In addition, management will report on the Company’s performance during fiscal 2010 and respond to questions.
Who is entitled to vote at the meeting?
You may vote if you owned stock as of the close of business on March 31, 2011. Each share of stock is entitled to one vote.
How do I vote?
For Shareholders whose shares are registered in their own names, as an alternative to voting in person at the Annual Meeting, you may vote via the Internet, by telephone or, for those Shareholders who receive a paper proxy card in the mail, by mailing a completed proxy card. For those Shareholders who receive a Notice of Internet Availability of Proxy Materials, the Notice of Internet Availability of Proxy Materials provides information on how to access your proxy card, which contains instructions on how to vote via the Internet or by telephone. For those stockholders who receive a paper proxy card, instructions for voting via the Internet or by telephone are set forth on the proxy card. Those Shareholders who receive a paper proxy card and voting instructions by mail, and who elect to vote by mail, should sign and return the mailed proxy card in the prepaid and addressed envelope that was enclosed with the proxy materials, and your shares will be held on May 22, 2008voted at 10:00 a.m.the Annual Meeting in the manner you direct.
If your shares are registered in the name of a bank or brokerage firm (your record holder), and any and all adjournments thereof, is solicited on behalfyou may also submit your voting instructions over the Internet or by telephone by following the instructions provided by your record holder in the Notice of Internet Availability of Proxy Materials. If you received printed copies of the Board of Directors of Vicon Industries, Inc. (the "Company").proxy materials, you can submit voting instructions by telephone or mail by following the instructions provided by your record holder on the enclosed voting instructions card. Those who elect to vote by mail should complete and return the voting instructions card in the prepaid and addressed envelope provided. Shareholders who have elected to receive the proxy materials electronically will be receiving an email on or about April 8, 2011 with information on how to access stockholder information and instructions for voting.
Any shareholder executing a proxy retains If your shares are registered in your own name, you have the right to revokevote in person at the Annual Meeting by using the ballot provided at the Annual Meeting, or if you requested and received printed copies of the proxy materials by mail, you can complete, sign and date the proxy card enclosed with the proxy materials you received and submit it by noticeat the Annual Meeting. If you hold shares through a bank or brokerage firm and wish to be able to vote in writingperson at the Annual Meeting, you must obtain a "legal proxy" from your brokerage firm, bank or other holder of record and present it to the Secretaryinspector of elections with your ballot at the Annual Meeting. Even if you plan to attend the Annual Meeting, we recommend that you submit your proxy or voting instructions in advance of the Companymeeting as described above so that your vote will be counted if you later decide not to attend the Annual Meeting. Submitting your proxy or voting instructions in advance of the meeting will not affect your right to vote in person should you decide to attend the Annual Meeting.Can I change my mind after I return my proxy?
Yes, you may change your mind at any time before the vote is taken at the meeting. You may revoke or change a previously delivered proxy at any time before the Annual Meeting by delivering another proxy with a later date, by voting again via the Internet or by telephone, or by delivering written notice of revocation of your proxy to the Company’s Secretary at our principal executive offices before the beginning of the Annual Meeting. You may also revoke your proxy by attending the Annual Meeting and voting in person, although attendance at the Annual Meeting will not, in and of itself, revoke a valid proxy that was previously delivered. If you hold shares through a bank or brokerage firm, you must contact that bank or brokerage firm to revoke any prior to its use. The cost of solicitingvoting instructions. You also may revoke any prior voting instructions by voting in person at the Annual Meeting if you obtain a legal proxy as described above.
What if I return my proxy card but do not include voting instructions?
Proxies that are signed and returned but do not include voting instructions will be borne byvoted FOR the Company.
PURPOSES OF ANNUAL MEETING
The Annual Meeting has been called forelection of the purposesnominee directors, FOR the ratification of electing two directors whose terms of office expire in 2011; ratifyingBDO USA, LLP to serve as the appointment ofCompany’s independent registered public accountants; receivingaccountants and in the reportsdiscretion of officers; and transacting suchthe proxy holders as to any other business asmatters that may properly come before the meeting.Annual Meeting or any postponement or adjournment of the Annual Meeting.
What does it mean if I receive more than one notice or proxy card?
It means that you have multiple accounts with brokers and/or our transfer agent. Please vote all of these shares. We recommend that you contact your broker and/or our transfer agent to consolidate as many accounts as possible under the same name and address. The Company’s transfer agent is Computershare and their telephone number is 1-800-962-4284.
Will my shares be voted if I do not provide my proxy?
If you hold your shares directly in your own name, they will not be voted if you do not provide a proxy.
The persons named Your shares may be voted under certain circumstances if they are held in the enclosed proxyname of a brokerage firm. Brokerage firms generally have been selectedthe authority to vote customers' unvoted shares on certain "routine" matters, including the ratification of accountants. At the Annual Meeting, these shares will be counted as voted by the Board of Directors and will vote shares represented by valid proxies. They have indicated that, unless otherwise specifiedbrokerage firm in the proxy, they intend to vote FORratification of accountants. Brokers are prohibited from exercising discretionary authority on non-routine matters, such as the election of two directors, whose termfor beneficial owners who haven't returned proxies to the brokers (so-called "broker non-votes"). In the case of office expirebroker non-votes, and in 2011; and FOR ratification of the appointment of independent registered public accountants.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presentedcases where you abstain from voting on a matter when present at the next Annual Meeting of Shareholders must be received at the Company's principal executive office no later than November 1, 2008,meeting 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 April 18, 2008.
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 shareholdersthose shares will be counted for purposes of record at the close of business on April 11, 2008. As of March 15, 2008, there were 4,810,270 shares outstanding.determining if a quorum is present.
The presence, in person or by proxy, of at leastHow many votes must be present to hold the meeting?
In order to conduct the Annual Meeting, a majority of the total number ofCompany’s outstanding shares of Common Stock entitled to vote is necessary to constitute a quorumcommon stock as of March 31, 2011 must be present at the Annual Meeting.meeting. This is referred to as a quorum. Your shares are counted as present at the meeting if you either: i) attend the meeting and vote in person, (ii) properly submit your proxy or (iii) your shares are registered in the name of a bank or brokerage firm and you do not provide voting instructions and such bank or broker casts a broker non-vote on the ratification of accountants. 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. On March 15, 2011, there were 4,480,836 shares of common stock outstanding and entitled to vote.
AsWhat vote is required to the election of directors, theelect directors?
Your proxy card being provided by the Board of Directors enables a shareholderyou to vote “FOR” the election of the nominees proposed by the Board of Directors or to “WITHHOLD” authority to vote for the nominees being proposed. Directors are elected by a plurality of shares voted,the votes cast, without regard to eithereither: (i) broker non-votes or (ii) proxies as to whichthe extent they withhold authority to vote for one or more of the nominees being proposedproposed.
What vote is withheld.required to ratify the appointment of BDO USA, LLP as the Company’s independent registered public accountants?
As Your proxy enables you to proposal 2, a shareholder may (i) vote “FOR” the proposal; (ii) voteor “AGAINST” the proposal;ratification of independent registered public accountants or (iii) “ABSTAIN” with respectregard to the proposal.such ratification. The ratification of independent registered public accountants shall be determined by a majority of the votes cast affirmatively or negatively, without regard to either: (i) broker non-votes or (ii) proxies marked “ABSTAIN” as to the matter.
Proxies solicited hereby will be returned to the Board and will be tabulated by the inspector of election designated by the Board of Directors.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of the Company's Common Stock as of March 15, 2008 by (i) those persons known by the Company to be beneficial owners of more than 5% of the Company’s outstanding Common Stock; (ii) each current executive officer named in the Summary Compensation Table; (iii) each director; and (iv) all directors and executive officers as a group.
| Name and Address of Beneficial Owner | | Number of Shares Beneficially Owned (1) | | | Percent of Class | |
| | | | | | | |
| | | | | | | |
| CBC Co., Ltd. | | | | | | |
| and affiliates | | | | | | |
| 2-15-13 Tsukishima, | | | | | | |
| Chuo-ku, Tokyo, Japan 104 | | | 543,715 | | | | 10.8 | % |
| | | | | | | | | |
| Renaissance Technologies, Corp. | | | | | | | | |
| 800 Third Avenue | | | | | | | | |
| New York, NY 10022 | | | 396,700 | (2) | | | 7.9 | % |
| | | | | | | | | |
| Dimensional Fund Advisors | | | | | | | | |
| 1299 Ocean Avenue | | | | | | | | |
| Santa Monica, CA 90401 | | | 378,045 | (3) | | | 7.5 | % |
| | | | | | | | | |
| David Weiner | | | | | | | | |
| 3940 Laurel Canyon Blvd., Ste. 327 | | | | | | | | |
| Studio City, CA 91604 | | | 294,486 | | | | 5.8 | % |
| | | | | | | | | |
| Bridgeway Capital Management, Inc. | | | | | | | | |
| 5615 Kirby Drive, Suite 518 | | | | | | | | |
| Houston, TX 77005 | | | 264,682 | (4) | | | 5.2 | % |
| | | | | | | | | |
C/O Vicon Industries, Inc. | | | | | | | | |
| | | | | | | | | |
| Kenneth M. Darby | | | 335,502 | (5) | | | 6.6 | % |
| Arthur D. Roche | | | 84,654 | (6) | | | 1.7 | % |
| Peter A. Horn | | | 54,697 | (7) | | | 1.1 | % |
| John M. Badke | | | 48,319 | (8) | | | * | |
| Peter F. Neumann | | | 37,072 | | | | * | |
| Christopher J. Wall | | | 35,301 | (9) | | | * | |
| W. Gregory Robertson | | | 31,900 | (10) | | | * | |
| Bret McGowan | | | 20,347 | (11) | | | * | |
| Clifton H.W. Maloney | | | 20,000 | (12) | | | * | |
| | | | | | | | | |
| Total all Executive Officers | | | | | | | | |
| and Directors as a group (11 persons) | | | 702,692 | (13) | | | 13.9 | % |
* 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 stock owned. |
(2) | Renaissance Technologies, Corp. had investment control over 396,700 shares and voting control over 359,800 shares of stock. |
(3) | Dimensional Fund Advisors had investment control over 378,045 shares and voting control over 369,545 shares of stock. |
(4) | Bridgeway Capital Management, Inc. had investment control over 264,682 shares and voting control over 243,656 shares of stock. |
(5) Includes currently exercisable options to purchase 16,129 shares.
(6) | Includes 15,000 shares held by Mr. Roche’s wife and currently exercisable options to purchase 10,000 shares. |
(7) Includes currently exercisable options to purchase 18,000 shares.
(8) Includes currently exercisable options to purchase 31,500 shares.
(9) Includes currently exercisable options to purchase 23,001 shares.
(10) Includes currently exercisable options to purchase 18,575 shares.
(11) Includes currently exercisable options to purchase 16,847 shares.
(12) Includes currently exercisable options to purchase 20,000 shares.
(13) Includes currently exercisable options to purchase 167,952 shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to the Company during the year ended September 30, 2007 and certain written representations that no
Form 5 is required, no person who, at any time during the year ended September 30, 2007 was a director, officer or beneficial owner of more than 10 percent of any class of equity
securities of the Company registered pursuant to Section 12 of the Exchange Act failed to file on a timely basis, as disclosed in the above forms, reports required by Section 16(a)
of the Exchange Act during the year ended September 30, 2007, except that Messrs. Darby, Badke, Horn, McGowan, Wall, Maloney, Neumann and Roche each filed one late report on
Form 4 and Messrs. Pshtissky and Abiri each filed two late reports on Form 4.
EQUITY COMPENSATION PLAN INFORMATION
At September 30, 2007
| | | | Number of securities |
| | | | remaining available for |
| | Number of securities | Weighted average | future issuance under |
| | to be issued upon | exercise price | equity compensation |
| | exercise of out- | of outstanding | plans (excluding |
| | standing options, | options, warrants | securities reflected |
| | warrants and rights | and rights | in column (a)) |
| Plan category | (a) | (b) | (c) |
| | | | |
| Equity compensation | | | |
| plans approved by | | | |
| security holders | 406,681 | $3.45 | 507,933 |
| | | | |
| Equity compensation | | | |
| plans not approved | | | |
| by security holders | __ | __ | __ |
| | | | |
| Total | 406,681 | $3.45 | 507,933 |
| | | | |
| | | | |
Equity Compensation Grants Not Approved by Security Holders
Through September 30, 2007 the Company had granted certain of its officers with deferred compensation benefits aggregating 33,251 shares of common stock currently held by the
Company in treasury. Such shares vest upon retirement. All shares vest earlier under certain occurrences including death, involuntary termination (without cause) or a change in
control (as defined) of the Company.
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF TWO DIRECTORS
The Board is comprised of five directors; two directors whose terms expires in 2012; one director whose term expires in 2009; two directors whose terms expire in 20102013 and two directors to be elected for termsa term expiring in 2011.2014. 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 20112014 at the Annual Meeting are Mr. Kenneth M. Darby and Mr. Arthur D. Roche. In the event that either nominee isthese nominees are 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 eitherthe person named will be unable or unwilling to serve.
Unless authority to vote for the nomineesnominee 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 |
Information with Respect to Nominees and Continuing Directors
The following sets forth the name of the nomineesnominee 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 Principal Occupation | Director Since | Age |
| | | |
Kenneth M. Darby Chairman and CEO Vicon Industries, Inc. | 1987 | 65 |
| | | |
Arthur D. Roche Retired Executive Vice President Vicon Industries, Inc. Retired Partner Arthur Andersen & Co. | 1992 | 72 |
| | | |
| Continuing Directors whose Term of Office Expires in 2012 | | |
| | | |
Peter F. Neumann Retired President Flynn-Neumann Agency, Inc. | 1987 | 76 |
| | | |
Bernard F. Reynolds Retired President Aon Consulting, Human Resources Outsourcing Group | 2009 | 69 |
| | | |
| Continuing Director whose Term of Office Expires in 2013 | | |
| | | |
W. Gregory Robertson Chairman TM Capital Corp. | 1991 | 67 |
| | | |
Nominees and Director
Principal Occupation Since Age
Kenneth M. Darby
- Chairman of the Board, President and CEO
Vicon Industries, Inc. 1987 62
Arthur D. Roche
RetiredChief Executive Vice President
Vicon Industries, Inc.
Retired Partner
Arthur Andersen & Co. Officer.1992 69
Continuing Director whose Term of Office Expires in 2009
Peter F. Neumann
Retired President
Flynn-Neumann Agency, Inc. 1987 73
Continuing Directors whose Term of Office Expires in 2010
Clifton H. W. Maloney
President
C. H. W. Maloney & Co., Inc. 2004 70
W. Gregory Robertson
Chairman
TM Capital Corp. 1991 64
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. He has served as a director since 1987. Mr. Darby also served as Chief Operating Officer and as Executive Vice President and as Vice President, Finance and Treasurer of the Company. He joinedsince joining the Company in 1978 as Controller after more than nine years at Peat Marwick Mitchell & Co., a public accounting firm.1978. Mr. Darby’sDarby brings extensive knowledge of the Company and industry experience having served in various executive capacities prior to becoming Chairman of the Board and Chief Executive Officer. Mr. Darby's current term on the Board ends in May 2008.2011.
Arthur D. Roche - Director.Mr. Roche has been a director of the Company since 1992. He served as Executive Vice President 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 prior to that time, 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. Mr. Roche’sRoche brings extensive Company knowledge and financial experience having served as the Company’s Executive Vice President and formerly serving as a partner with an international public accounting firm. Mr. Roche brings particular insight to the Board based on his former management responsibilities and provides strategic planning and financial oversight. His current term on the Board ends in May 2008.2011.
Peter F. Neumann - Director.Mr. Neumann has been a director of the Company since 1987. He is the retired President of Flynn-Neumann Agency, Inc., an insurance brokerage firm. Mr. Neumann’sNeumann has significant general business experience and knowledge of insurance and other financial products having served as the President of his own insurance brokerage firm. Mr. Neumann also brings experience and insight to the Board with respect to regulated industries and risk mitigation. Mr. Neumann's current term on the Board ends in May 2009.2012.
Bernard F. Reynolds - Director.Mr. Maloney isReynolds has been a director of the Company since 2009. He has been retired since 2004 and had previously served as the President of C.H.W. Maloney & Co., Inc.,Aon Consulting’s Human Resources Outsourcing Group. Prior to the merger of Aon Consulting Worldwide and ASI Solutions Incorporated in May 2001, Mr. Reynolds served as the Chairman and Chief Executive Officer of ASI, a private investment firm thatcompany he founded in 1981. From 19741978. Mr. Reynolds has extensive business knowledge having served as the President of a division of a global risk management services, insurance brokerage and human resources management consulting company. Prior to 1984, he wasthat, Mr. Reynolds served as the Chairman of the Board and Chief Executive Officer of a Vice President in investment banking at Goldman, Sachs & Co.publicly listed human resources outsourcing company, and brings general business experience and a particular knowledge of human resources and compensation matters. Mr. Maloney is a Director of Interpool, Inc., Chromium Industries, Inc. and The Wall Street Fund. Mr. Maloney’sReynolds’ current term on the Board ends in May 2010.2012.
W. Gregory Robertson - Director.Mr. Robertson has been a director of the Company since 1991. He is the Chairman of TM Capital Corporation, a financial services company which he founded in 1989. From 1985 to 1989, he was employed by ThompsonThomson McKinnon Securities, Inc., as head of investment banking and public finance. Mr. Robertson has extensive experience in investment banking and public finance having served as President and now Chairman of a financial services company. Mr. Robertson has worked with a diverse group of both publicly listed and private companies in merger, acquisition, divestiture and finance transactions and provides valuable insight into the shareholder’s perspective on value creation and strategic decisions. Mr. Robertson’s current term on the Board ends in May 2010.2013.
THE ROLE OF THE BOARD OF DIRECTORS
GeneralThe 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.
Board Leadership Structure
The Board of Directors has appointed the Company’s Chief Executive Officer to serve as Chairman of the Board. In his position as CEO, Mr. Darby has primary responsibility for the day-to-day operations of the Company and provides consistent leadership on the Company’s key strategic objectives. In his role as Chairman of the Board, he sets the strategic priorities for the Board of Directors, presides over its meetings and communicates its strategic findings and guidance to management. The Board believes that the combination of these two roles provides more consistent communication and coordination throughout the organization, which results in a more effective and efficient implementation of corporate strategy and is important in unifying the Company’s strategy behind a single vision.
In addition, the Company has found that its CEO is the most knowledgeable member of its Board of Directors regarding risks it may be facing and is best able to facilitate the Board’s oversight of such risks in his role as its Chairman. However, no single leadership model is right for all companies at all times, and the Company has no bylaw or policy in place that mandates that the CEO serve as the Chairman of the Board. The Board recognizes that other leadership models such as a separate independent Chairman of the Board might be appropriate depending on the circumstances. Accordingly, the Board of Directors periodically evaluates its leadership structure to ensure that it remains the optimal structure for the Company and its stockholders.
The Company has not found it necessary to appoint a lead independent director due principally to the limited size of the Board, the long tenure of its members and the fact that all Board Committees are comprised of independent directors. The Company’s Board is comfortable that its existing leadership structure provides for an appropriate balance that best serves the Company and its stockholders.
Board Oversight of Risk
The Board of Directors recognizes that although risk management is primarily the responsibility of the Company’s management team, the Board plays a critical role in the oversight of risk. The Board believes that an important part of its responsibilities is to assess the major risks which the Company faces and review the Company’s options for monitoring and controlling these risks. The Board has delegated responsibility for the Company’s overall risk assessment and risk management policies to the Audit Committee. The Audit Committee also has specific responsibility for oversight of risks associated with financial accounting and audits, internal control over financial reporting and the Company’s major financial risk exposures. The Compensation Committee oversees the risks relating to the Company’s compensation policies and practices, as well as management development and leadership succession in the Company. The Board of Directors as a whole examines specific business risks in its periodic reviews of the individual business units and also on a company-wide basis as part of its regular reviews.
Outside of formal meetings, the Board and its committees have regular access to senior executives, including the Company’s Chief Executive Officer and Chief Financial Officer. The Board believes that this structure allows it to maintain effective oversight over the Company’s risks and ensures that management personnel are following prudent and appropriate risk management practices.
Board Composition
The Company’s Board of Directors is comprised of individuals with diverse experience at policy-making levels in a variety of industries and businesses in areas that are relevant to the Company’s activities. Each director was nominated on the basis of the unique experience, qualifications, attributes and skills that he brings to the board, as well as how those factors blend with those of the others on the Board as a whole. On an individual basis:
| · | Mr. Darby brings extensive knowledge of the Company and industry experience having joined the Company in 1978 and having served in various executive capacities prior to becoming Chairman of the Board and Chief Executive Officer in 1992. |
| · | Mr. Neumann has significant general business experience and knowledge of insurance and other financial products having served as the President of his own insurance brokerage firm. Mr. Neumann also brings experience and insight to the Board with respect to regulated industries and risk mitigation. |
| · | Mr. Reynolds has extensive business knowledge having served as the President of a division of a global risk management services, insurance brokerage and human resources management consulting company. Prior to that, Mr. Reynolds served as the Chairman of the Board and Chief Executive Officer of a publicly listed human resources outsourcing company, which he founded in 1978. Mr. Reynolds brings general business experience and a particular knowledge of human resources and compensation matters. |
| · | Mr. Robertson has extensive experience in investment banking and public finance having served as President and now Chairman of a financial services company which he founded in 1989. Mr. Robertson has worked with a diverse group of both publicly listed and private companies in merger, acquisition, divestiture and finance transactions. Mr. Robertson provides valuable insight into the stockholder’s perspective on value creation and strategic decisions. |
| · | Mr. Roche brings extensive Company knowledge and financial experience having served as the Company’s Executive Vice President from 1993 through 1999 and formerly serving as a partner with an international public accounting firm. Mr. Roche brings particular insight to the Board based on his former management responsibilities and provides strategic planning and financial oversight. |
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. All independent directors are members of each of the Committees.
The Executive Committee is chaired by Mr. Darby and meets in special situations when the full Board cannot be convened. The Committee met twicedid not meet during the last fiscal year.
The Compensation Committee consists of Messrs. Neumann (Chairman), Maloney,Reynolds, 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 to the Board the award of stock options, and to review and approve the recommendations of Mr. Darby with respect to the compensation of all other officers. The Committee does not have a formal charter and met three timesonce during the last fiscal year.
The Audit Committee consists of Messrs. Roche (Chairman), Maloney, Neumann, Reynolds and Robertson, each of whom is an “independent director” as defined by American Stock ExchangeNYSE Amex Listing Standards. The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its responsibility to oversee management’s conduct of the Company’s financial reporting process, including review of the financial reports and other financial information of the Company, the Company’s system of internal accounting controls, the Company’s compliance with legal and regulatory requirements and the qualifications, independence and performance of the Company’s independent registered public accountants. The Audit Committee has sole authority to appoint, retain, compensate, evaluate and terminate the independent registered public accountants. The Board has determined that Mr. Roche is an “Audit Committee financial expert” under the rules of the Securities and Exchange Commission. The Audit Committee will periodically review the Audit Committee Charter in light of new developments in applicable regulations and may make additional recommendations to the Board of Directors for further revision of the Audit Committee Charter to reflect evolving best practices. A copy of the Company’sAudit Committee’s Charter is available on itsthe Company’s website at HTTP://www.vicon-cctv.com.www.vicon-security.com. The Committee met four times during the last fiscal year.
The Nominating Committee consists of Messrs. Roche (Chairman), Maloney, Neumann, Reynolds and Robertson. The primary function of the Nominating Committee is to recommend individuals qualified to serve as directors and on committees of the Board; to advise the Board with respect to Board composition, procedures and committees; and to evaluate the overall Board and Committee effectiveness. All director candidates, including those recommended by stockholders, are evaluated on the same basis. In its evaluation of director candidates, the Nominating Committee considers a variety of characteristics, including, but not limited to, core competencies, experience, independence, level of commitment, Board and company needs and considerations, and personal characteristics. The Nominating Committee may engage a third party to assist it in identifying potential director nominees. The Committee has generally identified nominees based upon recommendations from existing directors and will consider candidates recommended by stockholders if submitted to the Committee in writing and complying with shareholder proposal requirements outlined elsewhere in this proxy statement. The Nominating Committee does not have a specific policy with regard to the consideration of diversity in identifying director nominees. The Board of Directors has determined that each member of the Nominating Committee meets the definition of an “independent“independent director” as defined by American Stock ExchangeNYSE Amex Listing Standards. The Committee does not have a formal written charter and did not meet last fiscal year. The nominees for director for 2008 were discussed at the Board’s regular meetings.
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 nineeleven meetings in the Company’s 20072010 fiscal year, including all regularly scheduled and annual meetings. No 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 prior year annual meeting was attended by all of the current directors.
The non-employee directors are each compensated at the rate of $20,000$22,400 per year retainer and $1,200$1,600 per Committee meeting attended in person or by teleconference. The Chairman of the Audit Committee receives an additional annual retainer of $8,000. Employee directors are not compensated for Board or committee meetings. Directors may not stand for re-election after 70, except that any director may serve one additional three-year termterms after age 70 with the unanimous consent of the Board of Directors.
Certain Relationships and Related Transactions
The Company and CBC Co., Ltd. (CBC), a Japanese corporation which beneficially owns 10.8%11.5% of the outstanding shares of the Company, have been conducting business with each other since 1979. During this period, CBC has served as a lender, a product supplier and a private label reseller of the Company’s products. In fiscal 2007,2010, the Company purchased approximately $362,000$138,000 of products from or through CBC. CBC competes with the Company in various markets, principally in the sale of video products and systems. Sales of Vicon products to CBC were $163,000$69,000 in 2007.2010.
All named directors other than Mr. Darby are independent directors in accordance with American Stock Exchange listing requirements.the NYSE Amex Company Guide.
Code of Ethics and Business Conduct
The Company has adopted a Code of Ethics and Business Conduct that applies to all its employees, including its chief executive officer, chief financial and accounting officer, controller, and any persons performing similar functions. Such Code of Ethics and Business Conduct is published on the Company’s internet website (www.vicon-cctv.com)(www.vicon-security.com).
Ability of Stockholders to Communicate with the Board of Directors
Shareholders may contact the Board of Directors or a specified individual director by sending a written communication addressed to the Board of Directors or such individual director(s) in care of the Secretary of the Company at Vicon Industries, Inc., 89 Arkay Drive, Hauppauge, NY 11788. The Company’s Corporate Secretary will relay all such communications to the Board of Directors, or individual members, as appropriate.
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.
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, 2007.2010. Additionally, the Committee has reviewed and discussed with management and the independent registered public accountants the Company’s unaudited interim financial statements as of and for the end of each fiscal quarter. Such discussions occur prior to issuance of news releases reporting quarterly results.
The Committee has discussed with the independent registered public accountants the matters required to be discussed by the Statement on Auditing Standards No. 61, Communication with Audit Committeesas amended (AICPA, Professional Standards, Vol. 1. AU section 380), as amended, ofadopted by the Auditing StandardsPublic Company Accounting Oversight Board of the American Institute of Certified Public Accountants.in Rule 3200T.
The Committee has received and reviewed the written disclosures and the letter from the independent registered public accountants required by Standard No. 1, Independence Discussions with Audit Committees, as amended,applicable requirements of the Independence StandardsPublic Company Accounting Oversight Board regarding the independent accountants’ communications with the audit committee concerning independence, and has discussed with the independent accountants their firm’sthe independent accountants’ 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, 20072010.
Submitted by the Audit Committee,
Arthur D. Roche, Chairman Clifton H.W. MaloneyBernard F. Reynolds
Peter F. Neumann W. Gregory Robertson
OTHER OFFICERS OF THE COMPANY
In addition to Mr. Darby, the Company has sixseven other officers. They are:
John M. Badke, age 48 Sr. Vice President, Finance and
Chief Financial Officer
| John M. Badke, age 51 | Senior Vice President, Finance and Chief Financial Officer |
| |
| Yigal Abiri, age 61 | General Manager, Vicon Systems Ltd. |
| |
| Peter A. Horn, age 56 | Vice President, Operations |
| |
| Frank L. Jacovino, age 52 | Vice President, Technology and Development |
| |
| Bret M. McGowan, age 45 | Vice President, Sales |
| |
| Mark S. Provinsal, age 44 | Vice President, Marketing and Product Management |
| |
| Christopher J. Wall, age 57 | Managing Director, Vicon Industries, Ltd. |
Peter A. Horn, age 53 Vice President, Operations
Bret M. McGowan, age 42 Vice President, U.S. Sales and Marketing
Yacov A. Pshtissky, age 56 Vice President, Technology and Development
Christopher J. Wall, age 54 Managing Director, Vicon Industries, Ltd.
Yigal Abiri, age 58 General Manager, Vicon Systems Ltd.
Mr. Badke has been Senior Vice President, Finance since May 2004 and Chief Financial Officer since December 1999. Previously, he was Vice President, Finance since October 1998 and 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. Abiri has been General Manager, Vicon Systems Ltd. since joining the Company in August 1999. Previously, Mr. Abiri had been President of QSR, Ltd., a developer and manufacturer of remote video surveillance equipment.
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. Jacovino has been Vice President, Technology and Development since February 2010. Prior to joining the Company, Mr. Jacovino served as Vice President of Engineering of Tactronics International, LLC since 2008. From 2005 to 2008, Mr. Jacovino served as Vice President Technology & Operations of RVSI Inspection, and from 2001 to 2005 he served as Vice President/General Manager Inspection Products for Robotic Vision Systems, Inc and held other positions within the company since joining it in 1985.
Mr. McGowan has been Vice President, U.S. Sales and Marketing since April 2005. From 2001 to 2005, he served as Vice President, Marketing. Previously, he served as Director of Marketing since 1998 and as Marketing Manager since 1994. He joined the Company in 1993 as a Marketing Specialist.
Mr. PshtisskyProvinsal has been Vice President, TechnologyMarketing and DevelopmentProduct Management since May 1990.January 2010. Prior to joining the Company, Mr. Pshtissky wasProvinsal served as Executive Vice President of Dedicated Micros Inc. (U.S.) since 2008 and prior as its Vice President Marketing and Product Strategy since joining the company in 2006. From 2000 to 2006, he served as the Director of ElectricalMarketing and Product Development from March 1988 through April 1990.of IPIX Corporation.
Mr. Wall has been Managing Director, Vicon Industries, Ltd., since February 1996. Previously, he served as its Financial Director, Vicon Industries, Ltd. since joining the Company in 1989. Prior to joining the Company, Mr. Wall held a variety of senior financial positions within Westland plc, a UK aerospace company.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
BENEFICIAL OWNERS
Mr. Abiri has been General Manager, Vicon Systems Ltd. since becomingThe following table sets forth the beneficial ownership of the Company's Common Stock as of March 15, 2011 by (i) those persons known by the Company to be beneficial owners of more than 5% of the Company’s outstanding Common Stock; (ii) each current executive officer named in the Summary Compensation Table; (iii) each director; and (iv) all directors and executive officers as a member of management through acquisition of his company, QSR, Ltd., in August 1999. Previously, Mr. Abiri had been President of QSR, Ltd., a developer and manufacturer of remote video surveillance equipment.group.
Name and Address of Beneficial Owner | Number of Shares Beneficially Owned (1) | Percent of Class |
| | | |
CBC Co., Ltd. and affiliates 2-15-13 Tsukishima, Chuo-ku, Tokyo, Japan 104 | 543,715 | 11.5% |
| | | |
Anita G. Zucker, as Trustee of the Article 6 Marital Trust, a successor of the Jerry Zucker Revocable Trust c/o The InterTech Group, Inc. 4838 Jenkins Avenue North Charleston, SC 29405 | 507,122 (2) | 10.7% |
| | | |
Dimensional Fund Advisors 1299 Ocean Avenue Santa Monica, CA 90401 | 385,320 (3) | 8.1% |
| | | |
Renaissance Technologies, Corp. 800 Third Avenue New York, NY 10022 | 254,400 | 5.4% |
| | | |
Henry Investment Trust, L.P. 255 South 17th Street, Suite 2608 Philadelphia, PA 19103 | 238,000 (4) | 5.0% |
| | | |
C/O Vicon Industries, Inc. | | |
| Kenneth M. Darby | 360,903 (5) | 7.6% |
| Arthur D. Roche | 87,071 (6) | 1.8% |
| John M. Badke | 70,307 (7) | 1.5% |
| W. Gregory Robertson | 46,400 (8) | * |
| Peter F. Neumann | 45,822 (9) | * |
| Christopher J. Wall | 42,207 (10) | * |
| Bernard F. Reynolds | 27,500 (11) | * |
| | | |
Total all Executive Officers and Directors as a group (12 persons) | 827,479 (12) | 17.5% |
| (1) | Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment control over the shares of stock owned. |
| (2) | These shares are owned directly by the Article 6 Marital Trust, a successor of the Jerry Zucker Revocable Trust and indirectly by Anita Zucker, as trustee and as a beneficiary of the trust. |
| (3) | Dimensional Fund Advisors had voting control over 382,420 shares and investment control over 385,320 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. |
| (4) | Henry Investment Trust, L.P. may be deemed a beneficial owner of 143,900 shares held by Henry Partners, L.P. and 94,100 shares held by Matthew Partners, L.P. solely because Henry Investment Trust, L.P. is the general partner of those partnerships. |
| (5) | Includes currently exercisable options to purchase 28,000 shares. |
| (6) | Includes 15,000 shares held by Mr. Roche’s wife and currently exercisable options to purchase 14,500 shares. |
(7) Includes currently exercisable options to purchase 27,200 shares.
(8) Includes currently exercisable options to purchase 14,500 shares.
(9) Includes currently exercisable options to purchase 12,750 shares.
(10) Includes currently exercisable options to purchase 22,000 shares.
(11) Includes currently exercisable options to purchase 7,500 shares.
(12) Includes currently exercisable options to purchase 185,526 shares.
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Compensation Philosophy and Objectives of Our Compensation Program
The Company’s compensation programs are intended to enable it to attract, motivate, reward and retain the management talent required to achieve corporate objectives, and thereby increase stockholder value. It is the Company’s policy to provide incentives to senior management to achieve both short-term and long-term objectives and to reward exceptional performance and contributions to the development of the business. To attain these objectives, the executive compensation program includes four key components:
Base Salary. Base salary for the Company’s executives is intended to provide competitive remuneration for services provided to the Company over a one-year period. Base salaries are set at levels designed to attract and retain the most appropriately qualified individuals for each of the key management level positions within the Company.
Cash Incentive Bonuses. The Company's bonus programs are intended to reward executive officers for the achievement of various annual performance goals approved by the Company’s Board of Directors. For fiscal 2007,2010, the Company had no formal bonus plan for its named executive officers other than for Christopher J. Wall, the Company’s European subsidiary Managing Director. A performance based bonus plan was established for Mr. Wall whereby he would earn an amount equal to between 3% and 6.5% (based on achievement levels) of the combined pretax operating profits of the Company’s Europe based subsidiaries. Under such plan, Mr. Wall earned a bonus of $23,000 (14,939 Pounds Sterling) based upon the achievement of 3% of specified profits for fiscal 2010.
For fiscal 2009, a performance based bonus plan was established for certain of the Company’s executive officers, including among others Kenneth M. Darby, Chief Executive Officer;Officer and John M. Badke, Chief Financial Officer; and Peter A. Horn, Vice President of Operations,Officer, whereby the participants would earnshare a specified pretax profit based bonusesbonus pool of between seven percent (7%) and eleven percent (11%) upon the achievement of a certain minimum annual pretax profit target as defined by the Company’s Board of Directors.targets ranging from $2.0 million to $4.5 million (and above), respectively. Under such plan, Messrs. Darby Badke and HornBadke earned bonuses of $347,000, $173,000$176,000 and $116,000,$88,000, respectively, based upon sixthe allocation of an aggregate bonus pool of ten percent (6%(10%), three (3%) and two (2%), respectively, of the Company’s consolidated pretax profit for 2007,2009, after certain adjustments. Mr. Darby’s and Mr. Badke’s bonus allocation represented approximately 49% and 25%, respectively, of the available bonus pool. In addition, a performance based bonus plans wereplan was established for Christopher J.Mr. Wall the Company’s European subsidiary Managing Director and Bret M. McGowan, Vice President, U.S. Sales and Marketing, for fiscal year 20072009 whereby Mr. Wall would earnearned an amount equal to between 2% and 6% (based on achievement levels) of the combined pretax operating profits of the Company’s Europe based subsidiaries and Mr. McGowan will earn a specified commission upon achieving certain U.S. sales targets.subsidiaries. Under such plans,plan, Mr. Wall earned a bonus of $188,000$127,000 (82,083 Pounds Sterling) based upon the achievement of 5% of specified profits for fiscal 2007 and Mr. McGowan earned commissions of $60,641 during fiscal 2007.2009.
Equity-based Compensation. Equity-based compensation is designed to provide incentives to the Company’s executive officers to build shareholder value over the long term by aligning their interests with the interest of shareholders. Historically, equity-based compensation consisted of stock options granted by the Compensation Committee under the Company’s stock option plans. In May 2007, the Company received shareholder approval for a Stock Incentive Plan covering 500,000 shares of Common Stock that includes Restricted and other stock awards in addition to options. The Compensation Committee determined that such a plan provides more flexibility in determiningof the best formBoard of equity-based grants to effectively motivate the Company’s officers and key employees. The CommitteeDirectors believes that equity-based compensation provides an incentive that focuses the executive's attention on managing the company from the perspective of an owner with an equity stake in the business. Among our executive officers, the number of shares of stock awarded or common stock subject to options granted to each individual generally depends upon the level of that officer's responsibility. The largest grants are generally awarded to the most senior officers who, in the view of the Compensation Committee, have the greatest potential impact on the Company’s profitability and growth. Previous grants of stock options or stock grants are reviewed in determining the size of any executive's award in a particular year. In fiscal 2007, the Compensation Committee awarded a total of 47,000 stock options to named executive officers, including 10,000 to Mr. Darby, 15,000 to Mr. Badke, 5,000 to Mr. Wall, 3,500 to Mr. Horn and 13,500 to Mr. McGowan.
In March 2007, the Board of Directors adopted the Company’s 2007 Stock Incentive Plan, which was approved by the Company’s stockholders at its Annual Meeting of Stockholders held on May 18, 2007. Under such plan, a total of 500,000 shares of Common Stock were reserved for issuance and include the grant of stock options, restricted stock and other stock awards as determined by the Compensation Committee. The purpose of the Stock Incentive Plan is to attract and retain executive management by providing them with appropriate equity-based incentives and rewards for superior performance and to provide incentive to a broader range of employees. At September 30, 2007, no grants were made underIn fiscal 2009, the Stock Incentive Plan.Compensation Committee awarded a total of 43,000 stock options to named executive officers, including 25,000 to Mr. Darby, 8,000 to Mr. Badke and 10,000 to Mr. Wall.
Retirement, Health and Welfare Benefits and Other Perquisites. The Company’s executive officers are entitled to a specified retirement/severance benefit pursuant to employment agreements as detailed below.
In addition, the executive officers are entitled to participate in all of the Company’s employee benefit plans, including medical, dental, group life, disability, accidental death and dismemberment insurance and the Company’s sponsored 401(k) and mandated foreign Retirement Plans. Further, Mr. Wall receives a supplemental retirement benefit in the form of a defined contribution of five percent (5%) of his annual salary. The Company also provides its Chief Executive Officer with a country club membership and certain additional insurances not covered by primary insurance plans available to other employees and certain of the Company’s named executive officers are provided a leased car.
Employment Agreements
The Company has entered into employment agreements with its named executive officers that provide an annual base salary through date of expiration and certain benefits upon termination of employment or change in control of the Company without Board of Director approval. Under Mr. Darby’s employment agreement, he is entitled to receive a lump sum payment equal to the balance owing under his agreement in the event of a change in control of the Company under any condition. All the other agreements provide the named executive officer with a payment of three times their average annual compensation for the previous five year period if there is a change in control of the Company without Board of Director approval, as defined. Such payment can be taken in a present value lump sum or equal installments over a three year period. The agreements also provide the named executive officers other than Mr. Darby with certain severance/retirement benefits upon certain occurrences including termination of employment without cause as defined, termination of employment due to the Company’s breach of specified employment conditions (good reason termination), death, disability or retirement at a specified age. Such severance/retirement benefit provisions survive the expiration of the agreements and include a fixed stated benefit of $350,000 for Mr. Badke $200,000and $158,000 (100,000 Pounds Sterling) for Mr. Wall, $316,000 for Mr. Horn and $290,000 for Mr. McGowan.Wall. In addition, Messrs.Mr. Badke and Horn each receivereceives an additional deferred compensation benefit upon such employment termination occurrences in the form of 6,561 and 9,759 shares respectively, of the Company’s common stock.
On August 28, 2007,October 25, 2010, the Company entered into a one-year employment agreement with Kenneth M. Darby, the Company’s Chief Executive Officer, to expire on September 30, 2008.2011. The terms of the new agreement provide for a $75,000 increase in Mr. Darby’san annual base salary to $400,000 effective October 1, 2007.of $400,000. In the event the agreement is terminated prior to its expiration for reasons other than cause as defined, Mr. Darby is entitled to receive all remaining salary owed him through its expiration.
Mr. Badke and Mr. Horn are subject to two year employment agreements that expired December 31, 2007 and provide for annual base salaries of $180,000 and $163,000, respectively. Messrs. Wall and McGowan had one year employment agreements that expired on September 30, 2007. Mr. Wall has executed a new agreement which expires on September 30, 2008.
On October 25, 2007, the Compensation Committee of the Board approved the following annual base salary increases for the named executive officers of the Company other than Mr. Darby effective October 1, 2007:
| Name | Title | 2007 Base Salary | 2008 Base Salary |
| John M. Badke | Senior Vice President and Chief Financial Officer | $180,000 | $190,000 |
| Christopher J. Wall | Managing Director of Vicon Industries, Ltd. (Europe) | $200,000 | $210,000 |
| Peter A. Horn | Vice President, Operations | $163,000 | $168,000 |
| Bret M. McGowan | Vice President, U.S. Sales and Marketing | $170,000 | $180,000 |
20072010 Summary Compensation Table
The following table sets forth all compensation for the fiscal year ended September 30, 20072010 awarded to or earned by the Company’s Chief Executive Officer, Chief Financial Officer and by each of our other named executive officers whose total compensation exceeded $100,000 during such period.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards($) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) (3) | Change in Pension Value and Nonqualified Deferred Compensation ($) | All Other Compensation ($)(2) | Total ($) |
| Kenneth M. Darby | 2007 | $325,000 | - | - | $27,495 (1) | $346,711 (3) | $852,429 (4) | $22,324 (2) | $1,573,959 |
| Chairman and Chief Executive Officer | | | | | | | | | |
| | | | | | | | | | |
| John M. Badke | 2007 | $180,000 | - | - | $17,252 (1) | $173,355 (3) | - | $7,152 (2) | $377,759 |
| Senior Vice President and Chief Financial Officer | | | | | | | | | |
| | | | | | | | | | |
| Christopher J. Wall | 2007 | $200,000 | - | - | $11,263 (1) | $188,490 (5) | - | $25,014 (2) | $424,767 |
Managing Director Vicon Industries, Ltd. | | | | | | | | | |
| | | | | | | | | | |
| Peter A. Horn | 2007 | $163,000 | - | - | $8,375 (1) | $115,570 (3) | - | $7,244 (2) | $294,189 |
| Vice President, Operations | | | | | | | | | |
| | | | | | | | | | |
| Bret M. McGowan | 2007 | $170,000 | - | - | $12,856 (1) | $60,641 (6) | - | $6,000 (2) | $249,497 |
| Vice President, U.S. Sales and Marketing | | | | | | | | | |
Name and Principal Position | Year | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Option Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($)(2) | | | Total ($) | |
Kenneth M. Darby Chairman and Chief Executive Officer | 2010 | | $ | 370,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | $ | 21,026 | (5) | | $ | 391,026 | |
| 2009 | | $ | 400,000 | | | | - | | | | - | | | $ | 91,000 | (1) | | $ | 175,562 | (2) | | | - | | | $ | 21,026 | (5) | | $ | 687,588 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
John M. Badke Senior Vice President and Chief Financial Officer | 2010 | | $ | 190,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | $ | 8,311 | (6) | | $ | 198,311 | |
| 2009 | | $ | 190,000 | | | | - | | | | - | | | $ | 29,120 | (1) | | $ | 87,781 | (2) | | | - | | | $ | 8,465 | (6) | | $ | 315,366 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Christopher J. Wall Managing Director Vicon Industries, Ltd. | 2010 | | $ | 161,000 | | | | - | | | | - | | | | - | | | $ | 23,290 | (3) | | | - | | | $ | 24,383 | (7) | | $ | 208,673 | |
| 2009 | | $ | 159,856 | | | | - | | | | - | | | $ | 30,100 | (1) | | $ | 127,393 | (4) | | | - | | | $ | 24,273 | (7) | | $ | 341,622 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Represents the compensation costs recognized for financial statement reporting purposes in fiscal 2007 for theaggregate grant date fair value of stock optionsoption awards computed in accordance with StatementASC 718 (Statement of Financial Accounting Standards No. 123R.123R). The amounts previously reported have been restated in accordance with new SEC rules relating to executive compensation. (See “Note 1” under the caption “Accounting for Stock-Based Compensation” to the accompanying financial statements.) |
| (2) | For fiscal 2009, a performance based bonus plan was established for certain of the Company’s executive officers, including among others Kenneth M. Darby, Chief Executive Officer and John M. Badke, Chief Financial Officer, whereby the participants would share a specified pretax profit based bonus pool of between seven percent (7%) and eleven percent (11%) upon the achievement of certain annual pretax profit targets ranging from $2.0 million to $4.5 million (and above), respectively. Under such plan, Messrs. Darby and Badke earned bonuses based upon the allocation of an aggregate bonus pool of ten percent (10%) of the Company’s consolidated pretax profit for 2009, after certain adjustments. Mr. Darby’s and Mr. Badke’s bonus allocation represented approximately 49% and 25%, respectively, of the available bonus pool. |
| (3) | A performance based bonus plan was established for Christopher J. Wall, the Company’s European subsidiary Managing Director, for fiscal year 2010 whereby Mr. Wall would earn an amount equal to between 3% and 6.5% (based on achievement levels) of the combined pretax operating profits of the Company’s Europe based subsidiaries. Under such plan, Mr. Wall earned a bonus based upon the achievement of 3% of specified profits for fiscal 2010. |
| (4) | A performance based bonus plan was established for Christopher J. Wall, the Company’s European subsidiary Managing Director, for fiscal year 2009 whereby Mr. Wall would earn an amount equal to between 2% and 6% (based on achievement levels) of the combined pretax operating profits of the Company’s Europe based subsidiaries. Under such plan, Mr. Wall earned a bonus based upon the achievement of 5% of specified profits for fiscal 2009. |
| (5) | All Other Compensation in fiscal 2007other compensation represents: (a) Automobileautomobile expense of $11,857, $7,152, $15,380, $7,244$10,021 for both fiscal 2010 and $6,000, paid by the company for Messrs. Darby, Badke, Wall, Horn and McGowan, respectively,fiscal 2009, (b) Countrycountry club membership of $8,257$8,795 for both fiscal 2010 and fiscal 2009, and (c) long-term disability insurance of $2,210 paid by the Company for Mr. Darby in both fiscal 2010 and (c) Supplemental retirement contributions of $9,634 for Mr. Wall. |
(3) | Represents cash awards under the Company’s 2007 performance based bonus plan. These amounts were earned in fiscal 2007 and paid in fiscal 2008. |
(4) | Represents the distribution of a $620,000 severance/retirement benefit and 70,647 shares of the Company’s common stock with a market value of $232,429 upon the expiration of Mr. Darby’s previous employment agreement on September 30, 2006. Such amounts were earned by Mr. Darby over his thirty years of service with the Company and charged to expense over prior year periods. |
(5) | Represents cash award under Mr. Wall’s performance based bonus plan.2009. |
| (6) | Represents sales commissions earned in fiscal 2007.automobile expense paid by the Company. |
Compensation of Named Executive Officers
The Summary Compensation Table should be read in conjunction with the tables and narrative descriptions that follow. The Outstanding Equity Awards at Fiscal 2007 Year-End and Option Exercises and Stock Vested in Fiscal 2007 tables provide further information on the named executive officers’ potential realizable value and actual value realized with respect to their equity awards.
The following table provides information on the annual incentive bonuses the named executive officers were eligible to receive in fiscal 2007 under performance based plans. There were no Equity Incentive Plan Awards or Other Stock Awards in fiscal 2007.
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | |
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | All Other Option Awards: Number of Shares of Stock or Units (#)(3) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock Option Awards ($) (4) |
| | | | | | | | |
| Kenneth M. Darby | 2007 | | $175,000 (1) | | | | |
Chairman and Chief Executive Officer | 10/25/06 | | | | 10,000 | $3.59 | $20,300 |
| | | | | | | | |
| John M. Badke | 2007 | | $72,000 (1) | | | | |
Senior Vice President and Chief Financial Officer | 10/25/06 | | | | 15,000 | $3.59 | $30,450 |
| | | | | | | | |
| Christopher J. Wall | 2007 | | $44,620 (2) | | | | |
Managing Director Vicon Industries, Ltd. | 10/25/06 | | | | 5,000 | $3.59 | $10,150 |
| | | | | | | | |
| Peter A. Horn | 2007 | | $48,000 (1) | | | | |
| Vice President, Operations | 10/25/06 | | | | 3,500 | $3.59 | $7,105 |
| | | | | | | | |
| Bret M. McGowan | 2007 | | $52,500 (3) | | | | |
Vice President, U.S. Sales and Marketing | 10/25/06 | | | | 13,500 | $3.59 | $27,405 |
(1)(7) | The amounts shown reflect targeted cash paymentsAll other compensation represents: (a) automobile expense of $16,354 and $16,280 for achievementfiscal 2010 and 2009, respectively, and (b) supplemental retirement contributions of a certain minimum annual pretax profit target as defined by the Company’s Board of Directors under the Company’s$8,029 and $7,993 for fiscal year 2007 performance based bonus plan. |
(2) | Amount represents targeted cash payment for achievement of budgeted pretax operating profits, as defined, of the Company’s Europe based subsidiaries under Mr. Wall’s fiscal year 2007 performance based bonus plan. |
(3) | Amount represents targeted cash payment for achievement of fiscal year 2007 U.S. domestic sales quota. |
(4) | The amounts represent the full grant date fair value of stock options granted in 2007 in accordance with Statement of Financial Accounting Standards No. 123R, which will be expensed in the Company’s financial statements over the awards’ vesting period. (See “Note 1” under the caption “Accounting for Stock-Based Compensation” to the accompanying financial statements.)2010 and 2009, respectively. |
Outstanding Equity Awards at Fiscal 20072010 Year-End
The following table sets forth information with respect to the outstanding equity awards of the named executive officers as of September 30, 2007. There were no Equity Incentive Plan Awards in fiscal 2007.2010.
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options(#) | Option Exercise Price ($) | Option Expiration Date | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | Option Expiration Date |
| | | | | |
| Kenneth M. Darby | 16,129(1) | - | $3.95 | 08/12/09 | | | 6,000 | (1) | | | 4,000 | (1) | | | - | | | $ | 3.59 | | 10/25/12 |
| Chairman and Chief | - | 10,000(1) | - | $3.59 | 10/25/12 | | | 8,000 | (3) | | | 12,000 | (3) | | | - | | | $ | 4.79 | | 05/22/18 |
| Executive Officer | | | | | | 5,000 | (3) | | | 20,000 | (3) | | | - | | | $ | 5.00 | | 11/05/18 |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| John M. Badke | 3,500(1) | - | $3.05 | 11/15/07 | | | 5,000 | (1) | | | - | | | | - | | | $ | 3.00 | | 05/27/11 |
| Senior Vice President and | 15,000(1) | - | $2.80 | 11/04/08 | |
| Chief Financial Officer | 10,000(1) | - | $3.95 | 08/12/09 | |
| | 1,500(1) | 3,500(1) | - | $3.00 | 05/27/11 | |
| Senior Vice President | | | | 5,000 | (2) | | | - | | | | - | | | $ | 3.17 | | 12/09/10 |
| and Chief Financial | | | | 9,000 | (1) | | | 6,000 | (1) | | | - | | | $ | 3.59 | | 10/25/12 |
| Officer | | | | 4,000 | (3) | | | 6,000 | (3) | | | - | | | $ | 4.79 | | 05/22/18 |
| | 3,000(2) | 2,000(2) | - | $3.17 | 12/09/10 | | | 1,600 | (3) | | | 6,400 | (3) | | | - | | | $ | 5.00 | | 11/05/18 |
| | - | 15,000(1) | - | $3.59 | 10/25/12 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Christopher J. Wall | 10,000(1) | - | $2.80 | 11/04/08 | | | 5,000 | (1) | | | - | | | | - | | | $ | 3.00 | | 05/27/11 |
| Managing Director | 10,000(1) | - | $3.95 | 08/12/09 | | | 5,000 | (1) | | | - | | | | - | | | $ | 3.17 | | 12/09/11 |
| Vicon Industries, Ltd. | 1,501(1) | 3,499(1) | - | $3.00 | 05/27/11 | | | 3,000 | (1) | | | 2,000 | (1) | | | - | | | $ | 3.59 | | 10/25/12 |
| | - | 5,000(1) | - | $3.17 | 12/09/11 | | | 4,000 | (3) | | | 6,000 | (3) | | | - | | | $ | 4.79 | | 05/22/18 |
| | - | 5,000(1) | - | $3.59 | 10/25/12 | | | - | | | | 10,000 | (1) | | | - | | | $ | 5.00 | | 11/05/14 |
| | | | | | | | | | | | | | | | | | | | | |
| Peter A. Horn | 3,500(1) | - | $3.05 | 11/15/07 | |
| Vice President | 10,000(1) | - | $2.80 | 11/04/08 | |
| Operations | 5,000(1) | - | $3.95 | 08/12/09 | |
| | 1,500(1) | 3,500(1) | - | $3.00 | 05/27/11 | |
| | - | 5,000(1) | - | $3.17 | 12/09/11 | |
| | - | 3,500(1) | - | $3.59 | 10/25/12 | |
| | | | | |
| Bret M. McGowan | 3,500(1) | - | $3.05 | 11/15/07 | |
| Vice President | 7,500(1) | - | $2.80 | 11/04/08 | |
| U.S. Sales and Marketing | 5,000(1) | - | $3.95 | 08/12/09 | |
| | 1,500(1) | 3,500(1) | - | $3.00 | 05/27/11 | |
| | 1,154(2) | 770(2) | - | $3.17 | 12/09/10 | |
| | - | 3,076(1) | - | $3.17 | 12/09/10 | |
| | - | 13,500(1) | - | $3.59 | 10/25/12 | |
| | | | | |
| (1) | Options vest over a four year period at 30% of the shares on the firstsecond anniversary of the grant date, 30% of the shares on the secondthird anniversary of the grant date and the remaining 40% of the shares on the thirdfourth anniversary of the grant date. Options expire after the sixth anniversary of the grant date. |
| (2) | Options vest over a threetwo year period at 30% of the shares on the grant date, 30% of the shares on the first anniversary of the grant date and the remaining 40% of the shares on the second anniversary of the grant date. Options expire after the fifth anniversary of the grant date. |
Option Exercises and Stock Vested in Fiscal 2007
The following table sets forth information with respect to the number of options granted to the named executive officers in previous years that were exercised during the fiscal year ended September 30, 2007, as well as the value of the stock on the exercise date. There was no stock award vesting in fiscal 2007.
| Option Awards |
Name | Number of Shares Acquired on Exercise (#)
| Value Realized on Exercise ($)
|
Kenneth M. Darby | 50,000 | $248,500 (1) |
Chairman and Chief Executive Officer | 33,871 | $129,387 (2) |
| | |
John M. Badke | 12,500 | $6,750 (3) |
Senior Vice President and Chief Financial Officer | | |
(1) | Represents the difference between the closing price of the Company’s common stock of $7.77 on February 23, 2007, the date of exercise, and the exercise price of $2.80, multiplied by 50,000 shares. |
(2) | Represents the difference between the closing price of the Company’s common stock of $7.77 on February 23, 2007, the date of exercise, and the exercise price of $3.95, multiplied by 33,871 shares. |
| (3) | Represents the difference between the closing price of the Company’s common stock of $3.59 on November 14, 2006, the date of exercise, and the exercise price of $3.05, multiplied by 12,500 shares. |
As described above under the section entitled “Compensation Discussion and Analysis—Employment Agreements”, the Company has entered into employment agreements with certain of its named executive officers. These agreements provide for certain payments in the event ofOptions vest over a Change in Control of the Company (as defined) with or without Board of Director approval and post-employment severance benefits in the event of employment termination under certain circumstances.
The following table sets forth the Company’s obligations to the named executive officers in the event that a Change in Control had occurred as of September 30, 2007 and post-termination obligations assuming the officers respective employment was terminated under certain circumstances as of September 30, 2007 absent a Change in Control.
| Name | | Change in Control ($) | | | Employment Termination by Company under Certain Circumstances ($) | |
| | | | | | | |
Kenneth M. Darby | | | | | | |
| Salary | | $ | 400,000 | (2) | | $ | 400,000 | |
| | | | | | | | | |
John M. Badke | | | | | | | | |
| Salary | | $ | 488,354 | (1) | | $ | 350,000 | (3) |
| Deferred Compensation Shares | | $ | 76,632 | (4) | | $ | 76,632 | (4) |
| Total | | $ | 564,986 | | | $ | 426,632 | |
| | | | | | | | | |
Christopher J. Wall | | | | | | | | |
| Salary | | | - | | | $ | 200,000 | |
| | | | | | | | | |
| Peter A. Horn | | | | | | | | |
| Salary | | $ | 452,354 | (1) | | $ | 316,000 | (3) |
| Deferred Compensation Shares | | $ | 113,985 | (5) | | $ | 113,985 | (5) |
| Total | | $ | 566,339 | | | $ | 429,985 | |
| | | | | | | | | |
| Bret McGowan | | | | | | | | |
| Salary | | $ | 401,754 | (1) | | $ | 290,000 | (3) |
| | | | | | | | | |
(1) | Represents obligation in the event of a change in control of the Company (as defined) without Board of Director approval calculated at three times the average annual base salary of the officer for the five year period precedingin five equal annual installments beginning on the Changefirst anniversary of Control payable in either a present value lump sum or in equal monthly installments over a three year period as assumed in this computation.the grant date. Options expire after the tenth anniversary of the grant date. |
(2) | Mr. Darby has the right to terminate his agreement upon a change in control with or without the Board of Directors approval and receive the balance owing under his agreement. |
(3) | Specified amounts are payable in equal monthly payments over a twenty four (24) month period. Certain Agreements contain a provision that allows for the deferral of such payments due within the first six month period if not exempted from Section 409A of the Internal Revenue Code. |
(4) | Represents 6,561 shares of the Company’s common stock due Mr. Badke upon employment termination valued at the closing market price of the Company’s common stock at September 30, 2007, excluding any market discount due to the restricted stock designation on the shares. |
(5) | Represents 9,759 shares of the Company’s common stock due Mr. Horn upon employment termination valued at the closing market price of the Company’s common stock at September 30, 2007, excluding any market discount due to the restricted stock designation on the shares. |
The table below summarizes the compensation paid by the Company to non-employee directors for the fiscal year ended September 30, 2007.2010.
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($) | Option Awards ($)(2)(3) | All Other Compensation ($) | Total ($) | | Fees Earned or Paid in Cash ($)(1) | | | Stock Awards ($) | | | Option Awards ($)(2)(3) | | | All Other Compensation ($) | | | Total ($) | |
| | | | | | | |
| Clifton H.W. Maloney | $30,800 | - | $9,109(2) | - | $39,909 | |
| | | | | | | |
| Peter F. Neumann | $30,800 | - | - | - | $30,800 | | $ | 30,400 | | | | - | | | | - | | | | - | | | $ | 30,400 | |
| | | | | | | |
| Bernard F. Reynolds | | | $ | 30,400 | | | | - | | | | - | | | | - | | | $ | 30,400 | |
| W. Gregory Robertson | $29,600 | - | - | - | $29,600 | | $ | 30,400 | | | | - | | | | - | | | | - | | | $ | 30,400 | |
| | | | | | | |
| Arthur D. Roche | $38,800 | - | - | - | $38,800 | | $ | 38,400 | | | | - | | | | - | | | | - | | | $ | 38,400 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Directors who are not employees of the Company receivereceived an annual retainer fee of $20,000$22,400 for regular Board meetings and $1,200$1,600 per committee meeting attended in person or by teleconference. The Chairman of the Audit Committee also receivesreceived an additional annual retainer of $8,000. |
| (2) | Represents the compensation costs recognized for financial statement reporting purposes in fiscal 2007 for theaggregate grant date fair value of stock optionsoption awards computed in accordance with StatementASC 718 (Statement of Financial Accounting Standards No. 123R. (SeeSee “Note 1” under the caption “Accounting for Stock-Based Compensation” to the accompanying financial statements.) |
| (3) | On October 25, 2006, Mr. Maloney wasThere were no options granted 5,000 options to purchase common stock at the closing market price of $3.59 per share. As of September 30, 2007, Messrs. Maloney, Robertson and Roche held 20,000, 20,000 and 15,569 stock options, respectively.directors during fiscal 2010. |
Equity Compensation Grants Not Approved by Security Holders
Through September 30, 2010 the Company had granted certain of its officers with deferred compensation benefits aggregating 16,320 shares of common stock currently held by the Company in treasury. Such shares vest upon retirement. All shares vest earlier under certain occurrences including death, involuntary termination or a change in control of the Company.
Report of the Compensation Committee
The Compensation Committee’s compensation policies applicable to the Company’s officers for 20072010 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 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. Also, the Company has established incentive compensation plans for certain officers, which provide for a specified bonus upon the Company’s achievement of certain annual sales and/or 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 officer to the performance of the Company. In addition, in determining Mr. Darby’s salary and bonus for service as Chief Executive Officer, the Committee considers the responsibility assumed by him in formulating, implementing and managing the operational and strategic objectives of the Company.
The Compensation Committee has reviewed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Company’s management. Based on such review and discussion, the Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2007.2010.
Submitted by the Compensation Committee,
Peter F. Neumann, Chairman Clifton H.W. MaloneyBernard F. Reynolds
W. Gregory Robertson Arthur D. Roche
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors consists of Messrs. Maloney, Neumann, Reynolds, Robertson and Roche, none of whom has ever been an officer of the Company except for Mr. Roche, who served as Executive Vice President from August 1993 until his retirement in November 1999.
STOCK PERFORMANCE GRAPH
This graph compares the return of $100 invested in the Company's stock on October 1, 2002, with the return on the same investment in the AMEX U.S. Market Index and the AMEX Technology Index.
(The following table was represented by a chart in the printed material)
| | | | |
| | | | |
| | | AMEX U.S. | AMEX |
| Date | Vicon Industries, Inc. | Market Index | Technology Index |
| | | | |
| 10/01/02 | 100 | 100 | 100 |
| 10/01/03 | 134 | 128 | 144 |
| 10/01/04 | 152 | 149 | 166 |
| 10/01/05 | 99 | 176 | 170 |
| 10/01/06 | 106 | 190 | 185 |
| 10/01/07 | 377 | 224 | 263 |
PROPOSAL 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Board of Directors of the Company has appointed BDO Seidman,USA, LLP as its independent registered public accountants for fiscal year ending September 30, 20082011 and further directed that management submit the Board’s selection of public accountants to the shareholders at the Annual Meeting for ratification.
The following table details: the aggregate fee arrangements with BDO Seidman,USA, LLP for professional services rendered for the audit of the Company’s consolidated annual financial statements and review of the financial statements included in the Company’s quarterly reports on Form 10-Q; the aggregate fees billed by BDO Seidman,USA, LLP for audit related matters and; the aggregate fees billed by BDO Seidman,USA, LLP for tax compliance, tax advice and tax planning during fiscal years ended September 30, 20072010 and 2006:2009:
| | | 2007 | | | 2006 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | |
| Audit fees | | $ | 256,000 | | | $ | 171,000 | | | $ | 262,000 | | | $ | 262,000 | |
| Audit related fees | | $ | 5,000 | | | $ | 4,000 | | | $ | - | | | $ | - | |
| Tax fees | | $ | 35,000 | | | $ | 39,000 | | | $ | 47,000 | | | $ | 43,000 | |
| Totals | | | $ | 309,000 | | | $ | 305,000 | |
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent
Registered Public Accountants
The Audit Committee pre-approves all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit related services, tax services and other services. The Audit Committee has adopted a policy for the pre-approval of services provided by the independent auditors. Under the policy, pre-approval generally is provided for an annual period and any pre-approval is detailed as to the particular service or category of services and is subject to a specific limit. In addition, the Audit Committee may also pre-approve particular services on a case-by-case basis, which must be accompanied by a detailed explanation for each proposed service. The Audit Committee may delegate pre-approval authority to one or more of its members. Such member must report any decisions to the Audit Committee at the next scheduled meeting.
The Audit Committee has considered whether the non-audit services provided by BDO Seidman,USA, LLP were compatible with maintaining their independence.
BDO Seidman,USA, 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.
Unless marked to the contrary, the shares represented by the enclosed proxy will be voted FOR the ratification of the appointment of BDO Seidman,USA, LLP as the Company’s independent registered public accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN,USA, LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS.
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. However, 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
FINANCIAL STATEMENTS
A copy of the Company’s Annual Report to Shareholders, including financial statements, for the fiscal year ended September 30, 2010 has been provided to all Shareholders as of the Record Date. Shareholders are referred to the report for financial and other information about the Company, but such report is not incorporated in this proxy statement and is not a part of the proxy soliciting material.
SolicitationMISCELLANEOUS INFORMATION
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of proxies is being made by mail and may also be made in person or by telephone, fax or e-mail bythe Exchange Act, as amended, requires the Company’s executive officers, directors and regular employeespersons who own more than ten percent of a registered class of equity securities ("Reporting Persons") to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission and NYSE Amex. These Reporting Persons are required by SEC regulation to furnish the Company with copies of all Forms 3, 4 and 5 they file with the SEC and NYSE Amex. Based solely upon our review of the Company.copies of the forms we have received, we believe that all Reporting Persons complied on a timely basis with all filing requirements applicable to them with respect to transactions during fiscal 2010, except that one officer filed one late report on Form 3.
Matters to be Considered at the Meeting
The Board of Directors does not intend to present to the meeting any matters not referred to in the form of proxy. If any proposal not set forth in this Proxy Statement should be presented for action at the meeting, and is a matter which should come before the meeting, it is intended that the shares represented by proxies will be voted with respect to such matters in accordance with the judgment of the persons voting them.
Cost of Solicitation
The cost of soliciting proxies in the solicitationaccompanying form will be bornepaid by the Company. To the extent necessary in order to assure sufficient representation, the Company’s officers and regular employees may request the return of proxies personally, by telephone or telegram. The extent to which this will be necessary depends entirely upon how promptly proxies are received, and stockholders are urged to submit their proxies without delay.
By Order of the Board of Directors,
Hauppauge, New York Joan L. WolfDeadline for Submission of Shareholder Proposals for the 2012 Annual Meeting
April 18, 2008 Secretary
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 December 16, 2011 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.
| By Order of the Board of Directors, |
| |
| Hauppauge, New York | Joan L. Wolf |
| April 8, 2011 | Secretary |
