<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for use of the Commission only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
INTERNATIONAL ELECTRONICS, INC.
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee paid previously with preliminary materials
<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 Cohan, Rasnick,
Myerson & Marcus LLP, One State Street, Boston, Massachusetts 02109 at 10:00
a.m., local time, on Wednesday, April 7, 1999, for the following purposes:
1. To elect a Board of four Directors to serve until the next annual
meeting and until their successors are chosen and qualified.
2. To adopt a 1999 Stock Option Plan.
3. To transact such other business as may come before the meeting.
Only shareholders of record at the close of business on February 24,
1999 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
March 4, 1999
<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 April 7, 1999.
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
March 4, 1999.
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 24, 1999 will be entitled to vote at the meeting. On that
date, there were 1,493,301 shares of common stock of the Company outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Set forth below is information concerning ownership of the Company's common
stock as of February 10, 1999 (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 220,256/(2)/ 13.7%
c/o International Electronics, Inc.
427 Turnpike Street
Canton, Massachusetts
James Brierley, Jr. 25,076/(5)/ 1.7%
c/o International Electronics, Inc.
427 Turnpike Street
Canton, Massachusetts
Heath Paley 40,097/(3)/ 2.6%
c/o International Electronics, Inc.
427 Turnpike Street
Canton, Massachusetts
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF COMMON STOCK
Name SHARES/(1)/ OUTSTANDING
---- ------------ -------------
<S> <C> <C>
Kenneth Moyes 14,000/(6)/ .9%
526 Boston Post Road
Wayland, Massachusetts
Diane Balcom 15,935/(4)/ 1.1%
1709 Boulevard of the Allies, Suite 100
Pittsburgh, Pennsylvania
All executive officers and directors 342,247/(7)/ 20.2%
as a group (6 persons)
5% SHAREHOLDERS:
Warren Paley 217,267 14.5%
3 Mill Street
New Baltimore, New York
</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 February 10, 1999.
(2) Includes vested options and warrants to purchase an aggregate 112,417
shares of the Company's common stock granted at prices ranging from $.74-
$2.12 per share. Includes 6,234 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 31,412 shares of the
Company's common stock granted at prices ranging from $.75-$6.48 per share.
(4) Includes vested options to purchase an aggregate 14,387 shares of the
Company's common stock granted to Diane Balcom and Balcom & Associates at
prices ranging from $.72-$2.12 per share.
(5) Includes vested options and warrants to purchase an aggregate 17,500 shares
of the Company's common stock granted at prices ranging from $1.36-$1.58
per share.
(6) Includes 4,000 shares of common stock held in trust for the benefit of Mr.
Moyes' minor children. Mr. Moyes serves as co-trustee of two such trusts.
(7) Includes vested options and warrants to purchase an aggregate 200,966
shares of the Company's common stock granted at prices ranging from $.72-
$6.48 per share.
Page 2
<PAGE>
PROPOSAL ONE
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, Heath Paley, Diane Balcom, and
Kenneth Moyes.
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 45 President, Chief Executive Officer, 1982
Treasurer and Chairman of the Board
James Brierley, Jr. 47 Vice President of Sales and Marketing -
Christopher Hentschel 54 Vice President of Engineering -
Heath Paley 50 Director 1990
Diane Balcom 56 Director 1989
Kenneth Moyes 42 Director 1998
</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 is a graduate of Harvard College. See "Executive
Compensation."
James C. Brierley, Jr. has been employed by the Company since October 1995.
Initially engaged as a consultant to develop a business strategy for the
Company's line of industrial access control products, he was appointed Director
of Sales and Marketing in October 1997 and was appointed Vice President of Sales
and Marketing in April 1998. Prior to joining the Company, from September 1994
to September 1995, he was the Vice President of Product Marketing for The
Shareholders Services Group, a division of First Data Corporation. From 1981 to
June 1994, he was employed by Digital Equipment Corporation where he became
Director of Product management specializing in distributed database client
server products. Prior to that, Mr. Brierley was a Certified Public Accountant
with Coopers & Lybrand.
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. Mr. Hentschel is a graduate of Wentworth
Institute.
Heath Paley became a member of the Board of Directors in 1990. Since May
1996, Mr. Paley has been a self-employed computer consultant. He had been the
Company's director of Management Information Systems from September 1994 until
May 1996 and was the Company's Chief Operating Officer and Executive Vice
President from June 1990 to August 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. Heath Paley
is the son of Warren Paley. See "Security Ownership of Certain Beneficial
Owners and Management."
Page 3
<PAGE>
Diane Balcom became a member of the Board of Directors in July, 1989.
Since October 1998, Ms. Balcom has been the Executive Director of the Pittsburgh
Mercy Foundation. From September 1997 to September 1998, she held the position
of Director of Development for Children's Hospital of Pittsburgh. From August
1994 to August 1997, Ms. Balcom was the Chapter Director of the Juvenile
Diabetes Foundation of Western Pennsylvania. She has been an advisor 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.
Kenneth Moyes was appointed to the Board of Directors in October 1998.
Since August 1994, Mr. Moyes has been the President and founder of EH
Publishing, Inc., an information provider for the home systems industry. From
January 1990 to May 1994, Mr. Moyes served as President and Chief Executive
Officer of Arius, Inc., an international distributor of security products.
During May 1995, Arius filed for bankruptcy. Prior to that, Mr. Moyes was
employed by Geneva Merchant Bankers as a junior partner, founded Moyes and
Company, a management consulting firm, and was a Certified Public Accountant
with Peat, Marwick, Mitchel and Company.
In October 1998, Messrs. Moyes and Waldstein each received options under
the Company's non-qualified stock option plan to purchase 5,000 and 4,500
shares, respectively, of common stock at an exercise price of $1.17. The
options vest over a four-year period.
During the fiscal year ending August 31, 1998, the Board of Directors held
8 meetings (including regularly scheduled, telephone, special meetings and
actions by unanimous written consent).
The Board of Directors has an audit committee but no nominating committee.
The audit committee is comprised of John Waldstein, Heath Paley and Diane
Balcom. The audit committee is responsible for financial oversight and review
of potential conflicts of interest. The audit committee was formed on February
9, 1998, and had no meetings during fiscal 1998. The Company's compensation
committee of the Board of Directors is comprised of Heath Paley and Diane
Balcom. The compensation 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 compensation committee, during the
year ended August 31, 1998, held 2 meetings. The Company has no nominating
committee.
At the last annual meeting, shareholders elected a Board of Directors for
the ensuing year. The Board which was elected consisted of John Waldstein,
Diane Balcom, and Heath Paley.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF THE NOMINEES TO THE BOARD OF DIRECTORS.
Page 4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
each of the last three fiscal years ending August 31, 1998, of the Company's
President and Chief Executive Officer, and two other executive officers of the
Company who received at least $100,000 of compensation during any of these years
(the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION(2) OPTIONS ALL OTHER
-----------------------------------
NAME YEAR SALARY COMMISSION/BONUS(3) (SHARES) COMPENSATION(1)
- - ---- ---- -------- ------------------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
John Waldstein 1998 $137,947 $27,000 15,000 $9,180
President, Chief 1997 135,000 2,100 10,000(5) 9,180
Executive Officer 1996 135,519 4,750 - 9,180
James Brierley, Jr. 1998 89,250 25,100 10,000 -
Vice President of 1997 85,000 18,000 - -
Sales and Marketing 1996 63,096 15,000 20,000 -
Robert Voosen (4) 1998 51,539 - - -
Executive Vice 1997 100,000 - 9,000(5) -
President 1996 100,416 12,349 - -
</TABLE>
(1) Represents the cost of a split dollar whole life insurance policy with a
face value of $755,000 as of August 31, 1998. The Company is a beneficiary
of such policy to the extent of all premiums paid upon the death of John
Waldstein. Mr. Waldstein may 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) Amount represents commissions and/or bonus earned during the applicable
year.
(4) Mr. Voosen resigned as an officer of the Company in September, 1997.
(5) Represents warrants granted to purchase 10,000 and 9,000 shares of common
stock granted to Messrs. Waldstein and Voosen, respectively, at an exercise
price of $2.12 per share exercisable for a ten-year period.
The Company's Board of Directors, commencing in fiscal 1993, established an
annual bonus plan 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.
COMPENSATION ON INVOLUNTARY TERMINATION
John Waldstein has an employment contract with the Company which provides
for certain compensation to be paid to him if he is discharged by the Company
without cause before the end of the term of his contract. Mr. Waldstein has a
three-year employment contract which self-renews for a three-year term on
January 1 of each year, the anniversary date of his employment contract. John
Waldstein's current minimum annual salary under his contract is approximately
$140,000, subject to adjustment for inflation. The salary of this officer is
subject to performance reviews and annual adjustment by the Board of Directors
of the Company.
If the employment of John Waldstein is terminated by the Company without
cause, (including an involuntary relocation due to an acquisition), the Company
is obligated to pay the greater of an amount equal to one times his annual
salary on the date of termination or the salary to the conclusion of the
contract period. As of February 1, 1999, John Waldstein's salary to the
conclusion of his contract period is approximately $416,000, plus cost of living
adjustment.
Page 5
<PAGE>
YEAR END OPTION TABLE
The following table sets forth the number and value of unexercised options
held as of August 31, 1998 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 1998 END OF FISCAL 1998 (2)
----------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ------------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
John Waldstein (1)(3) 106,167 22,500 $68,689 $3,928
James Brierley (1) 10,000 20,000 3,663 7,975
</TABLE>
(1) There were no options exercised during fiscal 1998.
(2) Difference between the fair market value of the underlying common stock on
November 1, 1998 and the exercise price.
(3) Includes warrants to purchase an aggregate of 35,000 shares of common
stock. See "Summary Compensation Table - Note 5" herein and see Note 9 to
the Consolidated Financial Statements.
COMPENSATION OF DIRECTORS
Effective June 1998, the directors who are not officers receive $500 for
each Board of Directors meeting and $500 for each Committee meeting that they
attend in person or by telephone conference call. For the fiscal year ended
August 31, 1998, Ms. Balcom was paid $1,000 in director's fees. In June 1998,
Ms. Balcom and Mr. Paley, two of the Company's non-employee directors, each
received options under the Company's non-qualified stock option plan to purchase
2,500 shares of common stock at an exercise price of $1.67. These options vest
monthly over a one-year period.
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 1998, except that Mr. Brierley filed his form 5 late.
PROPOSAL TWO
ADOPTION OF 1999 STOCK OPTION PLAN
At the meeting, the shareholders will be asked to approve the adoption of a
1999 stock option plan (the "1999 Plan") authorizing the issuance of 175,000
shares of the Company's $.01 par value Common Stock under the Plan. In January
1999, the Board of Directors unanimously approved the proposed Plan, subject to
shareholder approval. A copy of the 1999 Plan is attached.
The Board of Directors believes that the 1999 Plan is necessary to continue
to fulfill its purpose of assisting the Company in attracting and retaining
officers and other key employees, outside directors, and consultants, motivating
them to increase shareholder value and enabling them to participate in the value
which has been created and to have a mutuality of interests with other
shareholders. At August 31, 1998, only 22,922 shares remain available for
future grants from the Company's current non-qualified stock option plans. At
the present time none of the options in the 1999 Plan have been allocated to any
party.
The 1999 Plan provides for the issuance of either incentive stock options
under Section 422 of the 1986 Internal Revenue Code, as amended, or non-
qualified stock options. To the extent that either
Page 6
<PAGE>
form of stock option is granted, they will reduce the pool of Common Stock
available under the 1999 Plan.
While the effect of the issuance of all the shares which are available
under the 1999 Plan would represent a dilution in the ownership interests of the
current shareholders, it should be kept in mind that the shares available under
the 1999 Plan are only issued upon the payment of the fair market value of those
shares on the date the option is granted. This means that some money will be
paid to the Company if the options are exercised and that such payments will
reduce the effect of the dilution of current shareholders' interests.
DESCRIPTION OF THE PLAN
Administration of the Plan. The Plan is administered by the Board of
---------------------------
Directors or by a committee of at least two members of the Board of Directors
who meet the requirements of Rule 16b-3 of the Securities Exchange Act of 1934
relating to "disinterested" administrators of a stock plan (the "Board"). The
Board may from time to time adopt such rules and regulations as it deems
advisable for the administration of the 1999 Plan, and may alter, amend or
rescind any such rules and regulations in its discretion. The Board has the
power to interpret, amend or discontinue the 1999 Plan.
Grant of Options. Options may be granted under the 1999 Plan for a total
-----------------
of 175,000 shares of Common Stock. The 1999 Plan will remain in existence for
ten years. The Board determines the terms of options granted under the Plan,
including whether the options are incentive options under Section 422 of the
Internal Revenue Code, or non-qualified options, the exercise price, the number
of shares subject to the option, and the exercisability thereof. The Board also
determines, at the time of grant, the period during which the option will be
exercisable, which could be as long as 10 years from the date of grant. The
options may be granted to employees, non-employee directors, and consultants.
Terms and Conditions of Options. The Board may impose on an option any
--------------------------------
additional terms and conditions which it deems advisable and which are not
inconsistent with the 1999 Plan. The exercise price of any option granted under
the 1999 Plan must not be less than 100% of the fair market value of a share of
Common Stock as of the date of grant. In connection with a merger, sale of all
the Company's assets, or other transaction which results in the replacement of
the Company's Common Stock with the stock of another corporation, all options
shall accelerate and be currently exercisable. No option granted under the 1999
Plan is transferrable by the optionee other than by will or the laws of descent
and distribution and each option is exercisable, during the lifetime of the
optionee, only by such optionee.
Exercise of Options. An optionee may exercise less than all of the vested
--------------------
portion of an option, in which case such unexercised portion shall continue to
remain exercisable, subject to the terms of the 1999 Plan, until the option
terminates.
Termination of Options. Subject to certain exceptions with respect to
-----------------------
death or disability, each option granted under the Plan terminates (i) the
number of years after the date of grant as is designated by the Board, or (ii)
three months following the termination of the employment by the Company, or by
its parent or subsidiary, of an employee to whom the option is granted.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. The Company anticipates that all options granted
------------------------
under the 1999 Plan and treated by the Company as "incentive stock options",
that is, a stock option described in Section 422 of the Code, will have the
following anticipated (but not guaranteed) federal income tax consequences,
among others:
a. The optionee will recognize no income at the time of grant.
b. Upon exercise of the incentive stock option, no income will result to
any party.
c. If there is no disposition of the shares until a date that is both (i)
two years from the grant of a stock incentive option and (ii) one year
from its exercise, no amount will be ordinary income and, upon
disposition in a taxable transaction, the employee will receive long-
term capital gain or loss treatment equal to the difference between
his amount realized and the option price. Any gain realized upon a
disposition other than as set forth above may result in ordinary
income tax treatment to the optionee.
d. In the event of the tax treatment to the employee described in (c)
above, the Company receives no deduction in connection with the
transaction.
Page 7
<PAGE>
e. Certain optionees may incur alternative minimum tax treatment under
the Code upon exercise of an incentive stock option.
Non-qualified Stock Options. The Company anticipates that all non-
----------------------------
qualified stock options granted under the 1999 Plan will have the following
anticipated (but not guaranteed) federal income tax consequences, among others:
a. The optionee will recognize no income at the time of grant.
b. Upon exercise of the non-qualified stock option, the individual to
whom the option is granted should be deemed to receive ordinary income
at the time of exercise equal to the excess, if any, of the fair
market value of the acquired shares at such time over the option price
for such shares.
c. If the shares acquired upon the exercise of a non-qualified stock
option are disposed of in a taxable transaction, the individual
disposing of such shares will have a realized and recognized capital
gain or loss equal to the difference, if any, between the amount
realized and the adjusted basis of such shares to him. Such gain or
loss will be long-term or short-term depending on whether such shares
are held for longer than one year or not. The adjusted basis usually
(but not always) will include the option price plus any ordinary
income described in (b) with respect to such shares.
d. In any year in which an employee reports compensation as a result of
the grant or exercise of a non-qualified stock option, the Company
would receive a business expense deduction in the same amount as such
reported compensation.
VOTE REQUIRED FOR APPROVAL
If a quorum of the Company's shares is represented at the meeting, a vote
of a majority of such quorum is required to approve Proposal 2 with respect to
the adoption of the 1999 Stock Option Plan. A quorum for this action is a
majority of the issued and outstanding shares of the Company's common stock.
Shareholders who vote against the proposal do not have any appraisal or similar
right if the vote is approved. Thus, neither shareholders who vote against the
proposal nor shareholders who abstain from voting will acquire any such
appraisal or similar rights. Only votes cast in favor of the proposal will be
counted.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE ADOPTION OF A 1999
STOCK OPTION PLAN AND RECOMMENDS TO THE SHAREHOLDERS A VOTE FOR THIS PROPOSAL.
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, 1999. 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 November 4, 1999.
Any proposal submitted by a Shareholder must comply with the provision of Rule
14A-8 of the Exchange Act of 1934 as amended.
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.
Page 8
<PAGE>
FINANCIAL STATEMENTS
A copy of the Company's Annual Report for the fiscal year ending August 31,
1998 and the Company's Form 10-QSB for the quarter ending November 30, 1998 is
being mailed to all shareholders herewith. The Annual Report and the Company's
Form 10-QSB are not to be regarded as proxy solicitation material.
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
March 4, 1999
Page 9
<PAGE>
INTERNATIONAL ELECTRONICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John Waldstein and Heath Paley 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 of Shareholders to be held at the offices
of Cohan, Rasnick, Myerson & Marcus, LLP, One State Street, Boston,
Massachusetts 02109, at 10:00 a.m. on April 7, 1999 or any adjournment thereof,
such proxy being directed to vote as specified on the reverse 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:
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 AND FOR THE PROPOSALS.
(Continued and to be signed on the other side.)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Special Meeting of Shareholders
INTERNATIONAL ELECTRONICS, INC.
April 7, 1999
- - --------------- Please Detach and Mail in the Envelope Provided ---------------
Please mark your
A [X] votes as in this
example.
WITHHOLD
FOR AUTHORITY
1. To elect a Board Nominees: John Waldstein
of four Directors to [_] [_] Heath Paley
serve until the next Diane Balcom
annual meeting and until their successors Kenneth Moyes
are chosen and qualified.
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE, DRAW A LINE THROUGH THE
NOMINEE'S NAME ON THE LIST AT RIGHT.
2. To approve the adoption of a 1999 Stock FOR AGAINST ABSTAIN
Option Plan. [_] [_] [_]
Management recommends a vote FOR this action.
3. To consider and act upon such other
business or further business as may [_] [_] [_]
properly come before the meeting.
Management recommends a vote FOR this action.
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.
Please mark, sign, date and return the proxy card promptly using the
enclosed envelope.
Signature of Shareholder
-------------------------------------------------------
Signature of Shareholder
-------------------------------------------------------
Date
-----------------------------------
IMPORTANT: Please date this Proxy and sign Proxy exactly as your name appears
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>
INTERNATIONAL ELECTRONICS, INC.
1999 STOCK OPTION PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. PURPOSE A-1
2. TERM OF THE PLAN A-1
3. STOCK SUBJECT TO THE PLAN A-1
4. ADMINISTRATION A-1
5. ELIGIBILITY A-2
6. OPTIONS A-2
7. RESTRICTIONS ON ISSUE OF SHARES A-3
8. PURCHASE FOR INVESTMENT; SUBSEQUENT REGISTRATION A-4
9. WITHHOLDING; NOTICE OF DISPOSITION OF STOCK
PRIOR TO EXPIRATION OF SPECIFIED HOLDING PERIOD A-4
10. ADJUSTMENTS FOR CORPORATE TRANSACTIONS A-5
11. RESERVATION OF STOCK A-6
12. LIMITATION OF RIGHTS IN STOCK;
NO SPECIAL EMPLOYMENT OR OTHER RIGHTS A-6
13. NONEXCLUSIVITY OF THE PLAN A-6
14. TERMINATION AND AMENDMENT OF THE PLAN A-6
15. NOTICES AND OTHER COMMUNICATIONS A-7
16. GOVERNING LAW A-7
17. DEFINITIONS A-7
</TABLE>
<PAGE>
INTERNATIONAL ELECTRONICS, INC.
1999 STOCK OPTION PLAN
1. PURPOSE
The purpose of this Stock Option Plan (the "Plan") is to provide a means
pursuant to which key employees and other key personnel, including consultants
and directors of International Electronics, Inc. (the "Company") and of its
Affiliates (as hereinafter defined), may be given an opportunity to purchase
Common Stock of the Company. The Company, by means of the Plan, seeks to retain
the services of its present key employees and other key personnel and to secure
and retain the services of additional key employees and other key personnel.
2. TERM OF THE PLAN
Unless the Plan shall have been earlier terminated by the Board, Options
may be granted hereunder at any time in the period commencing on the approval of
the Plan by the Company's shareholders and ending immediately prior to the tenth
anniversary of the approval of the Plan by the Company's shareholders. Options
granted pursuant to the Plan within such period shall not expire solely by
reason of the termination of the Plan.
3. STOCK SUBJECT TO THE PLAN
At no time shall the number of shares of Stock issued pursuant to or
subject to Options granted under the Plan exceed 175,000 shares. Such shares
may be either authorized but unissued shares or shares held by the Company in
its treasury. If any Option expires, terminates, or is canceled for any reason
without having been exercised in full, the shares not purchased by the Optionee
shall again be available for Options thereafter to be granted under the Plan.
4. ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the provisions
of the Plan, the Committee shall have complete authority, in its discretion, to
make or to select the manner of making the following determinations with respect
to each Option to be granted by the Company in addition to any other
determination allowed the Committee under the Plan: (a) the employee, director
or consultant to receive the Option; (b) whether the Option will be of an
Incentive Option or Nonstatutory Option; (c) the time of granting the Option;
(d) the number of shares subject to the Option; (e) subject to the limitations
of Section 6.2(b), the Option Price of any Option; (f) the Option period of any
Option; (g) the Option exercise date or dates of any Option; (h) the effect of
termination of employment or other association with the Company and its
Affiliates on the subsequent exercisability of the Option; and (i) such other
provisions as the Committee from time to time shall deem appropriate. In making
such determinations, the Committee may take into account the nature of the
services rendered by the respective employees, directors and consultants, their
present and potential contributions to the success of the Company and its
Affiliates, and such other factors as the Committee in its discretion shall deem
relevant. Subject to the provisions of the Plan, the Committee shall also have
complete authority to interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to it, to determine the terms and provisions of the
respective Option Agreements (which need not be identical), and to make all
other determinations necessary or advisable for the administration of the Plan.
The Committee's determinations made in good faith on matters referred to in this
Plan shall be conclusive.
Page A-1
<PAGE>
5. ELIGIBILITY
Options may be granted to any employee, key personnel or consultant of the
Company and/or any Affiliate. A director of the Company and/or any Affiliate
may receive Options under this Plan.
6. OPTIONS
6.1 Provision for Grant. Options may be granted under the Plan in the
-------------------
form of either Incentive Options or Nonstatutory Options.
6.2 Additional Terms and Conditions. Any Options shall have the following
-------------------------------
terms and conditions and such other terms and conditions, not inconsistent with
the terms of the Plan, as the Committee may prescribe.
(a) Date of Grant. The granting of an Option shall take place at the
-------------
time specified in the Option Agreement. Only if expressly so provided in the
applicable Option Agreement shall the Grant Date be the date on which the Option
Agreement shall have been duly executed and delivered by the Company and the
Optionee.
(b) Option Price. The Option Price under each Incentive Option shall
------------
be not less than 100% of the Fair Market Value of Stock on the Grant Date, or
not less than 110% of the Fair Market Value of Stock on the Grant Date if the
Optionee is a Ten Percent Owner. The Option Price under each Nonstatutory Option
shall be not less than 100% of the Fair Market Value of Stock on the Grant Date
without regard to whether the Optionee is a Ten Percent Owner.
(c) Option Period. No Incentive Option may be exercised on or after
-------------
the tenth anniversary of the Grant Date, or on or after the fifth anniversary of
the Grant Date if the Optionee is a Ten Percent Owner. No Nonstatutory Option
may be exercised on or after the tenth anniversary of the Grant Date without
regard to whether the Optionee is a Ten Percent Owner.
(d) Exercisability. An Option may be immediately exercisable or
--------------
become exercisable in such installments, cumulative or non-cumulative, as the
Committee may determine. In the case of an Option not otherwise immediately
exercisable in full, the Committee may accelerate the exercisability of such
Option in whole or in part at any time, provided the acceleration of the
exercisability of any Incentive Option would not cause the Option to fail to
comply with the provisions of Section 422 of the Code.
(e) Minimum Number of Options to Exercise. The minimum number of
-------------------------------------
shares with respect to which an Option may be exercised in part at any time is
the lesser of:
(1) one hundred (100) shares, or
(2) the maximum number of shares exercisable at such time under
all Options held by the Optionee pursuant to the Plan.
(f) Termination of Association with the Company. Unless the Committee
-------------------------------------------
shall provide otherwise in the grant of a particular Option under the Plan, or
unless otherwise required to meet the requirements of Section 422 of the Code,
if the Optionee's employment or other association with the Company and its
Affiliates is terminated, whether voluntarily or otherwise, any Option shall
immediately cease to be exercisable in any respect. Military or sick leave shall
not be deemed a termination of employment or other association, if it does not
exceed the longer of 90 days or the period during which the absent recipient's
reemployment rights, if any, are guaranteed by statute or by contract.
Page A-2
<PAGE>
(g) Transferability of Options. Except as otherwise provided in this
--------------------------
Section, Options shall not be transferable, other than by will or the laws of
descent and distribution, and may be exercised during the life of the Optionee
only by the Optionee. The Committee may, upon the grant of a Nonstatutory
Option or by amendment to the agreement evidencing such an Option, provide that
such Option may be transferred by the recipient to an Immediate Family Member;
provided, however, that any such transfer is without payment of any
consideration whatsoever and that no transfer of an Option shall be valid unless
first approved by the Committee, acting in its sole discretion.
(h) Exercise of Option. An Option may be exercised by the Optionee
------------------
giving written notice, in the manner provided in Section 15, specifying the
number of shares with respect to which the Option is then being exercised. The
notice shall be accompanied by payment in the form of cash, or certified or bank
check payable to the order of the Company in an amount equal to the Option Price
of the shares to be purchased or, if the Committee had so authorized on the
grant of any particular Option hereunder (and subject to such conditions, if
any, as the Committee may deem necessary to avoid adverse accounting effects to
the Company) by delivery of that number of shares of Stock having a fair market
value equal to the Option Price of the shares to be purchased. Receipt by the
Company of such notice and payment shall constitute the exercise of the Option.
Within 30 days thereafter but subject to the remaining provisions of the Plan,
the Company shall deliver or cause to be delivered to the Optionee or his agent
a certificate or certificates for the number of shares then being purchased.
Such shares shall be fully paid and nonassessable. Nothing herein shall be
construed to preclude the Company from participating in a so-called "cashless
exercise", provided the Optionee or other person exercising the Option and each
other party involved in any such exercise shall comply with such procedures, and
enter into such agreements, of indemnity or otherwise, as the Company shall
specify.
6.3. Limit on Incentive Option Characterization. An Incentive Option shall
------------------------------------------
be considered to be an Incentive Option only to the extent that the number of
shares of Stock for which the Option first becomes exercisable in a calendar
year do not have an aggregate Fair Market Value (as of the date of the grant of
the Option) in excess of the "current limit". The current limit for any
Optionee for any calendar year shall be $100,000 minus the aggregate Fair Market
-----
Value at the date of grant of the number of shares of Stock available for
purchase for the first time in the same year under each other Incentive Option
previously granted to the Optionee under the Plan, and under each other
incentive stock option previously granted to the Optionee under any other
incentive stock option plan of the Company and its Affiliates, after December
31, 1986. Any shares of Stock which would cause the foregoing limit to be
violated shall be deemed to have been granted under a separate Nonstatutory
Option, otherwise identical in its terms to those of the Incentive Option.
7. RESTRICTIONS ON ISSUE OF SHARES
7.1. Violation of Law. Notwithstanding any other provision of the Plan,
----------------
if, at any time, in the reasonable opinion of the Company, the issuance of
shares of Stock covered by an Option may constitute a violation of law, then the
Company may delay such issuance and the delivery of a certificate for such
shares until (i) approval shall have been obtained from such governmental
agencies, other than the Securities and Exchange Commission, as may be required
under any applicable law, rule, or regulation; and (ii) in the case where such
issuance would constitute a violation of a law administered by or a regulation
of the Securities and Exchange Commission, one of the following conditions shall
have been satisfied:
(a) the shares are at the time of the issue of such shares
effectively registered under the Act; or
(b) the Company shall have received an opinion, in form and substance
satisfactory to the Company, from the Company's legal counsel to the effect that
the sale, transfer, assignment,
Page A-3
<PAGE>
pledge, encumbrance or other disposition of such shares or such beneficial
interest, as the case may be, does not require registration under the Act or any
applicable State securities laws.
The Company shall make all reasonable efforts to bring about the occurrence of
said events.
8. PURCHASE FOR INVESTMENT; SUBSEQUENT REGISTRATION
8.1. Investment Representation. Unless the shares to be issued pursuant
-------------------------
to Options granted under the Plan have been effectively registered under the
Act, the Company shall be under no obligation to issue any shares covered by any
Option unless the recipient of such shares shall give a written representation
to the Company which is satisfactory in form and substance to its counsel and
upon which the Company may reasonably rely, that he or she is acquiring the
shares for his or her own account for the purpose of investment and not with a
view to, or for sale in connection with, the distribution of any such shares.
8.2. Registration. If the Company shall deem it necessary or desirable to
------------
register under the Act or other applicable statutes any shares issued or to be
issued pursuant to Options granted under the Plan, or to qualify any such shares
for exemption from the Act or other applicable statutes, then the Company shall
take such action at its own expense. The Company may require from each
recipient of an Option, such information in writing for use in any registration
statement, prospectus, preliminary prospectus or offering circular as is
reasonably necessary for such purpose and may require reasonable indemnity to
the Company and its officers and directors from such holder against all losses,
claims, damage and liabilities arising from such use of the information so
furnished and caused by any untrue statement of any material fact therein or
caused by the omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made. In addition, the Company may require
of any such person that he or she agree that, without the prior written consent
of the Company or such managing underwriter, he or she will not sell, make any
short sale of, loan, grant any option for the purchase of, pledge or otherwise
encumber, or otherwise dispose of, any shares of Stock during the 180 day period
commencing on the effective date of the registration statement relating to such
underwritten public offering of securities.
8.3. Placement of Legends; Stop Orders; etc. Each share of Stock to be
---------------------------------------
issued pursuant to Options granted under the Plan may bear a reference to the
investment representation made in accordance with Section 8.1 in addition to any
other applicable restriction under the Plan and the terms of the Options and to
the fact that no registration statement has been filed with the Securities and
Exchange Commission in respect to said Stock. All certificates for shares of
Stock or other securities delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations, and other requirements of any stock exchange upon
which the Stock is then listed, and any applicable Federal or state securities
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
9. WITHHOLDING;
NOTICE OF DISPOSITION OF STOCK PRIOR TO EXPIRATION OF SPECIFIED HOLDING
PERIOD
9.1. Tax Withholding. Whenever shares are issued or to be issued pursuant
---------------
to Options granted under the Plan, the Company shall have the right to require
the recipient to remit to the Company an amount sufficient to satisfy federal,
state, local or other withholding tax requirements if, when, and to the extent
required by law (whether so required to secure for the Company an otherwise
available tax deduction or otherwise) prior to the delivery of any certificate
or certificates for such shares. The obligations of the Company under the Plan
shall be conditional on such payment and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the recipient of an Option.
Page A-4
<PAGE>
9.2. Notification of Disposition. Each person exercising any Incentive
---------------------------
Option granted under the Plan shall be deemed to have covenanted with the
Company to report to the Company any disposition of such shares prior to the
expiration of the holding periods specified by Section 422(a)(1) of the Code
and, if and to the extent that the realization of income in such a disposition
imposes upon the Company federal, state, local or other withholding tax
requirements, or any such withholding is required to secure for the Company an
otherwise available tax deduction, to remit to the Company an amount in cash
sufficient to satisfy those requirements.
10. ADJUSTMENTS FOR CORPORATE TRANSACTIONS
10.1. Stock Dividend, Etc. In the event of any stock dividend payable in
-------------------
Stock or any split-up or contraction in the number of shares of Stock after the
date of an Option Agreement evidencing an Option and prior to the exercise in
full of the Option, the number of shares subject to such Option and the price to
be paid for each share subject to the Option shall be proportionately adjusted.
10.2. Stock Reclassification. In the event of any reclassification or
----------------------
change of outstanding shares of Stock, shares of stock or other securities
equivalent in kind and value to those shares an Optionee would have received if
he or she had held the full number of shares of Stock subject to the Option
immediately prior to such reclassification or change and had continued to hold
those shares (together with all other shares, stock and securities thereafter
issued in respect thereof) to the time of the exercise of the Option shall
thereupon be subject to the Option.
10.3. Consolidation or Merger. Subject to the remainder of this Section
-----------------------
10.3., in the event of any consolidation or merger of the Company with or into
another company or in case of any sale or conveyance to another company or
entity of the property of the Company as a whole or substantially as a whole,
shares of stock or other securities equivalent in kind and value to those shares
and other securities an Optionee would have received if he or she had held the
full number of shares of Stock remaining subject to the Option immediately prior
to such consolidation, merger, sale or conveyance and had continued to hold
those shares (together with all other shares, stock and securities thereafter
issued in respect thereof) to the time of the exercise of the Option shall
thereupon be subject to the Option. However, unless any Option Agreement
evidencing the grant of an Option shall provide different or additional terms,
in any such transaction the Committee, in its discretion, may provide instead
that any outstanding Option shall terminate, to the extent not exercised by the
Optionee prior to termination, either (a) at the close of a period of not less
than ten (10) days specified by the Committee and commencing on the Committee's
delivery of written notice to the Optionee of its decision to terminate such
Option without payment of consideration as provided in the following clause or
(b) as of the date of the transaction, in consideration of the Company's payment
to the Optionee of an amount of cash equal to difference between the aggregate
Fair Market Value of the shares of Stock for which the Option is then
exercisable and the aggregate exercise price for such shares under the Option.
10.4. Dissolution or Liquidation. Upon dissolution or liquidation of the
--------------------------
Company, each outstanding Option shall terminate, but the Optionee (if at the
time in the employ of or otherwise associated with the Company or any of its
Affiliates) shall have the right, immediately prior to such dissolution or
liquidation, to exercise the Option to the extent exercisable on the date of
such dissolution or liquidation.
10.5. Related Matters. Any adjustment required by this Section 10 shall
---------------
be determined and made by the Committee. No fraction of a share shall be
purchasable or deliverable upon exercise, but in the event any adjustment
hereunder of the number of shares covered by the Option shall cause such number
to include a fraction of a share, such number of shares shall be adjusted to the
nearest smaller whole number of shares. In the event of changes in the
outstanding Stock by reason of any stock dividend, split-up, contraction,
reclassification, or change of outstanding shares of Stock of the nature
Page A-5
<PAGE>
contemplated by this Section 10, the number of shares of Stock available for the
purposes of the Plan as stated in Section 3 shall be correspondingly adjusted.
11. RESERVATION OF STOCK
The Company shall at all times during the term of the Plan and any
outstanding Options granted hereunder reserve or otherwise keep available such
number of shares of Stock as will be sufficient to satisfy the requirements of
the Plan (if then in effect) and such Options and shall pay all fees and
expenses necessarily incurred by the Company in connection therewith.
12. LIMITATION OF RIGHTS IN STOCK;
NO SPECIAL EMPLOYMENT OR OTHER RIGHTS
An Optionee shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the shares of Stock covered by an Option, except
to the extent that the Option shall have been exercised with respect thereto
and, in addition, a certificate shall have been issued therefor and delivered to
the Optionee or his agent. Any Stock to be issued pursuant to Options granted
under the Plan shall be subject to all restrictions upon the transfer thereof
which may be now or hereafter imposed by the Articles of Organization and the
By-Laws of the Company. Nothing contained in the Plan or in any Option
Agreement shall confer upon any recipient of an Option any right with respect to
the continuation of his or her employment or other association with the Company
(or any Affiliate), or interfere in any way with the right of the Company (or
any Affiliate), subject to the terms of any separate employment or consulting
agreement or provision of law or corporate articles or by-laws to the contrary,
at any time to terminate such employment or consulting agreement or to increase
or decrease, or otherwise adjust, the other terms and conditions of the
recipient's employment or other association with the Company and its Affiliates.
13. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan to the shareholders of the Company shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including without limitation, the granting of stock
options other than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
14. TERMINATION AND AMENDMENT OF THE PLAN
The Board may at any time terminate the Plan or make such modifications of
the Plan as it shall deem advisable. No termination or amendment of the Plan
may, without the consent of any recipient of an Option granted hereunder,
adversely affect the rights of such recipient under such Option. The Committee
may amend the terms of any Option theretofore granted, prospectively or
retroactively, but no such amendment shall impair the rights of the recipient of
such Option without his or her consent.
15. NOTICES AND OTHER COMMUNICATIONS
Any notice, demand, request or other communication hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person or duly sent by first class registered, certified or overnight mail,
postage prepaid, or telecopied with a confirmation copy by regular, certified or
overnight mail, addressed or telecopied, as the case may be, (i) if to the
recipient of an Option, at his or her residence address last filed with the
Company and (ii) if to the Company, at 427 Turnpike Street, Canton,
Massachusetts 02021, Attention: President, Telecopier: (781) 821-4443, or to
such other address or telecopier number, as the case may be, as the addressee
may have designated by notice to the addressor. All such notices, requests,
demands and other communications shall be deemed to have been
Page A-6
<PAGE>
received: (i) in the case of personal delivery, on the date of such delivery;
(ii) in the case of mailing, when received by the addressee; and (iii) in the
case of facsimile transmission, when confirmed by facsimile machine report.
16. GOVERNING LAW
The Plan and all Option Agreements and actions taken thereunder shall be
governed, interpreted and enforced in accordance with the laws of the
Commonwealth of Massachusetts, without regard to the conflict of laws principles
thereof.
17. DEFINITIONS
As used in this Plan the following terms shall have the respective meanings
set out below, unless the context clearly requires otherwise:
17.1. Act means the Securities Act of 1933, as amended.
---
17.2. Affiliate means a parent or subsidiary corporation of the Company,
---------
as defined in Sections 424(e) and (f), respectively, of the Code.
17.3. Board means the Company's Board of Directors.
-----
17.4. Code means the Internal Revenue Code of 1986, as amended from time
----
to time, or any statute successor thereto, and any regulations issued from time
to time thereunder.
17.5. Committee means a committee appointed by the Board, responsible for
---------
the administration of the Plan, as provided in Section 4 of the Plan. For any
period during which no such committee is in existence all authority and
responsibility assigned the Committee under the Plan shall be exercised, if at
all, by the Board. The Board may at any time abolish the Committee and revest
in the Board the administration of the Plan.
17.6. Company means International Electronics, Inc., a corporation
-------
organized under the laws of the Commonwealth of Massachusetts.
17.7. Fair Market Value means the value of a share of Stock on any date as
-----------------
determined by the Committee.
17.8. Grant Date means the date as of which an Option is granted, as
----------
determined under Section 6.
17.9. Immediate Family Member means an individual's parents, siblings,
-----------------------
spouse and issue, spouses of such issue and any trust for the benefit of, or the
legal representative of, any of the preceding persons.
17.10. Incentive Option means an Option which by its terms is to be
----------------
treated as an "incentive stock option" within the meaning of Section 422 of the
Code.
17.11. Nonstatutory Option means any Option that is not an Incentive
-------------------
Option.
17.12. Option means an option to purchase shares of Stock granted under
------
the Plan.
17.13. Option Agreement means an agreement between the Company and the
----------------
recipient of an Option, setting forth the terms and conditions of an Option.
Page A-7
<PAGE>
17.14. Option Price means the price to be paid by an Optionee for a share
------------
of Stock upon exercise of an Option.
17.15. Optionee means a person eligible to receive an Option, as provided
--------
in Section 6, to whom an Option shall have been granted under the Plan.
17.16. Plan means this 1999 Stock Option Plan of the Company, as amended
----
from time to time.
17.17. Stock means Common Stock, par value $0.01 per share, of the Company.
-----
17.18. Ten Percent Owner means a person who owns, or is deemed within the
-----------------
meaning of Section 422(b)(6) of the Code to own, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company (or
any Affiliate). Whether a person is a Ten Percent Owner shall be determined
with respect to each Option based on the facts existing immediately prior to the
Grant Date of such Option.
The following does not form part of this Plan but is included solely for
informational purposes:
Date of Board Approval: January 26, 1999
Date of Shareholder Meeting
to Vote on Approval: April 7, 1999
Page A-8
