<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / 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>
INDUSTRIAL DATA SYSTEMS CORPORATION
May 20, 1999
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders
("Annual Meeting") of Industrial Data Systems Corporation to be held at 2:00
p.m. on Tuesday, June 8, 1999, at the corporate offices of the Company, 600
Century Plaza Drive, Building 140, Houston, Texas 77073-6013.
At the Annual Meeting, the shareholders will be asked to elect five
directors. The Notice of 1999 Annual Meeting of Shareholders and the Proxy
Statement on the following pages describe the nominees for election to our Board
of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU CAST YOUR VOTE IN
FAVOR OF EACH OF THE NOMINATED DIRECTORS.
Whether or not you plan to attend the Annual Meeting, we hope that you will
have your stock represented by marking, signing, dating, and returning your
proxy card in the enclosed envelope as soon as possible. Your stock will be
voted in accordance with the instructions you have given in your proxy card.
You may, of course, attend the Annual Meeting and vote in person even if you
have previously returned your proxy card.
We look forward to your attendance at the meeting.
Sincerely,
/s/ William A. Coskey
William A. Coskey
President and Chief Executive Officer
IMPORTANT
A PROXY CARD IS ENCLOSED HEREWITH. ALL SHAREHOLDERS ARE URGED TO COMPLETE
AND MAIL THE PROXY CARD PROMPTLY. THE ENCLOSED ENVELOPE FOR RETURN OF THE PROXY
CARD REQUIRES NO POSTAGE. ANY SHAREHOLDER ATTENDING THE ANNUAL MEETING MAY
PERSONALLY VOTE ON ALL MATTERS THAT ARE CONSIDERED, IN WHICH EVENT THE SIGNED
PROXY WILL BE REVOKED.
<PAGE>
INDUSTRIAL DATA SYSTEMS CORPORATION
600 CENTURY PLAZA DRIVE
BUILDING 140
HOUSTON, TEXAS 77073-6013
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 8, 1999
----------------------------------------------------------------
To the Shareholders of
Industrial Data Systems Corporation
Notice is hereby given that the 1999 Annual Meeting of Shareholders
("Annual Meeting") of Industrial Data Systems Corporation, a Nevada corporation
(the "Company), will be held in the corporate offices of Company, at 600 Century
Plaza Drive, Houston, Texas 77073-6013 on June 8, 1999, at 2:00 p.m., Central
Standard Time, for the following purposes:
1. To elect five directors to the Board of Directors of the Company to
serve until the next Annual Meeting of Shareholders or until their respective
successors are elected and qualified. The nominees for director are William A.
Coskey, P.E., Hulda L. Coskey, David W. Gent, P.E., Gordon R. Wingate, and Ken
J. Hedrick.
2. To approve and ratify the appointment of Hein + Associates LLP as the
Company's independent auditors.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
A record of shareholders has been taken as of the close of business on
April 27, 1999 and only those shareholders of record on that date will be
entitled to notice of and to vote at the meeting. A shareholders list will be
available at the offices of the Company commencing June 4, 1999 and may be
inspected during the normal business hours prior to the annual meeting.
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON, BUT
EVEN IF YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE REQUESTED TO
MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN
THE POSTAGE-PAID ENVELOPE PROVIDED TO ENSURE YOUR REPRESENTATION. YOUR PROXY
MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED BY SIGNING AND RETURNING A
LATER-DATED PROXY WITH RESPECT TO THE SAME SHARES, BY FILING WITH THE SECRETARY
OF INDUSTRIAL DATA SYSTEMS CORPORATION A WRITTEN REVOCATION BEARING A LATER DATE
OR BY ATTENDING AND VOTING IN PERSON AT THE ANNUAL MEETING. SHAREHOLDERS
ATTENDING THE ANNUAL MEETING MAY VOTE IN PERSON EVEN IF THEY HAVE PREVIOUSLY
SENT IN A PROXY CARD.
By Order of the Board of Directors,
/s/ Hulda L. Coskey
Hulda L. Coskey
SECRETARY
Houston, Texas
Date: May 20, 1999
<PAGE>
INDUSTRIAL DATA SYSTEMS CORPORATION
600 CENTURY PLAZA DRIVE, BUILDING 140
HOUSTON, TEXAS 77073-6013
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, JUNE 8, 1999
-------------------------
PROXY STATEMENT
-------------------------
This Proxy Statement and accompanying Proxy are solicited by the Management
of Industrial Data Systems Corporation ("IDS" or the "Company") for use at the
Annual Meeting of Shareholders (the "Annual Meeting") of the Company to be held
on Tuesday, June 8, 1999 at 2:00 p.m. at the principal executive offices of the
Company, 600 Century Plaza Drive, Building 140, Houston, Texas 77073, and at any
adjournment or postponement thereof, for the purposes set forth in this Proxy
Statement and the accompanying Notice of Annual Meeting. This Proxy Statement
and accompanying Proxy are being mailed on or about May 20, 1999, to
shareholders of record on April 27, 1999.
SHAREHOLDERS ARE URGED, WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL
MEETING, TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE
ENCLOSED ENVELOPE. Your executed Proxy may be revoked at any time before it is
exercised by filing with the Secretary of the Company, at the Company's
principal executive offices, a written notice of revocation or a duly executed
Proxy bearing a later date. The execution of the enclosed Proxy will not affect
your right to vote in person, should you find it convenient to attend the
Meeting and desire to vote in person. Attendance at the Annual Meeting will not
in and of itself constitute the revocation of a Proxy.
The purpose of the Annual Meeting is to elect five directors to serve
one-year terms until the next Annual Meeting, or until their respective
successors shall be elected and qualified; and considering and acting upon the
ratification of the Company's independent auditors.
The Company intends to solicit proxies principally by the use of the mails
and will bear all expenses in connection with such solicitations. In addition,
some of the directors, officers and regular employees of the Company may,
without extra compensation, solicit proxies by telephone, telegraph and personal
interview. Arrangements have been made with banks, brokerage houses and other
custodians and nominees to forward copies of the Proxy Statement and the
Company's Annual Report for the fiscal year ended December 31, 1998, to persons
for whom they hold stock of the Company and to request authority for the
execution of proxies. The Company will reimburse the foregoing persons for
their reasonable expenses, upon request.
VOTING SECURITIES
On April 27, 1999, the Record Date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting, 13,073,718 shares of
the Company's Common Stock ("Common Stock") were outstanding. Shareholders are
entitled to one vote per share on all matters to be considered at the Meeting.
Shareholders are not entitled to cumulative voting.
In accordance with the Company's Articles of Incorporation, a majority of
the shares entitled to vote represented in person or by proxy shall constitute a
quorum at a meeting of shareholders. Any action to be taken by shareholders of
the corporation at the Annual Meeting requires the vote or concurrence of the
holders of a majority of the outstanding shares entitled to vote thereon.
Except as otherwise specified by law, if a quorum is present, the affirmative
vote of a majority of the shares represented in person or by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
shareholders. If a quorum is present, directors are elected by a majority of
the votes cast by the shares entitled to vote.
The shareholders shall also vote to ratify the selection of Independent
Auditors. As to any other business which may properly come before the Annual
Meeting, the proxy holders will vote in accordance with their best judgment.
Management of the Company does not presently know of any other such business.
<PAGE>
The shares represented by an executed proxy will be voted for the election
of directors, or withheld if so specified, and to approve and ratify the
selection of Independent Auditors. If no specification is made in said proxy,
the proxy will be voted "FOR" the nominees listed herein, and "FOR" the
selection and ratification of Hein + Associates, LLP, Certified Public
Accountants.
ELECTION OF DIRECTORS
At the meeting, five directors are to be elected, each director to hold
office until the next Annual Meeting of Shareholders or until his successor is
elected and qualified. The persons named in the accompanying proxy have been
designated by the Board of Directors and, unless authority is withheld, they
intend to vote for the election of the nominees named below to the Board of
Directors. If any nominee should become unavailable for election, the proxy may
be voted for a substitute nominee selected by the persons named in the proxy, or
the board may be reduced accordingly; however, the Board of Directors is not
aware of any circumstances likely to render any nominee unavailable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION OF EACH NOMINEE FOR
DIRECTOR.
INFORMATION REGARDING DIRECTORS AND NOMINEES
The Board of Directors of the Company presently consists of 5 members.
Five Directors are to be elected at the Meeting, each for a term expiring at the
next Annual Meeting.
The following table and the notes thereto state the names of all the
persons proposed to be nominated for election as Directors. Also disclosed are
their ages, all positions and offices with the Company now held by them, their
principal occupations or employment within at least the five preceding years and
the dates upon which they became directors of the Company.
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE POSITION HELD
---- --- -------------- -------------
<S> <C> <C> <C>
William A. Coskey, P.E. (1) 46 1985 Chairman of the Board,
Chief Executive Officer
and President
Hulda L. Coskey (1) 44 1985 Chief Financial Officer,
Secretary, Treasurer,
Director
David W. Gent, P.E. (2) 46 1994 Director
Gordon R. Wingate (2) 43 1998 Director
Ken J. Hedrick (3) 52 1998 Controller, Director
</TABLE>
(1) William A. Coskey and Hulda L. Coskey are husband and wife.
(2) Member of Audit Committee.
(3) Appointed by the Board on August 26, 1998 to fill the vacancy left by the
resignation of Rex S. Zerger.
WILLIAM A. COSKEY is the founder of the Company and has served as Chairman
of the Board, Chief Executive Officer and President since the Company's
formation in September 1985. Mr. Coskey also serves as President and Director of
the Company's subsidiaries: Industrial Data Systems, Inc.; IDS Engineering,
Inc.; Thermaire, Inc., Constant Power Manufacturing Corporation and IDS
Fabricated Systems, Inc. Prior to founding the Company, Mr. Coskey served as
Manager of Corporate Development for Keystone International, Inc., a public
company listed on the New York Stock Exchange, and was responsible for all
acquisition and merger activities of Keystone International, Inc. during the
period 1984 to 1985. Mr. Coskey had formerly held the position of President of
Syntech Associates, Inc., an engineering services company located in Houston,
Texas for the period 1979 to 1984. Mr. Coskey, an Honors Graduate, received a
B.S. in Electrical Engineering from Texas A&M University in 1975. He is a
Registered Professional Engineer, and is also a member of the Instrument Society
of America. William A. Coskey is the spouse of Hulda L. Coskey.
HULDA L. COSKEY has served as Chief Financial Officer and
Secretary/Treasurer of the Company since June 1994. During her thirteen years
with the Company and its predecessors, Mrs. Coskey has served in the following
capacities within the Company's subsidiaries: Vice President,
Secretary/Treasurer, and Director of Industrial Data Systems, Inc.; Vice
President, Secretary, and Director of IDS Engineering, Inc.;
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<PAGE>
Secretary/Treasurer and Director of Thermaire, Inc., Secretary and Director of
Constant Power Manufacturing Corporation, and Secretary/Treasurer and Director
of IDS Fabricated Systems, Inc. Her primary responsibilities include SEC
reporting, investor relations, and other corporate secretary functions. In
prior years, Mrs. Coskey has been responsible for management and supervision of
the Company's operations, including but not limited to all accounting, finance
and personnel functions. Prior to joining the Company, she served the banking
industry in the Houston area both as a Loan Review Officer, and as a Credit
Officer. Mrs. Coskey majored in Accounting at the University of Houston. Mrs.
Coskey serves as a committee member for various civic organizations. Hulda L.
Coskey is the spouse of William A. Coskey.
DAVID W. GENT, P.E. has served as a director of the Company since June 1994
and is a member of the Audit Committee. Since September 1991, Mr. Gent has held
the position of Director of International Engineering and Chief Information
Officer of Bray International, Inc., located in Houston, Texas, with the
responsibility of overseeing several departments that include Engineering,
Information Services, and Quality Control. Mr. Gent founded SofTest Designs
Corporation, a privately held electronic test equipment company, in 1980 and has
served as a director since its inception and as its President for the period
1986 to 1991. Prior to 1986, Mr. Gent was General Manager of the USA Controls
Division of Keystone International, Inc. Mr. Gent, an Honors Graduate, received
a B.S. in Electrical Engineering from Texas A&M University in 1975 and an MBA
from Houston Baptist University. He is a Registered Professional Engineer, and
a Senior member of the Instrument Society of America. Mr. Gent serves on the
Texas A&M University Electrical Engineering Department Advisory Council, the
Bray International, Inc. 401(k) committee, and as a Bray representative on
various councils including Fieldbus Foundation and the Open DeviceNet Vendors
Association. He also holds several patents in the field of industrial flow
controls.
GORDON R. WINGATE has served on the Board of Directors since June 1998 and
is a member of the Audit Committee. Mr. Wingate has served as President and
Chief Executive Officer of SynchroNet since 1989. SynchroNet is a Novell Gold
Authorized Reseller which provides advanced network management solutions to
businesses in the Houston and surrounding areas. Prior to this time Mr. Wingate
owned and operated Wingate Services, a computer cabling and installation
provider, which in 1986 changed its name to Synergy Computer Services and became
involved with system design and computer integration. Mr. Wingate earned his
Bachelors of Arts degree from the University of Texas at Austin. He also holds
certifications in both sales and service from Novell, Microsoft, Compaq, Hewlett
Packard and other major computer manufacturers.
KEN HEDRICK has served as Corporate Controller of Industrial Data Systems
Corporation since December 1997. Mr. Hedrick was appointed as an interim
Director upon the resignation of Rex S. Zerger in August 1998. Beginning his
career in public accounting over 20 years ago, Mr. Hedrick worked on auditing
assignments and on management consulting projects while in the public sector.
Moving into the private business sector, Mr. Hedrick has held Chief Financial
Officer, General Manager and Controller positions with public and privately held
companies primarily in the construction and the manufacturing industries. In
these various positions, Mr. Hedrick has been responsible for start-up
operations, information systems conversion and implementation, as well as
typical financial, accounting and general administrative functions. Mr. Hedrick
received a B.B.A. degree in Accounting and Management from Southwest Texas State
University in 1970 and received a C.P.A. certification in 1973.
DIRECTOR'S COMPENSATION
Employee directors of the Company do not receive any additional
compensation for their services as a member of the Board of Directors of the
Company. Independent directors do not receive any compensation for each board
meeting attended, nor do they receive compensation for each committee meeting
attended. The Company does not pay out-of-pocket expenses incurred by
independent directors to attend board and committee meetings. As specified in
the Industrial Data Systems Corporation 1998 Incentive Plan, non-employee
directors are eligible to receive nonstatutory stock options. Under the Plan,
Awards may be granted to directors of the Company and its majority-owned
subsidiaries. As of April 27, 1999 no options have been awarded and no shares
have been issued under the plan.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During 1998, there was one meeting of the Board of Directors and six
actions taken by unanimous consent. All incumbent directors were present at the
meeting of the Board of Directors, except for Mr. Gent who was unable to attend
due to prior business commitments. The Board of Directors has established a
standing Audit Committee. The Board does not have an Executive Committee, a
Nominating Committee,
3
<PAGE>
or a Compensation Committee. Compensation for the past several years for the
Company's executive officers and employees has been determined by the President
and Chief Executive Officer.
AUDIT COMMITTEE. The Audit Committee receives and considers financial
reports of the independent auditors and approves the consolidated financial
statements of the Company. The members of this Committee are Messrs. David W.
Gent and Gordon R. Wingate, both of whom are independent directors. The
committee met one time during 1998. Both directors were present.
BENEFICIAL OWNERSHIP OF SHARES
The directors and officers of the Company are not aware of any person or
company that beneficially owns, directly or indirectly, or exercises control or
direction over, shares carrying more than five percent (5%) of the voting rights
attached to the Common Stock of the Company as at the close of business on April
27, 1999 other than:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- -------------- ---------------- -------------------- ----------------
<S> <C> <C> <C>
Common Alliance 2000, Ltd. (1) 9,500,100 72.7%
William A. Coskey, P.E. (1) (2)
Hulda L. Coskey (1)
600 Century Plaza Drive,
Building 140
Houston, Texas 77073-6013
Common David W. Gent, P.E. 0 0.0%
Common Gordon R. Wingate 0 0.0%
Common Ken J. Hedrick 0 0.0%
All executive officers and directors as a group 9,500,100 72.7%
- ----------------------------------------------------
</TABLE>
(1) Alliance 2000, Ltd. is the record holder of 9,500,000 shares, shown above.
William A. Coskey and Hulda L. Coskey Serve as General Partners of Alliance
2000, Ltd.
(2) Includes 100 shares owned by William A. Coskey purchased on June 16, 1998
at the time the Company became listed with the American Stock Exchange.
EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
The following table sets forth information concerning compensation for
services in all capacities awarded to, earned by, or paid to, the Company's
Chief Executive Officer, the most highly compensated executive officer of the
Company and the only executive officer whose aggregate cash compensation
exceeded $100,000 (the "Named Executive Officers") during the years ended
December 31, 1996, 1997 and 1998.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------
NAME AND PRINCIPAL POSITION OTHER ANNUAL ALL OTHER
--------------------------- YEAR SALARY BONUS COMPENSATION COMPENSATION
---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C>
($) ($) ($) ($)
William A. Coskey, P.E., Chief 1998 109,200 - - -
Executive Officer and President 1997 72,000 - - - (1)
1996 72,000 - - -
</TABLE>
(1) The 1997 Proxy Statement indicated $16,000 was paid as compensation to Mr.
Coskey. This amount was actually a fee paid to a company owned by Mr.
Coskey for services rendered by that company to the Company.
4
<PAGE>
KEY MAN INSURANCE
William A. Coskey is a key employee of the Company and the loss of Mr.
Coskey's services could adversely affect the Company's business. The Company
maintains, and is the beneficiary of, a life insurance policy on the life of Mr.
Coskey. The face amount of such policy is $600,000. The continuance of such
policy is at the discretion of the Board of Directors and the policy may or may
not be maintained in the future.
INCENTIVE PLAN
Since the approval and adoption of the Industrial Data Systems Corporation
1998 Incentive Plan in June 1998, no options have been awarded and no shares
have been issued under the plan.
401(k) PLAN
On January 1, 1993, the Company adopted a Section 401(k) Profit Sharing
Plan and Trust (the "Plan"). The Plan is intended to qualify for tax exemption
under Section 401(k) of the Code and is subject to the Employee Retirement
Income Security Act of 1974. The Plan is administered by management of the
Company and all of the Company's employees who elect to do so are allowed to
participate, subject to certain eligibility requirements. Eligible employees
may contribute up to 15% of their annual compensation, which is matched by the
Company under a defined formula. In addition, the Company may make
discretionary contributions to the Plan, for the benefit of all participants, at
the election of the Board of Directors. Employee contributions are fully vested
at all times and contributions by the Company vest on a schedule of 25% per year
over a four-year period, commencing with the second year of employment.
CERTAIN TRANSACTIONS
The Board of Directors has adopted a policy requiring that all transactions
between the Company and its officers, directors, principal shareholders and
their affiliates be on terms no less favorable to the Company than could be
obtained from unrelated third parties and that any such transactions be approved
by a majority of the disinterested members of the Company's board.
As of April 27, 1999, William A. Coskey, Chairman of the Board, Chief
Executive Officer, and President of the Company was indebted to the Company for
two unsecured promissory notes in an amount totaling $150,000. The notes are
due on demand and bear interest at a rate of 9% per annum. The outstanding
balance at December 31, 1998 was $150,000 in principal and $24,965 in accrued
but unpaid interest. The largest aggregate amount of indebtedness outstanding
at any time during the last twelve months by William and Hulda Coskey was
$200,000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors, executive officers and 10% beneficial owners ("insiders") to file
with the United States Securities and Exchange Commission reports of ownership
and change in ownership of equity securities of the Company. Based solely on
its review of Forms 3 and 4 and amendments thereto furnished to the Company
under Rule 16a-3(e) during its most recent fiscal year and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, the Company believes that during the year ended December 31, 1998,
the Company's Directors and officers complied with all but one of the filing
requirements of Section 16. William A. Coskey, who is currently and was at the
time, Chairman of the Board, Chief Executive Officer and President of the
Company, failed to file timely one report on Form 4. The report related to two
sales of an aggregate of 9,400 shares of Common Stock and was filed seven days
late. The Company is not aware of any other late filings on Forms 3, 4 or 5.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation provide that, to the fullest extent
permitted under Nevada corporation law, the Company will indemnify any officer
or director who is, was, or is threatened to be made a party to any proceeding
because he or she (1) is or was a director or officer, or (2) while a
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<PAGE>
director or officer, at the Company's request, was serving as a director,
officer, partner, venturer, proprietor, trustee, employee or agent of another
entity.
The Company's Articles of Incorporation also provide that a director of the
Company shall not be personally liable to the Company or its shareholders for
monetary damages from breaches of fiduciary duties, except for liability (i) for
any breach of the duty of loyalty to the Company or its shareholders; (ii) for
acts or omissions not in good faith or in knowing violation of the law; or (iii)
for any transaction from which a director or officer has derived an improper
personal benefit.
Insofar as indemnification for liabilities arising under the Securities
Exchange Act of 1934 (the "Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
APPOINTMENT OF AUDITORS
The Board of Directors recommends, and unless otherwise directed the
designated persons named in the enclosed form of proxy will vote for, the
appointment of Hein + Associates LLP, 5075 Westheimer, Suite 970, Houston, Texas
77056, as auditors of the Company to hold office until the next Annual Meeting
of Shareholders and to authorize the Directors to fix the remuneration of the
auditors so appointed. Hein + Associates LLP has been the Company's auditors
since 1994. The auditors will be invited to attend the meeting to make such
comments as they deem appropriate and to answer any appropriate questions.
OTHER MATTERS
To the best of the knowledge, information and belief of the Directors,
there are no other matters which are to be acted upon at the Annual Meeting. If
such matters arise, the form of proxy provides that discretionary authority is
conferred on the designated persons in the enclosed form of proxy to vote with
respect to such matters.
The Company has received no notice of any other items submitted for
consideration at the meeting and except for reports of operations and activities
by Management, which are for informational purposes only and require no action
of approval or disapproval, and consideration of the minutes of the preceding
annual meeting for approval, which may involve technical corrections to the text
where actions taken were incorrectly recorded, but which require no action of
approval or disapproval of the subject matter, Management neither knows of nor
contemplates any other business that will be presented for action by the
shareholders at the meeting. If any further business is properly presented at
the meeting, the persons named as proxies will act in their discretion on behalf
of the shareholders they represent.
The next annual meeting of shareholders is expected to be on or about June
8, 2000. Any shareholder proposal intended to be presented at the next annual
meeting of shareholders must be received by the Company for inclusion in the
Company's proxy materials by March 15, 2000.
APPROVAL OF THE BOARD OF DIRECTORS
The contents of the Proxy Statement have been approved and the mailing
thereof to the shareholders of the Company has been authorized by the Board of
Directors of the Company.
6
<PAGE>
ANNUAL REPORT
A copy of the Company's 1998 Annual Report is being mailed with this Proxy
Statement to each shareholder of record. Shareholders not receiving a copy of
the Annual Report may obtain one without charge by contacting Hulda L. Coskey,
CFO, 600 Century Plaza Drive, Building 140, Houston, Texas 77073-6013,
(281) 821-3200, or by email at [email protected].
DATED at Houston, Texas, the 20th day of May, 1999.
By Order of the Board of Directors,
/s/ Hulda L. Coskey
Hulda L. Coskey
Secretary
7
<PAGE>
INDUSTRIAL DATA SYSTEMS CORPORATION (IDS)
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 8, 1999
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Industrial Data Systems Corporation (the
"Company") hereby appoints William A. Coskey, Hulda L. Coskey and/or any of
them, attorneys and proxies of the undersigned, each with full power of
substitution to vote on behalf of the undersigned at the Annual Meeting of
Shareholders of Industrial Data Systems Corporation to be held at the corporate
offices located at 600 Century Plaza Drive, Building 140, Houston, Texas
77073-6013, Tuesday, June 8, 1999, at 2:00 p.m. Central Standard Time, and at
any adjournments of said meeting, all of the shares of Common Stock in the name
of the undersigned or which the undersigned may be entitled to vote.
1. / / FOR the election (except as indicated below) as directors of
William A. Coskey, P.E., Hulda L. Coskey, David W. Gent, P.E.,
Gordon R. Wingate, and Ken J. Hedrick
/ / WITHHOLD AUTHORITY to vote on all nominees for directors listed.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE
provided below:
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2. For the appointment of Hein + Associates, LLP as the Company's independent
auditors.
/ / FOR / / AGAINST / / ABSTAIN
(PLEASE SIGN ON OTHER SIDE)
<PAGE>
(CONTINUED FROM FRONT)
3. In their discretion, upon such other matters as may properly come before
the meeting; hereby revoking any proxy or proxies heretofore given by the
undersigned.
The board of directors recommends a vote FOR the nominees named on reverse
and if no specification is made, the shares will be voted for such
nominees.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders and the Proxy Statement furnished herewith.
Dated: ____________________________, 1999
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Shareholder's Signature
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Shareholder's Signature
SIGNATURE SHOULD AGREE WITH THE NAME PRINTED
HEREON. IF STOCK IS HELD IN THE NAME OF MORE
THAN ONE PERSON, EACH JOINT OWNER SHOULD
SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES,
GUARDIANS AND ATTORNEYS SHOULD INDICATE THE
CAPACITY IN WHICH THEY SIGN. PERSONS ACTING
PURSUANT TO POWER OF ATTORNEY SHOULD SUBMIT
POWERS OF ATTORNEY.
PLEASE SIGN AND RETURN IN THE ENCLOSED SELF ADDRESSED, STAMPED ENVELOPE
