-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UNW+RMQ8IASXRDusQH8bsR2WoMk8tm80MC9tDYMbegWgE6v8UTRHhmjsR4pHGs1v fQBCEGJAZemjJNQNz2Hu0g== 0000950136-98-000823.txt : 19980505 0000950136-98-000823.hdr.sgml : 19980505 ACCESSION NUMBER: 0000950136-98-000823 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980504 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INDUSTRIAL ACOUSTICS CO INC CENTRAL INDEX KEY: 0000050253 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569] IRS NUMBER: 131713318 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-03680 FILM NUMBER: 98609348 BUSINESS ADDRESS: STREET 1: 1160 COMMERCE AVE CITY: BRONX STATE: NY ZIP: 10462 BUSINESS PHONE: 7189318000 MAIL ADDRESS: STREET 1: 1160 COMMERCE AVENUE CITY: BRONX STATE: NY ZIP: 10462 10-K/A 1 AMENDED FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year ended December 31, 1997 Commission file number 0-3680 INDUSTRIAL ACOUSTICS COMPANY, INC. ---------------------------------- (Exact name of registrant as specified in its charter) New York 13-1713318 - ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1160 Commerce Avenue, Bronx, New York 10462 - --------------------------------------- ---------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (718) 931-8000 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common stock, $0.10 par value Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months or for such shorter period that the registrant was required to file such reports, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of the Common Stock held by non-affiliates of the registrant on March 23, 1998 was $6,250,570. The number of shares outstanding of registrant's common stock, as of December 31, 1997, was 2,978,961. Documents Incorporated by Reference. A portion of the Form 8-K filed on April 1, 1998 is incorporated by reference in Item 13, Part III hereof. Part III Item 10. Directors and Executive Officers of the Registrant Identification of Directors --------------------------- Director Name Age Position with Company Since ---- --- --------------------- ----- Martin Hirschorn 77 Chairman, Director 1957 Frederic M. Oran 65 President, Director 1973 James A. Read 48 Director 1998 Robert M. Davies 47 Director 1998 Maarten D. Hemsley 48 Director 1998 Martin P. Dineen 32 Director 1998 Robert N. Haidinger 64 Director 1998 The directors shall serve until the 1998 Annual Meeting of Shareholders or until their successors are elected and qualified. Executive Officers of the Registrant ------------------------------------ Name Age Position Officer Since - ---- --- -------- ------------- Martin Hirschorn 77 Chairman July 27, 1951 Frederic M. Oran 65 President June 12, 1962 Robert N. Bertrand 43 Senior Vice April 9, 1990 President-Finance and Administration, Secretary Robert E. Schmitt 49 Senior Vice April 14, 1978 President, General Manager, IAC, SC Robert A. Schmidt 45 Senior Vice April 1, 1987 President -- Marketing and Sales T. Joseph Looney 40 Vice President, June 14, 1993 Finance; Treasurer Jasjit T. Ahluvalia 61 Vice President, May 2, 1981 Management Information Systems Peter Kohner 50 Vice President, September 18, 1986 Manufacturing Albert J. Cirulli 68 Vice President, October 12, 1987 Design Services All officers are elected each year by the Board of Directors to serve until the next annual election and at the pleasure of the Board of Directors. There are no arrangements or understandings between any nominees and any other person pursuant to which he or she has been nominated or previously elected as an officer. Family Relationships. None. Business Experience. All of the executives and directors of the Company have held their positions or other positions with the Company for at least the past five years, except for James A. Read, Robert M. Davies, Martin P. Dineen, Maarten D. Hemsley and Robert N. Haidinger. Since 1989, Mr. Read has been the Managing Director of Mezzanine Management Limited, an investment advisory business with principal offices in London, England. Mr. Davies is a merchant banker, and is the Managing Director of The Renai Group LLC. Prior to that time, Mr. Davies had served as a director of Wexford Capital Corp. and Executive Vice President of Wexford Management LLC, an investment management company, as Managing Director of Steinhardt Enterprises, Inc., an investment management company and as director and Executive Vice president of The Hallwood Group Incorporated, a merchant banking company. Mr. Hemsley is President of Bryanston Management Ltd., which he established in 1993 to provide specialized services to distressed companies and to investors in such opportunities, both in the United State and Europe. Prior to that, he was the President of Integra - - A Hotel and Restaurant Company, a publicly-held company with more than thirty hotels in the United States. Mr. Dineen is a Vice President of Mezzanine Management LLC. Prior to 1997, he was employed as a corporate banker at BankBoston and Chase Manhattan Bank. Since 1990, Mr. Haidinger has been the President of JJI Lighting Group, a commercial-institutional lighting fixture manufacturer and marketer. Item 11. Executive Compensation COMPENSATION COMMITTEE REPORT During 1997, the Compensation Committee consisted of Martin Hirschorn, the President of the Company, Frederic M. Oran, the Executive Vice President and Arnold W. Kanarek, the Senior Vice President-Secretary. This Committee reviewed and determined the Corporation's policies on compensation of salaried and hourly employees not covered by union contracts. The Company has maintained policies to provide senior managers, including executive officers, with strong motivation to produce and maintain a high level of profitability. The principal element of the policies is to maximize the total compensation packages based on profitability. Base salaries are therefore increased only as the result of promotions or to establish parity among senior managers. The intent is to provide senior managers with base salaries more or less equal to their peers at similar companies; however, total compensation packages after inclusion of cash bonuses based on pre-established performance targets, have generally been, the Committee believes, to be above the industry average. At the beginning of every year, the Committee establishes sales and profit targets in its annual budgets. The budgets are revised periodically to reflect actual business conditions, which, along with departmental performance, overseas assignments and consolidated profitability, determine the cash bonuses for senior managers. The Committee believes its long-standing incentive programs have contributed to the Company's financial performance. The Committee reviews the compensation of the Company's executive officers annually and believes such compensation has been in the best interests of both the executives and the Company's shareholders. 1997 RESULTS Fiscal 1997 was a disappointing year for the Company. The Compensation Committee, in reviewing the total compensation packages for senior managers, determined that only a few performance bonuses were to be paid based upon current year results. Year end adjustments were made only to bring compensation to a level which approximated the average for similar positions in the industry. The Committee's determination was consistent with that made in both 1995 and 1996, which had marked a departure from prior years, when a substantial portion of the compensation packages for senior managers consisted of performance bonuses. The Committee believes that its determination was consistent with long-established policy that such individuals have an inducement for the Corporation to be financially successful. In a year where the Company reported a loss, most senior managers were affected adversely in comparison to years prior to 1995 in their total compensation packages as performance objectives were not attained. CHIEF EXECUTIVE OFFICER COMPENSATION The Committee, after reviewing the Company's financial results for 1997, determined that Mr. Hirschorn's base salary of $110,000, as well as his performance-based bonus, would not be increased. His total compensation package remains at a level substantially reduced from years prior to 1994, and was determined to be below the average for a similar position within the industry. The additional benefits paid or payable to Mr. Hirschorn are established pursuant to the terms of compensation plans which have been in existence for periods in excess of 15 years. Mr. Oran's compensation is the same as in 1996, however his total compensation package also remains at a level substantially reduced from years prior to 1994. Martin Hirschorn, Chairman Frederic M. Oran Arnold W. Kanarek The following table summarizes, for the years indicated, the compensation paid or accrued by the Corporation and its subsidiaries to the highest paid executive officers of the Corporation whose remuneration exceeds $100,000. No executive officer of the Corporation was compensated for services performed as a director of the Corporation. Each director of the Corporation who is not an officer or employee receives an annual fee of $5,000. SUMMARY COMPENSATION TABLE(1)
Name and Principal Position Year Salary Bonus(2)(3) Other(4) - ------------------ ---- ------ ----------- -------- Martin Hirschorn, 1997 $110,000 $69,782 $16,785 President and Chief 1996 $110,000 $69,782 $16,785 Executive Officer; 1995 $110,000 $39,325 $16,785 Director Frederic M. Oran, 1997 $107,000 $48,420 $ 5,922 Executive Vice 1996 $107,000 $48,420 $ 5,922 President; Director 1995 $107,000 $48,420 $ 5,922
(1) The Corporation has no long-term compensation awards and payouts, and such categories are omitted from this table. (2) Includes cash bonus as incentive compensation pursuant to individual agreements with the named executives. Such additional compensation is based upon increases in the Corporation's annual pre-tax profits. A description of the Corporation's bonus plan is set forth below under "Cash Bonuses". (3) Includes amount deferred under the Corporation's Savings Plan (see "Savings Plan" below). (4) Includes contributions by the Corporation under deferred compensation plans for the benefit of Mr. Hirschorn and Mr. Oran adopted in 1968 and 1978, respectively. A description of such deferred compensation plans is set forth below in paragraph (a) under "Deferred Compensation Agreements". REMUNERATION UNDER EXISTING PLANS AND ARRANGEMENTS CASH BONUSES As incentive compensation, Management selects employees on a discretionary basis to receive annual cash bonuses based upon the Corporation's annual pre-tax profits. Payments to the participants have ranged from 0% to 245% of their base annual salary. Amounts distributed to executive officers in 1996 are included in the Summary Compensation Table set forth above. DEFERRED COMPENSATION AGREEMENTS (a) The Corporation adopted deferred compensation plans for the benefit of Mr. Hirschorn and Mr. Oran in 1968 and 1978, respectively. These plans provide in substance that if Mr. Hirschorn and Mr. Oran continue in the employ of the Corporation until the age 65 or later, they will receive 120 monthly payments of not less than $1,220.02 and $874.12, respectively, upon their retirement. If they die while employed by the Corporation prior to attaining the age of 65, their widows, children or estate will receive 120 monthly payments of not less than $3,096.45 and $2,189.13, respectively. If they become permanently disabled as determined pursuant to the plans, while employed by the Corporation prior to attaining the age of 65, they or their lawful representatives will receive 120 monthly payments of an amount, depending on the year of disability (the earlier the disability the smaller the payment), of not less than $1,220.02 and $874.12, respectively, if such disability occurs prior to retirement. Unless otherwise granted by the Board of Directors, no payments will be made other than upon terminations of employment as listed above. In January 1992, the Board of Directors approved payments to Mr. Martin Hirschorn, the cost of which is included in the Summary Compensation Table above. (b) The deferred cash bonus plan adopted in 1979 and amended on July 16, 1980 is administered by the Deferred Compensation Committee appointed by the Board of Directors. Eligible participants have been previously selected by such Committee. Under the plan, a portion specified by the individual participant of such participant's annual bonus was deferred, and interest on any or all such amounts accrued at the rate set forth in each participation contract, to be compounded annually. Deferred funds are earmarked and may be kept in cash or invested, at the discretion of the Committee, provided that no funds are to be invested in stock or bonds of the Corporation. Payments are to be made upon the death, retirement, or age 65 whichever comes first, or disability of the participant in 180 monthly installments as set forth in the plan, beginning on the first day of the month following such death, such retirement or determination by the Committee of such disability. Participants whose termination of employment is other than a result of death, disability or retirement are to be paid in monthly installments, the number of which is the product of the numbers of years of participation in the plan multiplied by 12, to commence on the first day of the month following the third anniversary of said termination. If a participant withdraws from the plan, payments are to be made in 36 monthly installments, to commence on the first day of the month following the fifth anniversary of such withdrawal. SAVINGS PLAN The Corporation adopted a defined contribution plan, the Industrial Acoustics Company, Inc. Employees Tax Deferred Savings Plan (the "Savings Plan"), effective January 1, 1987, which includes a cash or deferred arrangement (commonly known as a " 401(k) plan" ). The Savings Plan is maintained for non-union employees who have completed six months of service with the Corporation. A participant may elect to defer up to the lesser of 15% of compensation or $9,500 per year, adjusted for cost of living increases in accordance with the Internal Revenue Code of 1986 (the " Code" ), subject to other Code limitations. Each participant is fully vested in deferral contributions allocated to such participant's account. The Savings Plan also allows the Corporation to make discretionary contributions, which vest over a period of seven years or upon the participant's retirement, disability or death. The Corporation's discretionary contribution is based on corporate profitability and is allocated to employees based on a five year average salary basis and is integrated with Social Security. Benefits are payable following termination of employment with the Corporation, or at age 65 if the participant elects to defer payment, in an annuity, installment payments or a lump sum. Under the Savings Plan, during the fiscal year ended December 31, 1997, Messrs. Hirschorn and Oran deferred $0 and $9,500 respectively (which amounts are included in the Summary Compensation Table). The contributions for Mr. Hirschorn and Mr. Oran for 1996 were $0 and $9,500, respectively. SPLIT-DOLLAR LIFE INSURANCE AGREEMENT On March 19, 1992, the Corporation entered into a Split-Dollar Life Insurance Agreement with Michael Hirschorn, a director of the Corporation, wherein the Corporation agreed to advance up to one-half of the amount of premiums on an insurance policy owned by Michael Hirschorn on the life of Martin Hirschorn, his father and President of the Corporation. The Corporation shall be reimbursed for such advances by Michael Hirschorn upon the earlier to occur of the surrender of such policy or the payment of proceeds upon the death of Martin Hirschorn. Item 12. Security Ownership of Certain Beneficial Owners and Management The Company has one class of stock, consisting of Common Stock, with $0.10 par value per share. The following data is supplied with respect to the Company's Common Stock, as of March 20, 1998: Security Ownership of Certain Beneficial Owners -----------------------------------------------
Name & Address Amount & Nature of Percent of Beneficial Owner Beneficial Ownership of Class - ------------------- -------------------- -------- IAC Holdings Corp. 100 First Stamford Place Suite 600 Stamford, CT 06902 2,353,904 79.0% David L. Babson & Co., Inc. One Memorial Drive Cambridge, MA 02142-1300 279,100 9.4%
Except as shown above, no other person or group is known to the Company to be the beneficial owner of more than 5% of the Common Stock of the Company. Item 13. Certain Relationships and Related Transactions The information required to be furnished under this Item is incorporated by reference from the Company's Form 8-K filed on April 1, 1998. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INDUSTRIAL ACOUSTICS COMPANY, INC. April 30, 1998 By: /s/ Frederic M. Oran ------------------------------- Frederic M. Oran, President April 30, 1998 By: /s/ Robert N. Bertrand ------------------------------- Robert N. Bertrand, Senior Vice President -----END PRIVACY-ENHANCED MESSAGE-----