009, except that Mr. Harris filed one late report for one transaction and Mr.
Carlson filed one late report disclosing his ownership of the Companys stock upon his appointment
to the Board of Directors.
ADDITIONAL MATTERS
The Annual Report of the Company for the year ended December 31, 2009, including financial
statements, is being mailed with this Proxy Statement.
13
Shareholder proposals intended to be presented at the 2011 Annual Meeting of Shareholders must
be received by the Company at its principal executive office no later than November 23, 2010 for
inclusion in the Proxy Statement for that meeting. Any other shareholder proposal must be received
by the Company at its principal executive office no later than January 31, 2011 in order to be
presented at the 2011 Annual Meeting of Shareholders.
As of the date of this Proxy Statement, management knows of no matters that will be presented
for determination at the meeting other than those referred to herein. If any other matters
properly come before the Annual Meeting calling for a vote of shareholders, it is intended that the
shares of Common Stock represented by the proxies solicited by the Board of Directors will be voted
by the persons named therein in accordance with their best judgment.
By Order of the Board of Directors,
Jon Gerlach
Secretary
Dated: March 23, 2010
14
EXHIBIT A
IKONICS CORPORATION
AUDIT COMMITTEE CHARTER
(as of February 23, 2004)
Purpose
There shall be an Audit Committee of the Board of Directors (the Board) IKONICS Corporation
(the Company).
The Audit Committees purpose is to oversee accounting and financial reporting processes of
the Company and the audits of the financial statements of the Company. The Committee also has
oversight of the independent auditors qualifications and independence and the performance of the
Companys internal audit function and independent auditor.
Organization
The Audit Committee shall consist of at least three directors. The members of the Audit
Committee and the Chair of the Audit Committee shall be appointed by the Board. Each director
appointed to the Audit Committee shall:
1. satisfy the requirements of the The Nasdaq Stock Market, Inc. (Nasdaq) rules relating to
Audit Committee members, including (a) the applicable independence requirements in effect from time
to time, (b) the requirement that Audit Committee members not have participated in the preparation
of the financial statements of the Company or any current subsidiary of the Company at any time
during the past three years and (c) the requirement that the Audit Committee members be able to
read and understand financial statements, including the Companys balance sheet, income statement
and cash flow statement; and
2. satisfy, as applicable, the independence requirements of Section 10A(m)(3) of the
Securities Exchange Act of 1934 (the Exchange Act) and the rules and regulations of the
Securities and Exchange Commission (the SEC).
At least one member of the Audit Committee must have accounting or financial management
expertise as required by the Nasdaq rules. In addition, the Audit Committee shall endeavor to have
at all times on the Audit Committee at least one member who satisfies the definition of an audit
committee financial expert as defined by the SEC.
Compliance with the foregoing requirements shall be determined by the Board in its business
judgment and in accordance with applicable rules, regulations and standards in effect from time to
time.
Responsibilities
The Audit Committee recognizes that the preparation of the Companys financial statements and
other financial information is the responsibility of the Companys management and that auditing, or
conducting reviews of, those financial statements and other financial information is the
responsibility of the Companys independent auditor. The Audit Committees responsibility is to oversee the
management and the outside auditors in regard to the accounting and financial reporting processes
of the Company and the audits of the financial statements of the Company.
The Companys management, and its independent auditor, in the exercise of their
responsibilities, acquire greater knowledge and more detailed information about the Company and its
financial affairs than members of the Audit Committee. Consequently, the Audit Committee is not
responsible for providing any expert or special assurance as to the Companys financial statements
and other financial information or any professional certification as to the independent auditors
work, including without limitation its reports on and reviews of the Companys financial statements
and other financial information.
Oversight of Independent Auditor
1. The Audit Committee shall be directly responsible for the appointment, retention,
compensation, evaluation, termination and oversight of the work of the independent auditor
(including resolution of disagreements between management and the independent auditor regarding
financial reporting) for the purpose of preparing or issuing an audit report or related work. The
Audit Committee shall have sole authority to approve all audit engagement fees and terms and any
non-audit engagements of the independent auditor, subject to the Audit Committees right to
delegate such authority as provided below and to the provisions of any policy regarding
pre-approval of services established by the Audit Committee as provided below. The independent
auditor shall report directly to the Audit Committee. The Company shall provide appropriate
funding, as determined by the Audit Committee, for payment of compensation to any accounting firm
engaged for the purpose of preparing or issuing an audit report or performing other audit, review
or attest services for the Company.
2. The Audit Committee shall pre-approve all auditing services and permitted non-audit
services (including the fees and terms thereof) to be performed for the Company by its independent
auditor, subject to the de minimis exceptions for non-audit services described in
Section 10A(i)(1)(B) of the Exchange Act and Rule 2-01(c)(7) of Regulation S-X. The Audit
Committee may delegate authority to one or more members of the Audit Committee, who are independent
directors, the authority to grant pre-approvals of audit and permitted non-audit services, provided
that decisions of such member(s) shall be presented to the full Audit Committee at its next
scheduled meeting. The Audit Committee may establish policies and procedures regarding the
engagement of the independent auditor to render services to the Company, provided that the policies
and procedures are detailed as to the particular service, the Audit Committee is informed of each
service and the pre-approval policies and procedures do not include the delegation of the Audit
Committee responsibilities to management. If pre-approval policies and procedures are adopted, the
Company may engage the independent auditor to perform services consistent with the policies and
procedures. When pre-approving non-audit services, the Audit Committee should consider whether the
provision of the non-audit services by the independent auditor is compatible with maintaining the
independent auditors independence.
Authority to Engage Independent Advisors
The Audit Committee shall have the authority to retain independent counsel and other legal,
accounting or other advisors as it determines necessary to carry out its duties. The Company shall
provide
appropriate funding, as determined by the Audit Committee, for payment of compensation to any
advisors employed by the Audit Committee.
A-2
Other Responsibilities
The Audit Committee, to the extent it deems necessary or appropriate or to the extent required by
the Exchange Act, the rules and regulations of the SEC or the rules of the Nasdaq, shall:
1. Responsibility for Financial Statement and Disclosure Matters
(a) Review and discuss with management and the independent auditor the Companys annual
audited financial statements, including disclosures made in managements discussion and analysis,
and recommend to the Board whether the audited financial statements should be included in the
Companys Form 10-K.
(b) Review the Companys quarterly financial statements, including disclosures made in
managements discussion and analysis, prior to the filing of its Form 10-Q, including the results
of the independent auditors review of the quarterly financial statements. The review and
discussion should include any matters identified by the independent auditor pursuant to Statement
on Auditing Standards No. 71 regarding the Companys interim financial statements.
(c) Discuss with management and the independent auditor significant financial reporting issues
and judgments made in connection with the preparation of the Companys financial statements,
including any significant changes in the Companys selection or application of accounting
principles, any major issues as to the adequacy of the Companys internal controls and any special
steps adopted in light of material control deficiencies.
(d) Review and discuss any quarterly reports from the independent auditor on:
|
(i) |
|
all critical accounting policies and practices to be used, |
|
|
(ii) |
|
all alternative treatments of financial information within
generally accepted accounting principles that have been discussed with
management, ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent auditor, and |
|
|
(iii) |
|
other material written communications between the independent
auditor and management, such as any management letter or schedule of unadjusted
differences. |
(e) Discuss with management and the independent auditor the effect of regulatory and
accounting initiatives as well as off-balance sheet structures on the Companys financial
statements.
(f) Review and consider the matters required to be discussed by Statement on Auditing
Standards No. 61 with the independent auditor and management relating to the conduct of the audit,
including any difficulties encountered in the course of the audit work, any restrictions on the
scope of activities or access to requested information, and any significant disagreements with
management.
(g) Receive information from the Companys management about any significant deficiencies or
material weaknesses in the design or operation of internal controls that could adversely affect the
Companys ability to record, process, summarize and report financial data and
A-3
any fraud, whether or
not material, that involves management or other employees who have a significant role in the
Companys internal controls.
2. Oversight of the Companys Relationship with the Independent Auditor
(a) Review and evaluate the lead partner of the independent audit team.
(b) Obtain and review a report from the independent auditor at least annually regarding:
|
(i) |
|
the independent auditors internal quality-control procedures, |
|
|
(ii) |
|
any material issues raised by the most recent internal
quality-control review, or peer review, of the firm, or by any inquiry or
investigation by governmental or professional authorities within the preceding
five years respecting one or more independent audits carried out by the firm, |
|
|
(iii) |
|
any steps taken to deal with any such issues, and |
|
|
(iv) |
|
all relationships between the independent auditor and the
Company consistent with Independence Standards Board Standard No. 1. |
Actively engage in a dialogue with the independent auditor regarding any disclosed relationships or
services that may impact the objectivity and independence of the independent auditor. Evaluate the
qualifications, performance and independence of the independent auditor, including considering
whether the auditors quality controls are adequate and the provision of permitted non-audit
services is compatible with maintaining the auditors independence, taking into account the
opinions of management and internal auditors. Present its conclusions with respect to the
independent auditor to the Board.
(c) Ensure the rotation of the audit partner, lead partner and concurring partner of the
independent auditor as required by law.
(d) Recommend to the Board policies for the Companys hiring of employees or former employees
of the independent auditor who participated in any capacity in the audit of the Company in order to
ensure the independence of the independent auditor under the SEC rules.
(e) Confirm that none of the audit partners earn or receive compensation based on procuring
engagements with the Company for providing products or services, other than audit, review or attest
services.
(f) Discuss with the national office of the independent auditor issues on which they were
consulted by the Companys audit team and matters of audit quality and consistency.
(g) Meet with the independent auditor prior to the audit to discuss the planning and staffing
of the audit.
3. Oversight of the Companys Internal Audit Function
(a) Review the appointment and replacement of the senior internal auditing executive.
A-4
(b) Review the significant reports to management prepared by the internal auditing function
and managements responses.
(c) Discuss with the independent auditor and management the internal audit function
responsibilities, budget and staffing and any recommended changes in the planned scope of the
internal audit.
4. Compliance Oversight
(a) Obtain from the independent auditor assurance that the audit was conducted in a manner
consistent with Section 10A(b) of the Exchange Act.
(b) Administer and oversee, to the extent directed by the Board, any codes of ethics or
business conduct adopted by the Company.
(c) Establish procedures for the receipt, retention and treatment of complaints received by
the Company regarding accounting, internal accounting controls or auditing matters, and the
confidential, anonymous submission by employees of concerns regarding questionable accounting or
auditing matters.
(d) Discuss with management and the independent auditor any correspondence with regulators or
governmental agencies and any published reports which raise material issues regarding the Companys
financial statements or accounting policies.
(e) Review and evaluate related party transactions required to be disclosed by Item 404 of SEC
Regulation S-K for potential conflict of interest situations on an ongoing basis.
(f) Prepare an audit committee report as required by the rules of the SEC to be included in
the Companys annual proxy statement.
(g) Review and reassess the adequacy of this Charter annually and recommend any proposed
changes to the Board for approval.
Meetings
The Audit Committee shall meet as often as it determines, but not less frequently than
quarterly. The Audit Committee shall meet periodically with management, the internal auditors and
the independent auditor in separate executive sessions. The Audit Committee may request any
officer or employee of the Company or the Companys outside counsel or independent auditor to
attend a meeting of the Audit Committee or to meet with any members of, or consultants to, the
Audit Committee. The Audit Committee shall report regularly to the Board through presentations at
Board meetings or by submission of the minutes of the Audit Committee meetings to the Board. In
addition to funding for the specific purposes described above, the Company shall provide
appropriate
funding, as determined by the Audit Committee, for ordinary administrative expenses that are
necessary for the Audit Committee to carry out its duties.
A-5
EXHIBIT B
IKONICS CORPORATION
COMPENSATION COMMITTEE CHARTER
(as of February 23, 2004)
Purpose
The Compensation Committee is appointed by the Board of Directors to discharge the Boards
responsibilities relating to compensation of the Companys executives.
Committee Membership
The Committee will be composed of at least three directors, all of whom satisfy the definition of
independent under the applicable listing standards of the Nasdaq Stock Market, Inc. All
Committee members shall also be non-employee directors as defined by Rule 16b-3 under the
Securities Exchange Act of 1934 and outside directors as defined by Section 162(m) of the
Internal Revenue Code. The Committee members will be appointed by the Board and may be removed by
the Board in its discretion. The Committee shall have the authority to delegate any of its
responsibilities to subcommittees as the Committee may deem appropriate, provided the subcommittees
are composed entirely of independent directors.
Meetings
The Committee shall meet as often as its members deem necessary to perform the Committees
responsibilities.
Committee Authority and Responsibilities
The Committee will have the authority, to the extent it deems necessary or appropriate, to retain a
compensation consultant to assist in the evaluation of director, Chief Executive Officer (CEO) or
senior executive compensation. The Committee shall have sole authority to retain and terminate any
such consulting firm, including sole authority to approve the firms fees and other retention
terms. The Committee shall also have authority, to the extent it deems necessary or appropriate,
to retain other advisors. The Company will provide for appropriate funding, as determined by the
Committee, for payment of compensation to any consulting firm or other advisors employed by the
Committee.
The Committee will make regular reports to the Board and will propose any necessary action to the
Board. The Committee will review and reassess the adequacy of this charter annually and recommend
any proposed changes to the Board for approval. The Committee will annually evaluate the
Committees own performance.
The Committee, to the extent it deems necessary or appropriate, will:
|
|
Review and approve the Companys goals and objectives relevant to CEO compensation,
evaluate the CEOs performance in light of those goals and objectives, and determine and
approve the CEOs compensation level based on this evaluation. |
|
|
Consider the Companys performance and relative shareholder return, the value of similar
incentive awards to CEOs at comparable companies, and the awards given to the Companys CEO in
past years when determining the long-term component of the CEOs compensation. |
|
|
Approve non-CEO executive officer compensation (the Companys CEO may be present at the
meeting deliberations on this subject, but may not vote). |
|
|
Approve, or make recommendations to the Board, with respect to non-CEO compensation,
incentive-compensation plans and equity-based plans. |
|
|
Produce a compensation committee report as required by the rules of the SEC to be included
in the Companys proxy statement. |
B-2
|
|
|
|
|
Shareowner ServicesSM |
|
P.O. Box 64945 |
|
St. Paul, MN 55164-0945 |
TO VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS BELOW,
SIMPLY SIGN, DATE,
AND RETURN THIS PROXY CARD.
Please detach here
The Board of Directors Recommends a Vote FOR Item 1.
|
|
|
|
|
|
|
|
|
|
|
1. |
|
Election of directors: |
|
01 Charles H. Andresen |
|
05 Rondi C. Erickson |
o |
Vote FOR |
o |
Vote WITHHELD |
|
|
|
|
02 David O. Harris |
|
06 H. Leigh Severance |
|
all nominees |
|
from all nominees |
|
|
|
|
03 Gerald W. Simonson |
|
07 Lockwood Carlson |
|
(except as marked) |
|
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04 William C. Ulland |
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(Instructions: To withhold authority to vote for any indicated
nominee, write the number(s) of the nominee(s) in the box provided
to the right.) |
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2. |
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In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting, or adjournments or postponements thereof.
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN,
WILL BE VOTED FOR EACH PROPOSAL.
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Address Change? Mark box, sign, and indicate
changes below: o |
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Date , 2010 |
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Signature(s) in Box |
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(If there are co-owners, each must sign.)
Please sign exactly as your name(s) appear
on Proxy. If held in joint tenancy, all
persons must sign. Trustees, administrators,
etc., should include title and authority.
Corporations should provide full name of
corporation and title of authorized officer
signing the Proxy.
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IKONICS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
Thursday, April 29, 2010
1:30 p.m., Local Time
Canal Park Lodge
250 Canal Park Drive
Duluth, Minnesota
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IKONICS Corporation
4832 Grand Avenue, Duluth, MN 55807
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proxy
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This proxy is solicited by the Board of Directors for use at the Annual Meeting on April 29,
2010.
The shares of stock you hold in your account will be voted as you specify on the reverse side.
If no choice is specified, the proxy will be voted FOR Item 1.
By signing the proxy, you revoke all prior proxies and appoint William C. Ulland and Jon Gerlach,
and each of them, with full power of substitution, to vote your shares on the matter shown on the
reverse side and any other matters which may come before the Annual Meeting and all adjournments.
See reverse for voting instructions.
100985