<PAGE>
INTERNATIONAL ELECTRONICS, INC.
427 TURNPIKE STREET
CANTON, MASSACHUSETTS 02021
----------------------------------------
NOTICE OF SPECIAL MEETING IN LIEU OF THE
ANNUAL MEETING OF SHAREHOLDERS
----------------------------------------
Notice is hereby given that a Special Meeting in Lieu of the Annual Meeting
of Shareholders of International Electronics, Inc., a Massachusetts corporation
(the "Company") will be held at the offices of Davis, Malm & D'Agostine, One
Boston Place, Boston, Massachusetts at 10:00 a.m., local time, on Thursday,
March 21, 1996, for the following purposes:
1. To elect a Board of five Directors to serve until the next annual meeting
and until their successors are chosen and qualified.
2. To transact such other business as may come before the meeting.
Only shareholders of record at the close of business on February 8, 1996,
are entitled to notice of and to vote at the meeting.
Please complete, sign, and date the enclosed proxy, and mail it as promptly
as possible in the enclosed self-addressed envelope. If you attend the meeting
and desire to vote in person, the proxy will not be used.
By order of the Board of Directors,
Peter Myerson, Clerk
Canton, Massachusetts
February 17, 1996
<PAGE>
INTERNATIONAL ELECTRONICS, INC.
427 TURNPIKE STREET
CANTON, MASSACHUSETTS 02021
----------------------------------------
PROXY STATEMENT
----------------------------------------
The accompanying proxy is solicited by the Board of Directors of
International Electronics, Inc., a Massachusetts corporation (the "Company") for
use at a Special Meeting in Lieu of the Annual Meeting of Shareholders to be
held March 21, 1996.
PROXY SOLICITATION
Proxies in the accompanying form, properly executed and received prior to
the meeting and not revoked, will be voted as specified, or if no instructions
are given, will be voted in favor of the proposals described herein. Proxies may
be revoked at any time prior to the meeting by written notice given to the Clerk
of the Company. No dissenter to any action proposed will have any right to
appraisal as a result of voting against a proposed action. The cost of this
solicitation shall be borne by the Company. Solicitation of the Proxies by
telephone or in person may be made by the Company's Directors, Officers or other
employees, but any such solicitations will be carried on during working hours
and for no additional cost, other than the time expended and telephone charges
in making such solicitations. The approximate date on which this Proxy Statement
and the accompanying proxy card will be mailed to shareholders is February 17,
1996.
INFORMATION AS TO VOTING SECURITIES
Each outstanding share of the Company's common stock, $.01 par value per
share, is entitled to one vote. Only shareholders of record at the close of
business on February 8, 1996 will be entitled to vote at the meeting. On that
date, there were 1,475,850 shares of common stock of the Company outstanding.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
Set forth below is information concerning ownership of the Company's common
stock as of January 31, 1996, (i) by all persons known by the Company to own
beneficially 5% or more of the outstanding common stock, (ii) by each director
and each of the two executive officers of the Company named in the Summary
Compensation Table appearing later in this proxy statement, and (iii) by all
directors and executive officers as a group.
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF COMMON STOCK
NAME SHARES/(1)/ OUTSTANDING
- ---- ------ -----------
<S> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS:
John Waldstein 132,321/(2)/ 8.5%
c/o International Electronics, Inc.
427 Turnpike Street
Canton, Massachusetts
Robert Voosen 61,041/(3)/ 4.1%
c/o International Electronics, Inc.
427 Turnpike Street
Canton, Massachusetts
Heath Paley 31,056/(4)/ 2.1%
c/o International Electronics, Inc.
427 Turnpike Street
Canton, Massachusetts
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF COMMON STOCK
NAME SHARES/(1)/ OUTSTANDING
---- ------ ------------
<S> <C> <C>
Robert Prager 36,336/(5)/ 2.4%
220 Boylston Street
Boston, Massachusetts
Diane Balcom 13,060/(6)/ .9%
300 6th Avenue
Suite 273
Pittsburgh, Pennsylvania
All executive officers and directors 294,780/(7)/ 17.9%
as a group (6 persons)
OTHER 5% SHAREHOLDERS:
Agia, Inc. 228,455/(8)/ 15.5%
201 St. Charles Avenue
New Orleans, Louisiana
Warren Paley 217,267/(9)/ 14.7%
3 Mill Street
New Baltimore, New York
CSC Industries, Inc. and Affiliated 94,625 6.4%
Companies Pension Plans Trusts
c/o Harris Trust & Savings Bank, Trustee
111 W. Monroe Street
Chicago, Illinois
</TABLE>
(1) Except as otherwise indicated below, the named owner has sole voting and
investment power with respect to the shares set forth. No arrangements are
known to the Company, which may result in a change in control. The number
of shares shown does include shares which may be acquired through the
exercise of options and warrants, which are exercisable currently or within
sixty (60) days after January 31, 1996.
(2) Includes vested options and warrants to purchase an aggregate 73,083 shares
of the Company's common stock granted at prices ranging from $.74-$2.07
per share. Includes 2,334 shares of common stock held by Mr. Waldstein's
wife. Mr. Waldstein disclaims beneficial ownership of these shares.
(3) Includes vested options to purchase an aggregate 25,762 shares of the
Company's common stock granted at prices ranging from $.75-$5.25 per share.
(4) Includes vested options to purchase an aggregate 22,370 shares of the
Company's common stock granted at prices ranging from $.75-$6.48 per share.
(5) Includes vested options and warrants to purchase an aggregate 19,200 shares
of the Company's common stock granted at prices ranging from $.72-$1.36 per
share.
(6) Includes vested options and warrants to purchase an aggregate 11,512 shares
of the Company's common stock granted to Diane Balcom and Balcom &
Associates at prices ranging from $.72-$2.07 per share.
(7) Includes vested options and warrants to purchase an aggregate 171,261
shares of the Company's common stock granted at prices ranging from $.72-
$6.48 per share.
(8) Includes 168,717 shares owned by Agia, Inc. ("Agia") of record and solely
for the purposes of this table includes 59,738 shares held by Saurer Ltd.
("Saurer"). Agia and Saurer consider themselves to be a "group" within the
meaning of Rule 13d-5 under the Securities Exchange Act of 1934.
(9) Includes 3,666 shares of common stock held by Mr. Paley's wife. Mr. Paley
disclaims beneficial ownership of these shares.
Page 2
<PAGE>
ELECTION OF DIRECTORS
Shares represented by proxies in the enclosed form, unless the proxies
otherwise direct, will be voted to elect the following individuals to the
Company's Board of Directors: John Waldstein, Robert Voosen, Heath Paley, Robert
Prager and Diane Balcom.
The following table sets forth the name and age of each executive officer,
director and nominee of the Company. The narrative following the table describes
the principal employment of each executive officer, director and nominee. For
each person presently serving as director, the table sets forth the date on
which he/she was first elected director.
<TABLE>
<CAPTION>
Position with Director
Name Age the Company Since
- ---- --- ------------- --------
<S> <C> <C> <C>
John Waldstein 42 Chairman of the Board, President, 1982
Chief Executive Officer, Treasurer
and Director
Robert Voosen 47 Executive Vice President 1982
and Director
Christopher Hentschel 51 Vice President of Engineering -
Heath Paley 47 Director of Management Information 1990
Systems and Director
Robert Prager 64 Director 1992
Diane Balcom 53 Director 1989
</TABLE>
Directors of the Company hold office until the shareholders' next annual
meeting and thereafter until their successors are chosen and qualified. The
officers of the Company hold office until their successors are chosen and
qualified.
The following is a summary of the background of those individuals listed in
the above table:
John Waldstein has been employed by the Company since 1978, has been
Treasurer since March, 1982, was Vice President between January, 1983 and May,
1988, Chief Operating Officer from February, 1988 to May, 1988, President and
Chief Executive Officer since May, 1988 and Chairman of the Board since
November, 1990. Mr. Waldstein has an employment contract with the Company which
expires in December, 1999. See "Executive Compensation-Compensation on
Involuntary Termination."
Robert Voosen was the Company's Vice President for Product Development from
1982 until 1988 and was appointed Executive Vice President in 1988. From 1979
through 1982 he was an independent sales representative for manufacturers in the
security systems industry. From 1972 to 1982 Mr. Voosen also acted as a
consultant on the design and installation of security systems for 3M Alarm
Services, Inc. Mr. Voosen has an employment contract with the Company which
expires on August 31, 1997. See "Executive Compensation - Compensation on
Involuntary Termination."
Christopher Hentschel was appointed the Company's Vice President of
Engineering in March, 1995 and had previously been Chief Engineer since 1989.
Before joining the Company, Mr. Hentschel was a founder and Vice President of
Engineering of Guard Aware, Inc.
Heath Paley has been the Company's director of Management Information
Systems since September 1994. He was the Company's Chief Operating Officer and
Executive Vice President from June 1990 to August 31, 1994. From 1983 to June,
1990, Mr. Paley was President and a founder of Ecco Industries, Inc. From 1980
to 1983, he was President of the Maine Woods Shoe Division of Bennett
Industries.
Page 3
<PAGE>
Robert Prager was appointed to the Board of Directors in December, 1992.
Since 1988, Mr. Prager has been a private investor. In 1973, Mr. Prager founded
the Major Glass Company and served as President from its inception until 1986
and Chairman of the Board from 1986 to 1988.
Diane Balcom became a member of the Board of Directors in July, 1989. Since
August, 1994, Ms. Balcom has been the Chapter Director of the Juvenile Diabetes
Foundation of Western Pennsylvania. She has been an adviser to the Company on
corporate and financial matters since 1985. From January, 1989 to August, 1994,
Ms. Balcom operated a consulting practice which provided services related to
private and public financing for small and medium-sized companies. From March,
1987 to January, 1989, she served as Vice President and Chief Financial Officer
for Environmental Diagnostics, Inc. a publicly-held company. Prior to that, Ms.
Balcom held various senior management positions in corporate finance and
research for 13 years with brokerage firms on the West Coast.
During the fiscal year ending August 31, 1995, the Board of Directors held
16 meetings (including regularly scheduled, telephone, special meetings and
actions by unanimous written consent). Each of the Company's two outside
Directors in September 1995 received vested options to purchase 1,000 shares of
the Company's common stock at an exercise price of $1.36 per share.
The Board of Directors has no standing audit or nominating committee. The
Company's Compensation Committee of the Board of Directors (the "Committee") is
comprised of Robert Prager and Diane Balcom. The Committee is responsible for
evaluating and approving the compensation arrangements for each of the Company's
executive officers, including the granting of options to purchase shares of
Common Stock under the Company's Employee Stock Option Plans. The Committee,
during the year ended August 31, 1995, held 3 meetings.
At the last annual meeting, shareholders elected a Board of Directors for
the ensuing year. The Board which was elected consisted of John Waldstein,
Robert Voosen, Diane Balcom, Heath Paley and Robert Prager.
The Board of Directors recommends that stockholders vote FOR the election
of the nominees to the Board of Directors.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
each of the last three fiscal years ending August 31, 1995, of the Company's
President and Chief Executive Officer, and the only other executive officer of
the Company who received at least $100,000 of compensation during these years
(the "Named Executive Officers"):
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation(2) ------------
--------------------- Options All Other
Name Year Salary Commissions (Shares) Compensation(1)
- ---- ---- ------ ----------- -------- ---------------
<S> <C> <C> <C> <C> <C>
John Waldstein 1995 $135,519 $ - 25,000(3) $ 9,180
President, Chief 1994 131,558 - 42,000 10,257
Executive Officer 1993 125,481 - - 10,235
Robert Voosen 1995 100,000 5,889 20,000 -
Executive Vice 1994 75,000 18,323 2,000 -
President 1993 75,000 6,004 - -
</TABLE>
(1) Represents the cost of a split dollar whole life insurance policy with a
face value of $755,000 as of August 31, 1995. The Company is a beneficiary
of such policy to the extent of all premiums paid upon the death of John
Waldstein. Mr. Waldstein may
Page 4
<PAGE>
purchase this policy upon termination of his employment for the then
current cash surrender value.
(2) Does not include perquisites which do not exceed 10% of annual salary.
(3) Represents warrants granted to purchase 25,000 shares of common stock at an
exercise price of $.74 per share exercisable for a ten-year period in
exchange for a personal guarantee of debt held by the FDIC.
In July, 1992, the Company's Board of Directors approved an annual bonus
plan, commencing in fiscal 1993 for officers and certain key employees. The
available funds for the plan shall be up to five percent of income before taxes.
The final amount and subsequent distribution to employees shall be determined by
the Company's Compensation Committee. To date, there have been no payments made
under the plan.
COMPENSATION ON INVOLUNTARY TERMINATION
John Waldstein and Robert Voosen have employment contracts with the Company
which provide for certain compensation to be paid to them, if they are
discharged by the Company without cause before the end of the term of their
contracts. Mr. Waldstein's contract expires on December 31, 1999 and extends for
one additional year on each January 1, while his guarantee of the Company's
outstanding debt to the Federal Deposit Insurance Corporation is in force. Mr.
Voosen's contract expires on August 31, 1997. John Waldstein's and Robert
Voosen's current minimum annual salary under their contracts are $135,000 and
$100,000, respectively. The salaries of these officers are subject to
performance review and annual adjustment by the Board of Directors of the
Company. Mr. Waldstein's salary shall increase for inflation effective
January 1, 1998.
If the employment of John Waldstein is terminated by the Company without
cause, the Company is obligated to pay the greater of an amount equal to one
times his salary on the date of termination or the salary to the conclusion of
the contract period. As of February 1, 1996, John Waldstein's salary to the
conclusion of his contract period is approximately $530,000. If the employment
of Robert Voosen is terminated by the Company without cause, the Company is
obligated to pay an amount equal to 25% of his annual salary plus certain
commissions on the date of termination. In the event the Company is acquired
prior to August 31,1996 or from September 1, 1996 to August 31, 1997 and Mr.
Voosen is terminated due to such acquisition, the Company shall pay to Mr.
Voosen 1.5 and 1 times his annual salary, respectively, plus certain commissions
on the date of termination.
YEAR END OPTION TABLE
The following table sets forth the number and value of unexercised options
held as of August 31, 1995 by the Named Executive Officers:
Aggregated Option Exercises In Last Fiscal
Year and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options at
Options at end of Fiscal 1995 End of Fiscal 1995 (2)
----------------------------- ----------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
John Waldstein (1) 69,250(3) 34,417 $42,274 $13,036
Robert Voosen (1) 23,595 24,834 $10,089 $11,771
</TABLE>
(1) There were no options exercised during fiscal 1995.
(2) Difference between the fair market value of the underlying Common Stock on
November 6, 1995 and the option exercise price.
(3) Includes warrants to purchase 25,000 shares of Common Stock. See "Summary
Compensation Table - Note 3" herein.
Page 5
<PAGE>
OTHER MATTERS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors, and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
with the Securities and Exchange Commission ("SEC") and the National Association
of Securities Dealers. Executive officers, directors, and greater than ten-
percent stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
The Company believes that all filing requirements applicable under Section
16(a) to its executive officers, directors, and 10% stockholders were complied
with for fiscal 1995, except that Messrs. Waldstein and Voosen are required to
file a Form 4 and 5 late and Mr. Hentschel is required to file a Form 3 late.
OPTIONS GRANTED DURING FISCAL 1995
The following table sets forth certain information with respect to the
grant of nonqualified stock options and warrants in fiscal 1995 to any of the
Named Executive Officers:
<TABLE>
<CAPTION>
Potential Realizable
Individual Grants Value of Assumed
----------------------------------------------------------------- Annual Rates of
Number of Percent of Stock Price
Shares Total Options Appreciation for
Underlying Granted to Exercise Option Term(3)
Option Employees Price Expiration --------------
Name Grants In Year Per Share Date 5%($) 10%($)
- ---- ------ ------- --------- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
John Waldstein 25,000 (1) 48.5% $.74 Dec. 7, 2004 $11,635 $29,484
Robert Voosen 20,000 (2) 38.8% $1.13 Jan. 18, 2005 $14,213 $36,019
</TABLE>
(1) The warrants vest in full upon grant. See "Summary Compensation Table -
Note 3" herein.
(2) The options vest annually over a 4 year period commencing on January 18,
1995.
(3) Amount represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date. This table does not take into account any
appreciation in the price of the Common Stock to date.
INDEPENDENT AUDITORS
Deloitte & Touche LLP has served as the Company's independent auditors
since 1982. The Company's management anticipates that Deloitte & Touche LLP will
also serve as the Company's auditors in connection with the financial statements
to be prepared for the fiscal year ending August 31, 1996. No representative of
Deloitte & Touche LLP is expected to attend the meeting of Shareholders.
PROPOSALS BY SHAREHOLDERS
Any Shareholder who wishes to include a proposal for presentation at the
next annual meeting of the Company must send such proposal to the Company and
such proposal must be received by the Company no later than October 17, 1996.
Any proposal submitted by a Shareholder must comply with the rules established
by the Securities and Exchange Commission.
Page 6
<PAGE>
OTHER MATTERS
As of the date hereof, the Company has not been informed of any matters to
be presented for action at the meeting other than those listed in the notice of
meeting and referred to herein. If any other matters come before the meeting or
any adjournment thereof, it is intended that the proxies will be voted in
respect thereof in accordance with the judgment of the persons named therein.
Shareholders are urged to sign the enclosed form of proxy and return it at
once in the envelope enclosed for that purpose.
By Order of the Board of Directors,
Peter Myerson, Clerk
Canton, Massachusetts
February 17, 1996
Page 7
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John Waldstein and Robert Voosen and each of
them, with full power of substitution, as the true and lawful attorney in fact
and proxy for the undersigned to vote all shares of common stock of
International Electronics, Inc. (the"Company") which the undersigned is entitled
to vote at a Special Meeting in Lieu of the Annual Meeting of Shareholders to be
held at the offices of Davis, Malm & D'Agostine, One Boston Place, Boston
Massachusetts at 10:00 a.m. on Thursday, March 21, 1996 or any adjournment
thereof; such proxy being directed to vote as specified below on the election of
directors and other proposals and being authorized to vote in his own discretion
for each proposal as to which a specified vote is not directed. The above named
proxies are directed to vote all of the undersigned's shares as follows:
1. [ ] FOR [ ] WITHHOLD AUTHORITY (for) the election of the following to
serve as directors of the Company, each to serve until the next annual meeting
of shareholders and until his successor is chosen and qualified.
John Waldstein Robert Voosen Heath Paley Robert Prager Diane Balcom
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, DRAW A
LINE THROUGH THE NOMINEE'S NAME ON THE LIST ABOVE.
2. In their discretion upon such other matters as may properly come before
the meeting.
MANAGEMENT RECOMMENDS A VOTE FOR THIS ACTION [ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS INDICATED. IF NO
SPECIFICATION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NAMED NOMINEES.
Management knows of no other matters that may properly be, or which are
likely to be, brought before the meeting. However, if any other matters are
properly brought before the meeting the persons named in this Proxy or their
substitutes will vote in accordance with their best judgment.
------------------------------
Date
------------------------------
(Signature of Shareholder)
------------------------------
(Signature of Shareholder)
IMPORTANT: Please date this
Proxy and sign Proxy exactly
as your name or names appear
hereon. If shares are held
jointly, signature should
include both names. Executors,
administrators, trustees,
guardians and others signing
in a representative capacity
should indicate the capacity
in which they sign and their
titles.
<PAGE>
___________________________________________________________
I E I INTERNATIONAL
ELECTRONICS, INC. NEWS RELEASE
______________________________________________________
FOR IMMEDIATE RELEASE Contact: John Waldstein (617) 821-5566
- ---------------------
Diane Balcom (412) 781-1314
INTERNATIONAL ELECTRONICS, INC. REPORTS EARNINGS
FOR FIRST QUARTER OF FISCAL 1996
Canton, MA, January 5, 1996--- International Electronics, Inc. (NASDAQ: IEIB)
today reported operating results for the fiscal 1996 first quarter ended
November 30, 1995.
Net sales increased to $1,945,323 for the first quarter of fiscal 1996, a gain
of 22% compared to the $1,595,281 reported for the first quarter of the prior
year. Operating income for the three months ended November 30, 1995 was $44,347,
compared to an operating income of $1,246 for the comparable period of the prior
year. Net income was $30,269 or $.02 per share for the three months ended
November 30, 1995, compared to a $11,957 or $.01 per share in the previous year.
IEI president, John Waldstein, commented, "In our first quarter of fiscal 1996,
we are pleased to report record sales representing a 22% increase over the
comparable quarter from last year. We continue to show growth in our keypad and
access control product lines as well as our OEM and global business. Our
marketing efforts are aimed at supporting our leadership position in the keypad
and small systems access control markets. I am also encouraged that the target
markets we are in with our core products are growing and present world wide
opportunities."
IEI designs, manufactures, and markets electronic security equipment used in
residential, industrial, and commercial security systems. The Company's product
lines include its Door-Gard/TM/ keypad and access control products, glassbreak
sensors, VoiceKey/TM/ products and its PowerKey/TM/ line of industrial controls.
The Company markets to the leading distribution and installation companies
serving the electronic security industry in the U.S as well as in Europe,
Eastern Europe, South America, Canada, Australia and Asia.
-more-
Premium Quality Security Products for a Profitable Day's Work/TM/
INTERNATIONAL ELECTRONICS, INC. . 427 TURNPIKE STREET .
CANTON, MASSACHUSETTS 02021
<PAGE>
_____________
I E I RELEASE IEI, Page 2
_____________
INTERNATIONAL ELECTRONICS, INC.
COMPARATIVE ANALYSIS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------
NOVEMBER 30, 1995 NOVEMBER 30, 1994
----------------- -----------------
<S> <C> <C>
Net sales $1,945,323 $1,595,281
Income from operations 44,347 1,246
Net income 30,269 11,957
Net income per common share $ .02 $ .01
Weighted average number of
shares outstanding 1,407,669 1,423,669
</TABLE>
####
Premium Quality Security Products for a Profitable Day's Work/TM/
INTERNATIONAL ELECTRONICS, INC. . 427 TURNPIKE STREET .
CANTON, MASSACHUSETTS 02021
