<PAGE>
23 Carol Street
Clifton, New Jersey 07014
VERTEX INDUSTRIES, INC.
INFORMATION STATEMENT
Pursuant to Section 14(f) of the
Securities Exchange Act of 1934
and Rule 14f-1 Thereunder
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS
REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT.
NO PROXIES ARE BEING SOLICITED AND YOU ARE NOT REQUESTED
TO SEND THE COMPANY A PROXY
___________________
July 1, 1999
___________________
This Information Statement is being mailed on or about July 2,
1999 to holders of record at the close of business on July 1,
1999 (the "Statement Date") of shares of Common Stock, $.005 per
share ("VTX Common Stock"), of Vertex Industries, Inc. (the
"Company"). It is being furnished in connection with the
appointment to the Company's Board of Directors, other than at a
meeting of the Company's stockholders, of six new directors
consisting of three individuals designated by Edwardstone &
Company, Incorporated, a Delaware corporation ("Edwardstone") (the
"Edwardstone Designees"), and three individuals designated by
MidMark Capital, L.P., a Delaware limited partnership ("MidMark",
and together with Edwardstone, the "Buyers") (the "MidMark
Designees", and together with the "Edwardstone Designees", the
"Buyers' Designees"). Edwardstone is an investment management
company. Edwardstone's principal executive offices are located at
600 Madison Avenue, 26th Floor, New York, NY 10022. MidMark is an
investment limited partnership holding equity securities in 12
private portfolio companies. MidMark's principal executive
offices are located at 466 Southern Boulevard, Chatham, NJ 07928.
As more fully described below, the Company has entered into a
Subscription Agreement, dated as of June 21, 1999 (the
"Subscription Agreement"), with the Buyers. The Subscription
Agreement provides for Edwardstone's purchase, subject to certain
conditions, of four million four hundred forty nine thousand six
hundred forty two (4,449,642) shares (the "Edwardstone Shares") of
VTX Common Stock and MidMark's purchase, subject to certain
conditions, of four million (4,000,000) shares (the "MidMark
Shares", and together with the Edwardstone Shares, the "Shares")
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of VTX Common Stock. The Shares represent 61.8% of the 13,676,621 VTX
Common Stock that will be outstanding after the consummation of the
transaction. As a condition to the Buyers' purchase of the Shares, which
purchase will occur on a date that is at least 10 days after the date of
this Information Statement (the "Closing Date"), the Buyers and the Company
will enter into a Stockholders Agreement (the "Stockholders Agreement"),
containing certain terms and conditions concerning the acquisition and
disposition of such Shares of the Company and the corporate governance of the
Company. In accordance with the Stockholders Agreement (i) three of the
Company's five directors have resigned from office, such resignations
to be effective on the Closing Date; (ii) the number of directors consti-
tuting the full Board of Directors was increased to eight (8) members,
such increase to be effective on the Closing Date; and, (iii) six Buyers'
Designees were appointed by the directors of the Company to fill the
vacancies on the Company's Board of Directors created by such resignations,
such appointments to be effective on the Closing Date.
The purpose of this Information Statement is to provide certain
information concerning the Buyers' Designees and the Company's Board of
Directors, and the appointment of two new executive officers of the
Company. The information contained herein concerning Edwardstone, MidMark
and the Buyers' Designees has been furnished to the Company by Edwardstone
and MidMark and the Company assumes no responsibility for the accuracy
or completeness of such information.
CHANGE OF CONTROL
Pursuant to the Subscription Agreement, Edwardstone has agreed to
purchase from the Company 4,449,642 shares of VTX Common Stock and MidMark
has agreed to purchase from the Company 4,000,000 shares of VTX Common
Stock. The consideration to be paid by Edwardstone and its affiliates for
such shares will be $3,750,000 and the consideration to be paid by MidMark
for such shares will be $3,750,000. To fund the acquisition, MidMark will
be calling in commitments from its limited partners, including the Small
Business Administration, which is a preferred limited partner in MidMark
and Edwardstone will use its own funds as well as those of its affiliates.
In accordance with the provisions of the Subscription Agreement, the
consideration to be paid by Edwardstone and its affiliates and MidMark
will be paid by wire transfer of immediately available funds to such account
as the Company may reasonably direct by written notice delivered to the Buyers
by the Company at least two (2) business days before the Closing Date.
Simultaneously, the Company will deliver to each Buyer a certificate or
certificates in definitive form, registered in the name of such Buyer,
representing the VTX Shares being purchased by such Buyer pursuant to the
Subscription Agreement.
Pursuant to the terms of the Stockholders Agreement (i) three of the
Company's five directors, James Maloy, Wilbur Highleyman and Irwin Dorros,
resigned from office, such resignations to be effective on the Closing Date;
(ii) the number of directors constituting the full Board of Directors was
increased to eight (8) members, such increase to be effective on the
Closing Date; and,(iii) the three Edwardstone Designees, Hugo H. Biermann,
Gregory N. Thomas and Nicholas R. H. Toms, and the three MidMark Designees,
Wayne L. Clevenger, Denis Newman and Joseph R. Robinson (see also
"Certain Relationships and Related
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Transactions"), were appointed by the directors of the Company to
fill the vacancies on the Company's Board of Directors created by
such resignations, such appointments to be effective on the
Closing Date. Ronald C. Byer and George Powch, currently
directors of the Company, will continue to serve in that capacity
(the "Continuing Directors").
Consequently, effective on the Closing Date, the Buyer's
Designees will constitute a majority of the Company's directors.
The Continuing Directors and the Buyer's Designees will hold
office as directors for a term of one year or until their
successors are elected and qualified.
Effective as of the Closing Date, James Q. Maloy has also
resigned as Chairman of the Board and Ronald C. Byer has resigned
as Chief Executive Officer of the Company. Hugo H. Biermann has
been appointed to serve as Chairman of the Board and Nicholas R.H.
Toms has been appointed to serve as Chief Executive Officer of the
Company (the "Executive Officer Designees"), effective on the
Closing Date. Messrs. Biermann and Toms are both principals in
Edwardstone where Mr. Biermann serves as President and Mr. Toms
serves as Chairman and Chief Executive Officer.
Accordingly, upon the effectiveness of the resignations of
Messrs. Maloy and Byer, the executive officers of the Company will
be as follows:
Hugo H. Biermann, Chairman of the Board
Nicholas R.H. Toms, Chief Executive Officer
Ronald C. Byer, President
Barbara H. Martorano, Corporate Secretary
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Set forth below are the names, ages (at the Statement Date),
principal occupation and business experience during the past five
years of (i) the Edwardstone Designees, (ii) the MidMark Designees
(iii) the Continuing Directors, (iv) the Executive Officer
Designees, and (v) the executive officers of the Company, each of
whom is expected to continue as such following the Closing Date.
Directors
The Edwardstone Designees
Hugo H. Biermann, 50, has been a principal in Edwardstone, an
investment management company, since 1986 and has served as
President of Edwardstone since 1989. From 1988 to 1995 Mr.
Biermann served as Director and Vice Chairman of Peak Technologies
Group, Incorporated ("Peak Technologies"), a company involved in
automated data capture technologies.
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Gregory N. Thomas, 52, has been managing director of Treacy Ventures
LLC, a private venture capital company, since February 1999. Mr. Thomas
also sits on the board of directors of a number of private companies. From
December 1997 to February 1999, Mr. Thomas served as Vice Chairman
and a Director of Freedom Securities, Inc., an investment bank. Mr. Thomas
was a director of Peak Technologies from September 1992 to June 1997. Prior
to his retirement in December 1992, Mr. Thomas had, for more than five
years, been a partner with William Blair & Company, an investment banking
firm.
Nicholas R. H. Toms, 50, has been a principal of Edwardstone
since 1986 and Chairman and Chief Executive Officer of Edwardstone
since 1989. From 1985 to 1996 he served as a Director of Lynton
Group, Inc., a corporation involved in general aviation. From
1988 to 1997, Mr. Toms served as Chairman, President and Chief
Executive Officer of Peak Technologies.
The MidMark Designees
Wayne L. Clevenger, 56, has been a managing director of
MidMark Advisors, Inc., the general partner of MidMark Equity
Partners, L.P., since 1994 and a managing director of MidMark
Associates, Inc., the general partner of MidMark, since 1994.
MidMark is an investment limited partnership holding equity
securities in 12 private portfolio companies. Mr. Clevenger is on
the board of directors of several privately owned companies.
Denis Newman, 69, has been a managing director of MidMark
Advisors, Inc., the general partner of MidMark Equity Partners,
L.P., since 1994 and a managing director of MidMark Associates,
Inc., the general partner of MidMark, since 1994. Mr. Newman is on
the board of directors of several privately owned companies.
Joseph R. Robinson, 57, has been a managing director of MidMark
Advisors, Inc., the general partner of MidMark Equity Partners, L.P.,
since 1994 and a managing director of MidMark Associates, Inc., the
general partner of MidMark, since 1994. Mr. Robinson is on the board of
directors of several privately owned companies.
The Continuing Directors
Ronald C. Byer, 66, joined the Company in 1975 and has served
as President since July 31, 1995 and as Chief Executive Officer
since January 17, 1996. Mr. Byer also served as the Company's
Vice President of Marketing and Sales since 1979, Treasurer since
1983, Executive Vice President since 1985 and Director since 1976.
From 1963 to 1975, Mr. Byer held various positions at Datascan,
Inc. After its acquisition by Dymo Industries, Inc., he became
manager of its newspaper computer systems group. From 1958 to
1972 Mr. Byer was employed by Bendix Aviation Corp. Mr. Byer has
a bachelors degree in electrical engineering from Rensselaer
Polytechnic Institute ("RPI").
George Powch, 50, has served as a Director of the Company
since 1987. He is President & CEO of Huber + Suhner (North
America) Inc., responsible for the North American units of Huber +
Suhner AG of Switzerland. These include Champlain Cable
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Corporation, a manufacturer of specialty wire and cable, Huber +
Suhner, Inc. a manufacturer and reseller of RF and microwave
components for telecommunications, and Huber + Suhner (Canada)
Ltd. He was previously Vice President & General Manager of Cinch
Connectors, a division of Labinal Components & Systems, Inc. From
1987 to 1993, Mr. Powch was President of BFI-IBEXSA International
Inc. a distributor of electronic components. Prior to that, he
held a variety of positions including President of Diffracto Ltd.
(1984-1986). Mr. Powch has an MBA degree from Harvard Business
School, an M.S. degree from Stanford University and a B.S. from
MIT, both in Electrical Engineering.
Executive Officers
On the Closing Date, the resignation of James Q. Maloy as
Chairman of the Board and Ronald C. Byer as Chief Executive
Officer and the appointment of Hugo H. Biermann as Chairman of the
Board and Nicholas R.H. Toms as Chief Executive Officer will
become effective. Neither Mr. Biermann nor Mr. Toms is currently
an executive officer of the Company nor does either one hold any
position with the Company.
Executive Officer Designees
Hugo H. Biermann, 50, has been a principal in Edwardstone
since 1986 and has served as President of Edwardstone since 1989.
From 1988 to 1995 Mr. Biermann served as Director and Vice
Chairman of Peak Technologies, a company involved in automated
data capture technologies.
Nicholas R. H. Toms, 50, has been a principal of Edwardstone
since 1986 and Chairman and Chief Executive Officer of Edwardstone
since 1989. From 1985 to 1996 he served as a Director of Lynton
Group, Inc., a corporation involved in general aviation. From
1988 to 1997, Mr. Toms served as Chairman, President and Chief
Executive Officer of Peak Technologies.
Continuing Executive Officers
Ronald C. Byer, 66, joined the Company in 1975 and has served
as President since July 31, 1995 and as Chief Executive Officer
since January 17, 1996. Mr. Byer also served as the Company's
Vice President of Marketing and Sales since 1979, Treasurer since
1983, Executive Vice President since 1985 and Director since 1976.
From 1963 to 1975, Mr. Byer held various positions at Datascan,
Inc. After its acquisition by Dymo Industries, Inc., he became
manager of its newspaper computer systems group. From 1958 to
1972 Mr. Byer was employed by Bendix Aviation Corp. Mr. Byer has
a bachelors degree in electrical engineering from Rensselaer
Polytechnic Institute ("RPI").
Barbara H. Martorano, 42, joined the Company in June 1990 and
has served in a variety of positions, including Sales Coordinator,
Office Administrator, Assistant to the Secretary, President and
Chairman of the Board, as well as, Corporate Secretary as of
January 17, 1996. Mrs. Martorano is a graduate of Berkley, Garret
Mountain campus.
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Meetings of the Board
During 1998, the Board of Directors held 4 meetings and two
incumbent directors attended 100% of the meetings with three
directors attending 75% of the meetings, and each director
attended all meetings of the committees of the Board of Directors
on which he served.
The Stock Option Committee, currently consisting of Messrs.
Maloy and Byer, met twice in 1998. This Committee makes awards of
stock options to Vertex employees under its incentive stock option
plan. It is anticipated that Mr. Clevenger and Mr. Thomas will
be appointed to such Committee to replace Mr. Maloy and Mr. Byer
after the Closing Date. The Audit Committee, consisting of
Messrs. Highleyman, Powch and Dorros, met once in fiscal 1998. It
is expected that Mr. Powch will be re-appointed to such Committee
and Messrs. Clevenger and Thomas will be appointed to such
Committee to replace Messrs. Highleyman and Dorros after the
Closing Date. The Company does not have Nominating or
Compensation Committees.
All directors hold office until the next annual Meeting of
the Company or until their successors have been elected and
qualified. It is anticipated that directors who are not officers
of the Company shall receive compensation of $1,000 per meeting
and will be reimbursed for all related expenses. The Company
shall pay MidMark for the services of the MidMark Designees
pursuant to the Management Agreement (see "Certain Relationships
and Related Transactions"). The MidMark Designees shall not
otherwise receive any other compensation for their services as
directors of the Company.
COMPLIANCE WITH BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires
directors, executive officers and 10% shareholders to file reports
of changes in beneficial ownership with the Company, the
Securities and Exchange Commission and the exchange upon which the
Company's Common Stock is traded. Based solely on written
representations from the Company's directors and executive
officers and a review of the copies of beneficial ownership
reports furnished to the Company, the Company believes that all of
the 10% shareholders and directors and executive officers of the
Company complied with the beneficial ownership reporting
requirements during the last fiscal year.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the
annual and long-term compensation for the services in all
capacities to the Company for the fiscal year ended July 31, 1996,
1997 and 1998 of those persons who were, at July 31, 1998,
executive officers of the Company earning annually $100,000 or
more:
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<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation All Other Compensation Compensation
<CAPTION>
Name Restricted
and Other Annual Stock Options/ LTIP All Other
Principal Year Salary Bonus Compensation Award(s) Sars Payouts Compensation
($) ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald C. - - - - -
Byer 1998 $115,000 - $5,553 - - - -
CEO and 1997 $115,000 - $6,150 - - - -
President 1996 $106,480 $6,055
<FN>
(1) All Officers and non-union employees of Vertex are covered by a pension
plan that is financed by voluntary employee and Company contributions.
(2) Mr. Byer is provided with an automobile by the Company; a
portion of which may represent the personal use thereof
estimated at $2,500 per year and is excluded.
</TABLE>
On November 13, 1995, Mr. Robert McLaughlin, then Chief Financial
Officer/Treasurer, was issued 50,000 stock options at an exercise price of
$ .75 which vest over five years. On November 13, 1997, Mr. McLaughlin
was granted 25,000 stock options at an exercise price of $.81 which vest
over five years and on November 11, 1998, Mr. McLaughlin was granted an
addition 25,000 stock options at an exercise price of $.75 which vest over
five years. From March 1997 through January 1999, Mr. McLaughlin exercised
35,000 options. His remaining 65,000 options have been retired.
The Company entered into a three (3) year employment contract
with Robert Morsch commencing on May 1, 1998 to serve as its Vice
President of Sales and Marketing. Under this contract, Mr. Morsch
is to receive as compensation: (a) an annual salary of $95,000 per
annum plus a cost of living increase each year; (b) 1% commission
on the Company's operating revenue; (c) grant of 70,000 stock
options at an exercise price of $.68 (35,000 options immediately
vest, with the remaining 35,000 options vesting on January 1,
1999); (d) use of a leased automobile costing up to $750 per month
and a right of first refusal to purchase such vehicle at the end
of the lease term; (e) reimbursement of business expenses incurred
and (f) the same group benefits received by other Company
executives. The above stock options are in addition to 200,000
options previously granted at an exercise price of $.75 pursuant
to the Company's Incentive Stock Option Plan.
On September 10, 1998, the Company entered into a two (2)
year employment contract with Ronald Byer, Jr. to serve as its
Director of Middleware Technologies. Under this contract, Mr.
Byer is to receive as compensation: (a) an annual salary of
$104,500 per annum for the first year and $109,725 per annum for
the second year; (b) a grant of a five year stock option to
purchase up to 25,000 shares of VTX Common Stock under its
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Incentive Stock Option Plan at an exercise price of $.94; (c)
reimbursement of business expenses; and, (4) the same group
benefits received by other Company executives. The above stock
options are in addition to 50,000 options previously granted at an
exercise price of $1.06 pursuant to the Company's Incentive Stock
Option Plan.
On May 28, 1999, the Company entered into an employment
contract with Ronald C. Byer to serve as President of the Company,
commencing on August 1, 1999 and terminating on July 31, 2000.
Under the terms of this contract, Mr. Byer is to receive as
compensation: (1) $150,000 per annum; (2) reimbursement for all
reasonable and necessary out-of-pocket travel and other business
expenses; (3) the same group medical benefits received by other
Company executives; and, (4) the use of a leased automobile, such
lease and automobile expenses (including insurance) to be paid by
the Company. Simultaneously with the employment contract, the
Company entered into a two (2) year consultant contract with
Ronald C. Byer commencing on August 1, 2000 to serve as a
consultant. Under this contract, Mr. Byer is to receive as
compensation: (1) $100,000 for the first year; (2) $75,000 for the
second year; (3) reimbursement for all reasonable and necessary
out-of-pocket travel and other business expenses; and, (4) the
same group medical benefits received by other Company executives
for the remainder of Mr. Byer's life.
On May 28, 1999, the Company entered into a two (2) year
consultant contract with James Q. Maloy, commencing upon his
retirement as Chairman of the Board of the Company. Under this
contract, Mr. Maloy is to receive as compensation for his
consulting services: (1) $26,000 per annum; (2) reimbursement for
all reasonable and necessary out-of-pocket travel and other
business expenses; and, (3) the same group medical benefits
received by other Company executives for the remainder of Mr.
Maloy's life.
The following directors of the Company were granted qualified
stock options in the amount specified opposite their names at
exercise prices so indicated on the dates specified:
<TABLE>
Initial Number
Name of of Option Exercise Price Options Options
Director (2) Date of Grant Shares (1)(3)(4) Per Option Exercised Exercisable
<CAPTION>
<S> <C> <C> <C> <C> <C>
Wilber 6/11/97 10,000 1.00 - -
Highleyman 1/20/93 40,000 4.25 8,000 32,000
Irwin 6/11/97 10,000 1.00 - -
Dorros 1/20/93 40,000 4.25 8,000 32,000
George 6/11/97 10,000 1.00 - -
Powch 1/20/93 40,000 4.25 16,000 24,000
<FN>
(1) Adjusted for 2 for 1 stock split effective April 19, 1993.
(2) No options were granted to Directors in Fiscal 1998.
(3) The above options were granted under the Incentive Stock Option Plan.
</TABLE>
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(4) As resigning directors, Messrs. Highleyman and Dorros' 10,000
options, each granted on June 11, 1997, became fully vested
upon their resignations and must be exercised within one
year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
James Q Maloy and Ronald C Byer were the only officers or
employees, or former officers, who during the last completed
fiscal year participated in the deliberations of the company's
board of directors concerning executive officer compensation (other than
that of the Chief Executive Officer).
REPORT ON EXECUTIVE COMPENSATION
Chief Executive Officer Compensation
The Board of Directors reviews the CEO's overall compensation
package on an annual basis. As a group, they review the financial
performance of the Company during the prior year, including
performance against budget in the areas of both Operating
Statement and Balance Sheet. The Board also reviews the
performance against the previous year's results.
The Board further takes into account Sales and Marketing
activities and how the performance has been against plans for
introducing new products and entering new markets. Research and
Development expenses are reviewed in order to determine how the
Company performed with respect to new product development plans.
After reviewing all of these factors as a group, the Board of
Directors makes a determination as to the compensation package for
the CEO of the Company for the following year.
Executive Compensation
The CEO establishes executive compensation based upon
individual qualifications and a comparison with companies in the
industry of comparable size.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 17, 1997, the Company entered into a License
Agreement with the NetWeave Corporation to develop, market, sell
and support the NetWeave product worldwide. The Company will pay
the NetWeave Corporation a royalty on the initial licenses sold
and on annual license fees paid by the customer for maintenance
and support of the NetWeave product. For the year ended July 31,
1998, the NetWeave Licensing Agreement generated revenues of
approximately $973,000. During 1998, the Company paid
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approximately $74,000 of royalties to the NetWeave Corporation.
For the year ended July 31, 1997, the NetWeave License Agreement
generated revenues of $105,000 and the Company paid the NetWeave
Corporation $20,000 in royalty payments.
Dr. Wilbur H. Highleyman, Chairman of the NetWeave
Corporation, has been a director of the Company since 1985 and
presently owns 25.5% of the NetWeave Corporation. Pursuant to the
Stockholder's Agreement, Mr. Highleyman resigned from office, such
resignation to be effective on the Closing Date. Approximately
six months ago, Ronald C. Byer, Jr., the son of Ronald C. Byer,
resigned as the President of the NetWeave Corporation. Ronald C.
Byer, Jr. presently owns 2.1% of the NetWeave Corporation.
Pursuant to Subscription Agreement, the Company and MidMark
will enter into a Investment Banking, Management and Monitoring
Fee Agreement (the "Management Agreement") on the Closing Date,
whereby the Company will retain MidMark for a period of five years
to provide investment, banking, business and organizational
strategy, and financial and investment management services to the
Company. In addition, the Management Agreement provides for the
appointment by MidMark of up to three MidMark officers to serve on
the Company's Board of Directors. As compensation for its
services and the services of its officers, the Company will pay
MidMark the following: (a) a one-time investment banking fee of
$187,500; (b) an additional investment banking fee equal to (5%)
of the amount of additional equity financing MidMark is able to
attract for the Company after the Closing Date; provided, however,
in no event shall the aggregate of such investment banking fees
referred to in clauses (a) and (b) exceed $250,000; (c) an annual
management fee of $250,000; and (d) reasonable out-of-pocket
expenses incurred by MidMark in connection with its performance of
services under the Management Agreement.
OWNERSHIP OF EQUITY SECURITIES OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following information table sets forth certain
information regarding the Company's Common Stock owned on June 1,
1999 by (i) each stockholder who is known by the Company to own
beneficially more than 5% of VTX Common Stock, (ii) each director
and officer, and (iii) all officers and directors as a group:
Names and Address of Shares Owned (1)(2)
Directors, Officers Number Percent
and 5% Shareholders
James Q. Maloy
23 Carol Street
Clifton, New Jersey 07014 1,202,208 23.4%
Ronald C. Byer
23 Carol Street 448,422 8.7%
Clifton, New Jersey 07014
All officers and 1,702,630 33.1%
directors as a group
(4 persons) (3)
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(1) Does not give effect to the issuance of up to 2,000,000
shares of VTX Common Stock reserved for issuance under the
Company's stock option plan and, 445,000 shares under non-
qualified stock options.
(2) Gives effect to a 2 for 1 stock split effective April 19,
1993.
(3) Includes 50,000 shares of VTX Common Stock owned by Mr. Powch
and 2,000 shares of VTX Common Stock owned by Dr.
Highleyman's pension plan.
PERFORMANCE GRAPH
The following graph compares the cumulative shareholder return
(including reinvestment of dividends) on an indexed basis with the
Hambrecht & Quist Technology Index and the Standard & Poors 500
Composite Stock Price Index.
These indices are included for comparative purposes only and do
not necessarily reflect management's opinion that such indices are
an appropriate measure of the relative performance of the stock
involved, and are not intended to forecast or be indicative of
possible future performance of the Common Stock
Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Mar-99
Hambrecht&Quist Tech Index $100 $135 $170 $250 $395 $480
S&P 500 $100 $135 $172 $202 $249 $283
VETX $100 $40 $48 $32 $101 $135
Note $100 invested December 31, 1994 in Stock or Index, including
reinvestment of dividend.
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VERTEX INDUSTRIES, INC.
July 1, 1999
12
