SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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 ss.240.14a-11(c) or ss.240.14a-12
COMMAND SECURITY CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[XXX] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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>
COMMAND SECURITY CORPORATION
Route 55, Lexington Park
Lagrangeville, New York 12540
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held March 14, 2000
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To the shareholders of Command Security Corporation:
The annual meeting of shareholders of Command Security Corporation will
be held at its executive offices, located at Route 55, Lexington Park,
Lagrangeville, New York on March 14, 2000, at 10:00 o'clock in the forenoon,
eastern standard time, for the following purposes:
1. To elect five directors, Messrs. Franklyn H. Snitow, William C.
Vassell, Gordon Robinett, Gregory J. Miller and Peter J. Nekos,
to hold office until their respective two year terms expire and
until their successors have been elected and qualified.
2. To ratify the selection of auditors for the fiscal year ending
March 31, 2000.
3. To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on January 25,
2000, are entitled to notice of and to vote at the meeting and at any
adjournment thereof. A complete list of shareholders entitled to vote will be
available for inspection by shareholders at the executive offices of the
Company at least ten days before the date of the meeting.
By order of the Board of Directors.
Debra M. Miller, Secretary
Dated: February 14, 2000
Lagrangeville, New York
IMPORTANT - Please sign the enclosed proxy and mail it promptly in the
postpaid return envelope provided, particularly if you do not expect to
attend the meeting in person.
IT IS IMPORTANT THAT YOUR SHARES BE VOTED IN ORDER
TO AVOID DELAYS AND THE ADDITIONAL EXPENSE TO THE
COMPANY OF FURTHER SOLICITATION. PLEASE MAIL YOUR
PROXY PROMPTLY.
<PAGE>
COMMAND SECURITY CORPORATION
Route 55, Lexington Park
Lagrangeville, New York 12540
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PROXY STATEMENT
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Command Security Corporation ("Company")
to be used at the annual meeting of shareholders of the Company to be held on
March 14, 2000, at 10:00 o'clock in the forenoon, eastern standard time, at
its executive offices, located at Route 55, Lexington Park, Lagrangeville,
New York, for the purposes set forth in the accompanying notice of annual
meeting of shareholders. If the enclosed form of proxy is executed and
returned, it may nevertheless be revoked at anytime before it is exercised,
either in person at the annual meeting or by written notice or by a duly
executed proxy, bearing a later date, sent to the Secretary of the Company.
If no instructions are given on the proxy, it will be voted as herein
recommended by the board of directors. The Company anticipates mailing this
proxy statement and the accompanying proxy to shareholders on or about
February 14, 2000. In addition to the solicitation of proxies by mail, the
Company, through its directors, officers and employees, may solicit proxies
from shareholders personally or by telephone or other forms of communication.
The Company may also require the assistance of certain broker-dealers and/or
proxy solicitation agents in obtaining completed proxies from shareholders.
Such assistance would be in the form of telephonic or written communication
by employees of such broker-dealers and/or proxy solicitation agents. No
contract or compensation is anticipated in connection with any such
solicitation. All expenses of proxy solicitation will be borne by the
Company.
As of January 25, 2000, (the "Record Date") there were 6,437,343 shares
of the Company's common stock issued and outstanding, held by approximately
1,318 beneficial owners and 207 holders of record. Each share of common stock
is entitled to one vote. Only holders of record of common stock at the close
of business on January 25, 2000 will be entitled to vote at the meeting.
Proxies will be received and tabulated by the Company's transfer agent.
Votes cast in person at the meeting will be tabulated by an election
inspector appointed by the Company. Abstentions and "broker non-votes" are
included in the determination of the number of shares present at the meeting.
Abstentions are counted in tabulations of the vote cast on proposals
presented to the shareholders, whereas broker non-votes are not counted in
tabulations of the votes cast. Neither are counted as votes cast "for" a
proposal.
If fewer shares are voted in favor of the proposals than required for
their approval, the meeting may be adjourned for the purpose of allowing
additional time for obtaining additional proxies or votes. At any subsequent
reconvening of the meeting, all proxies will be voted on the matter(s) to be
considered at the reconvened meeting in the same manner as such proxies would
have been voted on the matter at the original convening of the meeting
(except for any proxies which have theretofore effectively been revoked or
changed), notwithstanding that they may have been effectively voted on the
same or any other matter at a previous meeting. Any such adjournment will
require the affirmative vote of a majority of the shares present at the
session of the meeting to be adjourned. A proxy granting authority to vote
upon such other business incidental to the conduct of the meeting as may
properly come before the meeting will constitute authority to vote in favor
of one or more adjournments of the meeting.
None of the Company's executive officers, directors, or director
nominees have any substantial interest, direct or indirect, in any matter to
be voted on other than election or appointment to office.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's bylaws provide for its Board of Directors (the "Board") to
be divided into two classes. Directors are elected by a plurality of the
votes of the shareholders. The Company's by-laws provide that there shall be
not more than twenty-one nor fewer than three directors of the Company, with
the exact number to be determined from time to time by the Board. On June 22,
1998, in conjunction with the appointment of Franklyn H. Snitow, Esq. as
director, Acting President and CEO, the Board resolved to expand the number
of directors from eight (8) to nine (9). Proxies cannot be voted for a
greater number of persons than the number of nominees named.
The Board proposes that Messrs. Franklyn H. Snitow, William C. Vassell,
Gordon Robinett, Gregory J. Miller and Peter J. Nekos, whose terms of office
expire at the upcoming annual meeting of shareholders, be re-elected as
directors. It is not anticipated that any of these nominees will become
unavailable for any reason, but, if that should occur before the meeting, the
appointees named in the proxy reserve the right, in the exercise of their
sole discretion, to substitute and to vote for any other person selected by
the Company's Board of Directors as nominee in place of such nominee or to
vote for such lesser number of directors as may be prescribed by the Board in
accordance with the Company's Certificate of Incorporation and bylaws.
In accordance with Securities and Exchange Commission regulations, the
enclosed proxy card provides shareholders with an opportunity to grant to, or
withhold from, the appointees named therein the authority to vote for the
election of any director nominee named above.
The Board recommends that shareholders vote FOR the foregoing nominees.
The following information is furnished as to the nominees:
Name Age Title Since
- ---- --- ----- -----
Franklyn H. Snitow 52 Director 1998
William C. Vassell 41 Director 1983
Gordon Robinett 64 Director 1990
Gregory J. Miller 40 Director 1992
Peter J. Nekos 72 Director 1991
Franklyn H. Snitow was elected Acting President, Chief Executive Officer
and Director by the Board at a meeting conducted on June 22, 1998. As stated
above, Mr. Snitow's election was the result of a stipulation entered into by
the other eight members of the Board of Directors pursuant to the derivative
action commenced on or about December 4, 1997. On January 12, 1999, the
Appellate Division modified the lower Court's order to continue Mr. Snitow's
authority to discharge his responsibilities as Acting President, Chief
Executive Officer and Director pending the underlying litigation. During the
past five years, Mr. Snitow has been a partner in the law firm of Snitow &
Pauley. On July 1, 1998 he became a partner in the law firm of Snitow &
Cunningham, LLP. Mr. Snitow is compensated at the rate of $300 per hour for
services rendered to the Company. He is reimbursed for any expenses incurred
in connection with the rendering of such services and is authorized to engage
the services of others at the expense of the Company to assist in performance
of his duties and responsibilities. Mr. Snitow will be indemnified by the
Company pursuant to an Indemnification Agreement to the extent permitted in
accordance with New York law, the Company's Certificate of Incorporation and
its bylaws. Mr. Snitow has been a director of Tofutti Brands, Inc. since
1990. Mr. Snitow obtained a Bachelor of Arts Degree from American University
in 1967 and a Juris Doctor Degree from New York Law School in 1970.
William C. Vassell has been Chairman of the Board since 1983. Mr.
Vassell had been Chairman of the Board, President and Chief Executive Officer
of the Company since 1983, when the Company repurchased the remaining 50% of
its then outstanding Common Stock (he became a 50% owner of the Company in
1980). In connection with the Company's acquisition of United Security Group,
Inc. ("United"), Mr. Vassell resigned from the offices of President and Chief
Executive Officer on February 24, 1995, and retained his position as Chairman
of the Board. He has been a director of the Company since 1980, and has been
a member of the Executive Committee since March 1995. Mr. Vassell is active
in various industry and trade associations. He twice was Chairman of the
Mid-Hudson Chapter of the American Society for Industrial Security (the
nationally recognized security association), and he is a Certified Protection
Professional within the Society. He is also a director of the Associated
Licensed Detectives of New York State and a member of the Committee of
National Security Companies.
Gordon Robinett was appointed Vice Chairman of the Board of Directors on
February 24, 1995. He served as Treasurer of the Company from May, 1990 until
August 1, 1996 when Mr. Robinett and the Company agreed to mutually terminate
his employment. In August, 1997, Mr. Robinett was engaged as Acting Treasurer
until a replacement for the Company's former Chief Financial Officer, H.
Richard Dickinson was approved by the Board. On July 1, 1999, Mr. Robinett
resigned as Acting Treasurer in conjunction with the Board's approval of
Nathan Nelson as the Company's new Chief Financial Officer and Executive Vice
President. Mr. Robinett has been a director since 1990. From May 1989 to
April 1990, he was a consultant to Uniforce Temporary Personnel, Inc., a
publicly held national temporary personnel agency, and managed his personal
investments. From 1968 to April 1989, he was employed by Uniforce, initially
as Controller and thereafter as Vice President of Finance, Secretary and
Treasurer; and he continues to serve as a member of its board of directors.
Mr. Robinett also is currently a director of Comforce Corporation.
Gregory James Miller has been a director of the Company since September
1992. Since 1987 he has served as General Counsel for Goldline Connectors,
Inc., a Connecticut-based electronics manufacturer, and sits on its board of
directors. Mr. Miller also serves "of counsel" to Benenson & Kates, in New
York, handling labor law and contract negotiations for security guard
clients, and has handled various legal matters for the Company since 1985.
Mr. Miller is currently employed by Goldline Connectors, Inc. He has a
Bachelors Degree from Kalamazoo College, and a Juris Doctor degree from New
York Law School, where he was an editor of the Journal of Human Rights.
Peter J. Nekos has been a director of the Company since March 1991. Mr.
Nekos is a certified public accountant. From July 1984 to June 1986 he was a
partner of Nekos & Kilduff, an accounting firm located in New Rochelle, New
York. He operated his own accounting firm in Mamaroneck, New York from July
1986 until September 1996. At present he operates in Valhalla, New York.
Each member of the Board, other than Franklyn H. Snitow, Esq., entered
into a Shareholder Voting Agreement dated March 8, 1995, which was finally
memorialized on March 24, 1995, and which was amended on June 2, 1995 to
include H. Richard Dickinson and on September 22, 1997 to include Thomas P.
Kikis ("Agreement"). The Agreement provides that each person then on the
Board will (i) vote all shares beneficially owned by him ("Shares") for the
election to directorships of each of the other members of the Board, (ii)
refrain from voting any of his shares for any action that would result in the
increase or decrease of the number of positions on the Board or for the
removal, without cause, of any member of the Board, and (iii) in the event of
death, resignation or removal of any director, vote all of his shares in
favor of the election of a person to be designated as replacement in
accordance with the Agreement. The validity of this Shareholder Voting
Agreement is being litigated as part of the lawsuit discussed in the Section
entitled "Director and Executive Officers." (See, "Directors and Executive
Officers").
The provisions of the Agreement will make it more difficult for the
shareholders to replace the current directors. The Agreement provides that it
will remain in effect so long as the parties thereto continue to hold shares.
<PAGE>
PROPOSAL NO. 2
AUDITORS
D'Arcangelo & Co., LLP audited the financial statements of the Company
for the fiscal year ending March 31, 1999 and has been selected by the Board
to audit the Company's financial statements for the fiscal year ending March
31, 2000. Representatives of D'Arcangelo & Co., LLP are expected to be
present at the meeting, with the opportunity to make a statement and to be
available to respond to appropriate questions. At the meeting, the
shareholders will be asked to ratify the selection.
The Board recommends that shareholders vote FOR this Proposal.
<PAGE>
COMMITTEES AND MEETINGS
OF THE BOARD OF DIRECTORS
The Company has the following standing committees: Executive,
Compensation, and Audit. The Company does not have a Nominating Committee.
The Executive Committee includes Messrs. Vassell and Peter T. Kikis, and had
one seat open during the fiscal year ended March 31, 1999. The Executive
Committee advises management between Board meetings and considers matters
prior to presentation to the full Board. The Executive Committee meets
regularly (at least twice monthly). The Compensation Committee includes
Messrs. Vassell, Sands, and Peter T. Kikis. The Compensation Committee
advises the Board on compensation-related issues with respect to the
Company's employees. The Audit Committee includes Messrs. Robinett, Nekos and
Saunders. The Audit Committee is responsible for recommending a selection for
the Company's auditors and for advising the Board with respect to all audit,
control and accounting matters. All committee meetings were attended by at
least 75% of the directors comprising the committee.
The Company's Board met five times during the fiscal year ended March
31, 1999 and took action by Unanimous Written Consent on one occasion. The
Company's Executive Committee met approximately twice each month during the
fiscal year ended March 31, 1999; the Company's Audit Committee met once
during the fiscal year ended March 31, 1999. The Company's Compensation
Committee met once during the fiscal year ended March 31, 1999. Each
non-employee member of the Board is currently entitled to receive $1,000 per
Board meeting.
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
On or about December 4, 1997, an outside shareholder and four of the
Company's directors (Sands, P. Kikis, Saunders, and T. Kikis) commenced an
action in the Supreme Court of the State of New York, County of New York
(Index No. 606166/97) against the other four directors (Vassell, Robinett,
Nekos and Miller), the Company's outside corporate and securities counsel and
the Company itself in a lawsuit characterized as a derivative action. The
complaint alleges that one or more of the defendant-directors engaged in
improper activities, including ultra-vires acts, breach of fiduciary duty,
fraud against the Company, constructive fraud, waste of corporate assets and
concealment of information from the plaintiff-directors regarding the
Company's earnings, lacked power to enter into an employment agreement on
behalf of the Company with Mr. Robinett, and entered into service contracts
with financially unstable companies without performing due diligence. The
complaint further alleges that the Company has failed to appoint a
replacement to the office of president and that the directors have entered
into a shareholder agreement which is violative of public policy. Plaintiffs
seek the award of money damages in an amount which is "not less than $11
million" from the individual defendants, a declaratory judgment that the
shareholder agreement is void, an order for an accounting, certain other
injunctive relief and attorneys' fees and disbursements.
The Company has interposed an answer denying the allegations contained
in the complaint. The individual defendants have stated that they believe the
allegations are completely without merit and intend to vigorously defend
against each and every claim. The Company's Certificate of Incorporation and
the Business Corporation Law of New York provide for indemnification of
officers and directors with respect to damages and legal fees incurred in
connection with lawsuits against them arising by reason of serving the
Company. Due to the fact that certain members of the Board have chosen to
participate as plaintiffs in this lawsuit, the Company may not have coverage
under its officers and directors liability insurance policy. The
defendant-directors intend to seek indemnification, and have received
advancements of legal fees incurred in connection with their defense, from
the Company. Through February 1, 2000, the Company has expended approximately
$204,000 in legal fees in defense of this matter on its own behalf as well as
on behalf of the defendant officers and directors. In addition, the Company
has expended $100,000 for legal fees on behalf of the plaintiff directors in
December, 1998, and in March, 1999 accrued $92,000 for contingent legal fees
incurred by one of the defendants, where management has determined that
indemnification by the Company is probable. On or about March 25, 1998, the
plaintiffs filed a motion for the appointment of a temporary receiver. On
June 5, 1998, the Court ordered the appointment of a temporary receiver, but
prior to the order taking effect, the parties agreed to a stipulation
pursuant to which Franklyn H. Snitow, Esq., was appointed Acting President
and Chief Executive Officer and acting ninth Board member during the pendency
of the defendants' appeal to the Appellate Division of the decision to
appoint a receiver. Based on the stipulation, the defendant's request to the
Appellate Division for a stay pending the appeal of the order appointing the
receiver was granted. On January 12, 1999, the Appellate Division dismissed
the appeal and modified the lower court's order to continue Mr. Snitow's
authority to discharge his responsibilities as Acting President, Chief
Executive Officer and Director pending the underlying litigation. The Company
is unable to reasonably estimate the potential impact on the Company's
financial condition and results of operations from this lawsuit. The
foregoing information presented regarding indemnification is intended to
comply with Section 725(c) of the New York Business Corporation Law.
The Company's by-laws require that the Board be divided into two
classes. The first class consists of directors Steven B. Sands, Peter T.
Kikis, Lloyd H. Saunders, III and Thomas Kikis. The second class consists of
Franklyn H. Snitow, Esq., William C. Vassell, Gordon Robinett, Peter J. Nekos
and Gregory J. Miller. The terms of the directors in the first class will
expire at the meeting of shareholders for the year 2000 or until their
successors are elected and qualified. The terms of the directors in the
second class expire at the upcoming meeting of shareholders. Each director's
term is for two years. A classified Board makes it more difficult for
shareholders to change the majority of directors. Depending on the number of
people in each class it could take two (2) annual meetings to replace a
majority of the Board.
Each member of the Board, other than Franklyn H. Snitow, Esq., entered
into a Shareholder Voting Agreement on March 8, 1995, which was finally
memorialized on March 24, 1995, and which was amended on June 2, 1995 to
include H. Richard Dickinson and on September 22, 1997 to include Thomas
Kikis. The Agreement provides that each party to said agreement then on the
Board will (i) vote all shares beneficially owned by him ("Shares") for the
election to directorship of each of the other members of the Board, (ii)
refrain from voting any Shares for any action that would result in the
increase or decrease of the number of positions on the Board or for the
removal, without cause, of any member of the Board, and (iii) in the event of
death, resignation or removal of any director, vote all Shares in favor of
the election of a person to be designated as replacement in accordance with
the Agreement. The validity of this Shareholder Voting Agreement is being
litigated as part of the lawsuit discussed in the Section entitled "Director
and Executive Officers".
Simultaneously with the execution of the above-referenced voting
agreement, all of the persons then on the Board signed a Unanimous Written
Consent which provides for them to designate replacements for any current
director upon death, resignation, removal or inability to serve. Messrs.
Vassell, Nekos, Miller and Robinett were given the authority to nominate
their replacements; Messrs. Sands, Saunders and Thomas Kikis were given the
authority to nominate their replacements; and Mr. Peter Kikis was given the
authority to nominate his replacement. The Board members agreed that their
respective nominees of any replacements could be provided at a later date.
The following table provides information concerning each person who was
an executive officer or director of the Company on February 1, 2000.
Name Age Title
- ---- --- -----
Franklyn H. Snitow, Esq. 52 Director and Acting President and CEO
William C. Vassell 41 Chairman of the Board and Director
Gordon Robinett 64 Vice Chairman of the Board
and Director
Thomas P. Kikis 38 Director
Gregory J. Miller 40 Director
Peter J. Nekos 72 Director
Peter T. Kikis 76 Director
Steven B. Sands 40 Director
Lloyd H. Saunders, III 45 Director
Eugene U. McDonald 50 Sr. Vice President - Operations
Nathan Nelson 51 Chief Financial Officer
and Executive Vice President
Debra M. Miller 44 Secretary
Franklyn H. Snitow was elected Acting President, Chief Executive Officer
and Director by the Board at a meeting conducted on June 22, 1998. As stated
above, Mr. Snitow's election was the result of a stipulation entered into by
the other eight members of the Board of Directors pursuant to the derivative
action commenced on or about December 4, 1997. On January 12, 1999, the
Appellate Division modified the lower Court's order to continue Mr. Snitow's
authority to discharge his responsibilities as Acting President, Chief
Executive Officer and Director pending the underlying litigation. During the
past five years, Mr. Snitow has been a partner in the law firm of Snitow &
Pauley. On July 1, 1998 he became a partner in the law firm of Snitow &
Cunningham, LLP. Mr. Snitow is compensated at the rate of $300 per hour for
services rendered to the Company. He is reimbursed for any expenses incurred
in connection with the rendering of such services and is authorized to engage
the services of others at the expense of the Company to assist in performance
of his duties and responsibilities. Mr. Snitow will be indemnified by the
Company pursuant to an Indemnification Agreement to the extent permitted in
accordance with New York law, the Company's Certificate of Incorporation and
its bylaws. Mr. Snitow has been a director of Tofutti Brands, Inc. since
1990. Mr. Snitow obtained a Bachelor of Arts Degree from American University
in 1967 and a Juris Doctor Degree from New York Law School in 1970.
William C. Vassell has been Chairman of the Board since 1983. Mr.
Vassell had been Chairman of the Board, President and Chief Executive Officer
of the Company since 1983, when the Company repurchased the remaining 50% of
its then outstanding Common Stock (he became a 50% owner of the Company in
1980). In connection with the Company's acquisition of United Security Group,
Inc. ("United"), Mr. Vassell resigned from the offices of President and Chief
Executive Officer on February 24, 1995, and retained his position as Chairman
of the Board. He has been a director of the Company since 1980, and has been
a member of the Executive Committee since March 1995. Mr. Vassell is active
in various industry and trade associations. He twice was Chairman of the
Mid-Hudson Chapter of the American Society for Industrial Security (the
nationally recognized security association), and he is a Certified Protection
Professional within the Society. He is also a director of the Associated
Licensed Detectives of New York State and a member of the Committee of
National Security Companies.
Gordon Robinett was appointed Vice Chairman of the Board of Directors on
February 24, 1995. He served as Treasurer of the Company from May, 1990 until
August 1, 1996 when Mr. Robinett and the Company agreed to mutually terminate
his employment. In August, 1997, Mr. Robinett was engaged as Acting Treasurer
until a replacement for the Company's former Chief Financial Officer, H.
Richard Dickenson was approved by the Board. On July 1, 1999, Mr. Robinett
resigned as Acting Treasurer in conjunction with the Board's approval of
Nathan Nelson as the Company's new Chief Financial Officer and Executive Vice
President. Mr. Robinett has been a director since 1990. From May 1989 to
April 1990, he was a consultant to Uniforce Temporary Personnel, Inc., a
publicly held national temporary personnel agency, and managed his personal
investments. From 1968 to April 1989, he was employed by Uniforce, initially
as Controller and thereafter as Vice President of Finance, Secretary and
Treasurer; and he continues to serve as a member of its board of directors.
Mr. Robinett also is currently a director of Comforce Corporation.
Peter T. Kikis became a director of the Company on February 24, 1995 in
connection with the acquisition of United. He has also served as Chairman of
the Company's Executive Committee of the Board since March, 1995. He is a
director of Deltec International S.A., the parent of Deltec Development
Corporation, the former subordinated debt lender to the Company. Since 1950,
Mr. Kikis has been the President and a principal in Spencer Management
Company, a real estate development and management company in New York, New
York. From 1972 to 1992, Mr. Kikis was Chairman of the Board of Directors and
a principal of McRoberts Protective Agency, a New York based provider of
security guard services. Mr. Kikis is the father of Thomas P. Kikis who is
also a director of the Company.
Peter J. Nekos has been a director of the Company since March 1991. Mr.
Nekos is a certified public accountant. From July 1984 to June 1986 he was a
partner of Nekos & Kilduff, an accounting firm located in New Rochelle, New
York. He operated his own accounting firm in Mamaroneck, New York from July
1986 until September 1996. At present he operates in Valhalla, New York.
Gregory James Miller has been a director of the Company since September
1992. Since 1987 he has served as General Counsel for Goldline Connectors,
Inc., a Connecticut-based electronics manufacturer, and sits on its board of
directors. Mr. Miller also serves "of counsel" to Benenson & Kates, in New
York, handling labor law and contract negotiations for security guard
clients, and has handled various legal matters for the Company since 1985.
Mr. Miller is currently employed by Goldline Connectors, Inc. He has a
Bachelors Degree from Kalamazoo College, and a Juris Doctor degree from New
York Law School, where he was an editor of the Journal of Human Rights.
Steven B. Sands was appointed to the Board on March 30, 1994, in
accordance with the provisions of the Company's agreement with Sands Brothers
executed in connection with the Company's 1993 Private Placement. Mr. Sands
is Chairman of the Board of Sands Brothers & Co., Ltd., a Delaware
corporation registered as a broker-dealer. Mr. Sands also has interests in
certain entities which own the Company's stock. Mr. Sands is currently on the
board of directors of the following publicly-traded companies: The Village
Green Bookstore, Inc.; and Semi-Conductor Packaging Materials, Inc.
Lloyd H. Saunders, III, became a director of the Company on February 24,
1995 in connection with the acquisition of United. He is a managing director
at Sands Brothers and has been so since 1991. From 1989 to 1990, he was a
private investor and from 1986 to 1988 he was the Director of Corporate
Finance for Whale Securities, New York, New York.
Thomas P. Kikis became a director of the Company on September 22, 1997
in accordance with the terms of the Shareholders Voting Agreement entered
into by the Directors of the Company as of March 8, 1995. For the last six
years, Mr. Kikis' principal occupation has been president of Kikis Asset
Management Corporation located in New York, New York. In September 1998, he
formed Arcadia Securities, LLC, a New York registered broker-dealer. Mr.
Kikis is the son of Mr. Peter T. Kikis who is also a director of the Company.
Eugene U. McDonald has more than 26 years experience in the security
business. He joined the Company in October of 1992 as Vice President of
Corporate Services, and in 1995, he took over the position of Senior Vice
President - Operations. Mr. McDonald has held senior management positions
with Globe Security (1973-1990) and Burns International Security Services
(1990-1992). He has extensive direct personal experience with the handling of
specialized security personnel for cleared facilities as evidenced by his
duties as Group Vice President of Energy Services for Globe Security. He is
active in the American Nuclear Society, Institute of Nuclear Materials
Management, American Society for Industrial Security and the Connecticut
Police Chiefs Association.
Nathan Nelson was appointed Chief Financial Officer and Executive Vice
President of the Company in July 1999. Before joining the Company, Mr. Nelson
was the Chief Financial Officer and Treasurer of Tower Air, Inc. From 1993 to
1998, Mr. Nelson was the Chief Financial Officer for the Amana Tool
Corporation. From 1992 to 1993, Mr. Nelson was the Chief Financial Officer
and a director for American Dream Airlines. Prior to that, Mr. Nelson was the
Treasurer of Trump Shuttle, Inc. from 1989 through 1992. Mr. Nelson is not
presently a director of any publicly-held companies.
Debra M. Miller has been employed by the Company since September 1983,
initially as Office Manager and, since March 1986, as Corporate Secretary.
<PAGE>
OWNERSHIP OF SECURITIES
The following table sets forth certain information regarding the number
and percentage of common stock (being the Company's only voting securities)
beneficially owned by (i) each person who owns of record (or is known by the
Company to own beneficially) 5% or more of the Company's common stock or as
to which he has the right to acquire within 60 days of February 1, 2000, (ii)
each director and executive officer and (iii) all of said beneficial owners,
officers and directors as a group, as of February 1, 2000. Except as
indicated below, the address for each director and executive officer is the
Company's principal office at Lexington Park, Route 55, Lagrangeville, New
York 12540.
Other than as set forth in the following table or pursuant to the
Agreement, the Company is not aware of any person (including any "group" as
that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934)
who owns more than 5% of the common stock of the Company.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial
Name Ownership<F1> Percent of Class<F8>
- ---- ------------- --------------------
<S> <C> <C>
William C. Vassell 1,030,000 16.0%
Steven B. Sands/ 949,912<F2> 13.1%
Sands Brothers &
Co., Ltd.
101 Park Avenue
New York, NY
Franklyn H. Snitow 0 <F9>
Gordon Robinett 262,500<F3> 3.9%
Peter T. Kikis 641,832<F4> 9.4%
Peter Nekos 12,500<F5> <F9>
Debra Miller 100 <F9>
Lloyd H. Saunders, III 500 <F9>
Gregory J. Miller 10,000<F6> <F9>
Thomas P. Kikis 1,007,548<F7> 14.6%
Eugene U. McDonald 1,250 <F9>
Nathan Nelson 0 <F9>
All Officers and 3,274,310 41.0%
Directors as a Group <F2><F3><F4>
(12 Persons) <F5><F6><F7>
<F8>
<FN>
<F1> The Company has been advised that all individuals listed above, except
Steven B. Sands (see Note (2), below) and Peter T. Kikis (see Note (4), and
(7) below) have the sole power to vote and dispose of the number of shares
set forth opposite their names.
<F2> Includes 924,412 shares (824,412 shares of which are issuable upon
conversion of shares of the Company's Series A Preferred Stock, (the "Series
A Preferred Stock") owned by Katie and Adam Bridge Partners, L.P. Mr. Sands
may be deemed to control the corporate general partner of this entity. Also
includes 25,000 shares owned by Owl-Partners, L.P. Mr. Sands may be deemed to
control the corporate general partner of this entity. Does not include
192,550 shares owned by partnerships in which an affiliate of Sands Brothers
& Co., Ltd., other than Mr. Sands, may be deemed to be the beneficial owner.
Mr. Sands is the Co-Chairman and Chief Executive Officer of Sands Brothers &
Co., Ltd. On March 30, 1994, Mr. Sands was elected to the Company's Board.
See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS." The above information
was provided to the Company by Mr. Sands.
<F3> Includes 107,500 shares underlying presently exercisable
non-qualified stock options and 120,000 shares underlying warrants that are
currently exercisable.
<F4> Includes 300,000 shares underlying warrants currently exercisable,
108,832 shares issuable upon conversion of Series A Preferred Stock.
<F5> Includes 10,000 shares underlying warrants currently exercisable.
<F6> Includes 10,000 shares underlying warrants currently exercisable.
<F7> A Schedule 13D filed by Thomas P. Kikis, Kikis Asset Management
Corporation ("KAMC") and Arcadia Securities, LLC ("Arcadia"), filed on or
about January 31, 2000, indicates that these shares are beneficially owned by
KAMC and Arcadia as follows: KAMC, 801,248 shares; Arcadia, 206,300 shares.
Of the 801,248 shares held by KAMC on behalf of its clients, 641,832 shares
are beneficially owned by Peter T. Kikis, including 300,000 shares issuable
upon the exercise of warrants and 108,832 shares issuable upon the conversion
of Series A Preferred Stock. KAMC also holds 144,416 shares on behalf of
Thomas P. Kikis, including 54,416 shares issuable upon the conversion of
Series A Preferred Stock. KAMC, as investment advisor to its advisory
clients, has sole voting power and dispositive power over 801,248 shares.
Arcadia, as a broker-dealer to its brokerage clients, has sole voting power
and dispositive power over 206,300 shares.
<F8> Percent of class for each shareholder is calculated as if all options
and warrants included in the table for such shareholder are outstanding. The
number of outstanding shares of common stock is 6,437,343. The percent of
class for all executive officers and directors as a group is calculated as if
all options and warrants held by any shareholders included in the group are
outstanding. The denominator for the group calculation is 7,972,503.
<F9> Less than 1 percent.
</FN>
</TABLE>
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Board Report On Executive Compensation
The Company's Compensation Committee advises the Board on all matters
related to the compensation of executive officers and is currently comprised
of William C. Vassell, Peter T. Kikis and Steven B. Sands. The Compensation
Committee's policy for determining compensation for management personnel is
based on its understanding of the market rate for similar positions in an
effort to attract and retain qualified personnel. Raises are granted based on
performance which is measured in terms of a wide range of factors including
the Company's earnings, revenue, period to period performance, acquisitions,
cost savings, length of service, creativity and financing.
Mr. Vassell's compensation has been fixed by an employment agreement
which became effective as of July, 1990. As a result of full Board action,
this agreement was amended as of February 24, 1995 (the date on which the
assets of United were acquired), to increase the base salary to $150,000 and
to extend the terms to July 19, 2000. The purpose of the extension was to
ensure continuity of management during the five-year period following the
acquisition of substantially all of the assets of United. The increase in
salary payable to Mr. Vassell was determined by the Board to be in accordance
with competitive rates paid senior executive officers of comparably sized
companies in the security industry.
In making determinations with respect to compensation, the Company
reviewed the compensation paid to chief executive officers at other security
guard companies with which the Board was familiar. The base salary selected
was at the low to median range of the comparison companies. Mr. Vassell's
bonus is equal to varying percentages of specified levels of Pre-Tax
Operating Profit ("PTOP"). Mr. Vassell is entitled to 5% of PTOP between $.5
million and $1.0 million and 2% of PTOP over $1.0 million. The bonus
percentages were determined by the committee, based upon potential PTOP and
the total compensation that would be payable Mr. Vassell in the event bonuses
were paid. The resulting potential aggregate compensation is considered
reasonable by the committee based on the achieved PTOP and is intended to
provide a monetary incentive to Mr. Vassell to maximize Company profits. Mr.
Vassell did not participate in any decision regarding his compensation.
The foregoing report has been submitted by the Company's Compensation
Committee. No director has dissented to any information contained herein.
William C. Vassell
Peter T. Kikis
Steven B. Sands
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
The Company's Compensation Committee is intended to make all recommendations
to the Board related to compensation issues with respect to executive
officers. It is comprised of William C. Vassell, Peter T. Kikis and Steven B.
Sands. While Mr. Vassell will participate in decisions relating to
compensation for executive officers, he will not vote on matters relating to
his own compensation. Likewise, none of the directors or executive officers
serve on the Compensation Committee of any other entity with the exception of
Gorden Robinett, who serves on the compensation committee of Uniforce
Temporary Personnel, Inc. None of the other members of the Company's Board is
an officer, director or employee of Uniforce Temporary Personnel, Inc.
On February 24, 1995 in connection with the acquisition of United, the
Company entered into a subordinated loan agreement with Deltec Development
Corporation, a subsidiary of Deltec International S.A. Peter T. Kikis, a
director of the Company, is a director of Deltec International S.A. The
original principal balance of the loan was $1,500,000 payable over four years
at 14% interest. This loan has been satisfied. The $1.5 million of
subordinated secured indebtedness was repaid in full on or about March 1,
1999.
Steven B. Sands is Chairman of Sands Brothers & Co., Ltd. ("Sands
Brothers") a broker-dealer and investment banking firm with which the Company
has entered into numerous agreements. Sands Brothers was engaged as private
placement agent in connection with the Company's 1993 and 1995 private
placements.
Summary Compensation
The following table sets forth all plan and non-plan compensation paid
to, earned by, or awarded during the fiscal year ended March 31, 1999 to all
persons serving as the Company's chief executive officer or similar capacity
and its executive officers who received total annual salary and bonus in
excess of $100,000 for the fiscal year ended March 31, 1999. Only the
compensation for such executive officers is disclosed.
<PAGE>
SUMMARY COMPENSATION TABLE
FOR THE FISCAL YEAR ENDED 3/31/99
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------------------------------------- --------------------------
Fiscal Other Shares Shares
Year Annual Underlying Underlying
Name and Ended Annual Salary Warrants Repriced
Principal Position March 31 Salary Compensation Bonus Granted Warrants
- ------------------ -------- ------ ------------ ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Franklyn H. Snitow<F5>
Chief Executive Officer
(Acting) 1999 0 <F2> 0 0 0
William C. Vassell<F1>
Chairman of the Board 1997 $150,000 <F2> 0 0 0
1998 $174,579 <F2> 0 0 0
1999 $175,000 <F2> 0 0 0
Gordon Robinett
Vice Chairman
of the Board and
Former Treasurer 1997 $ 37,692 <F2> 0 0 227,500<F3>
1998 $ 39,923 $54,500<F2><F4> 0 0 0
1999 $ 60,000 $37,500<F2><F4> 0 0 0
Eugene U. McDonald
Senior Vice President-
Operations 1997 $105,270 <F2> $10,000 0 0
1998 $125,794 <F2> $ 6,620 0 0
1999 $112,116 <F2> $38,016 0 0
Martin Blake 1997 $100,000 <F2> $22,500 0 0
1998 $100,000 <F2> $15,000 0 0
1999 $114,539 <F2> $64,384 0 0
<FN>
<F1> As of February 1, 2000, Mr. Vassell held a total of 1,030,000 shares.
<F2> All perquisites and other personal benefits, securities or property do
not exceed 10% of the total annual salary and bonus of the executive
officer.
<F3> Includes repricing of the: 107,500 shares issued on January 19, 1991, with
exercise price at market value of $5.00, reduced to market value of $3.25
as of August 16, 1993 and reduced on July 15, 1996 to $2.50; 60,000 shares
issued on April 8, 1991, with exercise price at market value of $3.375,
reduced to market value of $3.25 as of August 16, 1993 and reduced on July
15, 1996 to $2.50; and 60,000 shares issued on May 15, 1992, with exercise
price at market value of $3.88, reduced to market value of $3.25 as of
August 16, 1993 and reduced on July 15, 1996 to $2.50.
<F4> Mr. Robinett also received $60,000 under his termination agreement (see
below).
<F5> Mr. Snitow is not compensated as an officer of the Company, however,
Mr. Snitow's law firm has been paid legal fees of approximately
$72,500 for the year ended March 31, 1999.
</FN>
</TABLE>
<PAGE>
The following table sets forth the information for the fiscal year ended
March 31, 1999, with respect to each exercise of stock options and warrants,
and the fiscal year end value of unexercised options and warrants for all
persons acting in the capacity of chief executive officer and each of the
Company's executive officers whose total annual salary and bonus exceeded
$100,000. There were no tandem or free stock appreciation rights outstanding.
March 31, 1999
OPTION/WARRANT VALUES
Number of Value of
Shares Unexercised
Underlying in-the-money
Warrants Options at
Outstanding(1) 3/31/99(2)
Name Exercisable Exercisable
- ---- ----------- -----------
Franklyn H. Snitow 0 $ 0
Chief Executive Officer
(Acting)
William C. Vassell
Chairman of the Board 125,000(3) $ 0
Gordon Robinett 227,500 $ 0
Vice Chairman of the
Board and Former Treasurer
Eugene U. McDonald 15,000(4) $ 0
Senior Vice President -
Operations
(1) No warrants were exercised by executive officers during the fiscal year
ended March 31, 1999.
(2) Values based on the closing sales price of the Company's common stock
on February 1, 2000.
(3) Mr. Vassell's warrants expired on May 15, 1999.
(4) Mr. McDonald's options expired on August 15, 1999.
<PAGE>
Comparison of Cumulative Total Return Among
Command, NASDAQ Index and Industry Peer Group
The following graph demonstrates the performance of the cumulative total
return to the shareholders of the Company's common stock in comparison to the
cumulative total return of companies which trade their securities on The
NASDAQ Stock Market (U.S. companies) and an industry peer group defined as
those companies with securities traded on NASDAQ with SIC numbers 7380 - 7389
(Miscellaneous Business Services). These companies include Pinkerton's, Inc.
and total one hundred ten distinct issues. The Company will provide to any
shareholder, upon request, a list of the companies included in the peer
group.
Comparison of Five-Year Cumulative Total Returns
Performance Graph for
COMMAND SECURITY CORPORATION
Produced on May 4, 1999 including data to 3/31/99
COMMAND NASDAQ
SECURITY Stock NASDAQ
COPORATION Market Stocks
3/31/94 100.0 100.0 100.0
3/31/95 50.8 111.3 113.7
3/31/96 32.8 151.1 238.2
3/31/97 50.0 167.8 194.2
3/31/98 32.8 254.4 233.5
3/31/99 37.7 342.4 371.5
Notes:
A. The lines represent monthly index levels derived from compounded
daily returns that include all dividends.
B. The indexes are re-weighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 03/31/94.
<PAGE>
Employment Agreements and Warrants and Termination of Employment
and Change of Control Agreements
The Company has entered into an engagement letter and an indemnification
agreement with Mr. Snitow. In accordance with the engagement letter, Mr.
Snitow shall be compensated at the rate of $300.00 per hour, plus
reimburseable expenses, based on his hourly billing to the Company. The
indemnification agreement between the Company and Mr. Snitow provides for the
maximum indemnification permitted under New York law, and the Company's
Certificate of Incorporation and by-laws. The inclusion of the foregoing
information is intended to comply with Section 725(d) of the New York
Business Corporation Law.
The Company has entered into employment agreements with Messrs. Vassell
and Robinett. These agreements were amended in April of 1991 and were amended
and restated in June of 1991. In September 1992, the terms of these
agreements were extended for two years to July 19, 1996, and were further
amended as of February 24, 1995, to extend the terms to July 19, 2000. Mr.
Robinett's employment agreement terminated on July 19, 1996. Following the
resignation in August of 1997 of H. Richard Dickinson, the Company's former
Chief Financial Officer and Executive Vice President, Mr. Robinett was
engaged on a per diem proration of his prior employment agreement to
temporarily perform the functions of Mr. Dickinson until a replacement was
approved by the Board. Mr. Robinett worked an average of three days per week
and was compensated therefor at the rate of $385 per day. On July 1, 1999,
Nathan Nelson was retained as the Company's Chief Financial Officer and
Executive Vice President and therefore, Mr. Robinett's employment with the
Company ended.
Pursuant to his employment agreement, as amended as of February 24,
1995, Mr. Vassell serves as Chairman of the Board of the Company and is
entitled to an annual salary of $150,000. Mr. Vassell is also entitled to an
annual bonus equal to 5% of the Company's pre-tax profit for each fiscal year
exclusive of (a) capital gains and losses; (b) the annual bonus; and (c)
federal, state and local income and franchise taxes for that year ("Pre-Tax
Operating Profit") from $.5 million to $1.0 million, and 2% of all Pre-Tax
Operating Profit in excess of $1.0 million. Mr. Vassell is provided with the
use of a Company-owned automobile and reimbursement for automobile insurance
and operating expenses. Also pursuant to the employment agreement, Mr.
Vassell was awarded a warrant to purchase 175,000 shares of Common Stock at a
price of $3.375 per share, exercisable on or after March 31, 1992. The
warrant expired in April, 1998.
Mr. Robinett's former employment agreement provided a non-qualified,
non-forfeitable five-year stock option to purchase 107,500 shares at a price
of $5.00 per share, a warrant to Purchase 60,000 shares at a price of $3.375
per share and a five-year warrant to purchase 75,000 shares at a price of
$6.00 per share. The 75,000 share warrant was canceled as a result of certain
financial goals not being met for the fiscal year ended March 31, 1992.
In May, 1992 in recognition of sales and profit achievements for fiscal
year 1992, the Board issued to Mr. Vassell a five-year warrant to purchase
125,000 shares at an exercise price of $3.88 per share and issued to Mr.
Robinett a five-year warrant to purchase 60,000 shares at an exercise price
of $3.88 per share. Also in May 1992, as an incentive for outside directors,
the Board of Directors issued to Peter J. Nekos a five-year warrant to
purchase 10,000 shares at an exercise price of $3.88 per share. The exercise
price of the foregoing warrants was the market value on the date of grant.
In recognition of certain voluntary salary reductions by Messrs. Vassell
and Robinett during 1993, and the contributions of Mr. Nekos, the Board
authorized the extension of Mr. Robinett's option and all of Messrs.
Vassell's, Robinett's and Nekos' outstanding warrants by two years and the
adjustment of the exercise prices under all of their warrants and option to
$3.25, the fair market value of the Company's stock as of August 16, 1993
(the date of the extension). Messrs. Vassell's and Nekos' warrants have
expired.
In September of 1992, the Company entered into a compensation
continuation agreement with Mr. Vassell in consideration of his agreement to
extend the term of his employment for two years. This agreement provides
that, if, within specified periods of a Change of Control of the Company (as
defined in the agreement) Mr. Vassell's employment is terminated by the
Company without Cause (as defined in the agreement), or if Mr. Vassell
terminates his employment for Good Reason (as defined in the Agreement), Mr.
Vassell will be paid 2.99 times the greater of his annual compensation as in
effect on the date of the Agreement or the highest annual compensation for
any of the three years preceding the termination. All awards previously
granted under any performance incentive plan, the actual payment of which may
be deferred, will be vested as a result of the Change of Control and all
options and warrants held by Mr. Vassell will become immediately exercisable.
Currently, the aggregate amount payable to Mr. Vassell upon his termination
in the event of a change in control would be 2.99 times his total
compensation of approximately $175,000 for the fiscal year ended March 31,
1999, or approximately $525,000.
Other than pursuant to the employment agreement and the compensation
continuation agreement for Mr. Vassell (see "Certain Relationships and
Related Transactions"), there is no compensation plan or arrangement for the
benefit of any person named in the Summary Compensation Table that would
result from the resignation, retirement or other termination of such person's
employment.
Other than the compensation described above, there are no long-term
incentive plans for the persons named in the Summary Compensation Table.
Furthermore, the Company did not have a pension plan during the year ended
March 31, 1999.
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Each director and executive officer of the Company who is subject to
Section 16 of the Securities Exchange Act of 1934, and each other person who
beneficially owns more than 10% of the Company's common stock, is required by
Section 16(a) of that Act to report to the Securities and Exchange Commission
by a specified date his or her ownership of and transactions in the Company's
common stock. Copies of such reports on Forms 3, 4, and 5 must also be
provided to the Company. Based solely on a review of Forms 3, 4 and 5 and any
amendments thereto, and written representations to the Company with respect
to the fiscal year ended March 31, 1999, the Company is not aware of any
person who, at any time during the fiscal year ended March 31, 1999, was a
director, officer or beneficial owner of more than ten percent (10%) of the
Company's common stock and who failed to file reports required by Section
16(a) of the Securities Exchange Act of 1934, as amended, during the fiscal
year ended March 31, 1999, except that: Messrs. Sands and Saunders have not
filed a Form 5 for the fiscal year ended March 31, 1999, and the Company has
not received a written representation from these directors that no Form 5 is
required.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A description of the engagement letter and indemnification agreement
between the Company and Franklyn H. Snitow, acting president, CEO and
director of the Company, is found in "Employment Agreements and Warrants and
Termination of Employment and Change of Control Agreements" in the Company's
Annual Report for the fiscal year ended March 31, 1999, which is being
provided together with this proxy statement.
Gregory J. Miller has been a director of the Company since 1992. Mr.
Miller is general counsel for Goldline Connectors, Inc. and has rendered
legal services to the Company during his tenure as a director. Mr. Miller has
rendered legal services in connection with various litigation and contractual
matters during the last three fiscal years. During each of the last three
fiscal years, payments to Mr. Miller for legal services were minimal. It is
expected that Mr. Miller will continue to render minimal legal services to
the Company from time to time. Management believes that the terms of the
various transactions between the Company and Mr. Miller were as favorable as
those which might have been obtained from an unaffiliated party.
Peter T. Kikis became a director of the Company on February 24, 1995, in
connection with the acquisition of United. Mr. Kikis is a director of Deltec
International, S.A., of which Deltec Development Corporation ("Deltec"), the
former lender of the Company's $1.5 million subordinated secured indebtedness
obtained in connection with the United acquisition, is an indirect,
wholly-owned subsidiary. The terms of the loan agreement provided for
interest at the rate of 14% per annum and 16 equal quarterly payments of
principal. The $1.5 million of subordinated secured indebtedness was repaid
in full on or about March 1, 1999. Deltec received a financing fee of
$180,000 in connection with the loan to help defray certain costs, including
legal fees, associated with the transaction. Deltec also purchased 3,000
shares of the Company's Series A Convertible Preferred Stock at $165 per
share. Management believes that the terms of the various transactions between
the Company and Deltec were as favorable as those which might have been
obtained from an unaffiliated party.
Gordon Robinett, a member of the Company's Board and former Treasurer,
entered into a Covenant Not-to-Compete with the Company on July 23, 1996 in
connection with his termination of employment with the Company. Under that
agreement, the Company is to make periodic payments to Mr. Robinett over four
years totalling $180,000, the exercise price of Mr. Robinett's options and
warrants was reduced to $2.50, and an expiration date was fixed at July 19,
2000. In return, Mr. Robinett is prohibited from directly or indirectly
competing with the Company until July 19, 2000. In August of 1997, Mr.
Robinett was engaged by the Company on a per diem proration of his prior
employment agreement to temporarily perform the functions of Mr. Dickinson
until a replacement was approved by the Board. Mr. Robinett worked an average
of three days per week and was compensated therefor at the rate of $385 per
day. On July 1, 1999, Nathan Nelson was retained as the Company's Chief
Financial Officer and Executive Vice President, and therefore, Mr. Robinett's
employment with the Company ended.
<PAGE>
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTORS
FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals intended for inclusion in the proxy material for
the 2000 annual meeting of shareholders, and nominations for directors to be
elected at the 2000 annual meeting of shareholders, must be received by the
Secretary of the Company at the Company's offices at Route 55, Lexington
Park, Lagrangeville, New York 12540 not later than October 19, 2000, and not
earlier than September 19, 2000, in order for such proposals and nominations
to be included in the proxy material for the 2000 annual meeting of
shareholders. The notice of nomination shall contain the following
information: (a) the full names and residence and business addresses of each
of the proposed nominees; (b) the business experience of each of the proposed
nominees for the most recent five (5) years, including principal occupations
and employment; (c) name, principal business and size of any entity in which
such occupations and employment were carried on; (d) the number of shares of
the Company's capital stock owned directly or indirectly by each of the
proposed nominees; (e) a description of any legal or administrative
proceedings or order or decree any nominee is or has been a party to or is or
was subject to during the most recent five (5) years; (f) the name and
residence and business address of the shareholder who makes the nomination;
(g) the number of shares of the Company's capital stock owned directly or
indirectly by the shareholder who makes the nomination; and (h) any other
information regarding each of the nominees required by Schedule 14A of the
Securities Exchange Act of 1934, as amended or any successor provision.
<PAGE>
ADDITIONAL INFORMATION AND OTHER MATTERS
The Company's financial statements, and Management's Discussion and
Analysis thereof, are incorporated herein by reference to the Company's
Annual Report for its fiscal year ended March 31, 1999 and to its quarterly
report, as amended, for the quarter ended September 30, 1999. The Company's
Annual Report is being provided to you together with this proxy statement.
Copies of quarterly reports or of any exhibit may be obtained, at a
reasonable charge, by writing to the Company at Route 55, Lexington Park,
Lagrangeville, New York 12540.
Management is not aware of any matters to be presented for action at the
meeting other than the matters mentioned above, and does not intend to bring
any other matters before the meeting. However, if any other matters should
come before the meeting, it is intended that the holders of the proxies will
vote them according to the discretion of the Company's Board of Directors.
By order of the board of directors,
Debra M. Miller, Secretary
Dated: February 14, 2000
<PAGE>
PROXY COMMAND SECURITY CORPORATION PROXY
PROXY FOR THE MARCH 14, 2000 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Shareholder of Command Security Corporation, Lagrangeville, New York, do
hereby nominate, constitute and appoint David J. Pollitzer and Alexa M.
Schumann (neither being an officer or employee of the Company) or any of them
(with full power to act alone) my true and lawful attorney(s) with full power
of substitution, for me and in my name, place and stead to vote all the
Common Stock of said Company, standing in my name on its books on January 25,
2000 at the Annual Meeting of its Shareholders to be held at the Company's
executive offices at Route 55, Lexington Park, Lagrangeville, New York at
10:00 a.m. on March 14, 2000, or any adjournment thereof, with all the powers
the undersigned would possess if personally present, as follows:
1. To elect the five (5) persons listed below to serve a two-year
term.
_ FOR _ AGAINST _ WITHHELD
Franklyn H. Snitow William C. Vassell Gordon Robinett
Gregory Miller Peter J. Nekos
Withhold authority to vote for ___________________________________.
2. To ratify the selection of D'Arcangelo & Co., LLP to serve as
auditors for the fiscal year ending March 31, 2000.
_ FOR _ AGAINST _ WITHHELD
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED ABOVE.
IN THE ABSENCE OF ANY DIRECTION, THE SHARES REPRESENTED HEREBY SHALL BE VOTED
FOR THE MATTERS SPECIFICALLY SET FORTH HEREIN. The Proxies are authorized to
vote at the direction of the Board of Directors upon such other business as
may properly come before such meeting or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE MENTIONED
MATTERS. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY
BE REVOKED PRIOR TO ITS EXERCISE BY DELIVERY OF NOTICE OF REVOCATION OR A
LATER-DATED PROXY TO DEBRA M. MILLER, SECRETARY OF THE CORPORATION AT ROUTE
55, LEXINGTON PARK, LAGRANGEVILLE, NEW YORK 12540.
DATED: ______________________
___________________________________________(L.S.)
Signature of Shareholder
___________________________________________(L.S.)
Signature of Shareholder
