VICON INDUSTRIES, INC.
89 Arkay Drive
Hauppauge, NY 11788
(631) 952-2288 (CCTV)
Notice of Annual Meeting of Shareholders
To Be Held on April 26, 2001
To the Shareholders of Vicon Industries, Inc.
Notice is hereby given that the Annual Meeting of Shareholders of Vicon
Industries, Inc. (the "Company"), a New York corporation, will be held at the
Company's corporate headquarters located at 89 Arkay Drive, Hauppauge, New
York 11788, on April 26, 2001 at 10:00 a.m. local time for the following
purposes, all of which are more completely described in the accompanying
proxy statement:
1. To elect two directors for terms expiring in 2004; and
2. To ratify the selection of KPMG LLP, independent certified public
accountants, as auditors for the Company for the fiscal year
ending September 30, 2001; and
3. To receive the reports of officers and to transact such other
business as may properly come before the meeting.
Shareholders entitled to notice of and to vote at the Annual Meeting
are shareholders of record at the close of business on March 2, 2001 fixed by
action of the Board of Directors.
The Company's proxy statement is submitted herewith. The Annual Report
to Shareholders for the year ended September 30, 2000 is included with the
proxy statement.
By Order of the Board of Directors,
Hauppauge, New York Arthur D. Roche
March 2, 2001 Secretary
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YOUR VOTE IS IMPORTANT
----------------------
You are urged to date, sign and promptly return your proxy so that your
shares may be voted in accordance with your wishes and in order that the
presence of a quorum may be assured. The prompt return of your signed proxy,
regardless of the number of shares you hold, will aid the Company in reducing
the expense of additional proxy solicitation. The giving of such proxy does
not affect your right to vote in person in the event you attend the meeting.
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1
PROXY STATEMENT FOR 2001 ANNUAL MEETING OF SHAREHOLDERS
SOLICITATION AND REVOCATION OF PROXY
The enclosed proxy, for use only at the Annual Meeting of Shareholders
to be held on April 26, 2001 at 10:00 a.m., and any and all adjournments
thereof, is solicited on behalf of the Board of Directors of Vicon
Industries, Inc. (the "Company").
Any shareholder executing a proxy retains the right to revoke it by
notice in writing to the Secretary of the Company at any time prior to its
use. The cost of soliciting the proxy will be borne by the Company.
PURPOSES OF ANNUAL MEETING
The Annual Meeting has been called for the purposes of electing two
directors whose term of office expires in 2004; ratifying the selection of
auditors; receiving the reports of officers; and transacting such other
business as may properly come before the meeting.
The persons named in the enclosed proxy have been selected by the Board
of Directors and will vote shares represented by valid proxies. They have
indicated that, unless otherwise specified in the proxy, they intend to vote
FOR the election of two directors whose term of office expires in 2004 and
FOR ratification of the selection of auditors.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next Annual
Meeting of Shareholders must be received at the Company's principal executive
office no later than November 1, 2001, and must comply with all other legal
requirements in order to be included in the Company's proxy statement and
form of proxy for that meeting. Proposals of security holders not meeting
the requirements of Rule 14a-8 of Regulation 14A must comply with the
requirements set forth in the Company's Bylaws relating to business conducted
at the Annual Meeting of Shareholders.
This proxy statement and the enclosed proxy card are being furnished to
shareholders on or about March 10, 2001.
VOTING SECURITIES
The Company has one class of capital stock, consisting of common stock,
par value $.01 per share, of which each outstanding share entitles its holder
to one vote. Cumulative voting is not provided under the Company's
Certificate of Incorporation or Bylaws. Shareholders entitled to vote or to
execute proxies are shareholders of record at the close of business on March
2, 2001. As of March 2, 2001, there were 4,646,081 shares outstanding.
The presence, in person or by proxy, of at least a majority of the
total number of shares of Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. In the event that there are
insufficient votes for a quorum or to approve any proposal at the time of the
Annual Meeting, the Annual Meeting may be adjourned in order to permit the
further solicitation of proxies.
As to the election of directors, the proxy card being provided by the
Board of Directors enables a shareholder to vote for the election of the
nominees proposed by the Board, or to withhold authority to vote for one or
more of the nominees being proposed. Under New York law and the Company's
Certificate of Incorporation and Bylaws, directors are elected by a plurality
of shares voted, without regard to either (i) broker non-votes, or (ii)
proxies as to which authority to vote for one or more of the nominees being
proposed is withheld.
Concerning the ratification of independent auditors and all other
matters that may properly come before the Annual Meeting, by checking the
appropriate box, a shareholder may (i) vote "FOR" the item; (ii) vote
"AGAINST" the item; or (iii) "ABSTAIN" with respect to the item. Under the
Company's Certificate of Incorporation and Bylaws, unless otherwise required
by law, the ratification of independent auditors and all other matters shall
be determined by a majority of the votes cast affirmatively or negatively,
without regard to broker non-votes or proxies marked "ABSTAIN" as to the
matter.
Proxies solicited hereby will be returned to the Board and will be
tabulated by inspectors of election designated by the Board of Directors.
2
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to each person, known to
the Company to be a "beneficial owner" (as defined in regulations of the
Securities and Exchange Commission) of more than five percent of the
Company's outstanding Common Stock as of January 26, 2001 and the shares
beneficially owned by the Company's Executive Officers and Directors and by
all Executive Officers and Directors as a group.
Name and Address Number of Shares Percent
of Beneficial Owner Beneficially Owned (1) of Class
CBC Co., Ltd.
And Affiliates
2-15-13 Tsukishima
Chuo-ku
Tokyo, Japan 104 543,715 11.4%
Dimensional Fund Advisors
1299 Ocean Avenue
Santa Monica, CA 90401 320,600 (8) 6.8%
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C/O Vicon Industries, Inc.
Kenneth M. Darby 250,092 5.3%
Chu S. Chun 204,507 (2) 4.3%
Arthur D. Roche 144,654 (3) 3.0%
W. Gregory Robertson 19,025 (4) *
Kazuyoshi Sudo 16,125 (5) *
Milton F. Gidge 16,825 (5) *
Peter F. Neumann 15,125 (6) *
Total all Executive Officers
and Directors as a
group (8 persons) 666,353 (7) 14.0%
* Less than 1%.
(1) Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment control over the shares of
the stock owned.
(2) Mr. Chun has voting and dispositive power over 204,507 shares
but disclaims beneficial ownership as to all but 48,400
shares. 100,707 shares are owned by the International
Industries, Inc. Profit Sharing Plan and 55,400 shares are owned
by immediate family members.
(3) Includes 50,000 shares held by Mr. Roche's wife and 15,000
shares held by their children.
(4) Includes currently exercisable options to purchase 12,125 shares.
(5) Includes currently exercisable options to purchase 7,125 shares.
(6) Includes currently exercisable options to purchase 6,250 shares.
(7) Includes currently exercisable options to purchase 32,625 shares.
(8) Dimensional Fund Advisors had voting and investment control over 320,600
shares as investment advisor and manager for various mutual funds and
other clients. These shares are beneficially owned by such mutual
funds or other clients.
3
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
Pursuant to a resolution of the Board of Directors adopted on November
16, 2000, the number of Board members will be reduced to six directors as of
the Annual Meeting. The Board will then be comprised of six directors: two
whose terms expire in 2002; two directors whose terms expire in 2003; and two
directors to be elected for a term expiring in 2004. Directors serve for a
term of three years or until their successors are elected and qualified. No
person being nominated as a director is being proposed for election pursuant
to any agreement or understanding between any person and the Company.
The nominees proposed for election to a term expiring in 2004 at the
Annual Meeting are Mr. Milton F. Gidge and Mr. W. Gregory Robertson. In the
event that either such nominee is unable or declines to serve for any reason,
the Board of Directors shall elect a replacement to fill the vacancy. The
Board of Directors has no reason to believe that either person named will be
unable or unwilling to serve. Mr. Chu S. Chun, a member of the Board since
1998, will not stand for reelection after the expiration of his current term
on April 26, 2001.
Unless authority to vote for the nominees is withheld, it is intended
that the shares represented by the enclosed proxy will be voted FOR the
nominees named in the Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF THE NOMINEES NAMED IN THIS PROXY STATEMENT
Information with Respect to Nominee and Continuing Directors
The following sets forth the name of nominees and continuing directors,
their ages, a brief description of their recent business experience,
including present occupations and employment, certain directorships held by
each and the year in which each became a director of the Company.
Nominee and Their Director
Principal Occupations Since Age
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Milton F. Gidge
Retired Director and Executive
Lincoln Savings Bank 1987 71
W. Gregory Robertson
President
TM Capital Corp. 1991 57
Continuing Directors whose Term of Office Expires in 2002
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Kenneth M. Darby
Chairman and CEO
Vicon Industries, Inc. 1987 55
Arthur D. Roche
Retired Executive Vice President
Vicon Industries, Inc.
Retired Partner
Arthur Andersen & Co. 1992 62
4
Continuing Directors whose Term of Office Expires in 2003
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Peter F. Neumann
Retired President
Flynn-Neumann Agency, Inc. 1987 66
Kazuyoshi Sudo
Chief Executive Officer
CBC (AMERICA) Corp. 1987 58
Mr. Gidge is a retired director and executive officer of Lincoln
Savings Bank for which he served from 1976 to 1994 as Chairman, Credit
Policy. He has also been a director since 1980 of Interboro Mutual Indemnity
Insurance Co., a general casualty insurance company, and a director of
Intervest Bancshares Corporation, a regional bank holding company. His
current term on the Board ends in April 2001.
Mr. Robertson is President of TM Capital Corporation, a financial
services company, which he founded in 1989. From 1985 to 1989, he was
employed by Thompson McKinnon Securities Inc., as head of investment banking
and public finance. He has also been a director since 1995 of Todhunter
International, a producer of spirits for the alcohol beverage industry. Mr.
Robertson's current term on the Board ends in April 2001.
Mr. Darby has served as Chairman of the Board since April 1999, as
Chief Executive Officer since April 1992 and as President since October
1991. Mr. Darby also served as Chief Operating Officer and as Executive Vice
President, Vice President, Finance and Treasurer of the Company. He joined
the Company in 1978 as Controller after more than nine years at Peat Marwick
Mitchell & Co., a public accounting firm. Mr. Darby's current term on the
Board ends in April 2002.
Mr. Roche served as Executive Vice President, Chief Financial Officer
and co-participant in the Office of the President of the Company from August
1993 until his retirement in November 1999. For the six months earlier, Mr.
Roche provided consulting services to the Company. In October, 1991, Mr.
Roche retired as a partner of Arthur Andersen & Co., an international
accounting firm which he joined in 1960. His current term on the Board ends
in April 2002.
Mr. Neumann is the retired President of Flynn-Neumann Agency, Inc., an
insurance brokerage firm. Mr. Neumann's current term on the Board ends in
April 2003.
Mr. Sudo is Chief Executive Officer of CBC (America) Corp., a
distributor of electronic, chemical and optical products. From 1981 to 1996,
he was Treasurer of such company. He has also been a director of CBC Co.,
Ltd. since 1997. Mr. Sudo's current term on the Board ends in April 2003.
5
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
The Board of Directors has a number of committees including the
executive committee, the compensation committee, the audit committee and the
nominating committee.
The executive committee consists of Messrs. Darby (Chairman), Gidge,
Neumann, and Roche. The committee meets in special situations when the full
Board cannot be convened. The Committee met once during the past fiscal year.
The compensation committee consists of Messrs. Neumann (Chairman),
Gidge, Robertson and Roche, all of whom are non-employee directors. The
function of the compensation committee is to establish and approve the
appropriate compensation for Mr. Darby, recommend the award of stock options,
and to review the recommendations of the CEO with respect to the compensation
of all other officers. The Committee met three times during the last fiscal
year.
The audit committee consists of Messrs. Gidge (Chairman), Robertson,
Roche and Sudo, all of whom are independent directors except Mr. Roche. Mr.
Roche retired from the Company in November 1999 and was appointed to the
audit committee in April 2000. The Board of Directors determined that the
appointment of Mr. Roche, although a former officer of the Company, was in
the best interests of shareholders and the Company given the extensive
financial experience Mr. Roche brings to the deliberations of the audit
committee. Such experience is described on page 7 herein. In April 2000, the
Board of Directors adopted a written charter for the audit committee, a copy
of which is included as Appendix A. The audit committee reviews the internal
financial controls of the Company and the objectivity of its financial
reporting. The committee meets with appropriate financial personnel from the
Company and independent certified public accountants in connection with their
audits. The committee recommends to the Board the appointment of independent
certified public accountants to serve as the Company's auditors, subject to
ratification by the shareholders. The independent certified public
accountants have complete and free access to the committee at any time. The
committee met four times during the last fiscal year.
The nominating committee, which was formed in May 2000, consists of Messrs.
Roche (Chairman), Gidge and Neumann. The committee considers candidates to the
Board as nominees for election at the Annual Meeting. Directors are selected on
the basis of recognized achievements and their ability to bring skillsand
experience to the deliberations of the Board. The Board will consider written
shareholder recommendations for candidates at the next Annual Meeting of
Shareholders, which are submitted not later than November 1, 2001 to the
Company's principal executive offices and are addressed to the Chairman of the
nominating committee. The committee did not meet during the last fiscal year.
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company. Outside
members of the Board are kept informed of the Company's business through
various reports and documents sent to them, as well as through operating and
financial reports made at Board and committee meetings by Mr. Darby and other
officers.
The Board of Directors held eight meetings in the Company's 2000 fiscal
year, including all regularly scheduled and annual meetings. With the
exception of Mr. Chun, who did not attend any board meetings during the
fiscal year, no other Board member attended fewer than 75% of the aggregate
of (1) the total number of meetings of the Board (held during the period for
which he was a director) and (2) the total number of meetings held by all
committees on which he served (during the periods that he served).
The directors are each compensated at the annual rate of $10,000 based
on the attendance at the six scheduled meetings a year. Committee fees are
$750 per meeting attended in person. Employee directors are not compensated
for Board or committee meetings. Directors may not stand for reelection
after 70, except that any director may serve one additional three year term
after age 70 with the unanimous consent of the Board of Directors.
6
Certain Relationships and Company-Related Transactions
The Company and CBC Co., Ltd. (CBC), a Japanese corporation which
beneficially owns 11.4% of the outstanding shares of the Company, have been
conducting business with each other for approximately twenty-one years.
During this period, CBC has served as a lender, a product supplier and
sourcing agent, and a private label reseller of the Company's products. In
past years, CBC provided a significant amount of funding to the Company in
the form of extended accounts payable related to product purchases. CBC has
also acted as the Company's sourcing agent for the purchase of certain video
products. In 2000, the Company purchased approximately $4.4 million of video
products from or through CBC. CBC has the exclusive right to sell Vicon brand
products in Japan and competes with the Company in various markets,
principally in the sale of video products and systems. Sales of all products
to CBC were $303,000 in 2000. Mr. Kazuyoshi Sudo, a director of the Company
and of CBC, is Chief Executive Officer of CBC (America) Corp., a U.S.
subsidiary of CBC.
Mr. Chu S. Chun, a director who has beneficial voting control over 4.3%
of the common stock of the Company, also beneficially owns a controlling
interest in Chun Shin Electronics, Inc., (CSE), a South Korean public company
that manufactures certain of the Company's proprietary products. CSE also
sells various security products, including the Company's products,
principally within the South Korean market. Mr. Chun is the President and a
principal stockholder of CSE. As of September 30, 2000, the Company owned
19% of CSE's shares. In 2000, CSE sold approximately $5.0 million of
products to the Company through International Industries, Inc. (I.I.I.), a
U.S. based company controlled by Mr. Chun. I.I.I. arranges the importation
of all the Company's product purchases from CSE. In addition, I.I.I.
purchased approximately $663,000 of products directly from the Company during
2000 for resale to CSE.
Report of the Audit Committee
The Audit Committee reviews the Company's financial reporting process
on behalf of the Board of Directors. Management has the primary
responsibility for the financial statements and the reporting process,
including the systems of internal control. A copy of the committee's charter
is included as Appendix A to this Proxy Statement.
In fulfilling its oversight responsibilities, the Committee reviewed
and discussed with management the audited consolidated financial statements
as of and for the fiscal year ended September 30, 2000. Additionally, the
committee has reviewed with management the Company's unaudited interim
financial statements as of and for the end of each fiscal quarter. Prior to
the adoption of the committee's charter, such reviews and discussions
generally occurred in meetings of the Company's Board of Directors. Since
the adoption of the committee's charter, such discussion with management and
the independent auditors have occurred prior to issuance of news releases
reporting quarterly results.
The committee discussed with the independent auditors the matters
required to be discussed by the Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, of the Auditing Standards
Board of American Institute of Certified Public Accountants.
The committee received and reviewed the written disclosures and the
letter from the independent auditors required by Independence Standard No. 1,
Independence Discussions with Audit Committees, as amended, of the
Independence Standards Board, and discussed with the auditor's their firm's
independence.
Based on the reviews and discussions referred to above, the committee
recommends to the Board of Directors that the audited fiscal year-end
financial statements referred to above be included in the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 2000.
Submitted by the Audit Committee,
Milton F. Gidge, Chairman Arthur D. Roche
W. Gregory Robertson Kazuyoshi Sudo
7
OTHER OFFICERS OF THE COMPANY
In addition to Mr. Darby, the Company has four other officers. They are:
Henry B. Murray, age 51 Executive Vice President
John M. Badke, age 41 Vice President, Finance and
Chief Financial Officer
Peter A. Horn, age 45 Vice President, Operations
Yacov A. Pshtissky, age 49 Vice President, Technology
and Development
Mr. Murray joined the Company in March 2000 as Executive Vice
President. From 1999 to 2000, he served as Vice President of Ultrak, Inc.,
where he was responsible for CCTV and access control sales in North and South
America. From 1997 to 1999, he was the Chief Executive Officer of Monitor
Dynamics, Inc., an access control company. From 1993 to 1997, he served as
Vice President of Control Systems International (CSI), a supplier and
manufacturer of electronic control systems.
Mr. Badke has been Chief Financial Officer since December 1999 and Vice
President, Finance since October 1998. Previously, he served as Controller
since joining the Company in 1992. Prior to joining the Company, Mr. Badke
was the Controller for NEK Cable, Inc. and an audit manager with the
international accounting firms of Arthur Andersen & Co. and Peat Marwick Main
& Co.
Mr. Horn has been Vice President, Operations since June 1999. From
1995 to 1999, he was Vice President, Compliance and Quality Assurance. Prior
to that time, he served as Vice President in various capacities since his
promotion in May 1990.
Mr. Pshtissky has been Vice President, Technology and Development since
May 1990. Mr. Pshtissky was Director of Electrical Product Development from
March 1988 through April 1990. Prior to that time he was an Electrical Design
Engineer.
8
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by, or
paid for all services rendered to the Company during 2000, 1999 and 1998 by the
Chief Executive Officer and the Company's most highly compensated executive
officers whose total annual salary and bonus exceeded $100,000 during any such
year.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
----------------------------------
Awards Payouts
------------------------ -------
Annual Compensation Restricted Securities
Name and All Other Stock Underlying LTIP
Principal Position Year Salary ($) Bonus ($) Compensation Award Options(#) Payouts
------------------ ---- --------- ------------ ------------ ------------ ---------- -------
Kenneth M. Darby 2000 $285,000 $ 42,271 (1) $ 3,000 (6) $ 50,813 (7) - -
Chief Executive 1999 275,000 261,690 (4) 3,000 (6) 111,814 (7) - -
Officer 1998 225,000 297,525 (5) 3,000 (6) 344,640 (7) - -
Henry B. Murray 2000 $100,000 $ 40,000 (2) - - - -
Executive 1999 - - - - - -
Vice President 1998 - - - - - -
Arthur D. Roche 2000 $ 29,769 $ 5,058 (3) - - - -
Executive 1999 180,000 140,910 (4) - - - -
Vice President 1998 170,000 160,206 (5) - - - -
(1) Represents cash bonus based on certain performance measures, including the
Company's profitability, which was adopted by the Board of Directors upon
the recommendation of its Compensation Committee.
(2) Represents minimum guaranteed bonus for fiscal
2000.
(3) Represents cash bonus equal to 1.75% of the sum of consolidated pre-tax
income and provision for officers' bonuses pro-rated for the two-month
period of employment as Executive Vice President. Such bonus formula was
adopted for 2000 by the Board of Directors upon the recommendation of its
Compensation Committee.
(4) Represents cash bonus equal to 3.25% and 1.75% of the sum of consolidated
pre-tax income and provision for officers' bonuses for Mr. Darby and
Mr. Roche, respectively, which bonus formula was adopted for 1999 by the
Board of Directors upon the recommendation of its Compensation Committee.
(5) Represents cash bonus equal to 4.55% and 2.45% of the sum of consolidated
pre-tax income and provision for officers' bonuses for Mr. Darby and
Mr. Roche, respectively, which bonus formula was adopted for 1998 by the
Board of Directors upon the recommendation of its Compensation Committee.
(6) Represents life insurance policy payment.
(7) Represents deferred compensation benefit of 8,130, 16,565 and 45,952
shares of Common Stock awarded in 2000, 1999 and 1998, respectively, which
are being held by the Company in Treasury and which vest upon the
expiration of Mr. Darby's employment agreement in October 2004, or earlier
upon certain occurrences including his death, involuntary termination or a
change in control of the Company. The value of such stock is based on the
fair market value on the date of grant. At September 30, 2000, the quoted
market value of such shares approximated $26,000, $54,000 and $149,000,
respectively, for the 2000, 1999 and 1998 awards. No dividends can be paid
on such shares.
9
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Individual Grants Value at Assumed
---------------------------------------------- Annual Rates of Stock
% of Total Price Appreciation
No. of Granted to Exercise for Option Term
Options Employees in Price Expiration ---------------------
Name Granted Fiscal Year Per Share Date 5% 10%
---- ------- ----------- --------- ---------- -- ---
Kenneth M. Darby 21,539 17% 3.1800 5/06 $23,300 $ 53,000
Henry B. Murray 50,000 39% 3.9375 3/06 $67,000 $151,900
Options granted in the year ended September 30, 2000 were issued under the
1999 Incentive Stock Option Plan and the 1999 Non-Qualified Stock Option Plan.
The options granted above are exercisable as follows: up to 30% of the shares on
the second anniversary of the grant date, an additional 30% of the shares on the
third anniversary of the grant date, and the balance of the shares on the fourth
anniversary of the grant date, except that no option is exercisable after the
expiration of six years from the date of grant.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
At September 30, 2000
---------------------
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-money
Options Options (2)
Shares ----------- ------------
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized (1) Unexercisable Unexercisable
---- ----------- ------------ ------------- -------------
Kenneth M. Darby -0- -0- -0-/21,539 -0-/$1,508
Henry B. Murray -0- -0- -0-/50,000 -0-/-0-
(1) Calculated based on the difference between the closing quoted market
prices per share at the dates of exercise and the exercise prices.
(2) Calculated based on the difference between the closing quoted market price
($3.25) and the exercise price.
10
Employment Agreements
Mr. Darby has entered into an employment agreement with the Company
that provides for an annual salary of $285,000 through fiscal 2004. This
agreement provides for payment in an amount up to three times his average
annual compensation for the previous five years if there is a change in
control of the Company without Board of Director approval (as defined in the
agreement). In addition, Mr. Darby is eligible to receive a cash bonus based
on certain performance measures, including the Company's profitability, which
was adopted by the Board of Directors upon the recommendation of its
Compensation Committee.
Report of the Compensation Committee
The Compensation Committee's compensation policies applicable to the
Company's officers for the last completed fiscal year were to pay a
competitive market price for the services of such officers, taking into
account the overall performance and financial capabilities of the Company and
the officer's individual level of performance.
Mr. Darby makes recommendations to the Compensation Committee as to the
base salary and incentive compensation of all officers other than himself.
The Committee reviews these recommendations with Mr. Darby, and after such
review, determines compensation. In the case of Mr. Darby, the Compensation
Committee makes its determination after direct negotiation with him. For
each officer, the Committee's determinations are based on its conclusions
concerning each officer's performance and comparable compensation levels in
the CCTV Industry and the Long Island area
for similarly situated officers at comparable companies. The overall level
of performance of the Company is taken into account but is not specifically
related to the base salary of these officers. The Company also has
established an incentive compensation plan for all of the officers, which
provides a specified bonus to each officer based upon, among other things,
the Company's achievement of certain annual profitability targets.
The Compensation Committee grants options to officers to link
compensation to the performance of the Company. Options are exercisable in
the future at the fair market value at the time of grant, so that an officer
granted an option is rewarded by the increase in the price of the Company's
stock. The Committee grants options to officers based on significant
contributions of such officers to the performance of the Company.
In addition, in determining Mr. Darby's salary for service as Chief
Executive Officer, the Committee considered the responsibility assumed by him
in formulating and implementing a management and long-term strategic plan.
Submitted by the Compensation Committee
Peter F. Neumann, Chairman W. Gregory Robertson
Milton F. Gidge Arthur D. Roche
11
STOCK PERFORMANCE GRAPH
The following graph compares the return of $100 invested in the Company's
stock on October 1, 1995, with the cumulative total return on the same
investment in the AMEX U.S. Market Index and the AMEX Technology Index. Such
published indexes were obtained from the University of Chicago Center for
Research in Securities Prices.
COMPARISON OF FIVE YEARS CUMULATIVE TOTAL RETURN BETWEEN
VICON INDUSTRIES, INC. AND THE AMEX U.S. MARKET INDEX
AND THE AMEX TECHNOLOGY INDEX
(The following table is to be represented by a chart in the printed material)
Vicon AMEX U.S. AMEX Technology
Date Industries, Inc. Market Index Index
10/01/95 100 100 100
10/01/96 133 102 91
10/01/97 447 128 100
10/01/98 380 120 121
10/01/99 373 155 206
10/01/00 173 191 241
* Fiscal years ended September 30th.
INSERT GRAPH IN PLACE OF NUMBERS ABOVE.
12
PROPOSAL 2. APPROVAL OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed KPMG LLP as
auditors for the fiscal year ending September 30, 2001, and further directed
that management submit the Board's selection of auditors to the shareholders
at the Annual Meeting for ratification. KPMG LLP, an internationally known
firm of independent certified public accountants, has audited the Company's
financial statements since 1973.
KPMG LLP will have a representative at the Annual Meeting of
Shareholders, who will have an opportunity to make a statement, if they
should so desire, and will be available to respond to appropriate questions.
KPMG LLP has provided no services other than audit and tax services in
connection with the examination of the Company's financial statements. The
Board of Directors of the Company recommends that you vote in favor of the
selection of KPMG LLP as the Company's auditors.
Unless marked to the contrary, the shares represented by the enclosed
proxy will be voted FOR the ratification of KPMG LLP as the independent
auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
As of this date, management is not aware of any matters to be presented
for action at the Annual Meeting, other than those referred to in the Notice
of Annual Meeting of Shareholders, but the proxy form included with this
proxy statement, if executed and returned, gives discretionary authority to
management with respect to any other matters that may come before the meeting.
MISCELLANEOUS
Solicitation of proxies is being made by mail and may also be made in
person or by telephone or fax by officers, directors and regular employees of
the Company.
The cost of the solicitation will be borne by the Company.
By order of the Board of Directors
Hauppauge, New York Arthur D. Roche
March 2, 2001 Secretary
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