11
VICON FIBER OPTICS CORP.
90 Secor Lane
Pelham, New York 10803
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To be held on
Thursday, May 30, 1996
May 6, 1996
Notice is hereby given that the Annual Meeting of Stockholders
of Vicon Fiber Optics Corp, a Delaware corporation ( hereinafter
called the "Corporation" ), will be held at the Ramada Plaza
Hotel, One Ramada Plaza, New Rochelle, New York 10801, on
Thursday, May, 30 1996. The meeting will commence at 11:00 a.m.
and will be held for the following purposes and to transact such
other business as may properly come before the meeting or any
adjournment or adjournments thereof:
( 1 ) To elect 3 directors to serve in accordance with the By-
Laws until the next annual meeting of Stockholders and
until their successors shall be elected and shall
qualify;
(2) To consider and act upon a proposal to ratify the
selection of Sheft Kahn & Company LLP as the
Corporation's independent accountants for the
fiscal year ending December 31,1996;
(3) To consider and act upon a proposal to adopt the 1996
Incentive Stock Option Plan for Key Employees.
The Board of Directors has fixed the close of business on
Tuesday, April 23,1996 as the record date for the determination
of Stockholders entitled to notice of and to vote at the Annual
Meeting, and, accordingly, only Stockholders of record at the
close of business on that date will be entitled to vote at the
meeting. A list of those Stockholders will be available for
inspection at the Annual Meeting upon request of a Stockholder.
The transfer books of the Corporation will not be closed.
You are cordially invited to attend the meeting.
By Order of the Board of Directors,
Les Wasser
Secretary
Vicon Fiber Optics Corp
90 Secor Lane
Pelham Manor, New York 10803
May 6, 1996
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors
of Vicon Fiber Optics Corp. (the "Corporation") for use at the
Annual Meeting of Stockholders to be held on Thursday, May 30,
1996, and at any adjournment or adjournments thereof. This Proxy
Statement and the accompanying proxy are first being mailed to
Stockholders on or about May 8, 1996.
The Board of Directors has fixed the close of business on
Tuesday, April 23, 1996 as the record date for the determination
of Stockholders entitled to notice of and to vote at the Annual
Meeting. As of such date, there were issued and outstanding
8,340,636 shares of Common Stock of the Corporation ( the "Common
Stock"), each of which is entitled to one vote. The presence, in
person or by properly executed proxy of the holders of a majority
of the outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business
at the Annual Meeting.
The accompanying proxy provides space for a Stockholder to
abstain from voting for any or all nominees for the Board of
Directors and to abstain from voting on any proposal if he or she
chooses to do so. Directors are elected by a plurality of the
votes cast and the ratification of the selection of independent
accountants (Proposal 2) requires the approval of a majority of
the votes cast at the Annual Meeting. Abstentions (votes
withheld) in connection with the election of one or more nominees
for director will not be counted as votes cast for such nominees,
and abstentions and "broker non-votes" will not be counted in
determining the number of votes cast in connection with the
ratification of the selection of independent accountants. The
approval of the holders of a majority of all outstanding Common
Stock entitled to vote at the Annual Meeting is required for the
approval of the adoption of the 1996 Incentive Stock Option Plan
for Key Employees (Proposal 3). Accordingly, an abstention or
broker non-vote on any of these proposals will have the same
legal effect as a vote against such proposal.
A proxy may be revoked by a Stockholder at any time before it
is voted at the Annual Meeting by (1) giving notice in writing of
such revocation to the Secretary of the Corporation, (2)
submitting another proxy bearing a later date, or (3) voting in
person at the Annual Meeting. Unless so revoked, the shares
represented by a properly signed proxy will be voted at the
Annual Meeting as specified by the Stockholder. If a proxy is
properly signed and returned and no specification is made, the
shares represented thereby will be voted FOR: (1) the election of
all nominees for director (Proposal 1); (2) FOR the ratification
of the selection of independent accountants (Proposal 2); (3)
FOR the adoption of the 1996 Incentive Stock Option Plan for Key
Employees (Proposal 3).
VOTING OF SHARES
Only stockholders of record at the close of business on
April 23, 1996, will be entitled to vote at the meeting. On such
date, there were 8,340,636 shares of Common Stock outstanding and
entitled to vote at the meeting. Each share is entitled to one
vote.
PROPOSAL 1
ELECTION OF DIRECTORS
General Information
Unless authority to vote is withheld, it is the intention of
the persons named in the enclosed form of proxy to vote shares
covered by valid proxies in favor of the election of the three
persons named below. All of the directors will, if elected, hold
office until the next Annual Meeting of Stockholders and until
their successors are elected and qualified. All of the nominees
have indicated a willingness to serve as directors, but if any
nominee becomes unable to serve prior to the Annual Meeting,
which is not anticipated, the persons named in the proxy will
vote for the election of a replacement as recommended by the
Board of Directors.
The Board of Directors recommends a vote "FOR" the Nominees
below.
Information Concerning Nominees
The following information concerning the nominees, all of
whom are currently serving as directors, includes their positions
with the Corporation, their principal occupation for the past
five years, their ages, the name of other public corporations of
which they are directors, the numbers of shares of Common Stock
of the Corporation owned by them and the percentage of the class
those shares represent.
Position with Shares Director Percent
NAME the Company Owned since of Class
Leonard Scrivo Chairman of the Board, 987,978 1970 11.9%
Chief Executive Officer,
Chief Financial Officer
Les Wasser Director, Secretary, 145,000 1990 1.7%
Controller
Stanley A. Director 41,600* 1991 0.5%
Youdelman
*Includes 6,700 shares owned by members of his family in
which Dr. Youdelman disclaims any beneficial interest.
Leonard Scrivo, Age 58: Director, President, Chief
Executive Officer and Treasurer of the Corporation.
Les Wasser, Age 52: Director and Controller of the
Corporation since 1989 and Secretary since 1991. Mr. Wasser is
a Certified Public Accountant.
Stanley A. Youdelman, Age 56: Has been an oral and
maxillofacial surgeon for more than 25 years. He is chief of Oral
Surgery at St. Johns Episcopal Hospital in Smithtown, New York.
He is also professor of Clinical Dentistry at the Dental School
of the Stony Brook Division of the State University of New York,
and past President of the Suffolk Academy of Medicine as well as
the Suffolk County Dental Society. Dr. Youdelman is not an
employee of the Corporation.
Committees of the Board of Directors
The entire Board of Directors serves as standing Audit,
Compensation and Stock Option committees. Members of the Board
receive no compensation for their services as directors. The
duties of the Compensation and Stock Option Committees are
described below in the Report of the Compensation and Stock
Option Committees. The Audit Committee recommends the selection
of the independent accountants, reviews the annual financial
statements of the Corporation and reviews the scope and
performance of the audit service provided by the independent
accountants.
All directors attended all of the meetings of the Board in
the last year.
EXECUTIVE COMPENSATION
Report of Compensation and Stock Option Committee
Regarding Executive Compensation
Under the supervision of the Board of Directors, the
Corporation has developed and implemented compensation policies,
plans and programs which seek to enhance the profitability of the
Corporation and Stockholder value, by closely aligning the
financial interest of the Corporation's executives with those of
the Corporation and its Stockholders. Accordingly, the
Corporation sets annual base salaries for these individuals below
what it believes to be competitive levels, and uses longer term
incentive compensation to reward officers and other key employees
for building the Corporation's profitability and Stockholder
value.
The Compensation and Stock Option Committees, comprised of
the three directors, one of whom, the Chairman, is not an
employee of the Corporation, reviews and evaluates management's
performance and makes recommendations on salary increases and
bonuses to the Board of Directors and administers the
Corporation's 1984 Stock Option Plan (which terminated in 1994)
and the 1996 Incentive Stock Option Plan.
It is the objective of the Compensation and Stock Option
Committees to take into consideration the Corporation's
performance as well as the individual contributions of each
employee in order to support the Committees' recommendations to
the Board of Directors. Levels of compensation are designed to
serve as incentives for management and key staff employees and to
acknowledge their value to the Corporation and its Stockholders.
Since the entire Board of Directors serves as standing
Compensation and Stock Option Committees, recommendations of the
Committees are simultaneously adopted by the Board of Directors.
The Board of Directors believes that its past compensation
policies have successfully focused the Corporation's management
on long-term success and increasing Stockholder value.
Summary Compensation Table
The following table sets forth cash or other compensation
received by the Chief Executive Officer and the four other most
highly paid executive officers of the Corporation for the last
three fiscal years.
Total
Fiscal Compensation Bonus Stock Options
Name and Principal Position Year ($) (1) ($) (#)
Leonard Scrivo, President 1995 84,651 0 0
Chief Executive Officer 1994 80,254 0 0
Chairman of the Board 1993 80,632 0 0
All Officers and Directors 1995 133,161 0 0
as a Group 1994 126,031 0 0
(3 persons) 1993 134,247 0 0
(1) This amount includes life insurance premiums paid by the
Company on behalf of Mr. Scrivo.
Option Grants - There were no stock options granted during
the fiscal year ended December 31, 1995.
Option Exercise and Year-End Values - There were no options
exercised during the fiscal year ended December 31, 1995.
CERTAIN TRANSACTIONS
In the last year there were no transactions between the
Corporation and any affiliates, including officers, directors or
holders of more than 5% of the outstanding common stock.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth the name and address, number
of shares beneficially owned and percent of the class those
shares represent for each person known by the Corporation to be
the beneficial owner of more than 5% of the outstanding Common
Stock, as of March 31,1996.
Title of Name of Shares Percent
Class Beneficially Beneficial Owner of Class
Common Leonard Scrivo 987,978 11.9%
Common Donald J. Unger 980,000 11.8%
Common Carol Cooper 596,378 7.2%
On March 31, 1996 all officers, directors and nominees of the
Corporation, a group of three persons, owned beneficially
1,174,578 shares which represented 14.1% of the outstanding
shares of Common Stock, not including shares issuable upon the
exercise of warrants and options.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Shaft Kahn & Company
LLP, independent certified public accountants, to audit the
books, records, and accounts of the Corporation and its
subsidiaries for the fiscal year ending December 31, 1996. This
selection is being presented to the Stockholders for ratification
at the Annual Meeting.
The firm of Shaft Kahn & Company LLP has audited the
Corporation's books annually since 1991, has offices in or
convenient to the where the Corporation or its subsidiaries
operate, and is considered to be well qualified. If the
Stockholders do not ratify the selection of Shaft Kahn & Company
LLP, the selection of independent accountants will be
reconsidered by the Board of Directors. A representative of
Shaft Kahn & Company LLP will attend the Annual Meeting and will
have the opportunity to make a statement and be available to
respond to appropriate questions.
The Board of Directors recommends that Stockholders vote "FOR"
this proposal.
PROPOSAL 3
ADOPTION OF 1996 INCENTIVE STOCK OPTION PLAN FOR KEY EMPLOYEES
At a Special Board of Directors meeting held on March 20,
1996, The Board of Directors adopted the 1996 Incentive Stock
Option Plan for Key Employees (the "1996 Plan"), subject to the
approval of the Stockholders. The Board of Directors believes
that it is in the best interests of the Corporation and its
Stockholders to adopt the 1996 Plan. The 1996 Plan is intended
to continue the established policy of the Corporation of
encouraging ownership of Common Stock by employees of the
Corporation and its subsidiaries and of providing incentives for
them to put forth maximum efforts for the successful operations
of the Corporation and its subsidiaries..
The only plan under which the Corporation has granted options
to purchase shares of the Corporation is the Vicon Fiber Optics
Corp. Stock Option Plan (1984) (the "1984 Plan"), which was
approved by the Stockholders on May 11, 1984. Under the terms of
the 1984 Plan, options for a total of 55,000 shares were granted.
The balance of options for shares of Common Stock (225,000) which
were available for grant under the 1984 Plan expired on May 11,
1994, and no further awards may be made under the 1984 Plan. A
stock option plan is an integral component in the Corporation's
compensation system. Accordingly, the Board of Directors believes
that adoption of the 1996 Plan is necessary if the Corporation
is to be able to continue to attract and retain highly qualified
and talented individuals.
At the Special Board of Directors meeting held on March 20,
1996, the Board granted 50,000 stock options with an exercise
price of $.96 to Leonard Scrivo and 60,000 stock options with an
exercise price of $.87 to Les Wasser. At the March 20, 1996
meeting, the Board of Directors, as part of a consulting
agreement, also granted non-qualified options to Stanley A.
Youdelman to purchase 20,000 shares at $.875 per share. Such
grants are subject to the approval of the 1996 Plan by the
Stockholders.
The following is a summary of the material provisions of the
1996 Plan. This summary is qualified in its entirety by reference
to the specific provisions of the 1996 Plan, the full text of
which is attached to this Proxy Statement as Exhibit A.
Summary of the 1996 Incentive Stock Option Plan for Key Employees
Shares Subject to the Plan; Term. Subject to adjustment as
provided below, 1,000,000 shares of Common Stock (the "Shares")
will be available for issuance under the 1996 Plan. No awards
under the Plan ("Awards") may be granted after March 20, 2006
Types of Awards. Awards may be (1) incentive stock options
("ISOs") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), (2) non-qualified
stock options, or (3) Shares subject to certain restrictions
("restricted stock").
Administration. The Plan will be administered by the Stock
Option Committee (the "Committee") of the Board of Directors.
The Committee, in its sole discretion, will determine, subject to
the 1996 Plan, to whom and when Awards are to be granted, as well
as the terms and provisions of the Awards. The Committee will
also interpret the Plan and make rules and regulations relating
thereto.
Eligibility; Awards Granted. All key regular salaried
employees (including executive officers) of the Corporation and
its subsidiaries are eligible to receive Awards. In making
Awards, the Committee will consider the duties of the employees,
their present and potential contributions to the success of the
Corporation, and other factors deemed relevant in connection with
accomplishing the Plan's purposes. Subject to stockholder
approval of the 1996 Plan, the Committee has granted certain
Awards ( See the Summary Compensation Table and Option Grant
Table for further information with respect to prior grants under
the 1984 Plan and new grants under the 1996 Plan to each of the
executive officers named in the Summary Compensation Table.)
Stock Options. The purchase price for Shares covered by an
Award ("Options") will be 100% of the fair market value of the
Common Stock on the date of the grant. The fair market value of a
share of Common Stock will be the simple average of the high and
low sales prices on the date of grant.
The term of each Option will be determined by the Committee,
but cannot be more than 10 years from the date of the grant. If
the original term is less than ten years from the date of grant,
the term may be extended prior to expiration, with the approval
of the employee, but not beyond 10 years from the date of
original grant.
The vesting period and all other terms and conditions of each
Option will be determined by the Committee; provided that, except
as described below, no Option may be exercised prior to the
completion of at least six (6) months of continuous employment
from the date of grant. The Committee may impose restrictions,
including a holding period, on Shares received upon the exercise
of Options.
If a recipient's employment is terminated (other than by
retirement, disability, or death), his Option is exercisable (to
the extent exercisable at the time of such termination) for 30
days after such termination, but not later than the expiration of
the term of the Option.
If a recipient retires from employment at his normal
retirement date, or retires earlier than his normal retirement
date (i) with the prior consent of the Corporation or a
subsidiary or (ii) due to total and permanent disability, his
Option may be fully exercised prior to the end of the Option term
without regard to the period of continuous employment as follows:
(1) in the case of ISOs, within three months after such
retirement, and (2) in the case of non-qualified Options, within
five years after such retirement.
If an recipient dies while employed by the Corporation or one
of its subsidiaries, his Option may be exercised (to the extent
exercisable at the time of his death), by his estate or other
person then lawfully entitled to do so, at any time within one
year after his death, as prescribed in the Option agreement, but
not after the expiration of the Option term.
Options are exercisable only by the recipient or his guardian
or legal representative or other person lawfully entitled to do
so, and are not transferable other than by will or pursuant to
the laws of descent and distribution.
Restricted Stock. Awards of restricted stock are subject to
such restrictions as the Committee determines, including, but not
limited to: a vesting schedule based upon the recipient's
continuous employment and conditions based on performance
requirements. Except as described below, no restricted stock
Award may vest in whole or in part prior to the completion of the
number of years of continuous employment after the date of grant
established by the Committee, and restricted stock Awards shall
be forfeited to the extent any restriction is not met. Until all
conditions associated with restricted stock are met, restricted
stock may be not be sold, pledged, or otherwise disposed of.
Except for these limitations, recipients of restricted stock are
entitled to all rights of a Stockholder, including the right to
vote and receive dividends or other distributions on such
restricted stock.
If the employment of a recipient of a restricted stock Award
terminates by reason of death, total and permanent disability,
retirement, or discharge other than for cause before all
applicable restrictions have been met, the Committee may remove
the restrictions.
Termination and Amendment. The 1996 Plan terminates on March
20, 2006. The Board of Directors may at any time terminate, amend
or modify the 1996 Plan. However, stockholder approval is
required for amendments which materially increase the benefits to
Award recipients, increase the aggregate number of Shares which
may be issued under the 1996 Plan, or materially modify
eligibility requirements.
The Committee may at any time amend the terms of any Award,
including accelerating the date of exercise of any Option,
terminating stock restrictions, or converting the Option into a
non-qualified Option; but no such amendment may materially
adversely affect a recipient's rights without his consent .
Adjustments. Awards may provide for the adjustment of the
number and class of Shares covered by the Award, Option prices,
and the number of Shares as to which Options are exercisable in
the event of stock dividends, stock splits, recapitalization,
reorganizations, or other changes in the capitalization of the
Corporation. The number and class of Shares available under the
1996 Plan may also be adjusted in the event of any such change in
capitalization.
Certain Federal Income Tax Consequences
An employee to whom an ISO is granted will not recognize
income at the time of grant or exercise of the ISO (except that
the alternative minimum tax may apply), and no federal income tax
deduction will be allowable to the Corporation upon the grant or
exercise of the ISO. When the employee sells Shares received upon
the exercise of an ISO more than one year after the date of
exercise and more than two years after the date of grant of the
ISO, the employee will normally recognize a long-term capital
gain or loss equal to the difference, if any, between the sale
price of such Shares and the option exercise price. If the
employee does not hold such Shares for these periods, when the
employee sells such Shares the employee will recognize ordinary
compensation income and possibly capital gain or loss in such
amounts as are prescribed by the Code and the regulations
thereunder. Subject to applicable provisions of the Code and the
regulations thereunder, in the event of a disposition prior to
the end of the statutory holding periods noted above, the
Corporation will generally be entitled to a federal income tax
deduction in the amount of such ordinary compensation income.
An employee to whom a non-qualified stock option (which is
treated as an option for federal income tax purposes) is granted
will not recognize income at the time of grant of such option.
When the employee exercises such option, the employee will
recognize ordinary compensation income equal to the difference,
if any, between the option price paid and the fair market value,
as of the date of exercise, of the Shares received by the
employee. The tax basis of such Shares to such employee will be
equal to the fair market value on the date of exercise, and the
employee's holding period for such Shares will commence on the
date on which the employee recognized taxable income in respect
of such shares. Subject to applicable provisions of the Code and
the regulations thereunder, the Corporation will generally be
entitled to a federal income tax deduction in respect of non-
qualified stock options in an amount equal to the ordinary
compensation income recognized by the employee. Any compensation
includable in the gross income of an employee in respect of a non-
qualified option will be subject to appropriate federal income
and employment taxes.
Vote Required for Approval
The affirmative vote of the holders of a majority of all
outstanding shares of Common Stock entitled to vote at the Annual
Meeting is required for approval of the 1996 Incentive Stock
Option Plan.
The Board of Directors recommends that Stockholders vote "FOR"
this proposal.
GENERAL
A proposal submitted by a stockholder for action at next
year's Annual Meeting of the Corporation must be received at the
Corporation's principal executive office in Pelham Manor, New
York, no later than January 25, 1997 in order to be eligible for
inclusion in the Corporation's proxy statement for that meeting.
The Board of Directors is not aware of any other matters to be
brought before the meeting, but in the event that other matters
are presented, the persons named in the Board proxy will vote
upon such matters in their discretion.
The Annual Report to Stockholders for fiscal year ended
December 31, 1995 is also enclosed, but is not part of the proxy
soliciting material.
The Company's Annual Report on Form 10-KSB of the Securities
and Exchange Commission (without exhibits) will be provided
without charge to stockholders upon written request to the
Company at 90 Secor Lane, Pelham Manor, New York 10803.
SOLICITATION OF PROXIES
The enclosed proxy is solicited by and on behalf of the
Board of Directors of the Corporation. The Corporation will bear
all costs of distribution and solicitation of proxies, including
the preparation, printing and mailing of the Notice of Annual
Meeting of Stockholder, Proxy Statement, form of proxy, Annual
Report to Stockholders, and business reply envelopes. The
solicitation will be conducted principally by mail, although
directors, officers and regular employees of the Corporation (at
no additional compensation) may solicit proxies personally or by
telephone or telefax. Brokers, nominees, fiduciaries and other
custodians will be reimbursed their reasonable fees and expenses
incurred in forwarding proxy materials to beneficial owners.
By Order of the Board of
Directors
Les Wasser
Secretary
