UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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by the Registrant ☒
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| ☐ | Preliminary
Proxy Statement |
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| ☒ | Definitive
Proxy Statement |
| ☐ | Definitive
Additional Materials |
| ☐ | Soliciting
Material Pursuant to §240.14a-12 |
| THE
INTERGROUP CORPORATION |
| (Name
of Registrant as Specified In Its Charter) |
|
| (Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant) |
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THE
INTERGROUP CORPORATION
1516
S. BUNDY DRIVE, SUITE 200
los
angeles, California 90025
(310)
889-2500
Notice
of annual meeting of shareholders
to be held on MAY 31, 2023
To
the Shareholders of The InterGroup Corporation:
You
are cordially invited to attend the Annual Meeting of Shareholders (the “Annual Meeting”) of Shareholders of The InterGroup
Corporation (“InterGroup” or the “Company”) for the fiscal year ended June 30, 2022, at the Hilton San Francisco
Financial District, 750 Kearny Street, San Francisco, CA 94108 on May 31, 2023, at 2:30 P.M. for the following purposes:
| |
(1) |
To elect
one Class A director, to serve until the fiscal 2024 Annual Meeting; and to elect two Class B directors, to serve until the fiscal
2025 Annual Meeting; |
| |
|
|
| |
(2) |
To ratify
the retention of WithumSmith+Brown, PC as the Company’s independent registered public accounting firm for the fiscal year ending
June 30, 2023; |
| |
|
|
| |
(3) |
To transact
such other business as may properly come before the meeting or any postponements or adjournments thereof. |
The
Board of Directors has fixed the close of business on April 21, 2023, as the record date for determining the shareholders entitled to
notice of, and to vote at, the Annual Meeting or any postponements or adjournments thereof.
The
Company’s Annual Report for the fiscal year ended June 30, 2022 accompanies this Notice of Annual Meeting of Shareholders and Proxy
Statement.
| |
By Order of
the Board of Directors, |
| |
|
| |
/s/
John V. Winfield |
| May 2, 2023 |
John V. Winfield |
| Los Angeles, California
|
Chairman of the Board;
President and |
| |
Chief Executive Officer |
Your
vote is important, whether you own a few or many shares. Please complete, sign, date and promptly return the enclosed proxy in the self-addressed,
postage pre-paid envelope provided. Please return your proxy even if you plan to attend the Annual Meeting. You may always revoke your
proxy and vote in person.
This
Proxy Statement is available at: www.intgla.com
THE INTERGROUP CORPORATION
1516
S. BUNDY DRIVE, SUITE 200
los
angeles, California 90025
(310)
889-2500
PROXY
STATEMENT
annual
meeting of shareholders
to be held on MAY 31, 2023
The
Board of Directors of The InterGroup Corporation (“InterGroup” or the “Company”) is soliciting proxies in the
form enclosed with this proxy statement in connection with its fiscal 2022 Annual Meeting of Shareholders to be held on May 31, 2023,
or at any postponements or adjournments thereof. Only shareholders of record at the close of business on April 21, 2023, are entitled
to notice of, and to vote at, the Annual Meeting.
Each
shareholder is entitled to cast, in person or by proxy, one vote for each share held of record at the close of business on April 21,
2023. As of April 21, 2023, there were outstanding 2,206,944 shares of common stock, par value $.01 per share (the “Common Stock”).
Of the total 2,206,944 shares outstanding, a majority, or 1,103,472 voting shares will constitute a quorum for the transaction of business
at the Annual Meeting. The affirmative vote of the holders of the majority of the shares of Common Stock present and represented at the
meeting and entitled to vote is required to elect directors, to ratify the retention of the Company’s independent registered public
accounting firm, and to ratify or approve the other proposals being voted on at this time.
The
proxies named in the accompanying proxy card will vote the shares represented thereby if the proxy appears to be valid on its face, and
where a specification is indicated as provided in such proxy, the shares represented will be voted in accordance with such specification.
If no specification is made, the shares represented by the proxies will be voted: (1) FOR the election of one Class A director, to serve
until the fiscal 2024 Annual Meeting; and FOR the election of two Class B directors, to serve until the fiscal 2025 Annual Meeting; (2)
FOR ratification of the retention of WithumSmith+Brown, PC as the Company’s independent registered public accounting firm for the
fiscal year ending June 30, 2023.
If
you give us a proxy, you can revoke it at any time before it is used. To revoke it, you may file a written notice revoking it with the
Secretary of the Company at least 48 hours before the date and time of our Annual Meeting, execute a proxy with a later date, or attend
the meeting and vote in person.
This
Proxy Statement and the accompanying Form of Proxy are first being sent to shareholders on or about April 21, 2023. In some cases, these
materials will be mailed to banks and brokers that should forward copies to the persons for whom they hold stock of the Company and to
request authority for the execution of proxies. Officers of the Company may, without being additionally compensated, solicit proxies
by mail, telephone, telegram, or personal contact. All proxy soliciting expenses will be paid by the Company. The Company does not expect
to employ anyone else to assist in the solicitation of proxies.
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
The
Company’s Certificate of Incorporation provides that the Board of Directors shall consist of not less than five nor more than nine
members (subject to any vacancies). The exact number of directors is fixed by the Board prior to each year’s Annual Meeting of
Shareholders. The Board is divided into three staggered classes, each class having not less than one member and not more than three members.
Each director is elected to serve for a three-year term and until the election and qualification of his or her successor. When vacancies
on the Board occur, due to resignation or otherwise, the directors then in office may continue to exercise the powers of the Board of
Directors, and a majority of such directors may select a new director to fill the vacancy, and such replacement director shall serve
only until the expiration of the term of the director whose vacancy he is filling. Any director may resign at any time. Any director
may be removed with cause by the vote of, or written consent of, the holders of a majority of the shares of Common Stock entitled to
then vote at an election of directors at a special meeting called for the purpose of removal or to ratify the recommendation of a majority
of the directors that such director be removed. A replacement director may be elected at the same special meeting.
The
Board has proposed Mr. Steve Grunwald as Class A director to serve until the Fiscal 2024 Annual Meeting. Mr. Grunwald replaced Director
Jerold Babin who passed away in October 2022. The term of current Class B Directors expires at the fiscal 2022 Annual Meeting to be held
on May 31, 2023. The Board has proposed Yvonne L. Murphy and William Nance as Class B Directors to serve until the Fiscal 2025 Annual
Meeting (to be held in 2026) and until the election and qualification of their successors. The Board of Directors has been informed that
the nominees have consented to be named as such and are willing to serve as director if elected. However, if a nominee should be unable
or declines to serve, it is intended that the proxies will be voted for such other persons as the proxies shall, in their discretion,
designate. Unless otherwise directed in the accompanying proxy card, the persons named therein will vote FOR the election of the nominee.
Election requires a plurality of votes (i.e., for the number of seats available for directors at an Annual Meeting, those directors obtaining
the highest number of votes shall be elected to fill those seats).
DIRECTORS
AND EXECUTIVE OFFICERS
The
following table sets forth certain information with respect to the Board of Directors (including the nominees), executive officers and
secretary of the Company:
| Name |
|
Positions
with the Company |
|
Age |
|
Term
to Expire |
| |
|
|
|
|
|
|
| Class
A Directors: |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| John
V. Winfield (4) |
|
Chairman
of the Board; President and Chief Executive Officer |
|
76 |
|
Fiscal
2024 Annual Meeting |
| |
|
|
|
|
|
|
| Steve
Grunwald (3)(5) |
|
Director
|
|
41 |
|
Fiscal
2022 Annual Meeting |
| |
|
|
|
|
|
|
| Class
B Directors: |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Yvonne
L. Murphy (1)(2)(4) |
|
Director
|
|
66 |
|
Fiscal
2022 Annual Meeting |
| |
|
|
|
|
|
|
| William
J. Nance (2)(3)(4) |
|
Director
|
|
79 |
|
Fiscal
2022 Annual Meeting |
| |
|
|
|
|
|
|
| Class
C Director: |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| John
C. Love (1)(2)(3) |
|
Director |
|
83 |
|
Fiscal
2023 Annual Meeting |
| |
|
|
|
|
|
|
| Executive
Officers: |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| David
C. Gonzalez (4)(7) |
|
Vice
President Real Estate |
|
55 |
|
N/A |
| |
|
|
|
|
|
|
| Danfeng
Xu (6) |
|
Treasurer,
Controller, and Secretary |
|
36 |
|
N/A |
| |
|
|
|
|
|
|
| Jolie
G. Khan |
|
Secretary |
|
58 |
|
N/A |
(1)
Member of the Nominating Committee
(2)
Member of the Compensation Committee
(3)
Member of the Audit Committee
(4)
Member of the Executive Strategic Real Estate and Securities Investment Committee
(5)
Director Jerold R. Babin passed away in 2022 and was replaced by Mr. Steve Grunwald
(6)
Ms. Xu resigned in August 2022
(7)
Interim Treasurer and Principal Accounting Officer
Business
Experience
The
principal occupation and business experience during the last five years for each of the directors and officers of the Company are as
follows:
John
V. Winfield – Mr. Winfield was first appointed to the Board in 1982. He currently serves as the Company’s Chairman of
the Board, President, and Chief Executive Officer, having first been appointed as such in 1987. Mr. Winfield also serves as Chairman
and Chief Executive Officer of the Company’s subsidiary Portsmouth Square, Inc. (“Portsmouth”), a public company. Mr.
Winfield’s extensive experience as an entrepreneur and investor, as well as his managerial and leadership experience from serving
as a chief executive officer and director of public companies, led to the Board’s conclusion that he should serve as a director
of the Company.
Jerold
R. Babin – Mr. Babin was first appointed as a director of Portsmouth, a subsidiary of the Company, in February 1996. Mr. Babin
was elected to the Board of InterGroup in February 2014. Mr. Babin was a retail securities broker. From 1974 to 1989, he worked at Drexel
Burnham, and from 1989 to 2010, he worked for Prudential Securities (later Wachovia Securities and now Wells Fargo Advisors) where he
held the title of First Vice President. Mr. Babin retired from his position at Wells Fargo advisors in June 2010. Mr. Babin had also
served as an arbitrator for FINRA (formerly NASD) for over 20 years. Mr. Babin’s extensive experience in the securities and financial
markets, as well as his involvement in the securities and public company regulatory industry, led to the Board’s conclusion that
he should serve as a director of the Company. Mr. Babin passed away in October 2022.
Steve
Grunwald — Mr. Grunwald joined the Board in October 2022 to replace Mr. Jerold Babin who passed away. Mr. Grunwald also serves
as a Director of the Company’s subsidiary, Portsmouth Square, Inc., since 2019. Mr. Grunwald is a successful hospitality operator
with over 15 years of experience. He worked at various positions at the five-star hotel Le Châtelain Brussels and later became
the General Manager of the property. In 2006, Mr. Grunwald actively participated in the construction and opening of a boutique hotel,
The Progress Hotel. He became the General Manager of two more properties in 2009. In 2013, he oversaw the renovations and reopening of
The Hotel Siru and took over the management of the property. Mr. Grunwald is currently managing four hotels of different styles and categories.
Mr. Grunwald obtained his bachelor’s degree from Brussels Business Institute’s College of Hospitality and Tourism Management
in 2004. Mr. Grunwald’s vast experience in the hospitality industry led to the Board’s conclusion that he should serve as
a director of the Company.
Yvonne
L. Murphy – Mrs. Murphy was elected to the Board of InterGroup in February 2014 and had served as a director at Portsmouth
from March to December 2019. Mrs. Murphy has impressive experiences in corporate management, legal research, and legislative lobbying
for over 30 years. She was a member of Governor Kenny C. Guinn’s executive staff in Nevada and was employed for years by the prestigious
Jones Vargas law firm in Reno, Nevada. She served in nine legislative sessions during the most challenging years in Nevada’s history.
Before starting her lobbying firm, Ms. Murphy worked for RR Partners in its corporate office in Las Vegas, Nevada, and in the Government
Affairs Division in Reno. She has a Doctorate and a Master’s in Business Administration from the California Pacific University.
Within her community, she also serves as a volunteer board member for the Reno Philharmonic and Renown Health. Mrs. Murphy’s extensive
government affairs and business experience led to the Board’s conclusion that she should serve as a director of the Company. Ms.
Murphy replaced Portsmouth’s Director Jerold Babin upon his passing away in October 2022.
William
J. Nance – Mr. Nance is a Certified Public Accountant (“CPA”) and private consultant to the real estate and banking
industries. He is also President of Century Plaza Printers, Inc. Mr. Nance was first elected to the Board in 1984. He served as the Company’s
Chief Financial Officer from 1987 to 1990 and as Treasurer from 1987 to 2002. Mr. Nance is also a director of Portsmouth and serves as
a director of Comstock Mining Inc. (NYSE MKT: LODE). Mr. Nance’s extensive experience as a CPA and in numerous phases of the real
estate industry, his business and management experience gained in running his businesses, his service as a director and audit committee
member for other public companies and his knowledge and understanding of finance and financial reporting, led to the Board’s conclusion
that he should serve as a director of the Company.
John
C. Love – Mr. Love was appointed to the Board in 1998. Mr. Love is an international hospitality and tourism consultant. He
is a retired partner in the national CPA and consulting firm of Pannell Kerr Forster and, for the last 30 years, a lecturer in hospitality
management at Golden Gate University and San Francisco State University. He is Chairman Emeritus of the Board of Trustees of Golden Gate
University and the Honorary Director of the Hotel and Restaurant Foundation. Mr. Love is also a director of Portsmouth. Mr. Love’s
extensive experience as a CPA and in the hospitality industry, including teaching at the university level for the last 30 years in management
control systems, and his knowledge and understanding of finance and financial reporting, led to the Board’s conclusion that he
should serve as a director of the Company.
David
C. Gonzalez – Mr. Gonzalez was appointed Vice President Real Estate of the Company on January 31, 2001. Since 1989, Mr. Gonzalez
has served in numerous capacities with the Company, including Controller and Director of Real Estate. Mr. Gonzalez was appointed advisor
of the Executive Strategic Real Estate and Securities Investment Committee of the Company and Portsmouth in February 2020. In May 2021,
Mr. Gonzalez was elected as Portsmouth’s President upon the resignation of Mr. Winfield.
Danfeng
Xu – Ms. Xu was appointed as Treasurer and Controller of the Company and Portsmouth on October 16, 2017. Effective June 1st,
2018, Ms. Xu was elected as Secretary of the Company and Portsmouth. Ms. Xu had served as Controller and other positions, at the Hilton
San Francisco Financial District from July 2010 to February 2017. Ms. Xu obtained her Bachelor of Science degree in Business Administration,
Accounting and Finance from Ohio State University, and her Master of Professional Accounting, with a concentration in Audit and Assurance
from the University of Washington. Ms. Xu successfully passed all sections of the Uniform Certified Public Accountant Examination. Ms.
Xu resigned in August 2022.
Family
Relationships: There are no family relationships among directors, executive officers, or persons nominated or chosen by the Company
to become directors or executive officers.
Involvement
in Certain Legal Proceedings: No director or executive officer, or a person nominated or chosen to become a director or executive
officer, was involved in any legal proceeding requiring disclosure.
BOARD
AND COMMITTEE INFORMATION
InterGroup
is a Smaller Reporting Company under the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The
Company’s Common Stock is listed on the Capital Market tier of the NASDAQ Stock Market LLC (“NASDAQ”).
The
Board of Directors of InterGroup currently consists of five members. Except for the Company’s President and CEO, John V. Winfield,
all of InterGroup’s Board of Directors consists of “independent” directors as independence is defined by the applicable
rules of the SEC and NASDAQ. The independent directors also meet in executive sessions at least twice per year. The Board of Directors
held three meetings during the 2022 fiscal year (in person, telephonically or by written consent). No directors attended (whether in
person, telephonically, or by written consent) fewer than 75% of all Board meetings held during the 2022 fiscal year.
Board
Leadership Structure
The
Chairman of the Board, Mr. Winfield, also serves as the Company’s Chief Executive Officer. The Board believes that combining the
Chairman and Chief Executive officer roles is the most appropriate structure for the Company at this time because (i) this structure
has had a longstanding history with the Company, which the Board believes has served our shareholders well through many economic cycles
and business challenges; (ii) the Board believes Mr. Winfield’s unique business experience and history with the Company makes it
appropriate for him to serve in both capacities; and (iii) the Board believes its corporate governance processes and committee structures
preserve Board independence by insuring independent discussions among directors and independent evaluation of, and communications with,
members of senior management such that separation of the Chairman and Chief Executive Officer roles is unnecessary at this time.
Role
of the Board in Oversight of Risk
The
Board of Directors does not have a separate risk oversight body but instead manages risk directly. The Board mitigates risk through discussing
with management the appropriate level of risk for the Company and evaluating the risk information received by management. These risks
include financial, competitive, and operational risks. Further, every quarter, management reports to the Audit Committee regarding the
Company’s various risk areas as part of the Audit Committee’s oversight role over financial reporting per the Audit Committee
charter. Other committees of the Board of Directors also consider risks within their areas of responsibility.
We
do not believe that our compensation policies encourage excessive risk-taking. The design of our compensation policies encourages employees
to remain focused on both short-term and long-term financial and operational goals. Our equity awards typically vest over several years,
which we believe encourages employees to focus on sustained stock price appreciation over time and the intrinsic value of the Company
instead of short-term financial results.
Communications
with the Board of Directors
The
Board of Directors has not established a formal process for security holders to send communications to the Board of Directors, and the
Board has not deemed it necessary to establish such a procedure at this time. Historically, almost all communications that the Company
receives from security holders have been administrative and are not directed to the Board of Directors. Any communications to the Board
of Directors may be submitted in writing to the following address: Board of Directors, The InterGroup Corporation, 1516 S. Bundy Drive,
Suite 200, Los Angeles, CA 90025. If the Company should receive a security holder communication directed to the Board of Directors, or
an individual director, said communication would be relayed to the Board of Directors or the individual director as the case may be.
Board
Attendance at Annual Meetings of Shareholders
The
Company does not have any formal policy with regard to Board members attendance at Annual Meetings of Shareholders but encourages each
director to attend such meetings. All of the Company’s directors attended the fiscal 2021 Annual Meeting of Shareholders.
Committees
The
Company has an Executive Strategic Real Estate and Securities Investment Committee (the “Executive Committee”) that meets
in place of the Board upon the request of the Chairman of the Executive Committee if time does not permit the entire Board to convene.
Mr. Winfield is Chairman of the Executive Committee. The purpose of the Executive Committee is to review time-sensitive, major issues
facing the Company until the entire Board can meet and deliberate on such matters. The Executive Committee also reviews and considers
potential acquisitions, dispositions, and financing of properties, and establishes certain investment procedures and reports to the Board
of Directors. The Executive Committee held six meetings (in person, telephonically or by written consent) during the 2022 fiscal year.
The
Company’s Compensation Committee (the “Compensation Committee”) is comprised of “independent” members of
the Board of Directors. For a director to be considered “independent” by the Board of Directors, he or she must (i) be free
of any relationship that, applying the rules of NASDAQ, would preclude a finding of independence, and (ii) not have any material relationship
with the Company or any of its affiliates or any of its executive officers. Mrs. Murphy, Messrs. Nance, and Love were members of the
Compensation Committee during the fiscal year 2022. None of the members of the Compensation Committee is an executive officer of the
Company. Mr. Nance previously served as the Company’s Chief Financial Officer from 1987 to 1990 and as the Company’s Treasurer
from 1987 to 2002.
Mr.
Nance serves as Chairman of the Compensation Committee. The Compensation Committee reviews and recommends to the Board of Directors the
compensation for the Company’s Chief Executive Officer and other executive officers, including equity or performance-based compensation
and plans. The Compensation Committee seeks to design and set compensation to attract and retain highly qualified executive officers
and to align their interests with those of long-term owners of the Company. The Compensation Committee may also make recommendations
to the Board of Directors as to the amount and form of director compensation. The Compensation Committee has not engaged any compensation
consultants in determining the amount or form of executive or director compensation, but does review and monitor published compensation
surveys and studies. The Compensation Committee did not hold any meetings (in person, telephonically or by written consent) during the
2022 fiscal year. The Compensation Committee also oversees the Company’s 2010 Omnibus Employee Incentive Plan (the “2010
Incentive Plan”).
The
Company’s Board of Directors has adopted a written charter for the Compensation Committee, which is reviewed on an annual basis.
A copy of that written charter, as amended, is posted on the Company’s website at www.intgla.com.
The
Company’s Audit Committee is currently comprised of three members: Mr. Nance (Chairperson), Mr. Love and Mr. Grunwald, each of
whom meets the independence requirements of the SEC and NASDAQ. Messrs. Nance and Love also meet the Audit Committee Financial Expert
requirement as defined by the SEC based on their qualifications and business experience discussed above. The primary function of the
Audit Committee is to assist the Board of Directors in fulfilling its responsibility of overseeing management’s conduct of the
financial reporting process, the annual independent audit of the Company’s financial statements, reviewing the financial reports
provided by the Company to any governmental body or the public; the Company’s system of internal controls regarding finance, accounting,
legal compliance and ethics that management and the Board have established; and the Company’s auditing, accounting, and financial
processes generally. The Audit Committee is also responsible for the selection and retention of the Company’s independent registered
public accounting firm. The Audit Committee held four meetings during the 2022 fiscal year.
The
Company’s Board of Directors has adopted a written charter for the Audit Committee, which is reviewed on an annual basis. A copy
of that written charter, as amended, is posted on the Company’s website at www.intgla.com.
The
Company’s Nominating Committee is comprised of two “independent” directors as independence is defined by NASDAQ. The
Company has not established a charter for the Nominating Committee. The Company has no policy or procedure concerning the consideration
of any director candidates recommended by security holders. As a Smaller Reporting Company that has more than 72% of its voting securities
controlled by management, the Company has not deemed it appropriate to institute such a policy, since any nominee that is unacceptable
to the Board of Directors would be unlikely ever to be elected. There have not been any material changes to the procedures by which security
holders may recommend nominees to the Company’s Board of Directors during the last fiscal year. Mrs. Murphy is the Chairwoman of
the Nominating Committee. The Nominating Committee held one meeting during the 2022 fiscal year.
Code
of Ethics
The
Company has adopted a Code of Ethics that applies to its principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. A copy of the Code of Ethics is posted on the Company’s website
at www.intgla.com. The Company will provide to any person without charge, upon request, a copy of its Code of Ethics by sending such
request to The InterGroup Corporation, Attn: Treasurer, 1516 S. Bundy Drive, Suite 200, Los Angeles, CA 90025. The Company will promptly
disclose any amendments or waivers to its Code of Ethics on Form 8-K and will post such information on its website.
EXECUTIVE
COMPENSATION
The
following table provides certain summary information concerning compensation awarded to, earned by, or paid to the Company’s principal
executive officer and other named executive officers of the Company whose total compensation exceeded $100,000 for all services rendered
to the Company and its subsidiaries for each of the Company’s last two completed fiscal years ended June 30, 2022 and 2021. There
was no non-equity incentive plan compensation or nonqualified deferred compensation earnings. There are currently no employment contracts
with executive officers.
SUMMARY
COMPENSATION TABLE
| | |
| | |
| | |
| | |
Other | | |
| |
| Name and Position | |
Fiscal Year | | |
Salary | | |
Bonus | | |
Compensation | | |
Total | |
| | |
| | |
| | |
| | |
| | |
| |
| John V. Winfield | |
| 2022 | | |
$ | 838,000 | (1) | |
$ | - | | |
$ | 59,000 | (2) | |
$ | 897,000 | (3) |
| Chairman, President and | |
| 2021 | | |
$ | 843,000 | (1) | |
$ | 270,000 | | |
$ | 56,000 | (2) | |
$ | 1,169,000 | (3) |
| Chief Executive Officer | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| David C. Gonzalez | |
| 2022 | | |
$ | 409,000 | | |
$ | - | | |
$ | - | | |
$ | 409,000 | (4) |
| Vice President Real Estate | |
| 2021 | | |
$ | 324,000 | | |
$ | 360,000 | | |
$ | - | | |
$ | 684,000 | (4) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Danfeng Xu(5) | |
| 2022 | | |
$ | 171,000 | | |
$ | 10,000 | | |
$ | - | | |
$ | 181,000 | (3) |
| Treasurer and Controller | |
| 2021 | | |
$ | 170,000 | | |
$ | 9,000 | | |
$ | - | | |
$ | 179,000 | (3) |
| (Principal Financial Officer) | |
| | | |
| | | |
| | | |
| | | |
| | |
(1)
Mr. Winfield also serves as Chairman of the Board and Chief Executive Officer of the Company’s subsidiary Portsmouth. Mr.
Winfield received a salary from Portsmouth in the among of $422,000 in 2022. Mr. Winfield served as President, Chairman of the Board,
and Chief Executive Officer of the Company’s subsidiary Santa Fe Financial Corporation (“Santa Fe”) before the liquidation
of Santa Fe in February 2021. Mr. Winfield received a salary from Santa Fe and Portsmouth in the aggregate amount of $438,000 for the
fiscal years 2021. The amounts include director’s fees totaling $6,000 and $11,000 for each fiscal year.
(2)
Compensation for a portion of the salary of an assistant to Mr. Winfield.
(3)
Salary was allocated approximately 50% to the Company and 50% to Santa Fe and Portsmouth. After the liquidation of Santa Fe in
February 2021, salary is allocated approximately 50% to the Company and 50% to Portsmouth.
(4)
Salary is allocated approximately 67% to the Company and 33% to Portsmouth.
(5)
Ms. Xu resigned in August 2022.
Performance-Based
Compensation
For
the fiscal year ended June 30, 2022, the independent members of the respective Boards of Directors of the Company and the Company’s
subsidiaries established a performance-based compensation program for the Company’s CEO, John V. Winfield, to keep and retain his
services as a direct and active manager of the securities portfolios of those companies. According to the criteria established by the
Board of Directors, Mr. Winfield is entitled to performance compensation for his management of the securities portfolios of the Company
and its subsidiaries equal to 20% of all net investment gains generated over an annual return equal to the Prime Rate of Interest (as
published by the Wall Street Journal) plus 2%. Compensation amounts are earned, calculated, and paid quarterly based on the results of
the Company’s investment portfolio for that quarter. Should the companies have a net investment loss during any quarter, Mr. Winfield
would not be entitled to any further performance-based compensation until the Company recoups any such investment losses. This performance-based
compensation program may be modified or terminated at the discretion of the respective Boards of Directors. No performance-based compensation
was earned or paid for the fiscal years ended June 30, 2022 or 2021.
Outstanding
Equity Awards at Fiscal Year Ended June 30, 2022
The
following table sets forth information concerning option awards and stock awards for each named executive officer that were outstanding
as of the end of the Company’s last completed fiscal year ended June 30, 2022. There were no other equity incentive plan awards
that were outstanding.
| | |
Option Awards | |
| | |
Number of | | |
Number of | | |
| | |
| |
| | |
securities | | |
securities | | |
| | |
| |
| | |
underlying | | |
underlying | | |
| | |
| |
| | |
unexercised | | |
unexercised | | |
Option | | |
Option | |
| | |
options (#) | | |
options (#) | | |
exercise | | |
expiration | |
| Name | |
exercisable | | |
unexercisable | | |
price $ | | |
date | |
| | |
| | |
| | |
| | |
| |
| John V. Winfield | |
| 100,000 | (1) | |
| - | | |
$ | 10.30 | | |
| 03/16/26 | |
| John V. Winfield | |
| 133,195 | (2) | |
| - | | |
$ | 18.65 | | |
| 12/26/23 | |
| David C. Gonzalez | |
| 18,000 | (3) | |
| - | | |
$ | 27.30 | | |
| 03/02/27 | |
(1)
Stock options issued to Mr. Winfield pursuant to the Company’s 2010 Incentive Plan are subject to both time and performance-based
vesting requirements, each of which must be satisfied before the options are fully vested and eligible to be exercised. Pursuant to the
time vesting requirements, the options vest over a period of five years, with 20,000 options vesting upon each one-year anniversary of
the date of grant, March 16, 2010. Pursuant to the performance vesting requirements, the options vest in increments of 20,000 shares
upon each increase of $2.00 or more in the market price of the Company’s common stock above the exercise price ($10.30) of the
options. To satisfy this requirement, the common stock must trade at that increased level for a period of at least ten trading days during
any one quarter. As of June 30, 2022, the performance vesting requirements of the options were satisfied.
(2)
On December 26, 2013, the Compensation Committee authorized, subject to shareholder approval, a grant of non-qualified stock options
of 133,195 shares (the “Option Grant”) to the Company’s President and Chief Executive Officer, John V. Winfield. The
stock option grant was approved by shareholders on February 19, 2014. The grant of stock options was made pursuant to, and consistent
with, the 2010 Incentive Plan. The non-qualified stock options have a term of ten years, expiring on December 26, 2023, with an exercise
price of $18.65 per share. In accordance with the terms of the 2010 Incentive Plan, the exercise prices were based on 100% of the fair
market value of the Company’s common stock as determined by reference to the closing price of the Company’s common stock
as reported on the NASDAQ Capital Market on the date of grant. The stock options are subject to time vesting requirements, with 20% of
the options vesting annually commencing on the first anniversary of the grant date.
(3)
Mr. Gonzalez’s stock options vest over five years, with 3,600 options vesting upon each one-year anniversary of the date
of grant, March 2, 2017. All options were vested as of June 30, 2022.
Stock
options issued to Mr. Winfield, according to the Company’s 2010 Incentive Plan, are subject to both time and performance-based
vesting requirements, each of which must be satisfied before the options are fully vested and eligible to be exercised. According to
the time vesting requirements, the options vest over five years, with 18,000 options vesting upon each one-year anniversary of the date
of grant, February 28, 2012. Under the performance vesting requirements, the options vest in increments of 18,000 shares upon each increase
of $2.00 or more in the market price of the Company’s common stock above the exercise price ($19.77) of the options. To satisfy
this requirement, the common stock must trade at that increased level for at least ten trading days during any one quarter. As of June
30, 2021, all of these options have met the market vesting requirements. On January 21, 2022, Mr. Winfield exercised the 90,000 vested
stock options by surrendering 35,094 shares of the Company’s common stock at fair value as payment of the exercise price, resulting
in a net issuance to him of 54,906 shares. No additional compensation expense was recorded related to the issuance.
Internal
Revenue Code Limitations
Section
162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), provides that, in the case of a publicly held corporation,
the corporation is not generally allowed to deduct remuneration paid to its chief executive officer and certain other highly compensated
officers to the extent that such remuneration exceeds $1,000,000 for the taxable year.
EQUITY
COMPENSATION PLANS
The
Company currently has one equity compensation plan, which has been approved by the Company’s stockholders. However, any outstanding
stock options issued under the Company’s prior equity compensation plans remain effective per their terms.
The
purpose of the Company’s equity compensation plan is to provide a means whereby officers, directors and key employees of the Company
develop a sense of proprietorship and personal involvement in the development and financial success of the Company, and to encourage
them to devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its shareholders.
A further purpose of this plan is to provide a means through which the Company may attract able individuals to become employees or serve
as directors of the Company and to provide a means for such individuals to acquire and maintain stock ownership in the Company, thereby
strengthening their concern for the welfare of the Company.
The
InterGroup Corporation 2010 Omnibus Employee Incentive Plan
On
February 24, 2010, the shareholders of the Company approved The InterGroup Corporation 2010 Omnibus Employee Incentive Plan (the “2010
Incentive Plan”), which was formally adopted by the Board of Directors following the annual meeting of shareholders. The Company
believes that such awards better align the interests of its employees with those of its shareholders. Option awards are generally granted
with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest
based on 5 years of continuous service. Certain option and share awards provide for accelerated vesting if there is a change in control,
as defined in the 2010 Incentive Plan. The 2010 Incentive plan as modified in December 2013, authorizes a total of up to 400,000 shares
of common stock to be issued as equity compensation to officers and employees of the Company in an amount and in a manner to be determined
by the Compensation Committee in accordance with the terms of the 2010 Incentive Plan. The 2010 Incentive Plan authorizes the awards
of several types of equity compensation including stock options, stock appreciation rights, performance awards and other stock-based
compensation. The 2010 Incentive Plan had an original expiration date of February 23, 2020, if not terminated sooner by the Board of
Directors upon recommendation of the Compensation Committee. Any awards issued under the 2010 Incentive Plan will expire under the terms
of the grant agreement.
The
shares of common stock to be issued under the 2010 Incentive Plan have been registered under the Securities Act, pursuant to a registration
statement filed on Form S-8 by the Company on June 16, 2010. Once received, shares of common stock issued under the Plan will be freely
transferable subject to any requirements of Section 16 (b) of the Exchange Act.
On
March 16, 2010, the Compensation Committee authorized the grant of 100,000 stock options to the Company’s Chairman, President and
Chief Executive, John V. Winfield to purchase up to 100,000 shares of the Company’s common stock pursuant to the 2010 Incentive
Plan. The exercise price of the options is $10.30, which is 100% of the fair market value of the Company’s Common Stock as determined
by reference to the closing price of the Company’s Common Stock as reported on the NASDAQ Capital Market on March 16, 2010, the
date of grant. The options had an original expiration date ten years from the date of grant, unless terminated earlier in accordance
with the terms of the 2010 Incentive Plan. The options shall be subject to both time and market-based vesting requirements, each of which
must be satisfied before options are fully vested and eligible to be exercised. Pursuant to the time vesting requirements, the options
vest over a period of five years, with 20,000 options vesting upon each one-year anniversary of the date of grant. Pursuant to the market
vesting requirements, the options vest in increments of 20,000 shares upon each increase of $2.00 or more in the market price of the
Company’s common stock above the exercise price ($10.30) of the options. To satisfy this requirement, the common stock must trade
at that increased level for a period of at least ten trading days during any one quarter. As of June 30, 2022, all the market vesting
requirements have been met.
On
December 28, 2019, the Compensation Committee of the Board of Directors recommended to the Board amendments to the 2010 Incentive Plan
which would amend Section 1.3 to extend the term from ten years to sixteen years, and Section 6.4 to change “tenth (10th) anniversary
date” to “twentieth (20th) anniversary date”. This would increase the term of the 2010 Incentive Plan to twenty years
(expiring in February 2030 instead of February 2020) and permit the existence of options with a term longer than ten years. The purpose
of the amendment to the term is to extend its existence as our only incentive plan. The purpose of amendment of the allowable term of
options is so that the Board may extend the term of the 100,000 options granted to John Winfield on March 16, 2010 from ten years to
sixteen years so that these options will terminate on March 16, 2026 instead of on March 16, 2020, in recognition of Mr. Winfield’s
contributions to and leadership of our Company. The recommended amendments were approved by shareholders on February 25, 2020. During
the fiscal year ended June 30, 2020, the Company recorded additional stock option compensation expense in the amount of $116,000 as a
result of the aforementioned amendments.
On
February 28, 2012, the Compensation Committee awarded 90,000 stock options to the Company’s Chairman, President and Chief Executive,
John V. Winfield to purchase up to 90,000 shares of common stock. The per share exercise price of the options is $19.77 which is the
fair value of the Company’s Common Stock as reported on NASDAQ on February 28, 2012. The options expire ten years from the date
of grant. The options are subject to both time and market-based vesting requirements, each of which must be satisfied before the options
are fully vested and eligible to be exercised. Pursuant to the time vesting requirements, the options vest over a period of five years,
with 18,000 options vesting upon each one-year anniversary of the date of grant. Pursuant to the market vesting requirements, the options
vest in increments of 18,000 shares upon each increase of $2.00 or more in the market price of the Company’s common stock above
the exercise price ($19.77) of the options. To satisfy this requirement, the common stock must trade at that increased level for a period
of at least ten trading days during any one quarter. As of June 30, 2021, all these options have met the market vesting requirements.
On January 21, 2022, Mr. Winfield exercised the 90,000 vested stock options by surrendering 35,094 shares of the Company’s common
stock at fair value as payment of the exercise price, resulting in a net issuance to him of 54,906 shares. No additional compensation
expense was recorded related to the issuance.
On
December 26, 2013, the Compensation Committee authorized, subject to shareholder approval, a grant of non-qualified and incentive stock
options for an aggregate of 160,000 shares (the “Option Grant”) to the Company’s President and Chief Executive Officer,
John V. Winfield. The stock option grant was approved by shareholders on February 19, 2014. The grant of stock options was made pursuant
to, and consistent with, the 2010 Incentive Plan. The non-qualified stock options are for 133,195 shares and have a term of ten years,
expiring on December 26, 2023, with an exercise price of $18.65 per share. The incentive stock options are for 26,805 shares and have
a term of five years, expiring on December 26, 2018, with an exercise price of $20.52 per share. In accordance with the terms of the
2010 Incentive Plan, the exercise prices were based on 100% and 110%, respectively, of the fair market value of the Company’s common
stock as determined by reference to the closing price of the Company’s common stock as reported on the NASDAQ Capital Market on
the date of grant. The stock options are subject to time vesting requirements, with 20% of the options vesting annually commencing on
the first anniversary of the grant date. In December 2018, Mr. Winfield exercised the 26,805 vested incentive stock options by surrendering
17,439 shares of the Company’s common stock at fair value as payment of the exercise price, resulting in a net issuance to him
of 9,366 shares. No additional compensation expense was recorded related to the issuance.
In
March 2017, the Compensation Committee awarded 18,000 stock options to the Company’s Vice President of Real Estate, David C. Gonzalez,
to purchase up to 18,000 shares of common stock. The per share exercise price of the options is $27.30 which is the fair value of the
Company’s Common Stock as reported on NASDAQ Capital Market on March 2, 2017. The options expire ten years from the date of grant.
Pursuant to the time vesting requirements, the options vest over a period of five years, with 3,600 options vesting upon each one-year
anniversary of the date of grant. All options were vested as of June 30, 2022.
Change
in Controls Provisions in Equity Compensation Plans
Under
the Company’s 2010 Incentive Plan, stock options may vest upon a change in control of the Company in accordance with their respective
grant agreements. Outstanding stock options issued pursuant to the Company’s 2010 Incentive Plan will also immediately vest and
become exercisable upon a change in control. Except for the foregoing, there are no employment contracts between the Company and its
officers or directors or any change in control arrangements.
SHAREHOLDER
ADVISORY VOTES ON EXECUTIVE COMPENSATION
At
its fiscal 2016 Annual Meeting of Shareholders held on March 2, 2017, the Company submitted to its shareholders two proposals regarding
executive compensation. The first proposal to approve, in a non-binding vote, the compensation of the Company’s named executive
officers was approved by the shareholders, having received more than 99% of the shares voted at the meeting in favor of the proposal.
The second proposal was to determine, in a non-binding vote, whether a shareholder advisory vote to approve the compensation of the Company’s
executive officers should occur every one, two, or three years. The shareholders overwhelmingly voted in favor of three years as the
frequency in which the Company should have an advisory vote on executive compensation with more than 89% of the shares voted at the meeting
being in favor of three years. The Board of Directors considered the guidance provided by those advisory votes and set three years as
the frequency in which it will have a non-binding vote on executive compensation.
At
its fiscal 2019 Annual Meeting of Shareholders held on February 25, 2020, the proposal to approve, in a non-binding vote, the compensation
of the Company’s named executive officers was approved by the shareholders.
The
Board of Directors will continue to focus on responsible executive compensation practices that attract, motivate, and retain high-performance
executives, reward those executives for the achievement of long-term performance, and support our other executive compensation objectives.
COMPENSATION
OF DIRECTORS
Non-employee
directors receive an annual cash retainer in the amount of $12,000. With the exception of members of the Audit Committee, non-employee
directors do not receive any additional fees for attending Board or Committee meetings but are entitled to reimbursement of their reasonable
expenses to attend such meetings. Members of the Audit Committee are paid a fee of $1,000 per quarter, with the Chair of that Committee
to receive $1,500 per quarter. As an executive officer, the Company’s Chairman has elected to forego his annual board fees. Non-employee
directors are also eligible for an annual cash payment of $22,000.
The
following table sets forth the compensation paid to directors for the fiscal year ended June 30, 2022:
DIRECTOR
COMPENSATION
| Name | |
Fees Earned or Paid in Cash (1) | | |
Stock Awards | | |
All Other Compensation | | |
Total | |
| | |
| | |
| | |
| | |
| |
| John C. Love | |
$ | 46,000 | (2) | |
| - | | |
| - | | |
$ | 46,000 | |
| | |
| | | |
| | | |
| | | |
| | |
| William J. Nance | |
$ | 48,000 | (3) | |
| - | | |
| - | | |
$ | 48,000 | |
| | |
| | | |
| | | |
| | | |
| | |
| Jerold R. Babin | |
$ | 44,000 | (4) | |
| - | | |
| - | | |
$ | 44,000 | |
| | |
| | | |
| | | |
| | | |
| | |
| Yvonne L. Murphy | |
$ | 34,000 | | |
| - | | |
| - | | |
$ | 34,000 | |
| | |
| | | |
| | | |
| | | |
| | |
| Steve Grunwald(5) | |
$ | 6,000 | | |
| - | | |
| - | | |
$ | 6,000 | |
| | |
| | | |
| | | |
| | | |
| | |
| John V. Winfield | |
$ | 6,000 | (6) | |
| - | | |
| - | | |
$ | 6,000 | |
(1)
Amounts shown include board retainer fees, committee fees, and meeting fees.
(2)
Mr. Love also serves as director of the Company’s subsidiary, Portsmouth. The amounts shown include $8,000 in regular board
and audit committee fees paid by Portsmouth.
(3)
Mr. Nance also serves as director of the Company’s subsidiary, Portsmouth. The amounts shown include $8,000 in regular board
and audit committee fees paid by Portsmouth.
(4)
Mr. Babin also served as a director of the Company’s subsidiary, Portsmouth. The amounts shown include $6,000 in regular
board fees paid by Portsmouth. Mr. Babin passed away in October 2022.
(5)
Mr. Steve Grunwald replaced Director Babin upon Mr. Babin’s passing in October 2022. The amounts shown above include $6,000
in regular board fees paid by Portsmouth.
(6)
As Chief Executive Officer, the Company’s Chairman, John V. Winfield, was not paid any board, committee, or meeting fees
by the Company. Mr. Winfield did receive a total of $6,000 in regular board fees from the Company’s subsidiaries.
Change
in Control or Other Arrangements
Except
for the preceding, there are no other arrangements for compensation of directors, and there are no employment contracts between the Company
and its directors or any change in control arrangements.
COMPLIANCE
WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section
16(a) of the Exchange Act requires the Company’s officers and directors, and each beneficial owner of more than ten percent of
the Common Stock of the Company, to file reports of ownership and changes in ownership with the SEC. Officers, directors, and greater
than ten-percent shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
Based
solely on its review of the copies of Forms 3 and 4 and amendments thereto filed with the SEC or furnished to the Company during its
most recent fiscal year and Forms 5 and amendments thereto filed with the SEC or furnished to the Company with respect to its most recent
fiscal year, or written representations from certain reporting persons that no Forms 5 were required for those persons, the Company knows
of no Form 4 not filed on a timely basis. All other filing requirements applicable to its officers, directors, and greater than ten-percent
beneficial owners were complied with during the fiscal year ended June 30, 2022.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of April 21, 2023, certain information with respect to the beneficial ownership of Common Stock of the
Company owned by (i) each director and each of the named executive officers and (ii) all directors and executive officers as a group.
The Company knows of no persons or groups which own more than five percent of the outstanding shares of Common Stock. Unless otherwise
indicated, the business address for each director and named executive officer is 1516 S. Bundy Drive, Suite 200, Los Angeles, CA 90025.
Name of Beneficial Owner | |
Amount and Nature of Beneficial Ownership (1) | | |
Percent of Class (2) | |
| | |
| | |
| |
| John V. Winfield | |
| 1,686,374 | (3) | |
| 68.6 | % |
| William J. Nance | |
| 47,946 | | |
| 2.0 | % |
| David C. Gonzalez | |
| 44,769 | (4) | |
| 1.8 | % |
| John C. Love | |
| 8,561 | | |
| * | |
| Yvonne M. Murphy | |
| 2,282 | | |
| * | |
| All Directors and Executive Officers as a Group (5 persons) | |
| 1,789,932 | | |
| 72.8 | % |
*
Ownership does not exceed 1%.
(1)
Unless otherwise indicated and subject to applicable community property laws, each person has sole voting and investment power
with respect to the shares beneficially owned.
(2)
Percentages are calculated based on 2,206,944 shares of Common Stock outstanding on March 31, 2023, plus any securities that person
has the right to acquire within 60 days pursuant to options, warrants, conversion privileges or other rights.
(3)
Includes 233,195 shares that Mr. Winfield has a right to acquire pursuant to vested stock options.
(4)
Includes 18,000 shares that Mr. Gonzalez has a right to acquire pursuant to vested stock options.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
As
Chairman of the Executive Strategic Real Estate and Securities Investment Committee, the Company’s President and Chief Executive
officer, John V. Winfield, oversees the investment activity of the Company in public and private markets pursuant to authority granted
by the Board of Directors. Mr. Winfield also serves as Chief Executive Officer and Chairman of Portsmouth and oversees the investment
activity of Portsmouth. Depending on certain market conditions and various risk factors, Mr. Winfield and Portsmouth may, at times, invest
in the same companies in which the Company invests. The Company encourages such investments because it places personal resources of Mr.
Winfield and the resources of Portsmouth, at risk in connection with investment decisions made on behalf of the Company. Under the direction
of the Executive Strategic Real Estate and Securities Investment Committee, the Company has instituted certain modifications to its procedures
to reduce the potential for conflicts of interest.
The
Company and its subsidiary Portsmouth have established performance-based compensation programs for Mr. Winfield’s management of
the securities portfolios of both companies. The performance-based compensation program was approved by the disinterested members of
the respective Boards of Directors of the Company and its subsidiaries. No performance bonus compensation was paid to Mr. Winfield for
the fiscal years ended June 30, 2022, and 2021.
Director
Independence
The
Common Stock is listed on the NASDAQ Capital Market tier of NASDAQ. InterGroup is a Smaller Reporting Company under the rules and regulations
of the SEC. The Board of Directors of InterGroup currently consists of five members. With the exception of the Company’s President
and CEO, John V. Winfield, all of InterGroup’s Board of Directors consists of “independent” directors as independence
is defined by the applicable rules of the SEC and NASDAQ. There are no members of the Company’s compensation, nominating, or audit
committees that do not meet those independence standards.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF STEVE GRUNWALD AS CLASS A DIRECTOR OF THE COMPANY; AND THE BOARD
OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF YVONNE L. MURPHY AND WILLIAM J. NANCE AS CLASS B DIRECTORS OF THE COMPANY
PROPOSAL
NO. 2
RATIFICATION
OF THE RETENTION OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee of the Board of Directors has appointed the firm of WithumSmith+Brown, PC (“Withum”) as the Company’s
independent registered public accounting firm for the fiscal year ending June 30, 2022. Although the action of shareholders in this matter
is not required, the Audit Committee believes it is appropriate to seek shareholder ratification of this appointment. Ratification requires
the affirmative vote of a majority of the shares represented and voted at the Annual Meeting.
We
expect that a representative of WithumSmith+Brown, PC will be present at the Annual Meeting to respond to appropriate questions from
shareholders, and we will provide this representative with an opportunity to make a statement if he or she desires to do so.
THE
FOLLOWING REPORT OF THE AUDIT COMMITTEE SHALL NOT BE DEEMED TO BE SOLICITING MATERIAL OR FILING WITH THE SEC UNDER THE SECURITIES ACT
OR THE EXCHANGE ACT OR INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.
AUDIT
COMMITTEE REPORT
The
Audit Committee’s responsibilities are described in a written charter adopted by the Board of Directors. The Audit Committee primary
duties and responsibilities are to serve as an independent and objective party to monitor the Company’s financial reporting process
and internal control system; appoint and approve the compensation of the Company’s independent registered public accounting firm;
review and appraise the audit efforts of the Company’s independent registered public accounting firm; and provide an open avenue
of communications among the independent registered public accounting firm, financial and senior management, and the Board of Directors.
On January 31, 2022, the Audit Committee appointed WithumSmith+Brown, PC, PCAOB ID: 100 (“Withum”) as the Company’s
independent registered public accounting firm. The Company’s prior registered public accounting firm Moss Adams, LLP, PCAOB ID:
659 (“Moss Adams”) resigned in December 2021. All fees and expenses paid to Withum and Moss Adams were approved by the Audit
Committee.
The
Audit Committee reviewed and discussed the audited financial statements with Withum, and management represented to the Audit Committee
that the consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States.
The discussions with Withum also included the matters required by Statement on Auditing Standards No. 114 (AICPA, Professional Standards,
Vol. 1, AU Section 380), as adopted by the U.S. Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T regarding
“Communication with Audit Committees.”
The
Audit Committee has also received written disclosures and letters from Withum, as required by applicable requirements of the PCAOB regarding
the independent accountants’ communications with the Audit Committee concerning independence, which was also discussed with Withum.
Based
on the Audit Committee’s review of the audited financial statements, and the review and discussions with management and Withum
referred to above, the Audit Committee recommended to the Company’s Board of Directors that the audited financial statements be
included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022, for filing with the Securities and
Exchange Commission.
THE
AUDIT COMMITTEE:
WILLIAM
J. NANCE, CHAIRPERSON
JOHN
C. LOVE
STEVE
GRUNWALD
Audit
Fees
The
aggregate fees billed for each of the last two fiscal years ended June 30, 2022 and 2021 for professional services rendered by Withum
and Moss Adams are set forth in the tables below. These fees were billed for audit of the Company’s annual financial statements,
review of financial statements included in the Company’s Form 10-Q reports, and services provided in connection with statutory
and regulatory filings and engagements for those fiscal years.
| | |
Fiscal Year | |
| | |
2022 | | |
2021 | |
| Audit fees – Withum | |
$ | 52,000 | | |
$ | - | |
| Audit fees – Moss Adams | |
| 207,000 | | |
| 247,000 | |
| Tax fees – Withum | |
| 31,000 | | |
| - | |
| Tax fees – Moss Adams | |
| 95,000 | | |
| 60,000 | |
| TOTAL: | |
$ | 385,000 | | |
$ | 307,000 | |
Audit
Committee Pre-Approval Policies
The
Audit Committee shall pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be
performed for the Company by its independent registered public accounting firm, subject to any de minimis exceptions that may be set
for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Audit Committee prior to the completion
of the audit. The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate,
including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee
to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting. All of the services described herein
were approved by the Audit Committee pursuant to its pre-approval policies.
None
of the hours expended on the independent registered public accounting firms’ engagement to audit the Company’s financial
statements for the most recent fiscal year were attributed to work performed by persons other than the independent registered public
accounting firm’s full-time permanent employees.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE RETENTION OF WITHUMSMITH+BROWN, PC AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.
The
following table sets forth information as of June 30, 2022 with respect to compensation plans (including individual compensation arrangements)
under which equity securities of the Company are authorized for issuance, aggregated as follows:
| Plan category | |
Number of securities to be issued upon exercise of outstanding options,
warrants and rights | | |
Weighted average exercise price of outstanding options warrants and rights | | |
Remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| | |
(a) | | |
(b) | | |
|
| | |
| | |
| | |
|
| Equity compensation plans approved by security holders | |
| 251,195 | | |
$ | 15.95 | | |
None |
| | |
| | | |
| | | |
|
| Equity compensation plans not approved by security holders | |
| None | | |
| N/A | | |
None |
| | |
| | | |
| | | |
|
| Total | |
| 251,195 | | |
$ | 15.95 | | |
None |
(a)
There were 251,195 stock options outstanding as of June 30, 2022.
(b)
Reflects the weighted average exercise price of all outstanding options.
OTHER
BUSINESS
As
of the date of this statement, management knows of no business to be presented at the meeting that is not referred to in the accompanying
notice. As to other business that may properly come before the meeting, it is intended that the proxies properly executed and returned
will be voted in respect thereof at the discretion of the person voting the proxies in accordance with the best judgment of that person.
SHAREHOLDER
PROPOSALS
It
is presently anticipated that the fiscal 2023 Annual Meeting of Shareholders will be held on May 29, 2024. Shareholder proposals intended
to be considered for inclusion in the proxy statement and form of proxy for presentation at the fiscal 2023 Annual Meeting of Shareholders
must be received by the Company not less than 120 calendar days before the one-year anniversary of the date that this proxy statement
is mailed. However, if the date of the fiscal 2023 Annual Meeting of Shareholders is changed by more than 30 days from the date of the
fiscal 2022 Annual Meeting, then the deadline will be a reasonable time before the Company begins to print and send its proxy materials.
In addition, all proposals must comply with the provisions of the Company’s charter and bylaws and Rule 14a-8 adopted under Section
14(a) of the Exchange Act. Any proposals must be submitted in writing to the following address: Corporate Secretary, The InterGroup Corporation,
1516 S. Bundy Drive, Suite 200, Los Angeles, CA 90025. It is suggested that the proposal be submitted by certified mail – return
receipt requested.
ANNUAL
REPORT ON FORM 10-K
The
Company’s Annual Report for the fiscal year ended June 30, 2022, accompanies this proxy statement but is not deemed a part of the
proxy solicitation material. A copy of the Company’s Form 10-K for the fiscal year ended June 30, 2022, as required to be filed
with the SEC, excluding exhibits, will be mailed to shareholders without charge upon written request to John V. Winfield, President,
The InterGroup Corporation, 1516 S. Bundy Drive, Suite 200, Los Angeles, CA 90025. Such requests must set forth a good-faith representation
that the requesting party was either a holder of record or beneficial owner of the Common Stock on April 21, 2023. The Company’s
Form 10-K and other public filings are also available on the Company’s website at www.intgla.com and through the SEC’s website
www.sec.gov.
| |
|
|
By Resolution
of the Board of Directors |
| |
|
|
|
| |
|
|
THE INTERGROUP CORPORATION |
| |
|
|
|
| |
|
|
/s/
John V. Winfield |
| |
|
|
John V. Winfield |
| |
|
|
Chairman of the Board;
President and Chief Executive Officer |
| |
|
|
|
| Dated: |
May
2, 2023 |
|
|
| |
Los
Angeles, California |
|
|
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