SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Section 240.14a-12
Vicon Industries Inc.
- ------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- ------------------------------------------------------------------------------
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<PAGE>
VICON INDUSTRIES, INC.
89 Arkay Drive
Hauppauge, NY 11788
(631) 952-2288 (CCTV)
Notice of Annual Meeting of Shareholders
To Be Held on April 20, 2000
To the Shareholders of Vicon Industries, Inc.
Notice is hereby given that the Annual Meeting of Shareholders of Vicon
Industries, Inc. (the "Company"), a New York corporation, will be held at the
Company's corporate headquarters located at 89 Arkay Drive, Hauppauge, New York
11788, on April 20, 2000 at 10:00 a.m. local time for the following purposes,
all of which are more completely described in the accompanying proxy statement:
1. To elect two directors for terms expiring in 2003; and
2. To ratify the selection of KPMG LLP, independent certified public
accountants, as auditors for the Company for the fiscal year
ending September 30, 2000; and
3. To receive the reports of officers and to transact such other
business as may properly come before the meeting.
Shareholders entitled to notice of and to vote at the Annual Meeting are
shareholders of record at the close of business on March 3, 2000 fixed by action
of the Board of Directors.
The Company's proxy statement is submitted herewith. The Annual Report
to Shareholders for the year ended September 30, 1999 is included with the proxy
statement.
By Order of the Board of Directors,
Hauppauge, New York Arthur D. Roche
March 3, 2000 Secretary
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
You are urged to date, sign and promptly return your proxy so that your shares
may be voted in accordance with your wishes and in order that the presence of a
quorum may be assured. The prompt return of your signed proxy, regardless of the
number of shares you hold, will aid the Company in reducing the expense of
additional proxy solicitation. The giving of such proxy does not affect your
right to vote in person in the event you attend the meeting.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
SOLICITATION AND REVOCATION OF PROXY
The enclosed proxy, for use only at the Annual Meeting of Shareholders
to be held on April 20, 2000 at 10:00 a.m., and any and all adjournments
thereof, is solicited on behalf of the Board of Directors of Vicon Industries,
Inc. (the "Company").
Any shareholder executing a proxy retains the right to revoke it by
notice in writing to the Secretary of the Company at any time prior to its use.
The cost of soliciting the proxy will be borne by the Company.
PURPOSES OF ANNUAL MEETING
The Annual Meeting has been called for the purposes of electing two
directors whose term of office expires in 2003; ratifying the selection of
auditors; receiving the reports of officers; and transacting such other business
as may properly come before the meeting.
The persons named in the enclosed proxy have been selected by the Board
of Directors and will vote shares represented by valid proxies. They have
indicated that, unless otherwise specified in the proxy, they intend to vote FOR
the election of two directors whose term of office expires in 2003; and FOR
ratification of the selection of auditors.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next Annual
Meeting of Shareholders must be received at the Company's principal executive
office no later than November 1, 2000, and must comply with all other legal
requirements in order to be included in the Company's proxy statement and form
of proxy for that meeting. Proposals of security holders not meeting the
requirements of Rule 14a-8 of Regulation 14A must comply with the requirements
set forth in the Company's Bylaws relating to business conducted at the Annual
Meeting of Shareholders.
This proxy statement and the enclosed proxy card are being furnished to
shareholders on or about March 10, 2000.
2
<PAGE>
VOTING SECURITIES
The Company has one class of capital stock, consisting of common stock,
par value $.01 per share, of which each outstanding share entitles its holder to
one vote. Cumulative voting is not provided under the Company's Certificate of
Incorporation or Bylaws. Shareholders entitled to vote or to execute proxies are
shareholders of record at the close of business on March 3, 2000. As of
March 3, 2000, there were 4,586,512 shares outstanding.
The presence, in person or by proxy, of at least a majority of the total
number of shares of Common Stock entitled to vote is necessary to constitute a
quorum at the Annual Meeting. In the event that there are insufficient votes for
a quorum or to approve any proposal at the time of the Annual Meeting, the
Annual Meeting may be adjourned in order to permit the further solicitation of
proxies.
As to the election of directors, the proxy card being provided by the
Board of Directors enables a shareholder to vote for the election of the
nominees proposed by the Board, or to withhold authority to vote for one or more
of the nominees being proposed. Under New York law and the Company's Certificate
of Incorporation and Bylaws, directors are elected by a plurality of shares
voted, without regard to either (i) broker non-votes, or (ii) proxies as to
which authority to vote for one or more of the nominees being proposed is
withheld.
Concerning the ratification of independent auditors and all other
matters that may properly come before the Annual Meeting, by checking the
appropriate box, a shareholder may (i) vote "FOR" the item; (ii) vote "AGAINST"
the item; or (iii) "ABSTAIN" with respect to the item. Under the Company's
Certificate of Incorporation and Bylaws, unless otherwise required by law, the
ratification of independent auditors and all other matters shall be determined
by a majority of the votes cast affirmatively or negatively, without regard to
broker non-votes or proxies marked "ABSTAIN" as to the matter.
Proxies solicited hereby will be returned to the Board, and will be
tabulated by inspectors of election designated by the Board, who will not be
employed, or a director of, the Company or any of its affiliates.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to each person, known to
the Company to be a "beneficial owner" (as defined in regulations of the
Securities and Exchange Commission) of more than five percent of the Company's
outstanding Common Stock as of January 28, 2000 and the shares beneficially
owned by the Company's Directors, Executive Officers and by all Executive
Officers and Directors as a group.
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned (1) of Class
- ------------------- ---------------------- --------
CBC Co., Ltd.
And Affiliates
2-15-13 Tsukishima
Chuo-ku
Tokyo, Japan 104 543,715 11.4%
Dimensional Fund Advisors
1299 Ocean Avenue
Santa Monica, CA 90401 267,200 (7) 5.6%
- -------------------------------------------------------------------------------
C/O Vicon Industries, Inc.
Kenneth M. Darby 250,092 5.2
Chu S. Chun 204,507 (2) 4.3
Arthur D. Roche 153,967 (3) 3.2
W. Gregory Robertson 19,025 (4) *
Kazuyoshi Sudo 16,125 (5) *
Milton F. Gidge 15,825 (5) *
Peter F. Neumann 15,125 (4) *
Total all Executive Officers
and Directors as a
group (7 persons) 674,666 (6) 14.1%
* Less than 1%.
(1) Unless otherwise indicated, the Company believes that all persons
named in the table have sole voting and investment control over the
shares of the stock owned.
(2) Mr. Chun has voting and dispositive power over 204,507 shares but
disclaims beneficial ownership as to all but 48,400 shares.
100,707 shares are owned by the International Industries, Inc.
Profit Sharing Plan and 55,400 shares are owned by immediate
family members.
(3) Includes currently exercisable options to purchase 14,000 shares,
69,967 shares held jointly by Mr.Roche and his wife, 50,000 shares
held by Mr.Roche's wife and 15,000 shares held by their children.
(4) Includes currently exercisable options to purchase 12,125 shares.
(5) Includes currently exercisable options to purchase 7,125 shares.
(6) Includes currently exercisable options to purchase 52,500 shares.
(7) As reported on Schedule 13G filed with the Securities and Exchange
Commission, Dimensional Fund Advisors had voting and investment control
over 267,200 shares as investment advisor and manager for various mutual
funds and other clients. These shares are beneficially owned by such
mutual funds or other clients.
4
<PAGE>
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Board is comprised of seven directors: three whose terms expire in
2001; two directors whose terms expire in 2002; and two directors to be elected
for a term expiring in 2003. Directors serve for a term of three years or until
their successors are elected and qualified. No person being nominated as a
director is being proposed for election pursuant to any agreement or
understanding between any person and the Company.
The nominees proposed for election to a term expiring in 2003 at the
Annual Meeting are Mr. Peter F. Neumann and Mr. Kazuyoshi Sudo. In the event
that either such nominee is unable or declines to serve for any reason, the
Board of Directors shall elect a replacement to fill the vacancy. The Board of
Directors has no reason to believe that either person named will be unable or
unwilling to serve.
Unless authority to vote for the nominees is withheld, it is intended
that the shares represented by the enclosed proxy will be voted FOR the
nominees named in the Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF THE NOMINEES NAMED IN THIS PROXY STATEMENT
Information with Respect to Nominee and Continuing Directors
The following sets forth the name of nominees and continuing directors,
their ages, a brief description of their recent business experience, including
present occupations and employment, certain directorships held by each and the
year in which each became a director of the Company.
Nominee and Their Director
Principal Occupations Since Age
- -----------------------------------------------------------------------------
Peter F. Neumann
Retired President
Flynn-Neumann Agency, Inc. 1987 65
Kazuyoshi Sudo
Chief Executive Officer
CBC (AMERICA) Corp. 1987 57
Continuing Directors whose Term of Office Expires in 2001
- -----------------------------------------------------------------------------
Chu S. Chun
Chairman and CEO
International Industries, Inc.
And Chun Shin Electronics, Inc. 1998 65
Milton F. Gidge
Retired Director and Executive
Lincoln Savings Bank 1987 70
W. Gregory Robertson
President
TM Capital Corp. 1991 56
5
<PAGE>
Continuing Directors whose Term of Office Expires in 2002
- -----------------------------------------------------------------------------
Kenneth M. Darby
Chairman and CEO
Vicon Industries, Inc. 1987 54
Arthur D. Roche
Retired Executive Vice President
Vicon Industries, Inc.
Retired Partner
Arthur Andersen & Co. 1992 61
Mr. Neumann has been a director of the Company since 1987. He is the
retired President of Flynn-Neumann Agency, Inc., an insurance brokerage firm.
Since 1978, Mr. Neumann has been serving as a director of Reliance Federal
Savings Bank. Mr. Neumann's current term on the Board ends in April 2000.
Mr. Sudo has been a director of the Company since 1987. Mr. Sudo is Chief
Executive Officer of CBC (AMERICA) Corp., a distributor of electronic, chemical
and optical products. From 1981 to 1996, he was Treasurer of such company. He
has also been a director of CBC Co., Ltd. since 1997. Mr. Sudo's current term on
the Board ends in April 2000.
Mr. Chun has been a director of the Company since April 1998. He has been
Chairman of the Board and Chief Executive Officer of International Industries,
Inc. and Chun Shin Electronics, Inc. since at least 1988. Mr. Chun's current
term on the Board ends in April 2001.
Mr. Gidge has been a director of the Company since 1987. He is a retired
director and executive officer of Lincoln Savings Bank for which he served from
1976 to 1994 as Chairman, Credit Policy. He has also been a director since 1980
of Interboro Mutual Indemnity Insurance Co., a general mutual insurance company,
and a director of Intervest Bancshares Corporation, a mortgage banking holding
company, and another affiliated company of Intervest since 1988. His current
term on the Board ends in April 2001.
Mr. Robertson has been a director of the Company since 1991. He is
President of TM Capital, a financial services company, which he founded in 1989.
From 1985 to 1989, he was employed by Thompson McKinnon Securities Inc., as head
of investment banking and public finance. He has also been a director since 1995
of Todhunter International, a producer of spirits for the alcohol beverage
industry. Mr. Robertson's current term on the Board ends in April 2001.
Mr. Darby has served as Chairman of the Board since April 1999, as Chief
Executive Officer since April 1992 and as President since October 1991. Mr.
Darby also served as Chief Operating Officer and as Executive Vice President,
Vice President, Finance and Treasurer of the Company. He joined the Company in
1978 as Controller after more than nine years at Peat Marwick Mitchell & Co., a
public accounting firm. Mr. Darby's current term on the Board ends in April
2002.
Mr. Roche has been a director of the Company since 1992. He served as
Executive Vice President and co-participant in the Office of the President of
the Company from August 1993 until his retirement in November 1999. For the six
months earlier, Mr. Roche provided consulting services to the Company. In
October, 1991, Mr. Roche retired as a partner of Arthur Andersen & Co., an
international accounting firm which he joined in 1960. His current term on the
Board ends in April 2002.
6
<PAGE>
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
The Board of Directors has a number of standing committees including the
executive committee, the compensation committee and the audit committee.
The executive committee consists of Messrs. Darby, Gidge, Neumann, and
Roche. The committee meets in special situations when the full Board cannot be
convened. The Committee did not meet during the past year.
The compensation committee consists of Messrs. Neumann, Gidge and
Robertson, all of whom are non-employee directors. The function of the
compensation committee is to establish and approve the appropriate compensation
for Mr. Darby, recommend the award of stock options, and to review the
recommendations of the President with respect to the compensation of all other
officers. The Committee met once during the last fiscal year.
The audit committee consists of Messrs. Gidge, Robertson, and Sudo, all
of whom are non-employee directors. The audit committee reviews the internal
financial controls of the Company and the objectivity of its financial
reporting. The Committee meets with appropriate financial personnel from the
Company and independent certified public accountants in connection with their
audits. The committee recommends to the Board the appointment of independent
certified public accountants to serve as the Company's auditors, subject to
ratification by the shareholders. The independent certified public accountants
have complete and free access to the committee at any time.
The committee met once during the last fiscal year.
The full Board of Directors considers candidates to the Board as
nominees for election at the Annual Meeting. Directors are selected on the basis
of recognized achievements and their ability to bring skills and experience to
the deliberations of the Board. The Board will consider written shareholder
recommendations for candidates at the next Annual Meeting of Shareholders, which
are submitted not later than November 1, 2000 to the Company's principal
executive offices and are addressed to the Chairman of the Board.
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company. Outside
members of the Board are kept informed of the Company's business through various
reports and documents sent to them, as well as through operating and financial
reports made at Board and committee meetings by Mr. Darby and other officers.
The Board of Directors held seven meetings in the Company's 1999 fiscal
year, including all regularly scheduled and annual meetings. With the exception
of Mr. Chun, who did not attend any board meetings during the fiscal year, no
other Board member attended fewer than 75% of the aggregate of (1) the total
number of meetings of the Board (held during the period for which he was a
director) and (2) the total number of meetings held by all committees on which
he served (during the periods that he served).
The directors are each compensated at the annual rate of $10,000 based on
the attendance at the six scheduled meetings a year. Committee fees are $750 per
meeting attended in person. Employee directors are not compensated.
7
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and CBC Co., Ltd. (CBC), a Japanese corporation which
beneficially owns 11.4% of the outstanding shares of the Company, have been
conducting business with each other for approximately twenty years. During this
period, CBC has served as a lender, a product supplier and sourcing agent, and a
private label reseller of the Company's products. In 1999, the Company purchased
approximately $5.4 million of products from CBC. CBC competes with the Company
in various markets worldwide. Additionally, the Company sold certain finished
products to CBC under private label for resale principally in Europe. Sales of
all products to CBC were $1.3 million in 1999. Mr. Kazuyoshi Sudo, a director of
the Company and of CBC, is Chief Executive Officer of CBC (AMERICA) Corp., a
U.S. subsidiary of CBC.
Mr. Chu S. Chun, a director, has beneficial voting control over 4.3% of the
common stock of the Company. Mr. Chun also beneficially owns a controlling
interest in Chun Shin Electronics, Inc., (CSE), a South Korea company that,
among other things, manufactures and assembles certain Vicon products. The
Company owns 30% of CSE. Mr. Chun is the CEO and has operating control of CSE.
In 1999, CSE sold approximately $5.7 million of products to the Company through
International Industries, Inc. (I.I.I.), a U.S. based company controlled by Mr.
Chun. I.I.I. arranges the importation of all the Company's product purchases
from CSE. In addition, I.I.I. purchased approximately $535,000 of products
directly from the Company during 1999 for resale to CSE.
OTHER OFFICERS OF THE COMPANY
In addition to Mr. Darby, the Company has five other officers. They are:
John M. Badke, age 40 Vice President, Finance and
Chief Financial Officer
John L. Eckman, age 50 Vice President, Sales
Robert D. Grossman, age 39 Vice President, Customer and
Technical Services
Peter A. Horn, age 44 Vice President, Operations
Yacov A. Pshtissky, age 48 Vice President, Technology and Development
Mr. Badke has been Chief Financial Officer since December 1999 and Vice
President, Finance since October 1998. Previously, he served as Controller since
joining the Company in 1992. Prior to joining the Company, Mr. Badke was the
Controller for NEK Cable, Inc. and an audit manager with the international
accounting firms of Arthur Andersen & Co. and Peat Marwick Main & Co.
Mr. Eckman has been Vice President, Sales since April 1999. He joined the
Company in August 1995 as Eastern Regional Manager and was promoted to Vice
President, U.S. Sales in July 1996. Prior to joining the Company, he was
Director of Field Operations for Cardkey Systems, Inc., an access control
security products manufacturer for which whom he was employed for 12 years.
Mr. Grossman has been Vice President, Customer and Technical Services since
June 1999. He joined the Company in 1996 as Director of Technical Services.
Prior to joining the Company, he was Senior Project Manager for Sensormatic
Electronics Corporation, a CCTV and electronic article surveillance products
manufacturer for which he was employed for six years.
Mr. Horn has been Vice President, Operations since June 1999. From 1995 to
1999, he was Vice President, Compliance and Quality Assurance. Prior to that
time, he served as Vice President in various capacities since his promotion in
May 1990.
Mr. Pshtissky has been Vice President, Technology and Development since May
1990. Mr. Pshtissky was Director of Electrical Product Development in from March
1988 through April 1990. Prior to that time he was an Electrical Design
Engineer.
8
<PAGE>
EXECUTIVE COMPENSATION
BOARD COMPENSATION COMMITTEE REPORT
The Compensation Committee's compensation policies applicable to the
Company's officers for the last completed fiscal year were to pay a competitive
market price for the services of such officers, taking into account the overall
performance and financial capabilities of the Company and the officer's
individual level of performance.
Mr. Darby makes recommendations to the Compensation Committee as to the
base salary and incentive compensation of all officers other than himself. The
Committee reviews these recommendations with Mr. Darby, and after such review,
determines compensation. In the case of Mr. Darby, the Compensation Committee
makes its determination after direct negotiation with him. For each officer, the
Committee's determinations are based on its conclusions concerning each
officer's performance and comparable compensation levels in the CCTV Industry
and the Long Island area for similarly situated officers at comparable
companies. The overall level of performance of the Company is taken into account
but is not specifically related to the base salary of these officers. Also, the
Company has established an incentive compensation plan for all of the officers,
which provides a specified bonus to each officer upon the Company's achievement
of certain annual profitability targets.
The Compensation Committee grants options to officers to link
compensation to the performance of the Company. Options are exercisable in the
future at the fair market value at the time of grant, so that an officer granted
an option is rewarded by the increase in the price of the Company's stock. The
Committee grants options to officers based on significant contributions of such
officers to the performance of the Company.
In addition, in determining Mr. Darby's salary for service as Chief
Executive Officer, the Committee considered the responsibility assumed by him in
formulating and implementing a management and long-term strategic plan.
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by,
or paid for all services rendered to the Company during fiscal 1999, 1998 and
1997 by the Chief Executive Officer and the Company's most highly compensated
Executive Officers whose total annual salary and bonus exceeded $100,000 during
any such year.
<TABLE>
<CAPTION>
Long-Term Compensation
Awards Payouts
Annual Compensation Restricted Securities
Name and All Other Stock Underlying LTIP
Principal Position Year Salary($) Bonus($) Compensation Award Options(#) Payouts
- ------------------ -------------- -------- ------------ ----- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Kenneth M. Darby 1999 $275,000 $261,690 (1) $3,000 (3) $111,814(4) - -
Chief Executive 1998 $225,000 $297,525 (2) $3,000 (3) $344,640(5) - -
Officer 1997 $225,000 $ 84,017 (2) $3,000 (3) - 58,000 -
Arthur D. Roche 1999 $180,000 $140,910 (1) - - - -
Executive 1998 $170,000 $160,206 (2) - - - -
Vice President 1997 $170,000 $ 45,240 (2) - - 35,000 -
9
<PAGE>
<FN>
(1) Represents cash bonus equal to 3.25% and 1.75% of the sum of
consolidated pre-tax income and provision for officers' bonuses for Mr.
Darby and Mr. Roche, respectively, which bonus formula was adopted for
1999 by the Board of Directors upon the recommendation of its
Compensation Committee.
(2) Represents cash bonus equal to 4.55% and 2.45% of the sum of
consolidated pre-tax income and provision for officers' bonuses for Mr.
Darby and Mr. Roche, respectively, which bonus formula was adopted for
years 1998 and 1997 by the Board of Directors upon the recommendation of
the Compensation Committee.
(3) Represents life insurance policy payment.
(4) Represents deferred compensation benefit of 16,565 shares of Common
Stock held by the Company in Treasury which vests upon the expiration of
Mr. Darby's employment or earlier upon certain occurrences including his
death, involuntary termination or a change in control of the Company.
Mr. Darby's current employment agreement expires in October 2004. The
value of such stock is based on the fair market value on the date of
grant. At September 30, 1999, the quoted market value of such shares
approximated $116,000. No dividends can be paid on such shares.
(5) Represents deferred compensation benefit of 45,952 shares of Common
Stock held by the Company in Treasury which vests upon the expiration of
Mr. Darby's employment or earlier upon certain occurrences including his
death, involuntary termination or a change in control of the Company.
The value of such stock is based on the fair market value on the date of
grant. At September 30, 1999, the quoted market value of such shares
approximated $322,000. No dividends can be paid on such shares.
</FN>
</TABLE>
10
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Individual Grants Value at Assumed
Annual Rates of Stock
% of Total Price Appreciation
No. of Granted to Exercise For Option Term
Options Employees in Price Expiration ----------------------
Name Granted Fiscal Year Per Share Date 5% 10%
- ---- ------- ------------ --------- ---------- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Kenneth M. Darby 25,000 17% 6.7500 4/05 $57,400 $130,200
25,000 17% 8.1875 6/05 $69,600 $157,900
Arthur D. Roche 5,000 3% 8.1875 6/05 $13,900 $ 31,600
</TABLE>
Options granted in the year ended September 30, 1999 were issued under the 1999
Incentive Stock Option Plan and the 1999 Non-Qualified Stock Option Plan. The
options granted to Mr. Darby are exercisable as follows: up to 30% of the shares
on the second anniversary of the grant date, an additional 30% of the shares on
the third anniversary of the grant date, and the balance of the shares on the
fourth anniversary of the grant date. Options are not exercisable after the
expiration of six years from the date of grant. The options granted to Mr. Roche
were made pursuant to plan provisions for grants to directors and are fully
exercisable after one year from the date of grant.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
At September 30, 1999
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-money
Options (2) Options (2)
------------ -------------
Shares
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized (1) Unexercisable Unexercisable
- --------------- ----------- ------------ ------------- -------------
Kenneth M. Darby 23,200 $115,850 -0-/50,000 -0-/$6,250
Arthur D. Roche - - 14,000/5,000 $60,750/-0-
(1) Calculated based on the difference between the closing quoted market prices
per share at the date of exercise and the exercise prices.
(2) Calculated based on the difference between the closing quoted market price
($7.00) and the exercise price.
11
<PAGE>
EMPLOYMENT AGREEMENTS
Mr. Darby has entered into an employment agreement with the Company that
provides for an annual salary of $285,000 through fiscal 2004. This agreement
provides for payment in an amount up to three times his average annual
compensation for the previous five years if there is a change in control of the
Company without Board of Director approval (as defined in the agreement). In
addition, Mr. Darby is eligible to receive a cash bonus based on certain
performance measures, including the Company's profitability, which was adopted
by the Board of Directors upon the recommendation of its Compensation Committee.
Mr. Darby's agreement also provides for an accumulated deferred compensation
benefit of 70,647 shares of Common Stock held by the Company in treasury. Such
benefit vests upon the termination of his employment, or earlier upon certain
occurrences, including his death, involuntary termination or a change in control
of the Company. The market value of such benefit as of February 18, 2000 was
approximately $283,000.
STOCK PERFORMANCE GRAPH
The following graph compares the return of $100 invested in the
Company's stock on October 1, 1994, with the cumulative total return on the same
investment in the AMEX U.S. Market Index and the Nasdaq Electronic Components
Index. Such published indexes were obtained from the University of Chicago
Center for Research in Securities Prices.
COMPARISON OF FIVE YEARS CUMULATIVE TOTAL RETURN BETWEEN
VICON INDUSTRIES, INC. AND THE AMEX U.S. MARKET INDEX
AND THE NASDAQ ELECTRONIC COMPONENTS INDEX
(The following table is to be represented by a chart in the printed material)
Vicon AMEX U.S. Nasdaq Electronic
Date Industries, Inc. Market Index Components Index
10/01/94 100 100 100
10/01/95 103 123 199
10/01/96 138 125 237
10/01/97 462 157 417
10/01/98 393 147 332
10/01/99 386 188 683
* Fiscal years ended September 30th.
PROPOSAL 2. APPROVAL OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed KPMG LLP as auditors
for the fiscal year ending September 30, 2000, and further directed that
management submit the Board's selection of auditors to the shareholders at the
Annual Meeting for ratification. KPMG LLP, an internationally known firm of
independent certified public accountants, has audited the Company's financial
statements since 1973. The Company is not aware of any relationship with KPMG
LLP or any of its associates, other than the usual relationship that exists
between independent certified public accountants and client.
KPMG LLP will have a representative at the Annual Meeting of
Shareholders, who will have an opportunity to make a statement, if they should
so desire, and will be available to respond to appropriate questions. KPMG LLP
has provided no services other than audit and tax services in connection with
the examination of the Company's financial statements. The Board of Directors of
the Company recommends that you vote in favor of the selection of KPMG LLP as
the Company's auditors.
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Unless marked to the contrary, the shares represented by the enclosed
proxy will be voted FOR the ratification of KPMG LLP as the independent
auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
As of this date, management is not aware of any matters to be presented
for action at the Annual Meeting, other than those referred to in the Notice of
Annual Meeting of Shareholders, but the proxy form included with this proxy
statement, if executed and returned, gives discretionary authority to management
with respect to any other matters that may come before the meeting.
MISCELLANEOUS
Solicitation of proxies is being made by mail and may also be made in
person or by telephone or fax by officers, directors and regular employees of
the Company.
The cost of the solicitation will be borne by the Company.
By Order of the Board of Directors
Hauppauge, New York Arthur D. Roche
March 3, 2000 Secretary
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