UNIVERSAL SECURITY INSTRUMENTS, INC.
7-A Gwynns Mill Court
Owings Mills, Maryland 21117
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on September 28, 2000
To the Shareholders of Universal Security Instruments, Inc.:
The Annual Meeting of Shareholders of UNIVERSAL SECURITY
INSTRUMENTS, INC. will be held at the Hilton Garden Inn, 4770
Owings Mills Boulevard, Owings Mills, Maryland 21117, on
Thursday, September 28, 2000, at 10:30 a.m. for the following
purposes:
1. To elect a Board of three directors to serve until the
next annual meeting and until their successors have been elected
and qualify.
2. To transact such other business as may properly be
brought before the meeting or any adjournment thereof.
Only shareholders of record at the close of business on July
31, 2000 will be entitled to notice of and to vote at the
meeting.
By Order of the Board of Directors,
HARVEY B. GROSSBLATT
Secretary
DATED: August 17, 2000
IMPORTANT - YOUR PROXY IS ENCLOSED. Shareholders who do not plan
to attend the meeting are requested to complete, date, sign and
return promptly the enclosed proxy in the enclosed envelope. No
postage is required for mailing in the United States.
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of
Universal Security Instruments, Inc. the "Company") in connection
with the Annual Meeting of the Shareholders of the Company to be
held on September 28, 2000 or any adjournments thereof. The proxy
is revocable at any time before exercise by written notice to the
Secretary of the Company, 7-A Gwynns Mill Court, Owings Mills,
Maryland 21117.
Only shareholders of record at the close of business on July
31, 2000 (the "Record Date") will be entitled to notice of and to
vote at the meeting. The number of shares of Common Stock, $.01
par value, of the Company (the "Common Stock") outstanding on
July 31, 2000 and entitled to vote at the meeting is 912,270
shares, each having one vote.
BENEFICIAL OWNERSHIP
The following table reflects the names and addresses of the
only persons known to the Company to be the beneficial owners of
5% or more of the Common Stock outstanding as of the Record Date:
Name and address Shares beneficially Percent
of beneficial owner owned of class(1)
Michael Kovens 333,3432 34.0%
7-A Gwynns Mill Court
Owings Mills, Maryland 21117
Stephen C. Knepper 105,3602 10.7%
7-A Gwynns Mill Court
Owings Mills, Maryland 21117
Bruce Paul 129,400 14.2%
One Hampton Road
Purchase, New York
______________________________
(1) For the purpose of determining the percentages of stock
beneficially owned, shares of stock subject to options or
rights exercisable within 60 days of July 31, 2000 are deemed
to be outstanding.
(2) For information regarding the nature of beneficial ownership
of stock owned by Messrs. Kovens and Knepper, please see
footnotes 2 and 3, under INFORMATION REGARDING STOCK
OWNERSHIP OF MANAGEMENT.
ELECTION OF DIRECTORS
At the 2000 Annual Meeting, three directors will be elected
to hold office for the ensuing year and until their successors
are elected and qualify. Under the Company's bylaws, directors
are elected by the vote of a majority of the Company's
outstanding shares of Common Stock. Consequently, the
withholding of votes, abstentions and broker non-votes with
respect to shares of Common Stock otherwise present at the Annual
Meeting in person or by proxy may have an effect on the outcome
of this vote.
Unless otherwise specified in the proxy, it is the present
intention of the persons named in the accompanying form of proxy
to vote such proxy for the election as directors of the five
nominees listed below. Pursuant to the Company's By-laws, the
three nominees were nominated by the Board of Directors. If, due
to unforeseen contingencies, any of the nominees designated below
shall not be available for election, the persons named in the
accompanying form of proxy reserve the right to vote such proxy
for such other person or persons as may be nominated for director
by the management of the Company so as to provide a full Board.
Management has no reason to believe that any nominee will be
unable to serve if elected.
Principal occupation Director
Name Age for past five years since
Stephen C. Knepper. .56 Director; Chairman of the 1970
Board of the Company 1970
through July 1996; Vice
Chairman of the Board
since August 1996.
Michael Kovens. . . .57 Director; President of the 1970
Company 1970 through July
1996; Chairman of the
Board since August 1996.
Harvey Grossblatt . .54 Director since September 1996
1996; President since July
July 1996; Chief Financial
Officer since April 1997;
Executive Vice President
of the Company from December
1986 through June 1996;
Secretary and Treasurer of
the Company since September
1988; Vice President and Chief
Financial Officer of the Company
from October 1983 through May 1995.
During the fiscal year ended March 31, 2000, the Board of
Directors held one regular meeting at which all of the directors
were present.
Committees and Meetings of the Board of Directors
For the fiscal year ended March 31, 2000, the Company did
not have a standing Nominating Committee or Compensation
Committee of the Board of Directors, or committees performing
similar functions. The Company's Audit Committee consisted of its
two independent directors, both of whom resigned during the
year. The Audit Committee is to recommend to the Board the
selection of the independent public accountants, review with such
accountants and management the financial statements of the
Company, discuss with the accountants the results of the audit
and internal accounting procedures and controls, and review any
proposed related party transactions. These functions are
currently being performed by the Board of Directors.
Compensation of Directors
For the fiscal year ended March 31, 2000, directors employed
by the Company received no additional compensation for serving as
a director.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires that the Company's directors and executive
officers and each person who owns more than 10% of the
outstanding Common Stock file with the Securities and Exchange
Commission an initial report of beneficial ownership and
subsequent reports of changes in beneficial ownership of Common
Stock. To the Company's knowledge, all of the required persons
complied with the filing requirements applicable.
INFORMATION REGARDING STOCK OWNERSHIP OF MANAGEMENT
As of July 31, 2000, the shares of the Company's Common
Stock owned beneficially by each director, by each executive
officer and by all directors and officers as a group were as
follows:
Amount and nature of Percent of
Name of beneficial owner beneficial ownership class(1)
Michael Kovens. . . . . . . . . . 333,3432 34.0%
Stephen C. Knepper. . . . . . . . 105,3603 10.7%
Harvey Grossblatt . . . . . . . . 31,2724 3.3%
All directors and officers as
a group (3 persons included) . . 469,975 43.8%
_________________________________
(1) For the purpose of determining the percentages of stock
beneficially owned, shares of stock subject to options or
rights exercisable within 60 days of July 31, 2000 are deemed
to be outstanding pursuant to options granted under the
Company's Non-Qualified Stock Option Plan.
(2) Includes 68,750 shares which Mr. Kovens presently has the
right to acquire pursuant to options granted under the
Company's Non-Qualified Stock Option Plan and 5,048 shares
held by Mr. Kovens' adult children.
(3) Includes 68,750 shares which Mr. Knepper presently has the
right to acquire pursuant to options granted under the
Company's Non-Qualified Stock Option Plan and 4,487 shares
held by Mr. Knepper's adult children.
(4) Includes 24,000 shares which Mr. Grossblatt presently has the
right to acquire pursuant to options granted under the
Company's Non-Qualified Stock Option Plan.
EXECUTIVE COMPENSATION
Table I. Summary Compensation Table
The following table reflects the aggregate amount paid or
accrued by the Company in its three most recent fiscal years, for
each executive officer whose compensation exceeded $100,000 in the fiscal
year ended March 31, 2000.
Long Term Compensation
Name and Awards Payouts
Principal Annual Compensation Stock LTIP All Other
Position Year Salary Bonus Other Awards Options Payouts Compensation
Michael
Kovens 2000 $175,000 75,000 - - 23,750 - $ -0-
Chairman 1999 $175,000 - - - 12,500 - $ -0-
of the 1998 $175,000 - - - 15,000 - $ -0-
Board
Harvey
Grossblatt 2000 $122,500 10,000 - - - - $ -0-
President, 1999 $122,500 - - - 6,250 - $ -0-
Secretary 1998 $122,500 - - - - - $ -0-
and Treasurer
Table II. Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End
Option/SAR Values
The following table sets forth information concerning the number and
value of unexercised options held as of March 31, 2000 by each executive
officer whose compensation exceeded $100,000 in the year then ended:
Number of
Securities Value of
Underlying Unexercised
Unexercised In-The-Money
Options Options
Shares SARS at FY-End SARS at FY-End
Acquired Value Exer- /Unexer- Exer- /Unexer-
Name on Exercise Realized cisable/cisable cisable/disable
Michael Kovens - - 68,750 / -0- 4,797 / -0-
Harvey Grossblatt - - 24,000 / -0- 13,844 / -0-
Table III. Option/SAR Grants in Last Fiscal Year (Individual Grants)
The following table sets forth information concerning the number and
percentage of total options to each executive officer whose compensation
exceeded $100,000 in the fiscal year ended March 31, 2000:
Number of Percent of
Securities Total Options/
Underlying SARS Granted Exercise
Options/SARS To Employees or
Name Granted In Fiscal Year Base Price
Expiration Date
Michael Kovens 23,750 32.3% 1-5/16
9/26/04
OTHER MATTERS
The solicitation of proxies will be made by mail, at the expense of the
Company, including the charges and expenses of brokerage firms and others for
forwarding solicitation material to beneficial owners of stock. Subsequent
solicitations may be made by mail, telegraph, telephone or any other
appropriate means.
The Board of Directors of the Company is not aware of any other matter
which may be presented for action at the Annual Meeting, but should any such
matter requiring a vote of the shareholders arise, it is intended that the
proxies will be voted with respect thereto in accordance with the best
judgment of the person or persons voting the proxies, and discretionary
authority to do so is provided for in the proxy.
Grant Thornton LLP is the firm of certified public accountants selected
by the Board of Directors of the Company to audit the books and accounts of
the Company for the fiscal year ended March 31, 2000. It is anticipated that
representatives of Grant Thornton LLP will be present at the Annual Meeting
to respond to appropriate questions.
Shareholders who do not plan to attend the Annual Meeting are urged to
complete, date, sign and return the enclosed proxy in the enclosed envelope
to which no postage need be affixed if mailed in the United States. Prompt
response is helpful and your cooperation will be appreciated.
By Order of the Board of Directors,
HARVEY B. GROSSBLATT
Secretary
Dated: August 17, 2000
