<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] 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 Rule 14a-11(c) or Rule 14a-12
INTEGRATED SECURITY SYSTEMS, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the 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)(1) and
0-11.
(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:
--------------------------------------------------------------------
<PAGE> 2
[ ] 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> 3
INTEGRATED SECURITY SYSTEMS, INC.
8200 SPRINGWOOD DRIVE, SUITE 230
IRVING, TEXAS 75063
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 11, 1998
To the Holders of Common Stock of
INTEGRATED SECURITY SYSTEMS, INC.:
Notice is hereby given that the 1998 Annual Meeting of Stockholders of
Integrated Security Systems, Inc., a Delaware corporation (the "Company"), will
be held at the Company's executive offices, 8200 Springwood Drive, Suite 230,
Irving, Texas 75063, on Friday December 11, 1998 at 10:00 A.M., Dallas, Texas
time, for the following purposes:
(1) To elect four persons to serve as directors until the Company's
1999 Annual Meeting of Stockholders or until their successors are duly
elected and qualified;
(2) To transact any other business properly brought before the
meeting or any adjournments or postponements thereof.
The Board of Directors has fixed Monday, October 23, 1998, at the close
of business, as the record date for the determination of stockholders entitled
to notice of, and to vote at, the meeting and any adjournments or postponements
thereof. Only holders of record of the Company's common stock on that date are
entitled to vote on matters coming before the meeting and any adjournments or
postponements thereof. A complete list of stockholders entitled to vote at the
meeting will be maintained in the Company's offices at 8200 Springwood Drive,
Suite 230, Irving, Texas 75063, for the ten days prior to the meeting.
Please advise the Company's transfer agent, American Stock Transfer,
6201 15th Avenue, Third Floor, Brooklyn, NY 11218, of any change in your
address.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.
IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOUR SHARES ARE REGISTERED IN
DIFFERENT NAMES OR AT DIFFERENT ADDRESSES, EACH SUCH PROXY CARD SHOULD BE SIGNED
AND RETURNED TO ENSURE THAT ALL OF YOUR SHARES WILL BE VOTED. THE PROXY CARD
SHOULD BE SIGNED BY ALL REGISTERED HOLDERS IN THE EXACT NAMES AS THE SHARES ARE
SO REGISTERED. ANY PERSON GIVING A PROXY HAS THE POWER TO REVOKE IT AT ANY TIME
PRIOR TO ITS EXERCISE AND, IF PRESENT AT THE ANNUAL MEETING, MAY WITHDRAW IT AND
VOTE IN PERSON.
By Order of the Board of Directors,
/s/ GERALD K. BECKMANN
Gerald K. Beckmann
Chairman, President and Chief Executive
Officer
Irving, Texas
November 4, 1998
<PAGE> 4
INTEGRATED SECURITY SYSTEMS, INC.
8200 Springwood Drive, Suite 230
Irving, Texas 75063
------------------------------------
PROXY STATEMENT
------------------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 11, 1998
The accompanying proxy, mailed with this Proxy Statement to
stockholders on or about October 27, 1998, is solicited by Integrated Security
Systems, Inc. (the "Company"), in connection with the Annual Meeting of
Stockholders to be held on December 11, 1998 (the "Annual Meeting").
As stated in the Notice to which this Proxy Statement is attached,
matters to be acted upon at the Annual Meeting include (i) election to the Board
of Directors of four directors to serve as directors until the Company's 1999
Annual Meeting of Stockholders or until their successors are duly elected and
qualified, and (ii) to transact any other proper business brought before the
Annual Meeting or any adjournments or postponements thereof.
All holders of record of shares of common stock at the close of
business on October 23, 1998 (the "Record Date") are entitled to notice of and
to vote at the Annual Meeting. On the Record Date, the Company had outstanding
9,312,603 shares of common stock. Each share of common stock is entitled to one
vote. The presence, in person or by proxy, of holders of a majority of the
outstanding shares of common stock entitled to vote as of the Record Date is
necessary to constitute a quorum at the Annual Meeting.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect. Brokers who hold shares in street name for customers and do
not receive voting instructions from such customers are entitled to vote on the
election of directors. Under applicable Delaware law, a broker non-vote
resulting from the failure to deliver voting instructions to a broker will have
no effect on the outcome of the election of directors.
Each stockholder has the unconditional right to revoke his or her proxy
at any time before it is voted. Any proxy given may be revoked either by a
written notice duly signed and delivered to the Secretary of the Company prior
to the exercise of the proxy, by execution of a subsequent proxy or by voting in
person at the Annual Meeting (although attending the Annual Meeting without
executing a ballot or executing a subsequent proxy will not constitute
revocation of a proxy). All properly executed, unrevoked proxies received before
the Annual Meeting will be voted in accordance with the directions contained
therein. When no direction has been given by a stockholder returning a proxy,
the proxy will be voted FOR the election as directors of the nominees named in
this Proxy Statement.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of outstanding
shares of Common Stock beneficially owned as of October 12, 1998, by (i) each
director and named executive officer of the Company, (ii) all officers and
directors of the Company as a group, and (iii) all persons who are known by the
Company to be beneficial owners of 5% or more of the Company's outstanding
Common Stock. Unless otherwise noted, each of the persons listed below has sole
voting and investment power with respect to the shares indicated as beneficially
owned by such person.
<TABLE>
<CAPTION>
Number of Shares
Name and Address of Beneficial Owner Beneficially Owned(1) Percent
------------------------------------------------------------------- ------------------------- ------------
<S> <C> <C>
Philip R. Thomas(4) 1,633,126 17.5%
Gerald K. Beckmann(2)(3)(5) 926,166 9.9%
ProFutures Bridge Capital Fund LP(6) 585,000 6.3%
Lehman Brothers Holdings, Inc.(7) 579,000 6.2%
Frank R. Marlow(2)(3)(8) 64,569 0.7%
Holly J. Burlage(2)(3)(9) 38,219 0.4%
Robert M. Galecke(2)(3)(10) 1,694 0.0%
James E. Jack(2)(3)(11) 1,694 0.0%
All current directors and executive officers as a group (5 persons) 1,032,342 12.1%
</TABLE>
- ---------------
(1) Pursuant to the rules of the Securities and Exchange Commission, shares
of Common Stock which an individual or group has a right to acquire
within 60 days pursuant to the exercise of options or warrants are
deemed to be outstanding for the purpose of computing the percentage
ownership of such individual or group, but are not deemed to be
outstanding for the purpose of computing the percentage ownership of
any other person shown in the table.
(2) The address for this person is 8200 Springwood Drive, Suite 230,
Irving, Texas 75063.
(3) Mr. Beckmann is a Director, the Chairman of the Board of Directors, the
President and the Chief Executive Officer of the Company. Mr. Marlow,
Mr. Galecke and Mr. Jack are Directors of the Company.
Ms. Burlage is Vice President and Secretary of the Company.
(4) Includes 146,850 shares of Common Stock owned by Thomas Group Holding
Company, a company owned by Mr. Thomas and 61,801 shares of Common
Stock issuable upon the exercise of warrants within 60 days. The
address for Mr. Thomas is 3510 Turtle Creek Boulevard, PH-A, Dallas, TX
75219-5542.
(5) Includes 234,473 shares of Common Stock issuable upon the exercise of
outstanding options exercisable within 60 days; and 146,021 shares of
Common Stock issuable upon the exercise of warrants within 60 days.
(6) Based on a 13(d) filing dated July 17, 1997, ProFutures Bridge Capital
Fund, LP is deemed the beneficial owner of 585,000 shares of Common
Stock. The address for this company is 1720 South Bellaire Street,
Suite 500, Denver, CO 80222.
(7) Based on a 13(g) filing dated May 7, 1998, Lehman Brothers Holdings,
Inc. is deemed the beneficial owner of 579,000 shares of Common Stock.
The address for this company is 3 World Financial Center, New York, NY
10285.
(8) Includes 54,105 shares of Common Stock issuable upon the exercise of
outstanding options exercisable within 60 days and 1,000 shares of
Common Stock issuable upon the exercise of warrants within 60 days.
2
<PAGE> 6
(9) Includes 27,725 shares of Common Stock issuable upon the exercise of
outstanding options exercisable within 60 days and 1,240 shares of
Common Stock issuable upon the exercise of warrants within 60 days.
(10) Includes 1,694 shares of Common Stock issuable upon the exercise of
outstanding options exercisable within 60 days.
(11) Includes 1,694 shares of Common Stock issuable upon the exercise of
outstanding options exercisable within 60 days.
ELECTION OF DIRECTORS
The nominees for director listed below will stand for election at this
Annual Meeting for a one-year term of office expiring at the 1999 Annual Meeting
of Stockholders or until their successors are duly elected and qualified. All
nominees are currently members of the Board of Directors.
The following table sets forth certain information as to the nominees
for director of the Company:
<TABLE>
<CAPTION>
Name and Age Positions and Offices With the Company Director Since
------------ -------------------------------------- --------------
<S> <C> <C>
Gerald K. Beckmann, 55 Director, Chairman of the Board, President 1991
and Chief Executive Officer
Robert M. Galecke, 56 Director 1996
James E. Jack, 57 Director 1998
Frank R. Marlow, 60 Director 1995
</TABLE>
While it is not anticipated that any of the nominees will be unable to
serve, if any nominee should decline or become unable to serve as a director for
any reason, votes will be cast instead for a substitute nominee designated by
the Board of Directors or, if none is so designated, will be cast according to
the judgment of the person or persons voting the proxy.
DIRECTORS AND EXECUTIVE OFFICERS
GERALD K. BECKMANN, 55, Director, Chairman, President and Chief
Executive Officer, has served as a director of the Company since its inception
in 1991. Mr. Beckmann was Chief Technical Officer of the Company from 1991 to
May 1995 and Chairman of the Board of Directors since February 1993. On May 1,
1995, Mr. Beckmann became President and Chief Executive Officer of the Company.
From 1991 to 1994 Mr. Beckmann was President and Chief Operating Officer of
Thomas Group Holding Company, a private investment company. In 1985, Mr.
Beckmann joined Thomas Group, Inc., a publicly-held management consulting firm.
Mr. Beckmann also serves as a director on the board of CTC Holdings, an
electronic funds transfer systems supplier. Mr. Beckmann is also a manager in
Celerity Partners, L.L.C., the general partner of two acquisition limited
partnerships, Celerity Partners I and II, L.P. Mr. Beckmann holds a B.S.E.E.
from Virginia Polytechnic Institute and University.
HOLLY J. BURLAGE, 35, Vice President, Secretary and Treasurer, joined
the Company in February 1994 as Accounting Manager, became Controller in 1995,
and became Vice President, Secretary and Treasurer in May 1997. Prior to joining
the Company, Ms. Burlage was Controller of Signature Home Care Group, Inc., a
home health care company, from 1993 to 1994, and Controller and Chief Accounting
Officer of National Heritage, Inc., a publicly-traded long-term care company,
from 1989 to 1993. Ms. Burlage holds a B.B.A. from Baylor University.
3
<PAGE> 7
ROBERT M. GALECKE, 56, Director, has been a director of the Company
since May 1996. Mr. Galecke is currently Vice President for Finance and
Administration for the University of Dallas. Prior to that he was a principal in
the corporate consulting firm of Pate, Winters & Stone, Inc. from 1993 to May
1996. He also served as Executive Vice President, Chief Operating Officer and
Chief Financial Officer of Southmark Corporation, a financial services insurance
and real estate holding company, from 1986 to 1992. From 1989 to 1995, Mr.
Galecke served as Chairman of the Board, President and Chief Executive Officer
of National Heritage, Inc. Mr. Galecke received a graduate degree from the
School of Banking at the University of Wisconsin, Madison, and a BS in Economics
from the University of Wisconsin Stevens Point.
JAMES E. JACK, 57, Director, has been director of the Company since
1997. Mr. Jack is currently Director, Global Financial Services Product for
TowersPerrin. From 1991 to 1996 Mr. Jack was Senior Executive Vice President and
Chief Financial Officer of Associates First Capital Corporation, a publicly
traded consumer and commercial finance organization. Prior to that, Mr. Jack was
Director, Executive Vice President and Chief Financial Officer from 1981 to 1993
of the same company. Mr. Jack received a graduate degree from the Southern
Methodist University School of Business and a B.B.A. from the University of
Notre Dame.
FRANK R. MARLOW, 60, Director, has been a director of the Company since
May 1995. Mr. Marlow served as Vice President, Sales and Marketing for the
Company from October 1993 to February 1995. Mr. Marlow is currently Vice
President of Sales for Money Star, a technology company based in Austin, Texas.
From 1995 until 1998, Mr. Marlow was vice president of Hogan Systems, a
publicly-traded company subsequently purchased by Computer Sciences Corp.
Previously, Mr. Marlow was with IBM, Docutel Corporation, UCCEL Corporation and
Syntelligence Corporation in executive sales and training positions.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has established two committees: a Compensation
and Stock Option Committee, and an Audit Committee. The Company's Board of
Directors acts as the nominating committee to nominate persons for election to
the Board of Directors.
The Compensation and Stock Option Committee is currently composed of
Messrs. Jack and Marlow. The Compensation and Stock Option Committee did not
meet during the fiscal year ended June 30, 1998. The Compensation and Stock
Option Committee determines the amount and form of compensation and benefits
payable to all officers and employees, and advises and consults with management
regarding the benefit plans and compensation policies of the Company. The
Compensation and Stock Option Committee also reviews and approves stock option
grants to directors, executive officers and employees of the Company.
The Audit Committee is currently composed of Messrs. Galecke, Jack and
Marlow. The Audit Committee met three times during the fiscal year ended June
30, 1998. This committee recommends to the Board of Directors the appointment of
independent auditors, reviews the plan and scope of audits, reviews the
Company's significant accounting policies and internal controls, and has general
responsibility for related matters. Prior to the mailing of this Proxy Statement
to the stockholders of the Company, this committee met with the Company's
independent auditors to review the fiscal 1998 audit and the significant
accounting policies and internal controls.
The Board of Directors held seven meetings during the fiscal year ended
June 30, 1998. None of the directors attended fewer than 90% of the meetings of
the Board of Directors and its committees on which they served.
4
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1) LONG-TERM COMPENSATION AWARDS
---------------------- -----------------------------
Other Annual Restricted Stock Option/
Name and Principal Position Year Salary Bonus Compensation Awards SARS
- --------------------------- ---- ------ ----- ------------ ------ ----
<S> <C> <C> <C> <C> <C> <C>
Gerald K. Beckmann 1998 $289,425 -- -- -- 200,000
Chairman, CEO & President 1997 $143,169 $125,000 -- -- --
1996 $281,875 -- -- -- --
1995 $114,583 -- -- $68,750(2) 14,473
Holly J. Burlage 1998 $90,368 $15,000 -- -- 17,500
Vice President & Secretary 1997 $41,348 -- -- -- 22,500
1996 $73,750 $10,000 -- -- 15,800
1995 $60,000 -- -- $6,200(2) 2,067
</TABLE>
- ---------------
(1) Fiscal year 1998 pertains to the twelve months ended June 30, 1998,
fiscal year 1997 pertains to the six months ended June 30, 1997, fiscal
years 1996 and 1995 pertain to the twelve months ended December 31.
(2) Convertible preferred stock issued for forgiveness of deferred salary
amounts.
No other executive officer's salary and bonus exceed $100,000 annually
and no executive had any form of long-term incentive plan compensation
arrangement with the Company during any of the indicated periods.
STOCK OPTION GRANTS
The following table provides information concerning the grant of stock
options during the twelve months ended June 30, 1998 to the named executive
officers:
<TABLE>
<CAPTION>
Number of Securities % of Total Options
Underlying Options Granted to Employees Exercise Expiration
Granted(1) in Fiscal Year Price Date
----------------------- ------------------------ ----------- -------------
For the twelve months ended 6/30/98
-----------------------------------
<S> <C> <C> <C> <C>
Gerald K. Beckmann 200,000 43% $1.38 8/19/07
Holly J. Burlage 17,500 4% $0.72 3/1/08
</TABLE>
- ---------------
(1) The options for all listed vest with respect to 25% of the shares
issuable thereunder six months after the date of grant and with respect
to cumulative increments of 25% of the shares issuable thereunder on
each anniversary of the date of grant.
5
<PAGE> 9
OPTION EXERCISES AND HOLDINGS
The following table provides information related to the number of
shares received upon exercise of options, the aggregate dollar value realized
upon exercise, and the number and value of options held by the named executive
officers of the Company at June 30, 1998.
<TABLE>
<CAPTION>
Number of Unexercised Options/SARS Value of Unexercised In-The-Money
at Fiscal Year End Options/SARS at Fiscal Year End
---------------------------------- ---------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
For the twelve months ended 6/30/98
- -----------------------------------
<S> <C> <C> <C> <C>
Gerald K. Beckmann 230,855 153,618 $ -- $ --
Holly J. Burlage 23,350 36,650 -- 12,583
</TABLE>
DIRECTOR COMPENSATION
Currently, directors are compensated annually $7,500 for serving on the
Board in addition to $1,250 for each Committee on which they serve. All
directors are reimbursed for their out-of-pocket expenses incurred in connection
with their attendance at Board meetings.
The Company has entered into a two-year employment agreement with Mr.
Gerald K. Beckmann that provides for a minimum annual base salary of $283,250.
If Mr. Beckmann is terminated by the Company, he is entitled to receive a
severance payment of six months' base salary upon termination.
CERTAIN TRANSACTIONS
During 1995, Mr. Philip R. Thomas, the Company's founder and principal
stockholder, loaned the Company $40,000 which was secured by certain
receivables. On December 29, 1995, Mr. Thomas converted this loan into 2,000
Series B $20 Convertible Preferred Stock. Also on December 29, 1995, Mr. Gerald
K. Beckmann, Ms. Holly J. Burlage (Vice President of the Company), and Mr. Frank
R. Marlow (a director of the Company), converted unpaid compensation totaling
$79,950 into 3,998 Series B $20 Convertible Preferred Stock.
During 1995 and 1996, Mr. Beckmann loaned the Company approximately
$400,000. These amounts were converted into Series B $20 Preferred Stock
convertible to 395,672 shares of Common Stock and Warrants to purchase 53,021
Shares of Common Stock at $.67 per share. On March 11, 1996, Mr. Beckmann loaned
the Company $100,000 as part of a $250,000 bridge loan. These bridge loans were
converted in June 1996 into $20 Series C Preferred Stock convertible to 30
shares of Common Stock and Warrants to purchase 15 shares of Common Stock at
$1.00 per share. These warrants expire five years from date of issue. During the
second and third quarters of 1996, Mr. Beckmann loaned the Company $90,000. This
loan has been repaid. In 1996, Mr. Beckmann guaranteed loans to the Company in
the aggregate amount of $1,050,000.
The Company believes that the terms of the foregoing transactions were
on terms no less favorable to the Company than could be obtained from
unaffiliated third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's directors, executive officers and persons who own more
than ten percent of the Company's common stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
Such persons are required by SEC regulations to furnish the Company with copies
of all Section 16(a) reports they file. Based solely upon a review of Forms 3, 4
and 5 and amendments thereto provided to the Company pursuant to Rule 16a-3(e),
Mr. Beckmann, Ms. Burlage, Mr. Galecke, Mr. Jack and Mr. Marlow each had one
late filing during the fiscal year ending June 30, 1998.
6
<PAGE> 10
INDEPENDENT ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
appointed PricewaterhouseCoopers LLP as the independent accountants of the
Company for the fiscal year ending June 30, 1999.
Representatives of Price Waterhouse Coopers are expected to be present
at the Annual Meeting with the opportunity to make a statement if they desire to
do so and to be available to respond to appropriate questions.
BOARD OF DIRECTORS' RECOMMENDATIONS; VOTE REQUIRED
The Board of Directors unanimously recommends a vote FOR the election
as director of each of the nominees named in the proxy.
STOCKHOLDER PROPOSALS
In order for stockholder proposals to receive consideration for
inclusion in the Proxy Statement for the Company's 1999 Annual Meeting of the
Stockholders, such proposals must be received by October 1, 1999, at the
Company's offices at 8200 Springwood Drive, Suite 230, Irving, Texas 75063,
Attention: Secretary.
The Company's by-laws contain a provision which requires that a
stockholder may nominate a person for election as a director only if written
notice of such stockholder's intention to make such nomination has been given to
the Secretary of the Company not earlier than 60 days nor later than 30 days
prior to a meeting of stockholders. However, in the event that notice or public
disclosure of a meeting of stockholders is first given or made to the
stockholders less than 40 days prior to such meeting, then notice of a
stockholder's intention to nominate a person for election as a director will be
timely if given in writing to the Secretary before the close of business on the
tenth day following the date on which the notice of the meeting was mailed or
the public disclosure of the meeting was made. The by-laws also require that the
notice set forth, among other things, a description of all arrangements or
understandings between the nominating stockholder and the nominee pursuant to
which the nomination is to be made or the nominee is to be elected and such
other information regarding the nominee as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated by the Company's Board. This provision
is intended to give the Company the opportunity to obtain all relevant
information regarding persons nominated for director. The Board may disqualify
any nominee who fails to provide the Company with complete and accurate
information as required by this provision.
SOLICITATION OF PROXIES
The Company will pay the expenses of this proxy solicitation. In
addition to solicitation by mail, some of the officers and regular employees of
the Company may solicit proxies personally or by telephone, if deemed necessary.
The Company will request brokers and other fiduciaries to forward proxy
soliciting material to the beneficial owners of shares which are held of record
by the brokers and fiduciaries, and the Company may reimburse them for
reasonable out-of-pocket expenses incurred by them in connection therewith.
OTHER MATTERS
The Board is not aware of any matter, other than the matters described
above, to be presented for action at the Annual Meeting. However, if any other
proper items of business should come before the Annual Meeting, it is the
intention of the person or persons acting under the enclosed form of proxy to
vote in accordance with their best judgment on such matters.
The Annual Report on Form 10-KSB for the year ended June 30, 1998 is
enclosed herewith.
7
<PAGE> 11
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED POSTAGE PAID RETURN ENVELOPE. A PROMPT RETURN OF
YOUR PROXY CARD WILL BE APPRECIATED, AS IT WILL SAVE THE EXPENSE OF FURTHER
MAILINGS.
By Order of the Board of Directors,
/s/ GERALD K. BECKMANN
Gerald K. Beckmann
Chairman, President and Chief Executive
Officer
Irving, Texas
November 4, 1998
8
<PAGE> 12
FRONT OF PROXY CARD
Integrated Security Systems, Inc.
8200 Springwood Drive, Suite 230, Irving, TX 75063
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned shareholder of Integrated Security Systems, Inc. (the
"Company") hereby appoints Gerald K. Beckmann and Holly J. Burlage, as Proxies,
each with the power to appoint his substitute, and hereby authorizes them, to
represent and vote, as designated on the reverse, all shares of Common Stock of
Integrated Security Systems, Inc. (the "Company") held of record by the
undersigned on October 23, 1998, at the Annual Meeting of Stockholders to be
held on December 11, 1998 or any adjournment thereof.
BACK OF PROXY CARD
FOR all nominees WITHHOLD
listed to right Authority to vote
(Except as marked for nominees
to the contrary) listed
1. Election of
Directors [ ] [ ] Nominees: Gerald K. Beckmann
Robert M. Galecke
James E. Jack
Frank R. Marlow
For, except votes withheld from this following nominee:
- -------------------------------------------------------
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS
WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE LISTED NOMINEES
AS DIRECTORS.
PLEASE CHECK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS ON
DECEMBER 11, 1998. [ ]
SIGNATURE DATE
-------------------------------- --------------------
SIGNATURE DATE
-------------------------------- --------------------
Signature if held jointly
Note: Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
