<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
GENERAL DATACOMM INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
GENERAL DATACOMM INDUSTRIES, INC.
MIDDLEBURY, CONNECTICUT 06762-1299
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 2, 2000
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
GENERAL DATACOMM INDUSTRIES, INC. (the "Corporation") will be held at the
Corporate offices of The Chase Manhattan Bank, 11th Floor, 270 Park Avenue, New
York, New York, on Thursday, March 2, 2000 at 4:00 P.M. for the following
purposes:
1. To elect two directors to serve for a term of three years and
until their successor are elected.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on January 4, 2000 has been fixed as the record date
for the determination of the stockholders entitled to receive notice of and to
vote at the meeting.
By Order of the Board of Directors
HOWARD S. MODLIN,
Secretary
Dated: January 4, 2000
IMPORTANT: THE MANAGEMENT INVITES YOU TO ATTEND THE MEETING IN PERSON, BUT IF
YOU ARE UNABLE TO BE PRESENT, PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY AS
PROMPTLY AS POSSIBLE. NO POSTAGE IS REQUIRED IF THE PROXY IS RETURNED IN THE
ENCLOSED ENVELOPE AND IS MAILED WITHIN THE UNITED STATES.
<PAGE> 3
GENERAL DATACOMM INDUSTRIES, INC.
MIDDLEBURY, CONNECTICUT 06762-1299
------------------------
PROXY STATEMENT
This statement is furnished in connection with the solicitation by the
Board of Directors of General DataComm Industries, Inc. (the "Corporation") of
proxies in the accompanying form to be used at the Annual Meeting of the
Stockholders of the Corporation to be held on Thursday, March 2, 2000, and at
all adjournments thereof, for the purposes set forth in the accompanying notice
of the meeting. It is intended that this statement and the proxies solicited
hereby be mailed to stockholders on or before January 31, 2000. A stockholder
who shall sign and return a proxy in the form enclosed with this statement has
the power to revoke it any time before it is exercised by giving written notice
to the Corporation, Attention: Secretary, to such effect. A stockholder
attending the meeting in person may make his or her own nomination from the
floor when the election of directors is considered. Proxies properly executed
and received in time for the meeting will be voted.
The close of business on January 4, 2000 has been fixed as the record date
for the determination of the stockholders entitled to receive notice of and to
vote at the meeting. There were outstanding as of the close of business on
January 4, 2000, and entitled to be voted at the meeting, 22,697,395 shares of
Common Stock and 2,092,383 shares of Class B Stock. All of said shares are
entitled to one (1) vote on all matters voted on at the Annual Meeting, voting
as a single class. The holders of Class B Stock are entitled to ten (10) votes
per share in any election of directors if more than 15% of the shares of Common
Stock outstanding on the record date are owned beneficially by a person or a
group of persons acting in concert, or if a nomination for the Board of
Directors is made by a person or group of persons acting in concert (other than
the Board) provided such nomination is not made by one (1) or more holders of
Class B Stock, acting in concert with each other, who beneficially own more than
15% of the shares of Class B Stock outstanding on such record date. The Board of
Directors is not presently aware of any circumstance that would give holders of
Class B Stock the right to ten (10) votes per share for the election of
directors at the Annual Meeting.
The affirmative vote, in person or by proxy, of a majority of the shares of
Common Stock and Class B Stock voted, together as a single class, is required to
elect two (2) directors.
The proxies in the accompanying form will be voted "FOR" the election of
two (2) directors as set forth in the Notice of Annual Meeting. If any other
specification is made by a stockholder in the proxy, it will be voted as
specified. In the discretion of the proxy-holders, the proxies will also be
voted for or against such other matters as may properly come before the meeting.
The Board of Directors is not aware that any other matters are to be presented
for action at the meeting.
<PAGE> 4
PRINCIPAL STOCKHOLDERS
The following table sets forth information as of December 13, 1999 with
respect to the beneficial ownership of the Corporation's Class B Stock and
Common Stock by all persons known by the Corporation to own more than 5% of the
Corporation's outstanding Class B Stock or Common Stock who are deemed to be
such beneficial owners of the Corporation's Class B Stock or Common Stock under
Rule 13d-3. The Percent of Class and Percent of All Classes presented are based
upon shares outstanding at January 4, 2000. Class B Stock is convertible into
Common Stock at any time on a share-for-share basis.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT OF PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP CLASS ALL CLASSES
- -------------- ------------------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Class B Stock Charles P. Johnson 1,513,677* 72.3%* 8.1%*
$.10 par value General DataComm Industries, Inc.
Middlebury, CT
06762-1299
James R. Arcara 351,420** 16.8%** 2.7%**
General DataComm Industries, Inc.
Middlebury, CT
06762-1299
Common Stock State of Wisconsin Investment Board 1,755,000*** 7.7% 7.1%
$.10 par value 121 East Wilson Street
Madison, WI 53702
</TABLE>
- ---------------
* The amount and percent of Class B Stock and percent of all classes do not
include 8,643 shares of Class B Stock or 10,857 shares of Common Stock owned
by trusts or in custody for the benefit of Mr. Johnson's daughter or 5,950
shares of Common Stock owned by his wife, as well as 8,293 shares of Common
Stock held by his wife in the Corporation's 401(k) Stock Fund, the
beneficial ownership of which he disclaims. In addition, the percent of all
classes includes 93,151 shares of Common Stock, 28,158 shares of Common
Stock held in the Corporation's 401(k) Stock Fund, 367,925
shares of Common Stock which Mr. Johnson
could acquire by the exercise of stock options within sixty (60) days, and
36,630 shares of Common Stock issuable upon conversion of the Corporation's
9% Convertible Exchangeable Preferred Stock ("Preferred Stock").
** The amount and percent of Class B Stock includes 100,419 shares owned
directly by Mr. Arcara and 251,001 shares held by Mr. Arcara as trustee
under various trusts for the benefit of the family of Mr. Johnson (238,801
shares) and as trustee under an insurance trust for the benefit of Mr.
Johnson (12,200 shares). Mr. Arcara has the sole power to vote and/or
dispose of the shares held as trustee. He disclaims beneficial ownership of
these 251,001 shares. In addition, the percent of all classes includes
98,486 shares of Common Stock owned directly by Mr. Arcara with his wife,
30,661 shares of Common Stock held in the Corporation's 401(k) Stock Fund,
137,143 shares of Common Stock held by Mr. Arcara as trustee under various
trusts for the benefit of Mr. Johnson's children for which he disclaims
beneficial ownership and 57,325 shares of Common Stock which Mr. Arcara
could acquire by the exercise of stock options within sixty (60) days.
*** Based on telephonic advice as of December 31, 1999. The State of Wisconsin
Investment Board is a state agency which invests assets on behalf of state
employees and claims it owns the shares so purchased.
2
<PAGE> 5
ITEM 1. ELECTION OF DIRECTORS
The nominees, Messrs. Lee M. Paschall and John L. Segall, were elected
directors of the Corporation at the 1997 meeting of stockholders for a three (3)
year term. Set forth opposite the name of the nominees and each director whose
term continues past the meeting is his principal occupation for the past five
(5) years, the name and principal business of any corporation or other
organization in which such employment is carried on, other business
directorships held, his age and the year in which the term of office for which
he is a nominee or the term of such office will expire.
Management has no reason to believe that the nominees are not available or
will not serve if elected, but if any nominee should become unavailable to serve
as a director, full discretion is reserved to the persons named as proxies to
vote for such other person(s) as may be nominated. Proxies will be voted "FOR"
the nominees unless the stockholder specifies otherwise.
<TABLE>
<CAPTION>
POSITION WITH THE CORPORATION, BECAME A TERM
NAME PRINCIPAL OCCUPATION AND AGE DIRECTOR EXPIRES
- ---- ------------------------------ -------- -------
<S> <C> <C> <C>
Charles P. Johnson............. Chairman of the Board of Directors and Chief 1969 2001
Executive Officer; 72
Howard S. Modlin............... Secretary of the Corporation and Member of the 1969 2001
law firm of Weisman Celler Spett & Modlin,
P.C.; Director of Fedders Corporation and
Trans-Lux Corporation; 68
Frederick R. Cronin............ Vice President, Corporate Technology; 68 1981 2002
Lee M. Paschall................ Consultant; former Chairman and President of 1981 2003
American Satellite Company, 1981 to 1985;
Telecommunications Consultant between August
1978 and August 1981. Previous thereto, he was
a Lieutenant General, United States Air Force;
Director of Radiation Systems, Inc.; 77
John L. Segall................. Consultant; Vice Chairman of GTE 1991-1994; 1994 2003
Vice Chairman of Contel Corp. 1989-1991; 73
</TABLE>
3
<PAGE> 6
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
Each nominee, each director whose term continues past the meeting and each
executive officer listed in the Summary Compensation Table (on page 6) have
advised the Corporation that, as of December 13, 1999, he owned beneficially,
directly or indirectly, securities of the Corporation in the amounts set forth
opposite his name.
<TABLE>
<CAPTION>
SHARES OF PERCENT
SHARES OF COMMON PERCENT CLASS B STOCK PERCENT OF ALL
NAME STOCK OWNED OF CLASS OWNED(1) OF CLASS CLASSES
- ---- ------------------- -------- ------------- -------- -------
<S> <C> <C> <C> <C> <C>
Charles P. Johnson.............. 525,864(2) 2.3% 1,513,677(2) 72.3% 8.1%
Howard S. Modlin................ 97,035(3) 0.4% 6,750(3) 0.3% 0.4%
Frederick R. Cronin............. 156,726(4) 0.7% -- -- 0.6%
Lee M. Paschall................. 12,500(5) 0.1% 5,770 0.3% 0.1%
John L. Segall.................. 7,500(6) -- -- -- --
Ross A. Belson.................. 224,837(7) 1.0% -- -- 0.9%
P. John Woods................... 31,421(8) 0.1% -- -- 0.1%
Keith A. Mumford................ 25,020(9) 0.1% -- -- 0.1%
James J. O'Meara................ 51,114(10) 0.2% -- -- 0.2%
Directors and Officers as a
group (13 individuals
including the
above)........................ 1,706,910(11) 7.2% 1,899,617(11) 90.8% 14.0%
</TABLE>
- ---------------
(1) The Class B Stock is convertible into Common Stock at any time on a
share-for-share basis.
(2) Includes 367,925 shares of Common Stock which Mr. Johnson could acquire by
the exercise of stock options within sixty (60) days, 28,158 shares of
Common Stock held in the Corporation's 401(k) Stock Fund and 36,630 shares
of Common Stock issuable upon conversion of the Preferred Stock shares held
by him. Does not include 8,643 shares of Class B Stock or 10,857 shares of
Common Stock owned by trusts or in custody for the benefit of his daughter
or 5,950 shares of Common Stock owned by his wife as well as 8,293 shares
of Common Stock held by his wife in the Corporation's 401(k) Stock Fund,
the beneficial ownership of which he disclaims.
(3) Includes 6,500 shares of Common Stock which Mr. Modlin could acquire by the
exercise of stock options within sixty (60) days and 90,535 shares held by
the law firm of which he is a member. Does not include 31,400 shares of
Class B Stock nor 112,000 shares of Common Stock owned directly by members
of his immediate family, the beneficial ownership of which Mr. Modlin
disclaims.
(4) Includes 113,281 shares of Common Stock which Mr. Cronin could acquire by
the exercise of stock options within sixty (60) days and 2,363 shares of
Common Stock held in the Corporation's 401(k) Stock Fund. Does not include
15,900 shares of Common Stock owned directly by members of his immediate
family, the beneficial ownership of which he disclaims.
(5) Includes 6,500 shares of Common Stock which Mr. Paschall could acquire by
the exercise of stock options within sixty (60) days.
(6) Includes 6,500 shares of Common Stock which Mr. Segall could acquire by the
exercise of stock options within sixty (60) days.
(7) Includes 205,219 shares of Common Stock which Mr. Belson could acquire by
the exercise of stock options within sixty (60) days.
(8) Includes 31,200 shares of Common Stock which Mr. Woods could acquire by the
exercise of stock options within sixty (60) days and 221 shares of Common
Stock held in the Corporation's 401(k) Stock Fund.
(9) Includes 24,500 shares of Common Stock which Mr. Mumford could acquire by
the exercise of stock options within sixty (60) days.
4
<PAGE> 7
(10) Includes 36,000 shares of Common Stock which Mr. O'Meara could acquire by
the exercise of stock options within sixty (60) days.
(11) Includes 986,742 shares of Common Stock which persons in the group have the
right to acquire by the exercise of stock options within sixty (60) days,
83,064 shares of Common Stock held in the Corporation's 401(k) Stock Fund,
137,143 shares of Common Stock and 238,801 shares of Class B Stock held by
Mr. James R. Arcara, Vice President, Corporate Operations, as trustee under
various trusts for the benefit of Mr. Johnson's family, 12,200 shares of
Class B Stock held by Mr. Arcara as trustee under an insurance trust for
the benefit of Mr. Johnson, 36,630 shares of Common Stock issuable upon
conversion of the Preferred Stock owned by Mr. Johnson and 90,535 shares of
Common Stock held by the law firm of which Mr. Modlin is a member. Does not
include 44,767 shares of Class B Stock and 154,000 shares of Common Stock
owned directly by members of the directors' and officers' immediate
families or related trusts, the beneficial ownership of which they
disclaim.
5
<PAGE> 8
EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS
WITH MANAGEMENT
The following Summary Compensation Table sets forth the compensation paid
or awarded for the fiscal years ended September 30, 1999, 1998 and 1997 to the
Corporation's Chief Executive Officer and the four (4) next most highly
compensated executive officers whose compensation for the fiscal year ended
September 30, 1999 exceeded $100,000:
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1)
<TABLE>
<CAPTION>
#
FISCAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS GRANTED OTHER COMPENSATION(2)
- --------------------------- ------ -------- -------- ------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Charles P. Johnson........ 1999 $498,657 $100,000 95,000 $14,671 $59,470
Chairman of the Board of 1998 498,657 100,000 150,000 21,937 59,470
Directors and Chief 1997 498,657 100,000 -- 23,897 58,520
Executive Officer
Ross A. Belson............ 1999 264,289 75,000 32,927 7,205 3,200
President and Chief 1998 264,289 75,000 84,500 10,238 3,200
Operating Officer 1997 264,289 75,000 -- 14,430 2,250
P. John Woods(3).......... 1999 155,485 44,560 52,500 7,610 9,819
President, Vital Network 1998 144,610 18,120 5,100 6,146 33,411
Services, L.L.C. 1997 141,855 13,650 10,800 10,749 27,749
Keith A. Mumford(4)....... 1999 156,387 46,313 54,500 14 8,977
Vice President and
General Manager,
Broadband Systems
Division
James J. O'Meara(5)....... 1999 143,634 55,835 45,000 8,532 3,200
Vice President and
General Manager,
Network Access Division
</TABLE>
- ---------------
(1) There are no restricted stock awards, stock appreciation rights or deferred
long-term incentive payouts.
(2) The Corporation is paying the annual premium on a $1,000,000 life insurance
policy on Mr. Johnson's life at an approximate annual cost of $56,270,
included in All Other Compensation, so long as Mr. Johnson is an employee of
the Corporation. Mr. Johnson's designee is the owner of said policy. The
balance of Mr. Johnson's All Other Compensation and amounts reported for the
other executives (excluding the relocation cost reimbursement referenced
below) reflects the Corporation's contributions under its 401(k) plan.
(3) Mr. Woods became an executive officer on September 4, 1997. All Other
Compensation reflects relocation expense reimbursements of $9,402, $30,299
and $25,209 for the fiscal years ended September 30, 1999, 1998 and 1997,
respectively.
(4) Mr. Mumford became an executive officer on October 28, 1998 (fiscal 1999).
All Other Compensation reflects relocation expense reimbursement of $8,977.
(5) Mr. O'Meara became a Division General Manager during fiscal 1999.
During the fiscal year ended September 30, 1999, $70,000 in fees, an amount
which the Corporation believes is fair, were paid to the law firm of which
Howard S. Modlin is a member.
6
<PAGE> 9
BOARD COMPENSATION COMMITTEE REPORT
All matters concerning executive compensation for the Chief Executive
Officer and other executive officers are considered by the Corporation's entire
Board of Directors since there is no separate Compensation Committee. The salary
levels are intended to be consistent with competitive practice and level of
performance. In determining the total compensation to be paid to the Chief
Executive Officer and all other executive officers, the Board considers
management's recommendation based upon past salary levels, industry surveys,
experience, capability, normal salary increase levels in past years and the
Corporation's and respective individual's performances during the last fiscal
year. The Chief Executive Officer's compensation and bonus are based upon the
above factors and include an annual bonus equal to three-quarters of one-percent
( 3/4 of 1%) of the Corporation's pretax earnings, but in no event shall the
Chief Executive Officer's annual bonus be less than $100,000.
CHANGE IN CONTROL
Under a benefit arrangement for senior executive officers and other senior
key employees designated by the Board who are 55 or over and have been employed
by the Corporation for more than 20 years, in addition to certain medical and
long term care benefits, Mr. Johnson (and each other designee) are entitled to
continuation of their then minimum compensation level for two years and have all
options vest which are outstanding for at least one year if they retire within
90 days following a change-in-control. If such event occurred as of January 4,
2000 and Mr. Johnson retired, he would currently be entitled to a minimum annual
compensation of $598,657, or a total of $1,197,314 for two (2) years. The
benefit arrangement was not established in response to any threatened
change-in-control and is part of an overall plan to reward long-term senior
executives and employees.
LOANS
In October 1996, the Corporation granted an unsecured loan to Mr. Dennis J.
Nesler, Vice President and Treasurer of the Corporation, in the amount of
$68,200 at an 8.24% annual rate of interest for the personal needs of Mr.
Nesler. The loan, secured by shares of the Corporation's Common Stock, is
payable on demand and remained outstanding at January 4, 2000 in the amount of
$17,050. Mr. Nesler's loan was amended in September 1997 and became payable in
twelve equal quarterly installments commencing January 1, 1998. If Mr. Nesler is
in the employ of GDC on the due date of an installment, such installment and
accrued interest will be forgiven. Should Mr. Nesler voluntarily resign, the
balance becomes immediately due and payable. Should his employment be terminated
for any reason other than voluntary resignation, the balance shall be forgiven
in its entirety.
STOCK OPTION PLANS
Under the terms of the Corporation's Stock Option Plans, the Corporation
has reserved a total of 4,762,247 shares of Common Stock as of December 13,
1999. Officers and key employees selected by the Chairman of the Board or the
Stock Option Committee, as the case may be, may be granted incentive stock
options at an exercise price equal to or greater than the fair market value per
share on the date of grant and non-incentive stock options at an exercise price
equal to, greater than or less than the fair market value per share on the date
of grant. While individual options can be issued under various provisions,
options cannot be exercised during the first year, generally vest in increments
of 25% per year over a four-year period and expire within ten (10) years. The
Chairman or the Stock Option Committee, as the case may be, determines the
number of stock options to be granted to any person, subject to the limitations
on incentive stock options in Section 422A of the Internal Revenue Code of 1986,
as amended ("Code").
7
<PAGE> 10
STOCK OPTIONS GRANTED IN LAST FISCAL YEAR
The following table is a summary of all stock options granted pursuant to
the Corporation's Stock Option Plans during the period October 1, 1998 through
September 30, 1999 for the persons named in the Summary Compensation Table.
There are no stock appreciation rights under the Plans. In addition, the table
shows the potential gain that could be realized if the fair market value of the
Corporation's Common Stock were to appreciate at a 5% or 10% annual rate over
the ten (10) year period of the option term.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF STOCK
GRANTED TO EXERCISE APPRECIATION FOR
# EMPLOYEES OR BASE OPTION TERM
OPTIONS IN LAST PRICE PER EXPIRATION ----------------------
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
- ---- ------- ------------ --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Charles P. Johnson........ 95,000 7.8% $3.281 12/07/08 $196,041 $496,807
Ross A. Belson............ 7,950 0.7 3.281 12/07/08 16,406 41,575
24,000 2.0 3.031 01/04/09 45,252 115,945
489 -- 2.75 01/19/09 846 2,143
488 -- 2.75 01/19/09 844 2,139
P. John Woods............. 52,500 4.3 2.719 01/04/09 89,765 227,482
Keith A. Mumford.......... 20,000 1.6 2.656 10/04/08 33,409 84,667
34,500 2.8 2.719 01/03/09 59,988 149,488
James J. O'Meara.......... 45,000 3.7 2.719 01/03/09 76,941 194,984
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth the number of shares acquired on exercise
during the fiscal year ended September 30, 1999, the value realized on exercise,
the number of unexercised options outstanding at September 30, 1999 and the
value of unexercised in-the-money options at September 30, 1999 for the persons
named in the Summary Compensation Table. No options were exercised by such
persons during such fiscal year.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
NUMBER OF SEPTEMBER 30, 1999 SEPTEMBER 30, 1999
SHARES --------------------- --------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------- --------------------- --------------------
<S> <C> <C> <C> <C>
Charles P. Johnson.............. None -- 320,425/195,000 $ 0/0
Ross A. Belson.................. None -- 189,000/105,427 0/0
P. John Woods................... None -- 10,200/ 63,000 0/0
Keith A. Mumford................ None -- 8,000/ 65,000 0/1,249
James J. O'Meara................ None -- 21,000/ 45,000 0/0
</TABLE>
EMPLOYEE RETIREMENT SAVINGS AND DEFERRED PROFIT SHARING PLAN
Under the retirement savings provisions of the Corporation's Employee
Retirement Savings and Deferred Profit Sharing Plan (the "Plan"), established
under Section 401(k) of the Code in fiscal 1987, U.S. employees are generally
eligible to contribute to the Plan after three (3) months of continuous service
in amounts determined by the Plan. The Corporation contributes an additional 50%
of the employee contribution up to certain limits, not to exceed 2% of total
eligible compensation. Employees become fully vested in the Corporation's
contributions after three (3) years of continuous service, death, disability or
upon reaching age 65. The Plan year for the Retirement Savings 401(k) portion of
the Plan coincides with the calendar year, and the Corporation's contribution is
paid in the following calendar year if the participant was employed on December
31 of the Plan year.
8
<PAGE> 11
The deferred profit sharing provisions of the Plan include retirement and
other related benefits for substantially all of the Corporation's full-time
employees. Contributions under the Plan are funded annually and are based, at a
minimum, upon a formula measuring profitability in relation to revenues.
Additional amounts may be contributed at the discretion of the Corporation.
Contributions to the Plan are allocated to each participant based upon
individual earnings in proportion to the earnings of all participants. There
were no contributions made for deferred profit sharing for fiscal 1999.
The Corporation's contributions to the Retirement Savings 401(k) portion of
the Plan for calendar 1998, paid in 1999, amounted to $986,874 for all
participants, including $3,200 on behalf of each of the named officers in the
Summary Compensation Table, with the exception of John Woods and Keith Mumford
who received $417 and $0, respectively.
EMPLOYEE STOCK PURCHASE PLAN
The Corporation's 1979 Employee Stock Purchase Plan (the "Purchase Plan")
was adopted by the Board of Directors in May 1979 and approved by the
stockholders in February 1980. The Purchase Plan currently expires on October
31, 2001.
The Purchase Plan is implemented by having one offering during each
six-month period ("Payment Period"). Such Payment Periods currently commence on
March 1 and September 1 of each year. The Purchase Plan is administered by a
committee appointed by the Chairman of the Corporation. Employees who have
completed 91 consecutive days of employment are eligible to participate if they
are customarily employed by the Corporation for more than twenty (20) hours per
week and more than five (5) months per year. The Purchase Plan permits eligible
employees to purchase Common Stock through payroll deductions (in an amount not
less than 2% nor more than 10% of the employee's regular base pay, bonuses and
commissions) at the lower of 85% of the average market price of the Common Stock
at the beginning or the end of each six-month offering period, provided, however
(i) if 85% of the average market price per share of the Common Stock is less
than book value per share at the beginning of a Payment Period, the Purchase
Plan is suspended; (ii) if 85% of the average market price per share at the end
of a Payment Period is less than the book value, the payroll deductions are
refunded; and (iii) if 85% of the average market price per share at the
beginning of a Payment Period is less than the book value per share at the end
thereof, the purchase price is the book value per share. The Board can reinstate
the Purchase Plan at any time if 85% of the average market price per share
exceeds the book value per share, and the Payment Period starting and ending
dates would be adjusted accordingly. Employees may end their participation in an
offering at any time during such offering Payment Period prior to two (2)
business days from the end of the Payment Period. Participation ends
automatically upon termination of employment with the Corporation. As of
December 13, 1999, 578,536 shares remained available for future issuance under
the Purchase Plan.
The following table sets forth certain information as to all executive
officers as a group and all other employees who participated in the Purchase
Plan between October 1, 1998 and September 30, 1999:
<TABLE>
<CAPTION>
NUMBER OF AGGREGATE AVERAGE
SHARES PURCHASE PRICE PER
NAME OF INDIVIDUAL OR IDENTITY OF GROUP PURCHASED PRICE SHARE
- --------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
All executive officers (2 persons in the Purchase Plan)..... 15,156 $ 31,035 $2.048
All other employees (161 persons)........................... 314,715 644,492 $2.048
</TABLE>
9
<PAGE> 12
FIVE YEAR CORPORATE PERFORMANCE GRAPH
The following graph compares the Corporation's total stockholder return
over the five (5) fiscal years ended September 30, 1999 with the total return on
the Standard & Poors 500 Index ("Standard & Poors 500") and an industry peer
group based upon the Value Line Computers & Peripherals Industry ("Computer-
Peripherals"). The stockholder return shown on the graph is not intended to be
indicative of future performance of the Corporation's Common Stock.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN*
(PERFORMANCE RESULTS THROUGH 9/30/99)
[COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
GENERAL DATACOMM
INDUSTRIES, INC. STANDARD & POORS 500 COMPUTER-PERIPHERALS
---------------- -------------------- --------------------
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 52.21 129.82 185.42
1996 39.82 156.28 264.42
1997 21.24 219.84 490.00
1998 10.62 239.29 483.91
1999 9.96 304.82 1202.81
</TABLE>
* Assumes $100 invested at the close of trading on September 30, 1994 in General
DataComm Industries, Inc. Common Stock, Standard & Poors 500 and the
Computer-Peripherals peer group. Cumulative total return assumes reinvestment
of dividends.
10
<PAGE> 13
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP was selected by the Board of Directors as
auditors for the Corporation's fiscal year ended September 30, 1999. A
representative of such auditors is expected to be at the Annual Meeting of
Stockholders and will be permitted to make a statement to the stockholders if
they desire and to respond to any appropriate questions addressed by
stockholders to such auditors. It is anticipated that such firm will be selected
as the Corporation's auditors for the fiscal year ending September 30, 2000.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
The Corporation's executive officers and directors are required under
Section 16(a) of the Securities Exchange Act of 1934 to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and New York Stock Exchange. Copies of those reports must also be furnished to
the Corporation.
Based solely on a review of the copies of reports furnished to the
Corporation and the Corporation's monthly reporting compliance program, the
Corporation believes that during the preceding year all filing requirements
applicable to executive officers and directors were met.
MEETINGS OF THE BOARD OF DIRECTORS
During fiscal 1999, the Board of Directors had seven (7) formal meetings.
All of the Directors attended 100% of such meetings. Non-employee directors
currently receive a fee of $1,200 for each meeting which they attend and an
annual fee of $8,000. Under a plan adopted by the Board of Directors in 1982,
non-employee directors have the opportunity to elect to defer receipt of all or
a portion of their fees plus interest thereon. On October 10, 1995, March 5,
1998 and October 21, 1999 the non-employee directors were each granted non-
statutory stock options to purchase 5,000, 4,500 and 6,000 shares of the
Corporation's Common Stock at $12.31 per share, $3.75 per share and $2.69 per
share, respectively, the fair market values on such dates. All such options
become exercisable in three equal annual installments on the first, second and
third anniversaries of date of grant.
The Corporation has an Audit Committee consisting of Messrs. Lee Paschall
and John L. Segall. Members of the Audit Committee receive an annual fee of
$3,000. As part of its responsibilities, the Audit Committee reviews the audit
function with the Corporation's independent auditors. During fiscal 1999 the
Audit Committee had five (5) meetings. The Corporation does not have a
nominating or compensation committee.
The Corporation has a Stock Option Committee consisting of Messrs. Lee
Paschall and Howard S. Modlin. Such Committee, which had six (6) telephone
meetings during fiscal 1999, followed up by written action, determines which
executive officers of the Corporation shall be granted stock options under its
stock option plans.
STOCKHOLDER PROPOSALS -- 2001 ANNUAL MEETING
If any stockholder desires to submit a proposal for action at next year's
annual meeting, it must be received by the Corporation, Middlebury, Connecticut
06762-1299, on or before September 7, 2000.
11
<PAGE> 14
COST OF SOLICITATION
The cost of preparing and mailing material in connection with the
solicitation of proxies is to be borne by the Corporation. To the extent
necessary in order to assure sufficient representation at the meeting, such
solicitation will be made by the Corporation's regular employees in the total
approximate number of three (3). Solicitation will be made by mail, telegram,
telephone and in person.
By Order of the Board of Directors
HOWARD S. MODLIN
Secretary
Dated: Middlebury, Connecticut
January 4, 2000
12
<PAGE> 15
GENERAL DATACOMM INDUSTRIES, INC.
PROXY - Annual Meeting of Stockholders -
March 2, 2000
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned stockholder of
General DataComm Industries, Inc., hereby constitutes and appoints CHARLES P.
JOHNSON, HOWARD S. MODLIN and GERALD GORDON, and each and any of them, the
attorneys and proxies of the undersigned with full power of substitution to vote
for and in the name, place and stead of the undersigned, at the Annual Meeting
of the Stockholders of said Corporation, to be held at The Chase Manhattan Bank,
11th Floor, 270 Park Avenue, New York, New York, on March 2, 2000 at 4:00 P.M.,
and at any adjournments thereof, the number of votes the undersigned would be
entitled to cast if present:
_______________________
(1) FOR [ ] NOT FOR [ ] the election of Lee M. Paschall and John L. Segall
to the Board of Directors for a term of three (3) years and until their
successors are elected. Authority is withheld as to the following
__________________________________.
(2) In their discretion, upon such other matters as may properly come before the
meeting or any adjournments thereof. FOR [ ] AGAINST [ ] ABSTAIN [ ]
Unless you specify otherwise, this Proxy will be voted "FOR" the
election of the nominees as directors.
<PAGE> 16
A majority of said attorneys and proxies, or their substitute at said
meeting, or any adjournments thereof (or if only one (l), that one (l)) may
exercise all of the powers hereby given. Any proxy to vote any of the shares,
with respect to which the undersigned is or would be entitled to vote,
heretofore given to any person or persons other than the persons named above is
hereby revoked.
IN WITNESS WHEREOF, the undersigned has signed and sealed this proxy
and hereby acknowledges receipt of a copy of the notice of said meeting and
proxy statement in reference thereto both dated January 4, 2000.
Dated: __________________ 2000
___________________________(L.S.)
(Stockholder(s) Signature)
___________________________(L.S.)
NOTE: This Proxy, properly completed, dated and signed, should be returned
immediately in the enclosed postage-paid envelope to GENERAL DATACOMM
INDUSTRIES, INC.
