On January 4, 2010, the Company announced it dismissed Grant Thornton as its independent auditor effective December 31, 2009. Although 2009 was the year of Ponzi schemes, it also was a time of large embezzlement cases. We are asking our stockholders to provide advisory approval of the compensation of our Named Executive Officers as set forth in this Proxy Statement. Assisting the board to discharge its responsibility to exercise due care, diligence and skill in relation to the following areas: 2. Audit Committee. Audit Committee Charter; Compensation Committee Charter; Press Releases Year: Items per page. The Audit Committee held five meetings during the fiscal year ended June 30, 2019. The Company's policy is that absent extraordinary circumstances, each member of the Board shall attend each annual stockholder meeting in person. Cash Contributions Paid to Non-employee Board Members. Includes the following shares which are deemed to be “beneficially owned” by Lenore E. Lillie: (i) 20,088 shares owned directly; (ii) 30,022 shares by reason of the allocation of those shares to her account under the KESOT and her ability to vote such shares; and (iii) 198,000 shares with respect to which she holds options which are exercisable within 60 days of August 1, 2019. The Retirement Payments are to be paid to Michael J. Koss monthly until his death, and after his death shall continue to be paid monthly to his surviving spouse until her death. ON THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS “EVERY YEAR”. Other companies may choose to have an audit committee. The Public Accounts Committee has responsibilities under the Public Finance and Audit Act 1983 to inquire into and report on activities of government that are reported in the Total State Sector Accounts and the accounts of the State’s authorities.1 The Committee, … As you probably noticed on the Income Statement, in 2010 this took a toll on Koss' numbers. Includes the shares which are deemed to be beneficially owned by Mr. Doerr, Michael J. Koss, Mr. Leveen, Mr. Nixon, Mr. Sweasy, John C. Koss Jr., Michael J. Koss, Jr., Ms. Lillie, and Mr. Smith. Item 4.01 Changes in Registrant’s Certifying Accountant. (Continued and to be signed on the reverse side), NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL, The Notice of Meeting, Proxy Statement and Proxy Card, THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS, “FOR” PROPOSALS 2 AND 4, AND FOR AN ADVISORY VOTE "EVERY YEAR" IN PROPOSAL 3. The ASX Listing Rules require certain listed entities to have audit committees. Michael Koss is the CEO; his father, John Koss, founded the company in 1958. All directors and executive officers as a group (10 persons) (13), Koss Employee Stock Ownership Trust (“KESOT”) (16). Corporate Governance. In fulfilling its responsibilities, the Audit Committee, among other things, monitors the integrity of the financial reporting process, systems of internal controls, and financial statements and reports of the Company; appoints, compensates, retains, and oversees the Company’s independent auditors, including reviewing the qualifications, performance and independence of the independent auditors; reviews and pre-approves all audit, attest and review services and permitted non-audit … Permissible non-audit services are to be pre-approved on a case-by-case basis. Each executive officer is elected annually by the Board of Directors and serves for one year or until his or her successor is appointed. APPROVAL OF AN ADVISORY RESOLUTION ON NAMED EXECUTIVE OFFICER COMPENSATION, 3. Additionally, our Board exercises its risk oversight function in approving the annual budget and in reviewing the Company’s long-range strategic and financial plans with management. All options for Michael J. Koss, John Koss, Jr., and Michael J. Koss, Jr. vest over a period of four (4) years with the first 25% vesting one year after the date of grant. Mr. Mattson is the retired President of Oster Company, a division of Sunbeam Corporation, which manufactures and sells portable household appliances. The Compensation Committee, which was composed of Mr. Doerr, Mr. Leveen, Mr. Nixon, and Mr. Sweasy during the fiscal year ended June 30, 2019, has responsibility for reviewing and recommending compensation for all employees whose annual salaries exceed $130,000. Proxies and Revocation of Proxies. Purposes of the Meeting. The Vice President of Finance, Sujata "Sue" Sachdeva was the one initialing the scandal. All full-time Koss employees (except Michael J. Koss,  John Koss, Jr., David Smith and one other sales department employee eligible for sales-related bonus) are eligible for profit sharing if they have been employed for the complete fiscal quarter. In December 1975, the Company adopted the KESOT, which is a form of employee benefit plan designed to invest primarily in employer securities. SWOT and PESTLE analysis is a powerful tool to analyze all the factors including external and internal things to decide on the problems that can impact the organization. The funds that are deferred and matched are immediately 100% vested to the employee’s 401(k) account. The Audit Committee of the Board of Directors (the “Audit Committee”) is composed of four non-employee directors. The amended charter was attached as Appendix A to the 2018 Proxy Statement and is also available on the Company's website. Mattson is the retired President of Oster Company, a division of Sunbeam Corporation, which manufactures and sells portable household appliances. STOCKHOLDER PROPOSALS FOR 2020 ANNUAL MEETING. The Nominating Committee does not currently have a written charter. KOSS CORPORATION, GRANT THORNTON (LO 1,2.3,4,6) In the Why It Matters feature “Examples of Theft and Financial Reporting Frauds” at the beginning of the chapter, we introduced you to the Koss Corporation fraud.In this problem, we provide you with further details about that fraud. The employees allocate their funds to a group of twenty-three funds or they may self-direct their funds to a qualified 401(k) of their choice. Education General Dictionary Economics Corporate Finance Roth … Section 16(a) Beneficial Ownership Reporting Compliance. The Audit Committee (the “Committee”) of Koss Corporation (the “Company”) will assist the board of directors in fulfilling its oversight responsibilities. Quorum and Voting Information. Representatives of WIPFLI are expected to be present at the Meeting, available to respond to appropriate questions and will have the opportunity to make a statement if they desire to do so. Form, Schedule or Registration Statement No. Milwaukee, Wisconsin 53212 . The base salary shall be calculated using the average base salary of Michael J. Koss during the three years preceding his retirement. If any correspondence is addressed to the Board or to a member of the Board, that correspondence is forwarded directly to the Board or a member of the Board. Mr. Leveen is co-founder and board member of the Levenger Company, having been CEO of Levenger from 1987 to 2014. Even if the selection of WIPFLI is ratified, the Audit Committee of the Board may, in its discretion, appoint a different firm at any time during the year if the Audit Committee feels that such a change would be in the best interests of the Company and its stockholders. Each of Mr. Doerr, Mr. Leveen, Mr. Nixon and Mr. Sweasy, is "independent" as such term is defined in Nasdaq Listing Rule 5605(a)(2). This plan is administered by the Compensation Committee and vests the Compensation Committee with discretionary powers to choose from a variety of incentive compensation alternatives to make annual stock-based awards to officers, key employees, consultants, and other members of the Company's management team. Information regarding the matters to be considered and voted upon at the annual meeting is set forth in the Proxy Statement accompanying this notice. All pre-approved matters must be detailed as to the particular service or category of services to be provided, whether recurring or non-recurring and reported to the Audit Committee at its next scheduled meeting. The following table represents fees for professional services rendered to the Company by WIPFLI and Baker Tilly Virchow Krause, LLP ("Baker Tilly") for the fiscal years ended June 30, 2019 and 2018, respectively: (1) Of this amount, $26,333 was attributable to WIPFLI and $120,710 was attributable to Baker Tilly. Press Releases. Lawrence S. Mattson, 77, has been a director of the company since 1978. Denotes beneficial ownership of less than 1%. Date, Time and Location. (i)    reviewed and discussed the Company’s audited financial statements for the fiscal year ended June 30, 2019, with the Company’s management; (ii)   discussed with WIPFLI LLP (“WIPFLI”), the Company’s independent registered public accounting firm, the matters required to be discussed by the Public Company Accounting Oversight Board (the "PCAOB") Auditing Standard No. Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 19 In January, he was removed as head of that committee, but still remains on the board and on the audit committee. The Company uses cash-based and equity incentive compensation to attract and retain qualified candidates to serve on the Board. The following table sets forth information on outstanding option awards held by the Named Executive Officers as of June 30, 2019, including the number of shares underlying both exercisable and un-exercisable portions of each stock option as well as the exercise price and the expiration date of each outstanding option. Koss claims that each member of the Audit Committee is independent as defined in Nasdaq Marketplace Rule 4200. Answers: e. What was the audit committee’s responsibility to notice that something looked amiss in the financial statements? John Koss, Jr. received performance awards based on sales. The five nominees receiving the greatest number of votes cast in person or by proxy at the Meeting will be elected directors of the Company. Jan 28, 2021. On December 31, 2009, upon a recommendation from Koss Corporation's Audit Committee and approved by the Board of Directors, Koss dismissed Grant Thornton LLP as its independent auditors. If you attend our annual meeting, you may vote your shares in person even if you previously submitted a proxy. All incumbent directors attended 75% or more of the total of (i) all meetings of the Board, plus (ii) all meetings of the committees on which they served during their respective terms of office. Later on, the external auditors agreed to pay KOSS compensation worth $8.5 million in July 2013 as a settlement. The Company's 2012 Omnibus Plan (the “Plan”) as well as the Company's 1990 Flexible Incentive Plan are administered by the Compensation Committee. The Company’s Annual Report to Stockholders, which includes the Company’s audited financial statements for the year ended June 30, 2019, although not a part of this Proxy Statement, is delivered herewith. Upon learning of the fraud, Koss Corporation executives fired Sachdeva, along with the company’s audit firm, Grant Thornton LLP. Proxy Statements and proxies will be mailed to stockholders on approximately September 3, 2019. Any recommendations must be submitted by the deadline by which a stockholder must give notice of a matter that he or she wishes to bring before the Company’s Annual Meeting as described in the Stockholder Proposals for the 2020 Annual Meeting section of this Proxy Statement. to transact such other business as may properly be brought before the annual meeting. Well instead of talking to the President and Vice President, they should have only talked to the President. The Committee will review the financial reporting process, the system of internal control, the audit process, and the Company's process for monitoring compliance with laws and regulations and with the Company's code of ethics. In January, he was removed as head of that committee, but still remains on the board and on the audit committee. 4. Washington, D.C. 20549. Premiums paid by the Company for disability insurance were $4,177 in 2019 and 2018. Principal Financial Group serves as trustee, as such, they hold dispositive power with respect to (and are therefore deemed under applicable SEC rules to beneficially own) all 395,442 KESOT shares. Koss Corporation received $8.5 in the settlement. Accounts are adjusted each year to reflect the investment experience of the trust. Each member of the Audit Committee is “independent” as defined in Nasdaq Listing Rule 5605(a)(2). Because overseeing risk is an ongoing process that is inherent in the Company’s strategic decisions, our Board discusses risk throughout the year at other meetings in relation to specific proposed actions. The options are exercisable for five (5) years and expire on the date five years from the date of grant. Supplemental Executive Retirement Plan. If stockholder ratification (by the affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy at the Meeting) is not received, the Audit Committee of the Board will reconsider the appointment. Grant Thornton has some-what disputed the conclusion that they were involved in evalu-ation of Koss’s internal controls. The total number of shares to be repurchased shall be sufficient to provide proceeds which are the lesser of $2,500,000 or the amount of estate taxes and administrative expenses incurred by his estate. The company's auditor, Grand Thornton took a lot of blame for not catching this. In 2020, the Company plans to match the employee dollar deferral with a $0.75 per dollar match. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. ACCT3109 Auditing Page 1 of 4 Case 2 P2-27 Koss Corporation (LO 3, 5, 6) 2-27. The Audit Committee is also responsible for recommending to the Board the firm of chartered accountants to be nominated for appointment as the external auditor, and for approving the assignment of any non-audit work to be performed by the external auditor. He said audit committee chair is a demanding and time-consuming job. The company expects to have a recommendation on a new auditor from its audit committee within the next week. Our Board strives to ensure that its corporate governance practices provide for the effective stewardship of the Company, and it regularly evaluates those practices to ensure they are keeping with the highest standards. Date Title and Summary ... Formats; Toggle Summary May 11, 2017: Koss Corp Releases Third Quarter Results. So who was hit the hardest in the scandal? When you have proper compensation, it decreases the likelihood of agency problems to occur. WIPFLI has served the Company as its independent registered public accounting firm since March 4, 2019. With respect to minimum qualifications of candidates, the Nominating Committee will consider candidates who have the experiences, skills and characteristics necessary to gain a basic understanding of the principal operational and financial objectives and plans of the Company, the results of operations and financial condition of the Company, and the relative standing of the Company and its business segments in relation to its competitors. Although the Nominating Committee did not meet by itself during fiscal year 2019, it did discuss with the full Board the prospects of adding certain additional expertise to the Board. The company also exports its products. He was elected President and Chief Operating Officer of the Company in 1987, Chief Executive Officer in 1991, Vice-Chairman in 1998 and Chairman in 2015. Stockholders may communicate with the Board, individually or as a group, by sending written communications to: Koss Corporation, 4129 North Port Washington Avenue, Milwaukee, Wisconsin 53212. Mr. Koss is also a director of STRATTEC Security Corporation. (1)  Michael J. Koss did not receive additional compensation for his service as a member of the Company's Board. Sachdeva's employment was terminated in December THE REPORT OF THE AUDIT COMMITTEE SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE ACT OF 1934 (TOGETHER, THE “ACTS”), EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS. With respect to diversity, certain of our directors have strong technical backgrounds that are relevant to our industry; other directors have a background in management. These stock options vest over a three year period and expire five years from date of grant. Required a. Michael J. Koss, 65, has held various positions at the Company since 1976 and has been a director of the Company since 1985. The Committee will review the financial reporting process, the system of internal control, the audit process, and the Company's process for monitoring compliance with laws and regulations and with the Company's code of ethics. The lease extension maintained the rent at a fixed rate of $380,000 per year. Premiums were paid by the Company for life insurance in the amount of $173 in 2019 and $154 in 2018. The non-employee members of the Board participate in the stock option program. Mr. Mattson owns no stock in Koss Corporation, and received $23,000 in cash compensation during 2009 to serve on the audit committee. The Company may elect to pay the purchase price in cash or may elect to pay cash equal to 25% of the total amount due and to execute a promissory note at the prime rate of interest for the balance payable over four years. Experience, Qualifications, Attributes and Skills. Application of accounting policies; 4. The Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation plans and arrangements. The proxy statement describes the responsibilities of the audit committee as follows: “The Audit Committee, among other. For the fiscal years ended June 30, 2019 and 2018, the “Tax Fees” reported above were billed by WIPFLI and Baker Tilly and affiliate for professional services rendered for tax compliance, tax advice and tax planning. Create your own unique website with customizable templates. You knew it was coming. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Audit Committee Mission Statement "The Audit Committee (the “Committee”) of Koss Corporation (the “Company”) will assist the board of directors in fulfilling its oversight responsibilities. When shares are held jointly, each holder should sign. More than 50% of the company is held by the family itself. The audit committee is supposed to speak with management on their findings. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and the Proxy Statement furnished therewith. Oct 29, 2020. Mr. Mattson is the designated audit committee financial expert. The Company is responsible for all property maintenance, insurance, taxes and other normal expenses related to ownership. The Audit Committee, which was composed of Mr. Doerr, Mr. Nixon and Mr. Sweasy during the fiscal year ended June 30, 2019, reviews and evaluates the effectiveness of the Company’s financial and accounting functions, including reviewing the scope and results of the audit work performed by the independent registered public accounting firm and by the Company’s internal accounting staff. As of the Record Date, there were issued and outstanding 7,404,831 shares of Common Stock, each of which is entitled to one vote per share. Larger public companies are required to conduct that audit, but for Koss, whose chief executive was an outspoken critic of increased federal corporate regulation, it was optional - … THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. Under the policy, the Audit Committee is to specifically pre-approve before the filing of the Form 10-K Annual Report for the previous fiscal year any recurring audit and audit-related services to be provided during the following fiscal year. There are no stockholder proposals on the agenda for the Meeting. Michael J. Koss received $12,250 in 2019 and $19,219 in 2018 in Company matching contributions under the Company’s 401(k) Plan. Mr. Doerr owns no stock in Koss Corporation, and received $24,000 in cash compensation during 2009 to serve on the audit committee. The KESOT is qualified under Section 401(a) of the Internal Revenue Code and Michael J. Koss and David Smith currently serve as members of the KESOT Committee. (a) On December 31, 2009, Koss Corporation (the “Company”), upon a recommendation from the Company’s Audit Committee and approved by the Board of Directors, dismissed Grant Thornton LLP as its independent auditor. Coenen says the audit fees Koss paid to Grant Thornton were low enough ($151,300 in fiscal 2009 but only $71,400 in 2008) that one can’t help but wonder how much audit work actually occurred.Kyviakidis, on the other hand, says auditors have enough pressure about fees and legal liability these days that the amount paid may not reflect the amount of work that truly went into the audit. An audit committee is the part of a company's board of directors in charge financial reporting and disclosure. Properly executed proxies received by the Company will be voted in the manner directed herein by the undersigned stockholder. At the present time, the Company knows of no other matters that are to come before the Meeting. Premiums were paid by the Company for life insurance in the amount of $1,667 in 2019 and $306 in 2018. The charter is available on the Company's website. The Nominating Committee will consider qualified director candidates recommended by stockholders if such recommendations for director are submitted in writing to the Secretary, c/o Koss Corporation, 4129 North Port Washington Avenue, Milwaukee, Wisconsin 53212 and include the following information: (i) name and address of the stockholder making the recommendation; (ii) name and address of the candidate; and (iii) pertinent biographical information about the candidate. On January 5, 2017, the lease was renewed for a period of five years, ending June 30, 2023, and is being accounted for as an operating lease. The firm of WIPFLI has acted as our independent registered public accounting firm to audit the consolidated financial statements of the Company and its subsidiaries for the fiscal year ending June 30, 2019. Each member of these committees is an “independent director” as defined in Nasdaq Listing Rule 5605(a)(2). In the event that any matter not described in this Proxy Statement properly comes before the Meeting, the accompanying form of proxy authorizes the persons appointed as proxies thereby (the “Proxyholders”) to vote on such matter in their discretion. Holding an annual advisory vote on executive compensation will provide the Company with more direct and immediate feedback on our compensation disclosures. As required by Section 14A of the Securities and Exchange Act of 1934, we request your vote supporting the following non-binding resolution: RESOLVED: That the stockholders approve, in a non-binding vote, the compensation of the company's Named Executive Officers as set forth in this Proxy Statement. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☒, ☐ FOR ALL EXCEPT (See instructions below). Annual Report. John Koss, Jr. received $10,263 in 2019 and $13,528 in 2018 in Company matching contributions under the Company’s 401(k) Plan. Information is provided below with respect to the executive officers of the Company. Lenore Lillie received $12,357 in 2019 and $18,227 in 2018 in Company matching contributions under the Company’s 401(k) Plan. Premiums were paid by the Company for life insurance in the amount of $1,172 in 2019 and 2018. Doerr, and Mr. Stein, reviews and evaluates the effectiveness of the Company’s financial and accounting functions, including reviewing the scope and results of the audit work performed by the independent accountants and by the Company’s internal Stockholders may also communicate with members of the Board by telephone (414) 964-5000 or facsimile (414) 964-8615. Protection of an entity’s assets; 9. Fee paid previously with preliminary materials. Each director nominee possesses the following experience, qualifications, attributes and skills, in addition to those reflected above, as these are required of all candidates nominated for election or reelection to the Board: The highest level of personal and professional ethics, integrity and values; Broad training and experience at the policy-making level in business, finance and accounting, or technology; Expertise that is useful to Koss and complementary to the background and experience of other Board members, so that an optimal balance and diversity of Board members can be achieved and maintained; Willingness to devote the required time to carrying out the duties and responsibilities of Board membership; Commitment to serve on the Board for several years to develop knowledge about Koss’s business; Willingness to represent the best interests of all stockholders and objectively appraise management performance; and. Mr. Koss Jr. has also been a Director, Chairman of Audit Committee, Member of Compensation Committee and Member of Nominating & Corporate Governance Committee at Strattec Security Corp. since 1995. The inspector of elections will treat abstentions as shares of Common Stock that are present and entitled to vote for purposes of determining the presence of a quorum. At the Meeting, stockholders will consider and vote upon the following: (i) to elect five (5) directors for one-year terms; (ii) to approve, on a non-binding advisory basis, executive compensation paid to our Named Executive Officers; (iii) to conduct an advisory vote on the frequency of future advisory votes on executive compensation; (iv) to ratify the appointment of WIPFLI LLP (“WIPFLI”) as the independent registered public accounting firm for the fiscal year ending June 30, 2020; and (v) to transact such other business as may properly be brought before the Meeting.
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