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.          )

IKONICS CORPORATION

4832 Grand Avenue

Duluth, Minnesota 55807

(218) 628-2217

Dear Shareholder:

You are cordially invited to attend the 2021 Annual Meeting of Shareholders (the “Annual Meeting”) of IKONICS Corporation (the “Company”) to be held on April 29, 2021 at 1:00 p.m., Central Time. The meeting will be completely virtual. We are also hosting a virtual Annual Meeting to safeguard the health and well-being of our employees, partners and shareholders in light of the public health impact of the coronavirus outbreak (COVID-19). Hosting a virtual Annual Meeting also provides expanded access, improved communication and cost savings for our shareholders and us and enables shareholder participation from any location around the world. In addition to on-line attendance, shareholders have an opportunity to hear all portions of the official meeting, submit written questions during the meeting, vote on-line during the open poll portion of the meeting, and listen to live responses to shareholder questions immediately following the formal meeting.

You may attend the meeting, vote your shares and submit questions electronically during the meeting via live webcast by logging in at: www.virtualshareholdermeeting.com/IKNX2021.

The Secretary’s Notice of Annual Meeting and the Proxy Statement which follow describe the matters to come before the meeting. During the meeting, we will also review the activities of the past year and items of general interest about the Company.

We hope that you will be able to attend the meeting via the live webcast. Please mark, date and sign the enclosed proxy card and return it in the accompanying envelope as quickly as possible, even if you plan to attend the Annual Meeting. You may revoke the proxy and vote by attending the virtual shareholder meeting through the website identified above.

	Sincerely,
	Glenn Sandgren Chief Executive Officer

March 23, 2021

IKONICS CORPORATION

Notice of Annual Meeting of Shareholders

to be held on  April 29, 2021

The 2021 Annual Meeting of Shareholders of IKONICS Corporation (the “Annual Meeting”) will be on April 29, 2021, at 1:00 p.m., Central Time. The Annual Meeting will be completely virtual.

You may attend the meeting, vote your shares and submit questions electronically during the meeting via live webcast by logging in at: www.virtualshareholdermeeting.com/IKNX2021.

The Annual Meeting will be held for the following purposes:

The Board of Directors has fixed March 5, 2021 as the record date for the meeting, and only shareholders of record at the close of business on that date are entitled to receive notice of and vote at the Annual Meeting.

Your proxy is important to ensure a quorum at the Annual Meeting. Even if you own only a few shares, and whether or not you expect to be present at the Annual Meeting, please mark, date and sign the enclosed proxy card and return it in the accompanying postage-paid reply envelope as quickly as possible. You may revoke your proxy at any time prior to its exercise at the Annual Meeting and returning your proxy card will not affect your right to vote by attending the virtual shareholder meeting through the website identified above.

	By Order of the Board of Directors,
Duluth, Minnesota March 23, 2021	Jon Gerlach Secretary

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PROXY STATEMENT

GENERAL INFORMATION

The enclosed proxy is being solicited by the Board of Directors of IKONICS Corporation, a Minnesota corporation (“IKONICS” or the “Company”), for use in connection with the Annual Meeting of Shareholders to be held on April 29, 2021 at 1:00 p.m., Central Time, and at any adjournments thereof. The meeting will be completely virtual. Hosting a virtual Annual Meeting provides expanded access, improved communication and cost savings for our shareholders and us and enables shareholder participation from any location around the world. We are also hosting a virtual Annual Meeting to support the health and well-being of our employees, partners and shareholders in light of the public health impact of the coronavirus outbreak (COVID-19). In addition to on-line attendance, shareholders have an opportunity to hear all portions of the official meeting, submit written questions during the meeting, vote on-line during the open poll portion of the meeting, and listen to live responses to shareholder questions immediately following the formal meeting.

You may attend the meeting, vote your shares and submit questions electronically during the meeting via live webcast by logging in at: www.virtualshareholdermeeting.com/IKNX2021. You will need the 16-digit control number included on your proxy card or in the instructions that accompanied  your proxy materials to join the online Annual Meeting. We recommend that you log in at least fifteen minutes before the meeting to ensure you are logged in when the meeting starts.

Only shareholders of record at the close of business on March 5, 2021 will be entitled to vote at such meeting or adjournment. Proxy cards accompanying this proxy statement which are properly signed, duly returned to the Company and not revoked prior to the Annual Meeting will be voted in the manner specified. A shareholder executing a proxy card retains the right to revoke it at any time before it is exercised at the Annual Meeting by providing notice in writing to the Secretary of the Company of termination of the proxy’s authority or a properly signed and duly returned proxy bearing a later date.

The address of the principal executive office of the Company is 4832 Grand Avenue, Duluth, Minnesota 55807 and the telephone number is (218) 628-2217. The mailing of this Proxy Statement and the form of proxy to shareholders will commence on or about March 23, 2021. This Proxy Statement is available on the Investor Relations page of our website at www.ikonics.com/investor- relations/.

The Company will pay the cost of soliciting proxies in the accompanying form. In addition to solicitation by mail, certain directors, officers and employees of the Company may solicit proxies by telephone, regular or electronic mail, or personal contact, and have requested brokerage firms and custodians, nominees and other record holders to forward soliciting materials to the beneficial owners of stock of the Company and will reimburse them for their reasonable out-of-pocket expenses in so forwarding such materials.

The common stock of the Company, par value $.10 per share (the “Common Stock”), is the only authorized and issued voting security of the Company. At the close of business on March 5, 2021, there were 1,977,104 shares of Common Stock issued and outstanding, each of which is entitled to one vote. Holders of Common Stock are not entitled to cumulate their votes for the election of directors.

A plurality of the votes cast is required for election of the director nominees listed under “Election of Directors” in this Proxy Statement. The affirmative vote of the holders of a majority of the outstanding shares of Common Stock of the Company present or represented by proxy at the meeting and entitled to vote is required to ratify the selection of the Company’s independent registered public accounting firm. If the advisory vote on the compensation of the named executive officers included in this Proxy Statement receives more votes “for” than “against,” then it will be deemed to be approved.

A shareholder voting through a proxy who abstains with respect to any matter is considered to be present and entitled to vote on such matter at the meeting and is in effect a negative vote with respect to the proposal relating to ratification of the Company’s independent registered public accounting firm. Abstentions will have no effect on the advisory vote to approve the compensation of the named executive officers as disclosed in this Proxy Statement. A shareholder (including a broker) who does not have or does not give authority to vote, or withholds authority to vote, on any proposal shall not be considered present and entitled to vote on such proposal.

SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT

The following table sets forth, as of March 2, 2021, the number of shares of Common Stock beneficially owned by each person who is a beneficial owner of more than 5% of the Common Stock issued and outstanding, by each executive officer named in the Summary Compensation Table, by each director, director nominee and by all officers and directors as a group. All persons have sole voting and dispositive power over such shares unless otherwise indicated.

ELECTION OF DIRECTORS

The business of the Company is managed under the direction of a Board of Directors, with the number of directors fixed from time to time by the Board of Directors. The Board of Directors has fixed at eight the number of directors to be elected to the Board at the 2021 Annual Meeting of Shareholders and has nominated the eight persons named below for election as directors, each to serve until the 2022 Annual Meeting of Shareholders. Proxies solicited by the Board of Directors will, unless otherwise directed, be voted to elect the eight nominees named below. Each of the nominees is a current director of the Company and each has indicated a willingness to serve as a director until the 2022 Annual Meeting of Shareholders. In case any nominee is not a candidate for any reason, the proxies named in the enclosed form of proxy may vote for a substitute nominee in their discretion.

All director nominees, except for Mr. Ulland and Mr. Sandgren, meet the independence requirements of The Nasdaq Stock Market, the stock exchange on which the Company’s shares trade.

Following is certain information regarding the nominees for the office of director:

William C. Ulland, age 80

Mr. Ulland is Chairman, and served as the President and Chief Executive Officer of the Company until his retirement on February 10, 2020. He was named the Company’s Chief Executive Officer in February of 2000 and President in December of 2000. He has been a member of the Company’s Board of Directors since 1972 and has served as its Chairman since 1976. Mr. Ulland earned a degree in Geophysical Engineering from the Colorado School of Mines in 1963 and a Master of Science degree in Industrial Administration from Purdue University in 1965. Prior to becoming the Company’s Chief Executive Officer, he was involved in mineral development and evaluation as Managing Partner of the American Shield Company and President of Geomines Inc.

Glenn Sandgren, age 61

Mr. Sandgren is a director and Chief Executive Officer of the Company. Mr. Sandgren became the Company’s Chief Executive Officer and a director of the Company on February 10, 2020. Mr. Sandgren earned a Mechanical Engineering degree from Purdue University in 1983, and a Master of Science in Administration from Central Michigan University in 1987. Prior to becoming the Company’s Chief Executive Officer, Mr. Sandgren served in roles of President and CEO of Pallidus, Inc. from January 2015 to January 2020 where he spun the company from Melior Innovations and was responsible for Technology, Business Development as well as Operations. Prior to Pallidus, Mr. Sandgren was the Vice President of Silicon Carbide for Melior Innovations, Inc. from 2014 to 2015. Preceding Melior, Mr. Sandgren was Vice President of Sales and Marketing at Sintex Wausaukee Composite from 2013 to 2014 and Vice President and Business Unit Manager at Polysciences, Inc. from 2003 to 2013.

Marianne Bohren, age 57

Ms. Bohren was elected as a director of the Company in 2016. She is Executive Director of the Western Lake Superior Sanitary District (“WLSSD”), a regional utility which provides wastewater treatment and solid waste management for a 530-square mile area in Northeastern Minnesota. Ms. Bohren has been with WLSSD for over ten years and was Director of Organizational Development and Business Service Manager before being appointed as Executive Director in 2008, making her responsible for the operational, environmental and financial performance of the organization. Prior to joining WLSSD, Ms. Bohren served for 17 years with Potlatch Paper Company in various positions of increasing responsibility, ultimately serving as Vice President of Marketing and Business Services. She received her M.B.A. and B.S. in Chemistry from the University of Minnesota Duluth.

Lockwood Carlson, age 77

Dr. Carlson was elected as a director of the Company in 2009. Dr. Carlson is President of Carlson Consulting Group, a Minneapolis-based consulting firm that he founded in 2002 and that provides strategic development foresight to organizations with a concentration in technical products and services. Dr. Carlson held the James Renier Chair in Technological Leadership at the Center for the Development of Technological Leadership at the University of Minnesota, where he was on the faculty and taught in the Management of Technology program. Dr. Carlson received his Ph.D. in Physics in 1971 from the University of Wyoming and is retired from 3M Company where he served as Corporate Scientist. Dr. Carlson also serves on the Board of Directors of several private companies and non-profit organizations.

Jeffrey D. Engbrecht, age 48

Mr. Engbrecht was elected as a director of the Company in 2016. Mr. Engbrecht has been the President & CEO of Clearwater Composites, LLC, a manufacturer of advanced composite products for the industrial and commercial markets located in Duluth, Minnesota, since 2011. He has over 20 years of experience in the advanced composites market, working in various technical and sales roles at Toray Carbon Fibers America, Inc., Celanese Corporation, and Cirrus Aircraft. Mr. Engbrecht received a B.E. in Composite Materials Engineering from Winona State University in 1995.

Ernest M. Harper Jr., age 66

Mr. Harper was elected as a director of the Company in 2012. Mr. Harper was Chief Tax Officer for General Mills, Inc. from 1996 until July 2010, when he retired. He was responsible for the global income tax function, including tax compliance, planning, controversy and SEC financial reporting. Mr. Harper has extensive experience in structuring international business operations and joint ventures, domestic and cross border international acquisitions and divestitures and corporate governance. He held various positions in the tax counsel function for General Mills from 1989 until 1996. Prior to his employment at General Mills, Mr. Harper was a tax consultant in the Minneapolis office of Ernst & Young LLP. He received his J.D. and B.A. degrees from the University of Minnesota.

Darrell B. Lee, age 72

Mr. Lee was elected as a director of the Company in 2012. Mr. Lee, a Certified Public Accountant, was Vice President, Chief Financial Officer, Treasurer and Secretary of MOCON, Inc., a publicly held manufacturer of precision test and measurement instruments located in Minneapolis, Minnesota until his retirement in October 2014. Prior to his retirement, Mr. Lee held this position for more than five years. Mr. Lee received his M.B.A. and B.S. degrees from Minnesota State University, Mankato and his Masters in Business Taxation from the University of Minnesota.

Gregory W. Jackson, age 61

Mr. Jackson was elected as a director of the Company in 2017. Mr. Jackson serves as Executive Vice President and Chief Legal Officer of Taylor Corporation, a privately-held diversified graphic communications provider with over 12,000 employees across the U.S. During a tenure of more than 30 years, Mr. Jackson has served as General Counsel, Secretary, Chief Administration Officer and Executive Vice President and Chief Legal Officer. He now leads the legal and M&A functions and has completed more than 140 acquisitions during his tenure. Mr. Jackson received his B.S. in history and theology from Pillsbury College and his J.D. from the University of Minnesota Law School.

Each nominee brings unique experience and skills to the Board of Directors. The Board of Directors believes the nominees as a group have the experience and skills in areas such as technology, manufacturing, finance and management that are necessary to effectively oversee the Company’s operations and growth strategies. The following is a summary of the experience and skills that the Board of Directors believes makes each nominee a strong choice to serve as a director of the Company:

Committees of the Board of Directors and Meeting Attendance

The Board of Directors met five times during fiscal 2020. All incumbent directors attended at least 75% of the meetings of the Board and of the Committees on which they served held during the periods for which they served as a director. The Company currently has an Audit Committee, a Compensation Committee and a Nominating Committee.

The following is a description of the functions performed by each of the Committees:

Audit Committee

The Company’s Audit Committee presently consists of Messrs. Lee (Chairman), Carlson, Engbrecht, Harper, Jackson and Ms. Bohren. All of the members of the Audit Committee are “independent” as that term is defined in the applicable listing standards of the Nasdaq Stock Market and Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, the Board of Directors has determined that Mr. Lee is an “audit committee financial expert” as defined by applicable regulations of the Securities and Exchange Commission. The Audit Committee provides assistance to the Board of Directors in fulfilling the Board’s duties relating to corporate accounting, reporting practices of the Company and the quality and integrity of the Company’s financial reports. Among other things, the Audit Committee selects and appoints the Company’s independent registered public accounting firm, meets with the independent registered public accounting firm and financial management to review the scope of the audit and the audit procedures, reviews annually the responsibilities of the Audit Committee and recommends to the Board of Directors any changes to these responsibilities. The responsibilities of the Audit Committee are set forth in the Audit Committee Charter, adopted by the Company’s Board of Directors on February 23, 2004. A copy of the Audit Committee Charter is included as Exhibit A to the Company’s Proxy Statement for its 2019 Annual Meeting of Shareholders. The Audit Committee met five times during fiscal 2020.

Compensation Committee

The Company’s Compensation Committee presently consists of Messrs. Harper (Chairman), Carlson, Engbrecht, Lee, Jackson and Ms. Bohren. All of the members of the Compensation Committee are “independent” as that term is defined in the applicable listing standards of the Nasdaq Stock Market. The Compensation Committee periodically reviews and acts upon a compensation package for the Chief Executive Officer and the Company’s other executive officers, and sets compensation policy for the other employees of the Company. In addition, the Compensation Committee acts upon management recommendations concerning employee stock options, bonuses and other compensation and benefit plans. The Compensation Committee also administers the IKONICS Corporation 2019 Equity Incentive Plan, which replaced the 1995 Stock Incentive Plan. The responsibilities of the Compensation Committee are set forth in the Compensation Committee Charter, adopted by the Company’s Board of Directors on February 28, 2013. Pursuant to the Compensation Committee Charter, the Committee has authority to delegate any of its responsibilities to subcommittees as the Committee may deem appropriate, provided that the subcommittees are composed entirely of independent directors. A copy of the Compensation Committee Charter is included as Exhibit B to the Company’s Proxy Statement for its 2019 Annual Meeting of Shareholders. The Compensation Committee met five times during fiscal 2020.

Nominating Committee

The Company’s Nominating Committee presently consists of Ms. Bohren (Chairman) and Messrs. Carlson, Engbrecht, Harper, Lee and Jackson. All of the members of the Nominating Committee are “independent” as that term is defined in the applicable listing standards of the Nasdaq Stock Market. The purposes of the Nominating Committee are to identify individuals qualified to become Board members and to approve director-nominees to be considered for election by shareholders and for election by the Board to fill any vacancy or newly created directorship. The responsibilities of the Nominating Committee are set forth in the Nominating Committee Charter, which is included as Exhibit A to the Company’s Proxy Statement for its 2020 Annual Meeting of Shareholders. The Nominating Committee met one time during fiscal 2020.

The Nominating Committee has established a policy with regard to the consideration of any director candidates recommended by the Company’s shareholders. The Nominating Committee will consider director candidates recommended by a Company shareholder provided that the shareholder sends the Company a written notice received by the Secretary of the Company that (i) states the name and address of the shareholder identifying the candidate as that information appears on the Company’s books and records and the number of shares of the Company owned by the recommending shareholder and (ii) provides the following information about the candidate:

The Company may require any proposed candidate to furnish such other information as may reasonably be required by the Nominating Committee to determine the eligibility of the proposed nominee to serve as a director. Provided a shareholder satisfies the requirements described above, the Nominating Committee will consider director candidates recommended by shareholders in the same manner that it considers all other director candidates. All director candidates must meet certain minimum qualifications established by the Nominating Committee from time to time, and the Nominating Committee will assess the experience, integrity, competence, diversity, skills and dedication to the Company of all director candidates. The Nominating Committee does not have an independent policy with regard to considering the diversity of the Company’s directors. The Nominating Committee will consider a number of features when evaluating diversity, including age, gender, ethnicity and professional experiences. As indicated above, diversity is one factor in the total mix of information the Board of Directors considers when evaluating director candidates. Shareholders who wish to suggest qualified candidates should write to the Office of the Corporate Secretary of IKONICS Corporation, at 4832 Grand Avenue, Duluth, Minnesota 55807, stating the information described above and any other relevant details concerning the candidate’s qualifications for consideration by the Nominating Committee.

Board Leadership Structure and Role in Risk Oversight

Mr. Ulland served in the combined roles of Chairman and Chief Executive Officer from 2000 until his retirement on February 10, 2020. The Board believes that by continuing as Chairman, Mr. Ulland, having served as Chairman and Chief Executive Officer of the Company, will be able to provide valuable advice and direction to both Mr. Sandgren and the Board in light of Mr. Sandgren’s hiring as Chief Executive Officer. The Board has no policy with respect to the separation of the offices of Chairman and Chief Executive Officer, and the Board believes that the shareholders’ interests are best served by allowing the Board to retain flexibility to determine the optimal organizational structure for the Company at a given time, including whether the offices of Chairman and Chief Executive Officer should be held by the same person. Currently, the Board believes that Mr. Ulland’s continued service as Chairman is in the best interests of the shareholders and the Company given Mr. Ulland’s perspective and experience and his ability to provide strategic advice and support in light of Mr. Sandgren’s hiring as Chief Executive Officer.

The Board of Directors does not have a lead independent director and does not believe that one is necessary in light of the Company’s size and the lengthy experience the majority of the directors have working with Mr. Ulland. The Board of Directors believes its leadership structure allows the Company to operate most efficiently and is in the best interests of the Company and its shareholders.

The Company’s management is responsible for day-to-day risk management of the Company. Management reports to the Board of Directors on the material risks the Company faces when management determines that the Company’s risk profile materially changes. The Board of Directors uses management’s reports to evaluate the Company’s exposure to risks in light of the Company’s business plan and growth strategies. The Board of Directors primarily focuses on risks in the areas of operations, liquidity and regulatory changes and compliance, which the Board of Directors believes are the areas most likely to potentially impact the Company in a material way.

Director Compensation

Each non-employee director of the Company receives a quarterly retainer of $2,000, plus meeting fees of $2,000 for each regular meeting except for Mr. Lee who receives a quarterly retainer of $3,000, plus meeting fees of $3,000 for each regular meeting of the Board of Directors to compensate for his additional duties as the Audit Committee Chairman and Mr. Ulland who receives a quarterly retainer of $4,000 plus meeting fees of $4,000 for each regular meeting of the Board of Directors, for which Mr. Ulland serves as Chairman, as compensation for his duties as Chairman.  During 2020 the board reduced all quarterly retainer and meeting fees by 50% in response to the COVID-19 pandemic for all non-employee directors.  The board met a total of five times in 2020.  Fees are not paid for committee meetings. From time to time, the Company’s non-employee directors have been awarded options to purchase the Company’s Common Stock under the 1995 Stock Incentive Plan and Mr. Ulland has been awarded stock options under such plan in connection with his position as Chairman, President and Chief Executive Officer. There have been no other such grants of stock options made since 2003. The following table sets forth the total compensation paid to each director for fiscal 2020.

DIRECTOR COMPENSATION

Shareholder Communication with the Board of Directors and Director Attendance at Annual Meetings

The Board provides a process for shareholders to send communications to the Board or any of the directors. Shareholders may send written communications to the Board of Directors or specified individual directors by addressing their communication to Chief Financial Officer, IKONICS Corporation, 4832 Grand Avenue, Duluth, Minnesota 55807, by U.S. mail. The communications will be collected by the Chief Financial Officer and delivered, in the form received, to the Board or, if so addressed, to a specified director.

The Company does not have a formal policy regarding attendance by members of the Board of Directors at the Company’s Annual Meetings of Shareholders. The Company has always encouraged its directors to attend its annual meeting of shareholders and expects to continue this informal policy. In 2020, all Company current directors, attended the Company’s Annual Meeting of Shareholders.

REPORT OF THE AUDIT COMMITTEE

The role of the Company’s Audit Committee, which is currently composed of six independent non-employee directors, is one of oversight of the Company’s management and the Company’s independent registered public accounting firm in regard to the Company’s financial reporting and the Company’s controls with respect to accounting and financial reporting. In performing its oversight function, the Audit Committee relied upon advice and information received in its discussions with the Company’s management and independent registered public accounting firm.

The Audit Committee has (i) reviewed and discussed the Company’s audited financial statements  for  the  fiscal  year  ended  December  31,  2020  with  the  Company’s  management; (ii) discussed with the Company’s independent registered public accounting firm the matters required to be discussed by the applicable Public Company Accounting Oversight Board standard regarding communication with audit committees; (iii) received the written disclosures and the letter from the Company’s independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence; and (iv) discussed with the independent registered public accounting firm the independent registered public accounting firm’s independence.

Based on the review and discussions with management and the Company’s independent registered public accounting firm referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 for filing with the Securities and Exchange Commission.

Principal Accounting Firm Fees

The following table shows the aggregate fees paid to RSM US LLP by the Company for the services it rendered during the fiscal years ended December 31, 2020 and 2019:

The Audit Committee’s current practice on pre-approval of services performed by the independent registered public accounting firm is to approve annually all audit services and, on a case- by-case basis, all permitted non-audit services to be provided by the independent registered public accounting firm during the fiscal year. The Audit Committee reviews each non-audit service to be provided and assesses the impact of the service on the auditor’s independence. In addition, the Audit Committee may pre-approve other non-audit services during the year on a case-by-case basis.

EXECUTIVE OFFICERS

Following is certain information regarding the executive officers of the Company during 2020, other than Glenn Sandgren:

Claude P. Piguet, age 63

Mr. Piguet was named Executive Vice President on December 19, 2000. Previously, he was the Company’s Vice President of Operations beginning in May 1994. He was the Company’s Director of Operations from January 1992 to May 1994. Mr. Piguet joined the Company in 1990 and holds a diploma of Engineer ETS/HTL from the Ecole D’Ingenieurs de l’Etat de Vaud in Switzerland.

Jon Gerlach, age 54

Mr. Gerlach was named Chief Financial Officer, Vice President Finance and Secretary on August 5, 2003. Previously he served as the Finance Manager for Sappi Limited - Cloquet. Prior to working for Sappi, Mr. Gerlach served in various positions with Potlatch’s Minnesota Pulp and Paper Division from 1994 to 2002. His most recent position at Potlatch was the Division Manager of Business Planning. Mr. Gerlach has also worked as a Financial Analyst with Maurices Incorporated and with Ernst & Young LLP in its audit department. Mr. Gerlach earned a M.B.A. from the University of Minnesota Duluth in 2001 and a B.S. in Accounting from St. John’s University in 1989.

Kenneth Hegman, age 50

Mr. Hegman joined the Company in February 1999, beginning his employment in sales. From January 2006 to January 2011, Mr. Hegman served as Division Manager of the Company’s IKONICS Imaging, Digital Texturing and AMS businesses. From January 2011 to April 2013, Mr. Hegman served as National Sales Director, leading the Company’s Domestic division. From April 2013 until March 2017, Mr. Hegman was Vice President of Sales: North America where he oversaw the Company’s Domestic and IKONICS Imaging operations, before being promoted to his current position of Chief Operating Officer in March 2017, in which he now oversees the Company’s International sales in addition to his previous duties. Prior to his tenure at IKONICS, Mr. Hegman served as Sales Manager for Bloomington, Minnesota-based Team Development Group, Inc.

EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE

The following table sets forth certain information regarding compensation for the fiscal years ended December 31, 2020 and December 31, 2019, provided to the Chief Executive Officer and the two other most highly compensated executive officers who received remuneration exceeding $100,000 during fiscal 2020 and 2019 (the “Named Executive Officers”).

In connection with his hiring and appointment as Chief Executive Officer, the Company entered into an employment agreement with Mr. Sandgren (the “CEO Employment Agreement”). The CEO Employment Agreement provides that Mr. Sandgren will receive an annual base salary of $275,000 and an initial signing bonus of $30,000, will be eligible for an annual cash incentive under the Company’s cash incentive plan for fiscal 2020 with a target incentive opportunity of 50% of his base salary, and will receive annual grants of 10,000 stock options under the Company’s 2019 Equity Incentive Plan (the “Equity Plan”) for the first five years of his employment. The stock options underlying each annual grant will vest pro rata over three years and remain exercisable for ten years from the grant date, subject to Mr. Sandgren meeting the conditions for exercise set forth in the Equity Plan.  The Company has not entered into employment agreements with any of the Named Executive Officers other than Glenn Sandgren.

The Company maintains an annual bonus program pursuant to which executive officers, including the Named Executive Officers, are eligible to receive cash bonuses equal to a percentage of the year’s bonus pool. Amounts shown in the “Non-Equity Incentive Plan Compensation” column represent payments pursuant to the Company’s bonus program for the applicable fiscal year. The fiscal 2020 and fiscal 2019 bonus pools were set at 10% of the amount by which net income before income taxes (as adjusted for unusual items of income or expense) (“EBT”) for the applicable fiscal year exceeded the EBT target for that fiscal year.  For fiscal 2020 and fiscal 2019, Mr. Ulland was eligible to receive a bonus equal to 33% of the pool.  Mr. Ulland’s 2020 allocation of the bonus pool was reduced proportionally to his time employed during 2020.  For fiscal year 2020, Mr. Sandgren was eligible to receive a bonus equal to 33% of the pool reduced proportionally to his time employed by the Company during 2020.  Mr. Piguet and Mr. Hegman each were eligible to receive a bonus equal to 22% of the pool, respectively. The Company’s other executive officer was eligible to receive a bonus equal to 22% of the pool in 2020 and 2019. No non-equity incentive plan compensation payments were made to the Named Executive Officers for 2020 or 2019 because the Company’s EBT for the period did not exceed the amount required for payment under the plan.

The Company did not make any grants of stock options to the Named Executive Officers during fiscal 2020 or fiscal 2019, except for a grant of 10,000 stock options to Glenn Sandgren on February 10, 2020 pursuant to the terms of his CEO Employment Agreement.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table summarizes outstanding equity awards granted to the Named Executive Officers as of December 31, 2020.

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes certain information regarding our equity compensation plans, as of December 31, 2020.

EMPLOYMENT CONTRACTS; TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS

As of December 31, 2020, the Company did not have any employment agreements with any of the Named Executive Officers other than Glenn Sandgren (as described more fully above), but has entered into confidentiality and non-competition agreements with the Named Executive Officers. These agreements generally provide that the executive will not solicit any other employee of the Company to leave the Company during the executive’s employment with the Company and for two years following such employment, will not compete with the Company during the executive’s employment and for one year thereafter, and will protect the proprietary information of the Company during and following such executive’s employment.

Pursuant to the CEO Employment Agreement, if Mr. Sandgren’s employment is terminated by the Company without cause or by him for good reason within the first five (5) years following his start date (the “Severance Eligibility Period”), then subject to his execution of a release and waiver of claims and his compliance with the other terms and conditions of his agreement, he’ll be entitled to receive six months of continued base salary payments, continued health insurance coverage for six months following his termination, and immediate vesting of any of his then granted but unvested stock option grants, which will remain exercisable for one year following the termination of his employment.  If. Mr. Sandgren’s employment is terminated during the Severance Eligibility Period by the Company without cause or by him for good reason within 12 months following, or in connection with, a change in control of the Company, then subject to the conditions outlined above, the severance period will be extended to twelve months. For purposes of the CEO Employment Agreement, good reason is defined to include a material reduction in Mr. Sandgren’s base salary or bonus opportunity, other than a general reduction that affects all similarly situated executives in substantially the same proportions; a relocation of Mr. Sandgren’s principal place of employment by more than fifty (50) miles from his then-current principal place of employment; or a material, adverse change in his title, authority, or material duties.  Cause is defined in the CEO Employment Agreement to include Mr. Sandgren’s breach of a material term of the CEO Employment Agreement; his material failure to act in accordance with proper and lawful specific direction of the Board; his engaging in gross misconduct, fraud, dishonesty, insubordination or moral turpitude which is materially injurious to the Company; his alcohol or drug use which adversely impairs the performance of his duties or adversely impacts the reputation of the Company; or his violation of any material statute governing the business of the Company or of any material rules or regulations promulgated by any regulatory body governing the Company or its business.

On January 7, 2020, the Company entered into a Transition Agreement with William C. Ulland in connection with his anticipated retirement, whereby the Company paid Mr. Ulland $225,000 as a severance payment in connection with his retirement. This amount was paid by the Company in March, 2020.

DELINQUENT SECTION 16(a) REPORTS

Section 16(a) of the Exchange Act requires that the Company’s directors, executive officers and persons who own more than ten percent of the Company’s Common Stock file initial reports of ownership of the Company’s Common Stock and changes in such ownership with the Securities and Exchange Commission. To the Company’s knowledge, based solely on a review of copies of forms submitted to the Company during and with respect to fiscal 2020 and on written representations from the Company’s directors and executive officers, all required reports were filed on a timely basis during fiscal 2020 except that David Elliot Lazar, Activist Investing LLC and Custodian Ventures LLC did not file a Form 3 for the transactions reported by them in the Schedule 13D jointly filed with the Securities and Exchange Commission on November 2, 2020.

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has selected RSM US LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. It is the judgment of the Audit Committee that RSM US LLP has and will conduct its affairs in an appropriate manner and warranted selection as the Company’s independent registered public accounting firm. While it is not required to do so, the Board of Directors is submitting the selection of RSM US LLP for ratification in order to ascertain the views of the Company’s shareholders on this selection. If the selection is not ratified, the Audit Committee will reconsider its selection.

A representative of RSM US LLP is expected to be present at the Annual Meeting of Shareholders and to be afforded an opportunity to make a statement or respond to questions during the meeting.

ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Company is asking its shareholders to provide advisory approval of the compensation of the Named Executive Officers included in this Proxy Statement, as the Company has described it in the “Executive Compensation” section. This vote is advisory and is not binding on the Company or the Compensation Committee of the Board of Directors. This vote is required under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The purpose of the vote is for the shareholders to give their opinion to the Board on the Company’s executive compensation. The Company believes its executive compensation practices, including the lack of employment agreements, change-in-control agreements or perquisites, demonstrate good governance practices and align the interests of the Company’s executive officers and shareholders. The Company also believes that the compensation of the Named Executive Officers as disclosed in this Proxy Statement is significantly lower than the compensation paid to similar executive officers at companies similar to IKONICS due to the Company’s relative low-cost location in Duluth, Minnesota, its historical pay practices, and its focus on pay equity among the Named Executive Officers.

The Board of Directors recommends that shareholders approve the following advisory resolution:

RESOLVED, that the compensation paid to the individuals identified in the Summary Compensation Table, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, is hereby approved.

ADDITIONAL MATTERS

The Annual Report of the Company for the year ended December 31, 2020, including financial statements, is being mailed with this Proxy Statement.

Shareholder proposals intended to be presented at the 2022 Annual Meeting of Shareholders must be received by the Company at its principal executive office no later than November 23, 2021 for inclusion in the Proxy Statement for that meeting. Such proposals must also meet all the relevant requirements of the Company’s By-laws in order to be included in the Proxy Statement.

If a shareholder desires to propose an item of business for consideration without inclusion in the Company’s Proxy Statement, then the shareholder must comply with all of the applicable requirements set forth in the By-laws, including timely written notice of such proposal delivered to the Secretary at the Company’s principal executive office. To be timely under our By-laws for the 2022 Annual Meeting of Shareholders, we must receive such notice not later than the close of business on January 29, 2022.

As of the date of this Proxy Statement, management knows of no matters that will be presented for determination at the meeting other than those referred to herein. If any other matters properly come before the Annual Meeting calling for a vote of shareholders, it is intended that the shares of Common Stock represented by the proxies solicited by the Board of Directors will be voted by the persons named therein in accordance with their best judgment.

 

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