Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
(Amendment
No. )
Filed by
the Registrant x
Filed by
a Party other than the Registrant ¨
Check the
appropriate box:
¨
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Preliminary
Proxy Statement
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¨
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Confidential, for Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
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x
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Definitive
Proxy Statement
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¨
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Definitive
Additional Materials
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¨
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Soliciting
Material Pursuant to §240.14a-12
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CTI
Industries Corporation
(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of filing fee (Check the appropriate box):
¨
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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1)
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Title
of each class of securities to which transaction
applies:
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2)
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Aggregate
number of securities to which transaction
applies:
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3)
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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)
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Proposed
maximum aggregate value of
transaction:
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¨
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Fee
paid previously with preliminary
materials.
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¨
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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.
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement
No.:
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CTI
INDUSTRIES CORPORATION
22160
North Pepper Road
Lake
Barrington, Illinois 60010
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS TO
BE HELD
ON JUNE 4, 2010
To: Shareholders
of CTI Industries Corporation
The annual meeting of the shareholders
of CTI Industries Corporation will be held at the offices of the Company, 22160
N. Pepper Road, Lake Barrington, Illinois 60010, on June 4, 2010, at 9:00 a.m.,
Central Time, for the following purposes:
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1.
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To
elect 7 directors to hold office during the year following the annual
meeting or until their successors are elected (Item No. 1 on proxy
card);
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2.
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To
ratify the appointment of Blackman Kallick, L.L.P. as auditors of the
Corporation for 2010 (Item No. 2 on proxy card);
and
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3.
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To
transact such other business as may properly come before the
meeting.
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The close of business on April 9, 2010,
has been fixed as the record date for determining the shareholders entitled to
receive notice of and to vote at the annual meeting.
BY ORDER OF THE BOARD OF
DIRECTORS
April
30, 2010
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/s/Stephen M. Merrick
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Stephen
M. Merrick, Secretary
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YOUR
VOTE IS IMPORTANT
It
is important that as many shares as possible be represented at the annual
meeting. Please date, sign, and promptly return the proxy in the
enclosed envelope, or you may submit your proxy via the Internet or by using the
toll-free number provided on your proxy card. Your proxy may be
revoked by you at any time before it has been voted.
CTI
INDUSTRIES CORPORATION
22160
North Pepper Road
Lake
Barrington, Illinois 60010
PROXY
STATEMENT
Information Concerning the
Solicitation
The Board of Directors of CTI
Industries Corporation (the “Company”) is furnishing this Proxy Statement for
the solicitation of proxies to be used at the Annual Shareholders Meeting (the
“Annual Meeting”) of the Company to be held at 9:00 a.m. Central Time on June 4,
2010, at 22160 N. Pepper Road, Lake Barrington, Illinois 60010. The
proxy materials are being mailed to shareholders of record at the close of
business on May 7, 2010.
The cost of preparing, assembling and
mailing the proxy material and of reimbursing brokers, nominees and fiduciaries
for the out-of-pocket and clerical expenses of transmitting copies of the proxy
material to the beneficial owners of shares held of record by such persons will
be borne by the Company. The Company does not intend to solicit
proxies otherwise than by use of the mail, but certain officers and regular
employees of the Company or its subsidiaries, without additional compensation,
may use their personal efforts, by telephone or otherwise, to obtain
proxies.
Your vote is very important. Whether or
not you plan to attend our Annual Meeting, please take the time to vote (i) by
completing and mailing the proxy card enclosed with the Proxy Materials as soon
as possible, (ii) vote via the Internet in accordance with the instructions on
the proxy card or (iii) vote by telephone by using the toll-free number on the
proxy card.
Quorum and
Voting
Only shareholders of record at the
close of business on April 9, 2010, are entitled to vote at the Annual
Meeting. There are 2,778,099 shares of Common Stock presently
outstanding. Each share has one vote. A simple majority of
the outstanding shares of Common Stock is required to be present in person or by
proxy at the meeting for there to be a quorum for purposes of proceeding with
the Annual Meeting. Seven directors will be elected by the Company's
Common Stockholders at this meeting. The Common Stock does not
possess cumulative voting rights, and the election of directors will be by the
vote of a majority of shares of Common Stock present in person or by proxy at
the Annual Meeting. The ratification of auditors will require the
vote of a simple majority of the shares of Common Stock present at the Annual
Meeting by person or proxy. Abstentions and withheld votes have
the effect of votes against these matters. Broker non-votes (shares
of record held by a broker for which a proxy is not given) will be counted for
purposes of determining shares outstanding for purposes of a quorum, but will
not be counted as present for purposes of determining the vote on any matter
considered at the meeting.
A shareholder signing and returning a
proxy on the enclosed form has the power to revoke it at any time before the
shares subject to it are voted by notifying the Secretary of the Company in
writing. If a shareholder specifies how the proxy is to be voted with
respect to any of the proposals for which a choice is provided, the proxy will
be voted in accordance with such specifications. If a shareholder
fails to so specify with respect to such proposals, the proxy will be voted
“FOR” the nominees for directors contained in these proxy materials, “FOR”
proposal 2, and “FOR” proposal 3.
Discretionary Voting
Power
The Board of Directors knows of no
other matters to be presented for shareholder action at the Annual
Meeting. On matters which may be raised at the Annual Meeting that
are not covered by this Proxy Statement, the persons named in the proxy will
have full discretionary authority to vote.
BENEFICIAL OWNERSHIP OF
SHARES BY MANAGEMENT
AND SIGNIFICANT
SHAREHOLDERS
The
following table provides information concerning the beneficial ownership of the
Company’s Common Stock by each director and nominee for director, certain
executive officers, and by all directors and officers of the Company as a group
as of April 9, 2010. In addition, the table provides information
concerning the current beneficial owners, if any, known to the Company to hold
more than 5 percent of the outstanding Common Stock of the Company.
The amounts and percentage of stock
beneficially owned are reported on the basis of regulations of the Securities
and Exchange Commission (“SEC”) governing the determination of beneficial
ownership of securities. Under the rules of the SEC, a person is
deemed to be a “beneficial owner” of a security if that person has or shares
“voting power,” which includes the power to dispose of or to direct the
disposition of such security. A person is also deemed to be a
beneficial owner of any securities of which that person has a right to acquire
beneficial ownership within 60 days after April 9, 2010. Under these rules, more
than one person may be deemed a beneficial owner of the same securities and a
person may be deemed a beneficial owner of securities as to which he has no
economic interest. The percentage of Common Stock beneficially owned
is based on 2,778,099 shares of Common Stock currently
outstanding.
Name and Address
Directors and Officers (1)
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Shares of
Common
Stock
Beneficially
Owned (2)
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Percent of
Common
Stock
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Stephen
M. Merrick
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736,357 |
(3)
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25.29 |
%
(4) |
John
H. Schwan
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719,397 |
(5)
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25.14 |
%
(4) |
Howard
W. Schwan
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221,421 |
(6)
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7.89 |
%
(4) |
Tim
Patterson
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20,698 |
(7)
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* |
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Bret
Tayne
6834
N. Kostner Avenue
Lincolnwood,
IL 60712
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13,816 |
(8)
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* |
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Samuel
Komar
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13,750 |
(9)
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* |
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Stanley
M. Brown
3015
West Roscoe Street, Suite A
Chicago,
IL 60176
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11,157 |
(10)
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* |
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Richard
Sherman
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10,550 |
(11)
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John
Collins
262
Pine Street
Deerfield,
IL 60015
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3,875 |
(12)
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* |
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Phil
Roos
680
State Circle
Ann
Arbor, MI 48108
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1,250 |
(13)
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* |
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All Current Directors and
Executive Officers as a group (10 persons)
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1,754,271 |
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61.12 |
% (4) |
* Less
than one percent
(1)
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Except
as otherwise indicated, the address of each stockholder listed above is
c/o CTI Industries Corporation, 22160 North Pepper Road, Lake Barrington,
Illinois 60010.
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(2)
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A
person is deemed to be the beneficial owner of securities that can be
acquired within 60 days from the date set forth above through the exercise
of any option, warrant or right. Shares of Common Stock subject to
options, warrants or rights that are currently exercisable or exercisable
within 60 days are deemed outstanding for purposes of computing the
percentage ownership of the person holding such options, warrants or
rights, but are not deemed outstanding for purposes of computing the
percentage ownership of any other
person.
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(3)
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Includes
562,717 shares held in the name of The Merrick Company LLC of which Mr.
Merrick is a principal owner, warrants to purchase up to 151,515 shares of
Common Stock at $3.30 per share and 20,000 shares of Common Stock at $4.80
per share. Also, includes options to purchase up to 1,125
shares of Common Stock at $5.14 per share and 1,000 shares at $1.94 per
share granted under the Company’s 2007 Stock Option
Plan.
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(4)
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Assumes
the exercise of all warrants and options owned by the named person into
shares of Common Stock.
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(5)
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Includes
warrants to purchase up to 101,515 shares of Common Stock at $3.30 per
share and 20,000 shares of Common Stock at $4.80 per
share. Also, includes options to purchase up to 1,125 shares of
Common Stock at $5.14 per share and 1,000 shares at $1.94 per share
granted under the Company’s 2007 Stock Option
Plan.
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(6)
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Includes
warrants to purchase up to 50,000 shares of Common Stock at $3.30 per
share, options to purchase up to 7,500 shares of Common Stock at $5.14 per
share and 12,500 shares at $1.94 per share granted under the Company’s
2007 Stock Option Plan.
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(7)
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Includes
options to purchase up to 3,750 shares of Common Stock at $4.67 per share
granted under the Company’s 2007 Stock Option Plan and 2,500 shares at
$1.76 per share granted under the Company’s 2007 Stock Option
Plan.
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(8)
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Includes
options to purchase 1,000 shares of Common Stock at $2.88 per share
granted under the Company’s 2002 Stock Option Plan, options to purchase
1,875 shares of Common Stock at $4.67 per share and 1,000 shares at $1.76
granted under the Company’s 2007 Stock Option
Plan.
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(9)
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Includes
options to purchase 7,500 shares of Common Stock at $2.88 per share
granted under the Company’s 2002 Stock Option Plan and options to purchase
up to 3,750 shares of Common Stock at $4.67 per share and 2,500 shares at
$1.76 per share granted under the Company’s 2007 Stock Option
Plan.
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(10)
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Includes
options to purchase up to 1,000 shares of Common Stock at $2.88 per share
granted under the Company’s 2002 Stock Option Plan, options to purchase up
to 1,875 shares of Common Stock at $4.67 per share and 1,000 shares at
$1.76 granted under the Company’s 2007 Stock Option
Plan.
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(11)
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Includes
options to purchase 2,500 shares of Common Stock at $2.88 per share
granted under the Company’s 2001 Stock Option Plan and options to purchase
up to 3,750 shares of Common Stock at $4.67 per share and 2,500 shares at
$1.76 per share granted under the Company’s 2007 Stock Option
Plan.
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(12)
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Includes
options to purchase up to 1,000 shares of Common Stock at $2.88 per share
granted under the Company’s 2002 Stock Option Plan, options to purchase up
to 1,875 shares of Common Stock at $4.67 per share and 1,000 shares at
$1.76 granted under the Company’s 2007 Stock Option
Plan.
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(13)
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Includes
options to purchase up to 1,250 shares of Common Stock at $4.97 per share
granted under the Company’s 2007 Stock Option
Plan.
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PROPOSAL
ONE - ELECTION OF
DIRECTORS
Seven directors will be elected at the
Annual Meeting to serve for one-year terms expiring on the date of the Annual
Meeting in 2011. All directors will be elected by holders of the
Company’s Common Stock. Each director elected will continue in office
until a successor has been elected. If a nominee is unable to serve,
which the Board of Directors has no reason to expect, the persons named in the
accompanying proxy intend to vote for the balance of those named and, if they
deem it advisable, for a substitute nominee selected by the Board of
Directors.
THE
BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE “FOR” THE SEVEN NOMINEES FOR
DIRECTOR NAMED IN PROPOSAL ONE.
Information Concerning
Nominees
The following is information concerning
nominees for election as directors of the Company as of April 30, 2010. Messrs.
John Schwan, Howard Schwan, Merrick, Brown, Collins, Tayne and Roos are
presently directors of the Company.
John H. Schwan, age 66,
Chairman and Executive Vice President. Mr. Schwan has been an officer
and director of the Company since January 1996. Until March 2006, Mr.
Schwan was an executive officer of Rapak, L.L.C. or affiliated companies for
over 15 years. Mr. Schwan has over 30 years of general management experience,
including manufacturing, marketing and sales. Mr. Schwan served in the U.S. Army
from 1966 to 1971, 1st Air
Cavalry Division in Vietnam from 1968 to 1969. Mr. Schwan has a BA
from North Park University.
Howard W. Schwan, age 55,
President. Mr. Schwan has been associated with the Company for 30 years,
principally in the management of the production and engineering operations of
the Company. Mr. Schwan was appointed as Vice President of Manufacturing in
November, 1990, was appointed as a director in January, 1996, and was appointed
as President in June, 1997.
John Schwan and Howard Schwan are
brothers.
Stephen M. Merrick, age 68,
Executive Vice President, Chief Financial Officer, and Secretary. Mr. Merrick
has been an officer of the Company since January 1996 and a director of the
Company for more than 20 years. In October 1999, Mr. Merrick became
Executive Vice President. Mr. Merrick is of Counsel to the law firm of Vanasco
Genelly & Miller of Chicago, Illinois and has been engaged in the practice
of law for more than 40 years. Mr. Merrick is also Senior Vice President,
Director and a member of the Executive Committee of Reliv International, Inc.
(Nasdaq), a manufacturer and direct marketer of nutritional supplements and food
products.
Stanley M. Brown, age 64, Director. Mr. Brown
was appointed as a director of the Company in January 1996. He is a
principal with Cheshire Partners LLC a financial and business consulting
firm. During his 21 year association with Cheshire Partners he
participated as president in a number of venture start-ups in both service and
manufacturing sectors. From 1968 to 1989, Mr. Brown was with the
United States Navy as a naval aviator, achieving the rank of
Captain.
Bret Tayne, age 51, Director.
Mr. Tayne was appointed as a director of the Company in December 1997. Mr. Tayne
has been the Managing Director of Intrepid Tool Industries, LLC, which is a
successor to Everede Tool Company, a manufacturer of industrial cutting tools,
since January 1992. Prior to that, Mr. Tayne was Executive Vice President of
Unifin, a commercial finance company, since 1986. Mr. Tayne received a Bachelor
of Science degree from Tufts University and an MBA from Northwestern
University.
John I. Collins,
age 50, Director. Mr. Collins is the Senior Vice President –
Strategy, Product and Risk Management and formerly the Chief Administrative
Officer and Chief Financial Officer of Members United Corporate Federal Credit
Union (“Members”), a $10 billion wholesale financial institution located in
Warrenville, Illinois. Prior to his affiliation with Members in 2001,
Mr. Collins was employed as both the Controller and Chief Financial Officer by
Great Lakes Credit Union (“GLCU”), a $425 million financial institution located
in North Chicago, Illinois. Mr. Collins is currently the Treasurer of
the Illinois Credit Union Executives Society, a board member of Fox Valley
Montessori School and a former member of the Chicago Federal Reserve Bank
Advisory Group. Mr. Collins received a Bachelor of Arts degree with
majors in Economics, History and English from Ripon College and a Masters in
Business Administration from Emory University with concentrations in management
and finance. Mr. Collins has also participated in the Kellogg
Management Institute and the Consumer Marketing Strategy programs at
Northwestern University on a post-graduate basis and attended the Director’s
Education Institute at Duke University.
Phil Roos, age 50,
Director. Mr. Roos was appointed as a Director of the Company on
April 14, 2008. He has been the President and Chief Executive Officer
of Arbor Strategy Group, Ann Arbor, Michigan, since 1998. Arbor
Strategy Group, a strategic brand innovation consulting firm, was acquired by
GfK Strategic Innovation in August 2008. Mr. Roos is now Managing
Director of GfK Strategic Innovation, the strategic innovation consulting arm of
GfK Custom Research North America. Prior to Arbor Strategy Group, Mr.
Roos was engaged in various positions in marketing, marketing consulting and
brand management. He is a Certified Public Accountant and earned a
BBA Degree from the University of Michigan and an MBA from Harvard
University.
Executive Officers Other
Than Nominees
Samuel Komar, age 53, Vice
President of Sales & Marketing. Mr. Komar has been employed by
the Company since March of 1998, and was named Vice-President of Sales &
Marketing in March of 2008. Mr. Komar has worked in sales for more
than 25 years, and prior to his employment with the Company, Mr. Komar was with
Bob Gable & Associates. Mr. Komar received a Bachelor of Science Degree in
Business Administration and Marketing from Indiana University.
Timothy Patterson, age 49,
Vice President of Finance and Administration. Mr. Patterson has been employed by
the Company as Vice President of Finance and Administration since September,
2003. Prior to his employment with the Company, Mr. Patterson was Manager of
Controllers for the Thermoforming Group at Solo Cup Company for two years. Prior
to that, Mr. Patterson was Manager of Corporate Accounting for Transilwrap
Company for three years. Mr. Patterson received a Bachelor of Science degree in
finance from Northern Illinois University and an MBA from the University of
Illinois at Chicago.
Richard Sherman, age 54, Vice
President. Mr. Sherman has been employed by CTI since 1984, primarily in
production management and sales of printed and laminated films and related
products. During his employment at CTI, Mr. Sherman has also served as the plant
manager for several production facilities, being promoted to Vice President in
2009. Currently, Mr. Sherman is focusing on the development and sales of printed
and laminated films as well as finished products converted from these
materials.
CORPORATE
GOVERNANCE AND
THE
BOARD OF DIRECTORS
General
The
business and affairs of the Company are managed under the direction of the Board
of Directors in accordance with the Illinois Business Corporation Act and the
Articles of Incorporation and By-laws of the Company, as
amended. Members of the Board of Directors are kept informed of the
Company’s business through discussions with the Chairman of the Board of
Directors and the Chief Financial Officer, and other officers, by reviewing
materials provided to them and by participating in meetings of the Board of
Directors and its committees.
During
2009, the Board of Directors had seven members. The Board met 4 times
during 2009. During 2009, no director attended less than 75% of the
combined Board of Directors and Committee meetings. The Board has
determined that each of Stanley M. Brown, Bret Tayne, John I. Collins and Phil
Roos are independent based upon the application of the rules and standards of
the NASDAQ Stock Market.
Board Leadership
Structure
John H.
Schwan, Executive Vice President of the Company has been appointed Chairman of
the Board of Directors. In his role as Chairman of the Board, he
presides over the meetings of the Board of Directors and communicates the
decisions and directives of the Board to management, and also engages in
implementation of Board decisions and operations. Howard W. Schwan,
President of the Company, is also a member of the Board of Directors and is
responsible for the day to day leadership of the Company and the implementation
of the Company’s plans and operations. Stephen M. Merrick, Executive
Vice President and Chief Financial Officer of the Company, is also a member of
the Board of Directors and provides leadership in the finance, financial
reporting, compliance and legal affairs of the Company, and in reporting
financial and operational matters to the Board of Directors. The
Board of Directors believes that this combination and allocation of roles among
the three principal executive officers of the Company, each of whom are also
members of the Board of Directors provides the most efficient and effective
leadership model for the Company, providing perspective and direction with
regard to business strategies and plans to both the Board and
management. The Company has no bylaw or policy in place that mandates
that an officer serve as Chairman of the Board. The Board of
Directors periodically evaluates its leadership structure.
John I.
Collins has been designated as the lead independent director. Mr.
Collins is responsible for (i) communicating regularly with the Chairman of the
Board and the Chief Financial Officer, and other officers of the Company for the
Board of Directors, and particularly the independent members of the Board of
Directors, and (ii) for calling separate meetings of the independent directors
of the Company. During 2009, there were 4 separate meetings of the
independent directors. At such meetings, only independent directors
are present and the independent directors are free to discuss any aspect of the
Company’s business and risk management without the influence of interested
directors or management.
All
members of the Company’s Audit, Compensation and Nominating and Governance
Committees have been determined to be independent based on application of the
rules and standards of the NASDAQ Stock Market.
Board
Role in Risk Oversight
The Board of Directors plays an active
role, as a whole and at the committee level, in overseeing management of the
Company’s risks. The Board regularly reviews information regarding
our credit, liquidity and operations, as well as the risks associated with
each. The Audit Committee oversees management of financial risks
through regular meetings with the Company’s independent registered public
accounting firm and the Company’s Chief Financial Officer. The
Company’s Compensation Committee evaluates and addresses risks relating to
executive compensation, our incentive compensation plans and other compensatory
arrangements. The Nominating and Governance Committee manages risks
associated with the independence of the Board of Directors and potential
conflicts of interest. While each committee is responsible for
evaluating certain risks and overseeing the management of those risks, the
entire Board of Directors is regularly informed through management and committee
reports to the full Board about these and other operational
risks.
Committees of the Board of
Directors
The Board of Directors has standing
Audit, Compensation and Nominating and Governance Committees.
Audit
Committee
Since
2000, the Company has had a standing Audit Committee, which is presently
composed of Mr. Tayne (Chairman), Mr. Roos, and Mr. Collins. Each of
the members of the Audit Committee is independent based on the application of
the rules and standards of The Nasdaq Stock Market and Rule 10a-3(b) under the
Securities Exchange Act of 1934. Mr. Collins has been designated as, and is, the
Company’s “Audit Committee Financial Expert” in accordance with Item
407(d)(5) of Regulation S-K and meets the requirements for an audit committee
expert as set forth in that item. The Audit Committee held 4 meetings during
fiscal year 2009, including quarterly meetings with management and independent
auditors to discuss the Company’s financial statements. The Company’s Board of
Directors has adopted a written charter, as amended, for the Company’s Audit
Committee, a copy of which has been posted and can be viewed on the Company’s
Internet website at http://www.ctiindustries.com
under the section entitled “Investor Relations.” In addition, the
Audit Committee has adopted a complaint monitoring procedure to enable
confidential and anonymous reporting to the Audit Committee of concerns
regarding, among other things, questionable accounting or auditing
matters.
Report of the Audit
Committee
The Audit
Committee oversees the Company’s financial reporting process on behalf of the
Board of Directors. Management has the primary responsibility for the
financial statements and the reporting process including the systems of internal
controls. In fulfilling its oversight responsibilities, the Audit
Committee reviewed the audited financial statements in the Annual Report with
management and the Company’s independent registered public accounting firm,
Blackman Kallick, L.L.P., including a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness of significant
judgments, the clarity of disclosures in the financial statements and internal
controls.
The Audit
Committee reviewed with the independent registered public accounting firm, which
is responsible for expressing an opinion on the conformity of those audited
financial statements with U.S. generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company’s
application of accounting principles and such other matters as are required to
be discussed with the Audit Committee under generally accepted auditing
standards, including but not limited to those matters required to be discussed
by SAS 61 (Codification of Statements on Auditing Standards, AU §380, as
amended). In addition, the Audit Committee has discussed with the
independent registered public accounting firm their independence from management
and the Company including the matters in the written disclosures and the letter
from the independent registered public accounting firm required by applicable
requirements of the Public Company Accounting Oversight Board regarding its
communications with the Audit Committee concerning independence.
The Audit
Committee discussed with the Company’s independent registered public accounting
firm the overall scope and plans for their audit of the Company’s financial
statements and the effectiveness of internal controls over financial
reporting. The Audit Committee meets with the internal auditor and
independent registered public accounting firm, with and without management
present, to discuss the results of their examinations, their evaluations of the
Company’s internal controls and the overall quality of the Company’s financial
reporting.
In
reliance on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors (and the Board has approved) that the
audited financial statements be included in the Annual Report on Form 10-K for
the year ended December 31, 2009 for filing with the Securities and Exchange
Commission. The Audit Committee and the Board of Directors have also
recommended, subject to stockholder approval, the selection of Blackman Kallick,
L.L.P., as the Company’s independent registered public accounting
firm.
Bret
Tayne, Audit Committee Chair
John I.
Collins, Member
Philip
Roos, Member
Compensation
Committee
The Compensation Committee is composed
of Stanley M. Brown (Chairman), John I. Collins and Phil Roos. The Board has determined that each of
the members of the Compensation Committee is independent as defined in the
listing standards for the NASDAQ Stock Market. The
Compensation Committee reviews and acts on the Company’s executive compensation
and employee benefit and retirement plans, including their establishment,
modification and administration. It also recommends to the Board of
Directors the compensation of the Chief Executive Officer and certain other
executive officers. The Compensation Committee has a charter which
has been posted and can be viewed on the Company’s Internet website at
http://www.reliv.com under the section entitled “Investor
Relations.” The Compensation Committee met 3 times in
2009.
Nominating
and Governance Committee
In 2005,
the Company established a Nominating and Governance Committee. The
Nominating and Governance Committee consists of three directors, Phil Roos
(Chairman), Stanley Brown and Bret Tayne. The Nominating and
Governance Committee does not have a charter. The Board of Directors
has determined that each of the members of the Nominating and Governance
Committee is independent as defined in the listing standards for the Nasdaq
Stock Market.
The Nominating and Governance Committee
has not adopted a formal policy with regard to consideration of director
candidates recommended by security holders. The Company believes that
continuing service of qualified incumbent members of the Board of Directors
promotes stability and continuity at the Board level contributes to the Board’s
ability to work as a collective body and provides the benefit of familiarity and
insight into the Company’s affairs. Accordingly, the process of the
Nominating and Governance Committee for identifying nominees reflects the
Company’s practice of re-nominating incumbent directors who continue to satisfy
the criteria for membership on the Board. For vacancies that are
anticipated on the Board of Directors, the Nominating and Governance Committee
intends to seek out and evaluate potential candidates from a variety of sources
that may include recommendations by security holders, members of management, the
Board of Directors, consultants and others. The minimum
qualifications for potential candidates for the Board of Directors include
demonstrated business experience, decision-making abilities, personal integrity
and a good reputation. It is believed that a formal policy and
procedure with regard to consideration of director candidates recommended by
security holders is not necessary in order for the Nominating and Governance
Committee to perform its duties.
COMPENSATION
OF DIRECTORS AND OFFICERS
The Company is a “smaller reporting
company” under Item 10 of Regulation S-K promulgated under the Securities
Exchange Act of 1934 and has elected to comply with certain of the requirements
applicable to smaller reporting companies in connection with this Proxy
Statement.
Summary Compensation
Table
The following table sets forth summary
compensation information with respect to the Principal Executive Officer and
each of the two other most highly compensated executive
officers. These individuals, including the Principal Executive
Officer, are collectively referred to in this proxy statement as the Named
Executive Officers.
SUMMARY
COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
All
other
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
Incentive
Plan
|
|
|
compensation
|
|
|
|
|
Name/Title
|
|
Year
|
|
Salary
|
|
|
Awards
(1)
|
|
|
Compensation
(2)
|
|
|
(3,4,5)
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Howard
W. Schwan
|
|
2009
|
|
$ |
193,501 |
|
|
$ |
15,985 |
|
|
$ |
17,849 |
|
|
$ |
18,980 |
|
|
$ |
246,315 |
|
President
|
|
2008
|
|
$ |
184,580 |
|
|
$ |
9,185 |
|
|
$ |
13,976 |
|
|
$ |
18,383 |
|
|
$ |
226,124 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
H. Schwan
|
|
2009
|
|
$ |
123,615 |
|
|
$ |
1,792 |
|
|
$ |
15,617 |
|
|
$ |
11,184 |
|
|
$ |
152,209 |
|
Chairman;
Vice President
|
|
2008
|
|
$ |
119,471 |
|
|
$ |
1,328 |
|
|
$ |
12,729 |
|
|
$ |
10,605 |
|
|
$ |
144,133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Samuel
Komar
|
|
2009
|
|
$ |
133,515 |
|
|
$ |
5,396 |
|
|
$ |
13,386 |
|
|
$ |
7,010 |
|
|
$ |
159,307 |
|
Vice
President-Marketing
|
|
2008
|
|
$ |
127,830 |
|
|
$ |
4,380 |
|
|
$ |
10,482 |
|
|
$ |
6,690 |
|
|
$ |
149,382 |
|
(1)
|
Reflects
the compensation expense recognized in 2009 and 2008 for stock option
awards under ASC Topic 718 asreported
in the Company's audited financial
statements.
|
(2)
|
Amounts
determined under the Company's incentive compensation
program.
|
(3)
|
Amounts
for 2009 include matching 401(k) contributions as follows: Howard W.
Schwan $7,740, John H. Schwan $4,944,Samuel
Komar $5,341.
|
(4)
|
Amounts
for 2009 include life insurance premiums paid for Howard W. Schwan of
$5,000, Samuel Komar of $1,669,
|
(5)
|
Amounts
for 2009 include country club dues for Howard W. Schwan of $6,240 and John
H. Schwan of $6,240.
|
Narrative Disclosure For
Summary Compensation Table
Employment
Agreements with Our Named Executive Officers.
In June
1997, the Company entered into an Employment Agreement with Howard W. Schwan as
President, which provides for an annual salary of not less than $135,000. The
term of the Agreement was through June 30, 2002, and is automatically renewed
thereafter for successive one-year terms. The Agreement contains covenants of
Mr. Schwan with respect to the use of the Company’s confidential information,
establishes the Company’s right to inventions created by Mr. Schwan during the
term of his employment, and includes a covenant of Mr. Schwan not to compete
with the Company for a period of three years after the date of termination of
the Agreement.
Information
Relating to Cash Incentives and Stock and Option Awards.
Effective
April 1, 2007, the Board of Directors, on the recommendation of the Compensation
Committee, adopted an Incentive Compensation Plan providing for annual incentive
compensation to be paid to executive and managerial employees of the
Company. Under the Plan, designated Named Executive Officers and
several other executive officers and managers receive incentive compensation
payments, determined on a quarterly and annual basis, which are based upon the
income from operations of the Company for the period if the profits exceed a
threshold amount of profit for any quarter of $100,000 and, for the year, of
$250,000. The benefits under the Plan are divided into two Pools of
compensation. Pool I (representing the largest pool of incentive
compensation) covers senior executive officers who participate in the pool of
incentive compensation based upon a percentage allocation made by the
Compensation Committee each year. Pool II covers other executives and
managers who are selected to participate in proportions determined by
management. The Compensation Committee believes such incentive
compensation motivates participants to achieve strong profitability which is
viewed as the most significant element of corporate performance, provides
rewards for strong corporate performance and aligns the incentive with the
interests of the stockholders. Incentive compensation participation
levels are generally determined during the first quarter of each fiscal
year.
With respect to Pool I participants
(other than the Chief Executive Officer whose participation is determined solely
by the Compensation Committee and the Board of Directors), the Compensation
Committee in consultation with the Chief Executive Officer and the Chief
Operating Officer, determine the participants and their relative level of
participation during the first quarter of the year. In determining
participation and the level of participation each year, the Compensation
Committee considers the executive’s responsibilities and individual performance
during the prior year.
Long-Term
Equity Incentives
Prior to
May 2009, long-term incentive awards were granted to executives under the 2007
Stock Option Plan approved by the stockholders in May 2007. At the
Company’s Annual Meeting of Stockholders held in May 2009, the Company’s 2009
Incentive Stock Plan was approved by the stockholders. To date, there
have been no grants of incentive awards under the 2009 Incentive Stock
Plan.
Stock and
option grants are determined from time to time by the Compensation Committee in
consultation with management. The actual grant for each executive is
determined taking into consideration (i) individual performance, (ii) corporate
performance and (iii) prior grants to, or stock ownership of the Company by, the
executive. Generally, stock options are granted with an exercise
price equal to or greater than the closing price of the Company’s common stock
on the NASDAQ Stock Market on the date of the grant.
During
2008, the Company issued 77,500 stock options from the 2007 Plan, of which
options to purchase 32,000 shares were issued to Named Executive Officers and
options to purchase 10,500 shares were issued to independent
directors.
All of
the stock options issued under the 2007 Stock Option Plan were for a four-year
term. The options become exercisable with respect to the following vesting table
below:
Amount
|
|
Years
After
|
Vesting
|
|
Grant
Date
|
25%
|
|
0.5
|
25%
|
|
1.0
|
25%
|
|
2.0
|
25%
|
|
3.0
|
The
policy of the Compensation Committee with respect to the timing of stock option
awards is as follows: (i) all awards shall be dated and issued as of
the date they are approved by the Compensation Committee and (ii) generally, the
Compensation Committee will expect to make awards annually during May of each
year after the release of financial information for the first
quarter.
Retirement
Benefits
The
Company maintains a 401(k) employee savings plan in which all salaried employees
are eligible to participate. The plan is a tax qualified retirement
plans.
Under the 401(k) Plan, employees may
contribute up to 15% of their eligible compensation to the Plan and the Company
will contribute a matching amount to the Plan each year. The
federal statutory limit for eligible compensation in 2009 was
$245,000. Participating employees may direct the investment of
individual and company contributions into one or more of the investment options
offered by the Plan. Under the terms of the Plan, the Company makes a
matching contribution equal to 100% of employee contributions that do not exceed
3% of eligible compensation plus 50% of employee contributions between 3% and 5%
of eligible compensation. The Company’s contributions to the 401(k)
plan totaled approximately $99,000 in 2009, which is allocated to participants
subject to the vesting requirements of the Plan.
Outstanding Equity Awards at
December 31, 2009
The
following chart sets forth all outstanding equity awards to named executive
officers as of December 31, 2009. All awards are in the form of
options to purchase Common Stock of the Company.
|
|
Option
Awards
|
|
|
|
|
Number
of Securities Underlying
|
|
|
Option
|
|
Option
|
|
|
|
|
Unexercised
Options (#)
|
|
|
Exercise
|
|
Expiration
|
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price
($)
|
|
Date
|
|
|
Howard
W. Schwan
|
|
|
23,810 |
|
|
|
- |
|
|
$ |
1.89 |
|
3/6/2010
|
(1 |
) |
|
|
|
7,500 |
|
|
|
2,500 |
|
|
$ |
5.14 |
|
10/1/2011
|
(2 |
) |
|
|
|
12,500 |
|
|
|
12,500 |
|
|
$ |
1.94 |
|
11/18/2012
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
H. Schwan
|
|
|
1,125 |
|
|
|
375 |
|
|
$ |
5.14 |
|
10/1/2011
|
(2 |
) |
|
|
|
1,000 |
|
|
|
1,000 |
|
|
$ |
1.94 |
|
11/18/2012
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Samuel
Komar
|
|
|
7,500 |
|
|
|
- |
|
|
$ |
2.88 |
|
12/30/2015
|
(1 |
) |
|
|
|
3,750 |
|
|
|
1,250 |
|
|
$ |
4.67 |
|
10/1/2011
|
(2 |
) |
|
|
|
2,500 |
|
|
|
2,500 |
|
|
$ |
1.76 |
|
11/18/2012
|
(3 |
) |
(1)
|
Each
of the stock options granted to the Named Executive Officers was fully
vested on the date of grant.
|
(2)
|
Each
of the stock options granted to the Named Executive Officers vests in
one-quarter increments on each of April 1, 2008, October 1, 2008,
October 1, 2009, and October 1,
2010.
|
(3)
|
Each
of the stock options granted to the Named Executive Officers vests in
one-quarter increments on each of May 18, 2009, November 18, 2009,
November 18, 2010, and November
18, 2011.
|
As of
December 31, 2009, the Company has not issued stock awards.
Director
Compensation
The
following table sets forth the compensation of directors of the Company during
the year ended December 31, 2009:
DIRECTOR
COMPENSATION
|
|
Director's
|
|
|
Option
|
|
|
All
other
|
|
|
|
|
Name
|
|
Fees
|
|
|
Awards (1)
|
|
|
compensation
|
|
|
Total
|
|
Stanley
Brown
|
|
$ |
14,750 |
|
|
$ |
2,525 |
|
|
|
- |
|
|
$ |
17,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bret
Tayne
|
|
$ |
15,750 |
|
|
$ |
2,525 |
|
|
|
- |
|
|
$ |
18,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phil
Roos
|
|
$ |
15,250 |
|
|
$ |
2,416 |
|
|
|
- |
|
|
$ |
17,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
I. Collins
|
|
$ |
16,250 |
|
|
$ |
2,525 |
|
|
|
- |
|
|
$ |
18,775 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen
M. Merrick (2)
|
|
$ |
- |
|
|
$ |
1,792 |
|
|
$ |
117,702 |
|
|
$ |
119,494 |
|
|
(1)
|
Reflects
the compensation expense recognized in 2009 for stock option awards under
ASC Topic 718 as reported in the Company's audited financial
statements.
|
|
(2)
|
Includes
compensation for Mr. Merrick's services as the Executive Vice President
and Chief
Financial Officer.
|
Narrative Description of
Director Compensation
Non-management members of the Board of
Directors will receive a monthly fee of $750 plus $500 for each meeting of the
Board of Directors or any Committee of the Board attended. The
Chairman of the Audit Committee will receive $750 for each meeting of the Audit
Committee in lieu of the $500 meeting fee.
In
October 2007, Stanley Brown, Bret Tayne, and John Collins were awarded an option
to purchase up to 2,500 shares of Common Stock of the Company. In
October 2008, Phil Roos was awarded an option to purchase up to 2,500 shares of
Common Stock of the Company. In November 2008, Stanley Brown, Bret
Tayne, and John Collins were awarded an option to purchase up to 2,000 shares of
Common Stock of the Company. The option terms and the vesting periods
are described in the Narrative Disclosure to the Summary Compensation
Table.
Section 16(a) Beneficial
Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s officers and
directors, and persons who own more than ten percent of a registered class of
the Company’s equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and with the Nasdaq Stock
Market. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based
solely on a review of such forms furnished to the Company, the Company believes
that during calendar year 2009, all Section 16(a) filing requirements applicable
to the officers, directors and ten-percent beneficial shareholders were
compliant.
Code of
Ethics
The
Company has adopted a code of ethics that applies to its senior executive and
financial officers. The Company’s Code of Ethics seeks to promote (i) honest and
ethical conduct, including the ethical handling of actual or apparent conflicts
of interest between personal and professional relationships, (ii) full, fair,
accurate, timely and understandable disclosure of information to the Commission,
(iii) compliance with applicable governmental laws, rules and regulations, (iv)
prompt internal reporting of violations of the Code to predesignated persons,
and (v) accountability for adherence to the Code. A copy of the Code
of Ethics has been posted and may be viewed on the Company’s Internet website at
http://www.ctiindustries.com
under the heading “Investor Relations.” The Company will provide to any person
without charge upon request a copy of the Code of Ethics. You may
make such request by sending a written request to the Corporate Secretary at
22160 N. Pepper Road, Lake Barrington, Illinois 60010 and providing a return
address.
Certain Relationships and
Related Transactions
Stephen
M. Merrick, Executive Vice President and Secretary of the Company, is of Counsel
to Vanasco Genelly & Miller, a law firm who provided services to the Company
in 2009. In addition, Mr. Merrick is a principal stockholder of the
Company. Legal fees incurred with
this firm or predecessor, were $130,000 and $174,000 for the years ended
December 31, 2009 and 2008, respectively.
John H.
Schwan is a principal owner of Shamrock Packaging and affiliated companies. The
Company made purchases of packaging materials from Shamrock of approximately
$1,718,000 and $824,000 during the years ended December 31, 2009 and 2008,
respectively.
John H.
Schwan, Chairman of the Company, and Howard Schwan, President, are the brothers
of Gary Schwan, one of the owners of Schwan Incorporated which provides building
maintenance and remodeling services to the Company. The Company made
purchases from Schwan Incorporated of approximately $27,000 and $142,000 during
the years ended December 31, 2009 and 2008, respectively.
In
February 2003, the Company received $1,630,000 from certain shareholders in
exchange for (a) two year 9% subordinated notes, and (b) five year warrants to
purchase 163,000 common shares at $4.87 per share. The proceeds were to (i)
re-finance the bank loan of CTI Mexico in the amount of $880,000 and (ii) to
provide financing for CTI Mexico and Flexo Universal. The value of the warrants
was $460,000 calculated using Black-Scholes option pricing formula. The Company
applied the discount against the subordinated debt. The discount is being
amortized using the effective interest method to interest expense over the term
of the debt. These loans are subordinated to the Bank debt of the
Company. On February 8, 2008 those shareholders exercised these
warrants in exchange for a reduction on these notes of $794,000.
During
the period from January 2003 to the present, John H. Schwan, Chairman of the
Company, and Stephen M. Merrick, Executive Vice President and Chief Financial
Officer have made loans to the Company and to Flexo which have outstanding
balances, for the Company of $2,356,000 and $2,267,000 (net of discount of
$96,000 and $185,000, respectively) and for Flexo of $659,000 and $858,000 as of
December 31, 2009 and 2008, respectively. Interest paid to related
parties, principally Mr. Schwan and Mr. Merrick, with respect to various loans
and advances made by them to the Company and its subsidiaries during 2009 and
2008 was $228,000 and $414,000, respectively.
The
Company believes that each of the transactions set forth above were entered
into, and any future related party transactions will be entered into, on terms
as fair as those obtainable from independent third parties.
PROPOSAL
TWO - SELECTION OF
AUDITORS
BLACKMAN KALLICK,
L.L.P.
The Audit
Committee and Board of Directors has selected and approved Blackman Kallick,
L.L.P. as the independent registered public accounting firm to audit our
financial statements for 2009, subject to ratification by the
stockholders. It is expected that a representative of the Firm of
Blackman Kallick, L.L.P. will be present at the Annual Meeting and will have an
opportunity to make a statement if he or she so desires and will be available to
respond to appropriate questions.
During
the Company’s last two fiscal years ended December 31, 2008 and December 31,
2009 there were no disagreements with Blackman Kallick L.L.P., respectively, on
any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Blackman Kallick L.L.P. would have caused them to make reference
to the subject matter of the disagreements in connection with their reports on
the financial statements for such periods.
During
the Company’s two fiscal years ended December 31, 2008 and December 31, 2009,
Blackman Kallick L.L.P, respectively, has not informed the Company of any
reportable events
Fees Billed By Independent
Public Accountants
The following table sets forth the
amount of fees billed by and Blackman Kallick, L.L.P. for services rendered for
the years ended December 31, 2009 and 2008:
Audit
Fees(1)
|
|
$ |
238,473 |
|
|
$ |
256,820 |
|
Other
Audit Related Fees(2)
|
|
$ |
53,509 |
|
|
$ |
14,937 |
|
All
Other Fees(3)
|
|
$ |
29,087 |
|
|
$ |
34,697 |
|
Total
Fees
|
|
$ |
321,069 |
|
|
$ |
306,454 |
|
(1)
|
Includes
the annual financial statement audit and limited quarterly reviews and
expenses.
|
(2)
|
Includes
fees and expenses for other audit related activity provided by Blackman
Kallick, L.L.P.
|
(3)
|
Primarily
represents tax services, which include preparation of tax returns and
other tax consulting
services.
|
All
audit, tax and other services to be performed by Blackman Kallick, L.L.P. for
the Company must be pre-approved by the Audit Committee. The Audit
Committee reviews the description of services and an estimate of the anticipated
costs to perform those services. Services not previously approved cannot
commence until such approval has been granted. Pre-approval is
granted usually at regularly scheduled meetings. If unanticipated
items arise between meetings of the Audit Committee, the Audit Committee has
delegated approval authority to the Chairman of the Audit Committee, in which
case the Chairman communicates such pre-approvals to the full Committee at its
next meeting.
The Audit
Committee of the Board of Directors reviews all relationships with its
independent auditors, including the provision of non-audit services, which may
relate to the independent registered public accounting firm’s
independence. The Audit Committee of the Board of Directors
considered the effect of Blackman Kallick, L.L.P’s tax services in assessing the
independence of the independent registered public accounting firm and concluded
that the provision of such services by Blackman Kallick, L.L.P was compatible
with the maintenance of that firm’s independence in the conduct of its auditing
function.
THE
BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE “FOR” SUCH
RATIFICATION
Stockholder Proposals for
2011 Proxy Statement
Proposals by shareholders for inclusion
in the Company's Proxy Statement and form of proxy relating to the 2011 Annual
Meeting of Stockholders, which is tentatively scheduled to be held on June 3,
2011, should be addressed to the Secretary, CTI Industries Corporation, 22160
North Pepper Road, Lake Barrington, Illinois 60010, and must be received at such
address no later than December 31, 2010. Upon receipt of any such
proposal, the Company will determine whether or not to include such proposal in
the Proxy Statement and proxy in accordance with applicable law. It
is suggested that such proposal be forwarded by certified mail return receipt
requested.
Proxy
Statement and Annual Report Delivery
The SEC
has adopted rules that permit companies and intermediaries such as brokers to
satisfy delivery requirements for annual reports and proxy statements with
respect to two or more shareholders sharing the same address by delivering a
single annual report and/or proxy statement addressed to those shareholders.
This process, which is commonly referred to as “householding,” potentially
provides extra convenience for shareholders and cost savings for companies. The
Company and some brokers household annual reports and proxy materials,
delivering a single annual report and/or proxy statement to multiple
shareholders sharing an address unless contrary instructions have been received
from the affected shareholders.
Once you
have received notice from your broker or the Company that your broker or the
Company will be householding materials to your address, householding will
continue until you are notified otherwise or until you revoke your consent. If,
at any time, you no longer wish to participate in householding and would prefer
to receive a separate annual report and/or proxy statement in the future, please
notify your broker if your shares are held in a brokerage account or the Company
if you hold registered shares. If, at any time, you and another
shareholder sharing the same address wish to participate in householding and
prefer to receive a single copy of the Company’s annual report and/or proxy
statement, please notify your broker if your shares are held in a brokerage
account or the Company if you hold registered shares.
You may
request to receive at any time a separate copy of our annual report or proxy
statement, or notify the Company that you do or do not wish to participate in
householding by sending a written request to the Corporate Secretary at 22160 N.
Pepper Road, Lake Barrington, Illinois 60010 or by telephoning (847)
382-1000.
Stockholder
Communications
The
Nominating and Governance Committee of our Board has established the following
process for stockholders to communicate with the Board. Stockholders wishing to
communicate with our Board should send correspondence to the attention of the
Nominating and Corporate Governance Committee, c/o CTI Industries
Corporation, 22160 N. Pepper Road, Lake Barrington, Illinois 60010, and should
include with the correspondence evidence that the sender of the communication is
one of our stockholders. Satisfactory evidence would include, for example,
contemporaneous correspondence from a brokerage firm indicating the identity of
the stockholder and the number of shares held. The Chairperson of the Nominating
and Corporate Governance Committee will review all correspondence confirmed to
be from stockholders and decide whether or not to forward the correspondence or
a summary of the correspondence to the Board or a committee of the Board. The
Chairperson of the Nominating and Corporate Governance Committee will review all
stockholder correspondence, but the decision to relay that correspondence to the
Board or a committee will rest entirely within his or her
discretion.
Dated:
April 30, 2010
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BOARD
OF DIRECTORS
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Stephen
M. Merrick, Secretary
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