INTELLIGENT CONTROLS, INC.
74 INDUSTRIAL PARK ROAD
P.O. BOX 638
SACO, MAINE 04072
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 19, 1997
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Intelligent Controls, Inc. ("INCON" or
the "Company") for use at the 1997 Annual Meeting of Shareholders. The
meeting will be held at the Sheraton Tara Hotel, 363 Maine Mall Road, South
Portland, Maine at 6:00 p.m. on Thursday, June 19, 1997.
When properly executed and returned, the enclosed proxy will be voted in
accordance with the choices marked. If no choice is specified, the proxy will
be voted as recommended by the Board of Directors. A proxy may be revoked at
any time before it is voted. Shareholders may revoke their proxies by
delivering written notice to the Clerk of the Company prior to the vote on a
given matter, by submitting a later dated proxy at or before the Meeting, or
by voting in person at the Meeting.
The record date for determining shareholders entitled to vote at the
Meeting (and any adjournment thereof) is May 1, 1997. All shareholders of
record as of the close of business on that date will be entitled to cast one
vote per share. This Proxy Statement and the accompanying form of proxy for
the Meeting are first being mailed to shareholders on or around May 20, 1997.
A description of matters to be voted upon is set forth at pages 4-5 of
this Proxy Statement. Certain information concerning share ownership,
management, and compensation appears below.
OWNERSHIP OF COMMON STOCK
As of May 1, 1997, a total of 3,242,394 shares of Intelligent Controls,
Inc. common stock were outstanding. Set forth below, as of such date, is
information concerning the only persons known to the Company to beneficially
own more than five percent of the outstanding shares.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OWNED OF CLASS
<S> <C> <C>
Alan Lukas 1,172,080 [1] 36.1% [1]
74 Industrial Park Road
Saco, Maine 04072
____________
<F1> Includes 1,056,783 shares owned directly by Mr. Lukas, 87,397
shares owned by his wife, 17,000 shares held by him as custodian for his
child, and 7,500 shares owned by Lukas Brothers, a general partnership of
which Mr. Lukas is one of the three partners.
</TABLE>
The following table shows, as of the record date, the number of shares
of Intelligent Controls, Inc. common stock which, to the Company's knowledge,
were beneficially owned by executive officers of the Company and by each
Director and other nominee for election as a Director. Except as otherwise
indicated, each person named owned less than one percent of the outstanding
common stock of the Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OWNED [1] OF CLASS [1]
<S> <C> <C>
Alan Lukas [2] 1,172,080 36.1%
Charlton H. Ames 6,682
Nathaniel V. Henshaw [3] 46,433 1.4%
George E. Hissong 7,500
Paul F. Walsh 3,000
Henry M. Powers 0
Kenneth J. Burek 5,675
All Directors, nominees, and
executive officers as a group 1,241,370 37.8%
<F1> Includes shares that could be purchased through stock
options exercisable within 60 days after the record date, as
follows: Mr. Henshaw 13,000; and all Directors and executive
officers as a group 33,250. Also includes shares owned by spouses
or other relatives residing in the same household.
<F2> Mr. Lukas' shares includes 1,056,783 shares owned directly
by him, 87,397 shares owned by his wife, 17,000 shares held by him
as custodian for his child, and 7,500 shares owned by Lukas
Brothers, a general partnership of which Mr. Lukas is one of the
three partners.
<F3> The shares attributed to Mr. Henshaw (excluding 100 shares
held by him as custodian for his son) are owned by Coastal
Enterprises, Inc., or CEI, Inc., with which Mr. Henshaw is
affiliated.
</TABLE>
THE BOARD OF DIRECTORS
The Directors of the Company are elected for one year terms at the
Annual Meeting of Shareholders. Set forth below is biographical
information for each of the current members of the Company's Board of
Directors, and for Mr. Powers who is a nominee for election as a
Director.
ALAN LUKAS (age 46). Alan Lukas has served as President, Chairman
of the Board, and a Director of the Company since 1978, the year in
which he founded the corporation.
CHARLTON H. AMES (age 55). Since 1985 Mr. Ames has served as
President of Morse, Payson & Noyes Capital Corporation, a private
investment firm. Since 1985 he has also managed the investment
portfolio of Katahdin Securities, a venture capital firm. From 1977 to
1985, he was Vice President of Ames & Wellman Company, a private
investment firm. Mr. Ames became a Director of INCON in 1991.
NATHANIEL V. HENSHAW (age 35). Since 1988, Mr. Henshaw has been a
Loan & Investment Officer of Coastal Enterprises, Inc. (CEI), which
provides various types of equity and debt financing to local businesses.
He also serves as President of Coastal Ventures, Inc., the general
partner of Coastal Ventures Limited Partnership, a venture capital fund.
Mr. Henshaw became a Director of INCON in 1993. He has decided not to
stand for reelection as a Director.
GEORGE E. HISSONG (age 61). Since 1991, Mr. Hissong has served as
a Trustee of the Kennebunk Light and Power District. From 1978 to 1986
he was Chairman and President of Energy Sciences Inc. He currently is
Treasurer of Hissong Development Corporation. Mr. Hissong was elected a
Director in March 1996.
PAUL F. WALSH (age 47). Since February 1995, Mr. Walsh has served
as President and Chief Executive Officer of Wright Express Corporation,
an information and financial services company. From January 1990 to
February 1995, Mr. Walsh was Chairman of BancOne Investor Services
Corporation, a financial services company. He has served since 1990 as
a Director of Staples, Inc., a leading office supplies distributor. Mr.
Walsh was first elected a Director of INCON in 1996.
HENRY M. POWERS (age 64). Mr. Powers is former Chairman,
President, and Chief Executive Officer of C.H. Sprague & Son Company.
This privately owned company (also known as Sprague Energy) is one of
New England's largest independent distributors of oils and coal.
Sprague also imports and exports a variety of liquid and bulk
commodities. Mr. Powers first joined Sprague in 1961, and presently
serves as a Consultant to the company. He is a former Director of First
New Hampshire Banks, and a former Director of Seaward Construction
Company (Kittery, Maine). Mr. Powers is a nominee for election as a
Director of INCON at the Annual Meeting of Shareholders.
Each non-employee Director of the Company receives as compensation
(i) cash payments of $500 per meeting and (ii) grants of stock options
(1,000 shares per quarter) having an exercise price equal to 100% of the
fair market value of the stock as of the date of grant. Mr. Ames,
during 1995 and the first quarter of 1996, received cash payments of
$1,000 per quarter (and no stock options) as compensation for his
services as a Director, and cash payments of $1,500 per quarter for
other consulting services to the Company. Commencing April 1, 1996, he
began receiving the same compensation as the other Directors.
The Board of Directors has appointed a Compensation Committee,
responsible for reviewing the general compensation policies of the
Company. The Committee specifically oversees and approves the
compensation of each INCON officer. In addition, the Committee
administers various employee benefit plans of the Company. The
Committee presently consists of Nathaniel V. Henshaw and Messrs. Ames
and Hissong. The Committee met five times in 1996.
The Board of Directors held a total of eleven meetings in 1996.
Each Director was present at 75% or more of the total number of Board
and Committee meetings he was eligible to attend in 1996.
EXECUTIVE COMPENSATION AND
RELATED MATTERS
Set forth below is certain information concerning the compensation
of Alan Lukas, the Chief Executive Officer of the Company. No executive
officer of the Company received annual compensation in excess of
$100,000 during 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION ALL OTHER
NAME YEAR SALARY BONUS OTHER COMPENSATION
<S> <C> <C> <C> <C> <C>
Alan Lukas 1996 $84,000 $0 $0 $0
1995 $86,300 $0 $0 $0
1994 $74,900 $3,000 $0 $0
</TABLE>
The Company leases a 13,000 square foot facility from a
corporation owned in part by Alan Lukas. The lease expires August 15,
1997 and is renewable, at the Company's option, for one additional five-
year term. The Company also has the right to purchase this facility in
1997 at the then fair market value, subject to a specified minimum price
of $550,000. The current rent is approximately $62,700 per year
(exclusive of utilities, taxes, and insurance) and is subject to an
automatic increase of 5% per year. The Company believes that the rent
under this lease is reasonable (although, under current market
conditions, equivalent industrial space is probably available at
slightly lower rental rates). The Company has not yet made any decision
on renewal of the lease or exercise of the purchase option. Presently,
the rental payments on the building exceed the landlord corporation's
monthly payments on its underlying mortgage loan; Alan Lukas' profits
from this arrangement currently amount to less than $1,250 per year.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934,
certain persons associated with the Company (Directors, executive
officers and beneficial owners of more than 10% of the outstanding
Common Stock) are required to file with the Securities and Exchange
Commission and the Company various reports disclosing their ownership of
Company securities and changes in such ownership. To the Company's
knowledge, all such reporting obligations for 1996 were satisfied on a
timely basis.
SUMMARY OF ACTIONS TO BE TAKEN
ELECTION OF DIRECTORS
The Company's articles of incorporation provide for a Board of
Directors of not fewer than three nor more than nine members, as from
time to time determined by resolution of the Board of Directors or by
the shareholders. Directors are elected at each Annual Meeting of
Shareholders for one year terms.
A resolution will be offered at the Meeting to establish the
number of Directors at five and to elect the following five persons as
Directors:
Alan Lukas, Charlton H. Ames, George E. Hissong,
Paul F. Walsh, and Henry M. Powers
The foregoing individuals have each consented to be named as nominees
and to serve as Directors if elected. Biographical information
concerning these individuals appears at pages 2-3 above.
The Company's articles of incorporation allow for cumulative
voting in the election of Directors. A shareholder may require
cumulative voting by giving the Company notice of his or her intention
to do so. Notice must be received prior to voting on Directors. Under
cumulative voting, each holder has the right to as many votes as equals
the number of Directors to be elected, multiplied by the number of
shares owned by such holder. The effect of cumulative voting would be
to ensure that the holders of more than one-sixth of the outstanding
shares could (by cumulating their votes) elect at least one of five
Directors of the Company. Regardless of whether votes are to be
cumulated, each Director position will be filled by plurality vote.
Abstentions and broker non-votes will not affect the tally of votes cast
in the election. (A broker non-vote occurs when a broker, or other
fiduciary, votes on at least one matter but lacks authority to vote on
another matter.)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE.
RATIFICATION OF ACCOUNTANTS
The shareholders will be asked to ratify the appointment of
Coopers & Lybrand L.L.P., who were the Company's auditors in 1996, as
the Company's independent accountants for the fiscal year ending
December 31, 1997. Coopers & Lybrand is one of the largest accounting
firms in the United States and has substantial experience in auditing
financial statements of public companies. One or more representatives
of Coopers & Lybrand will be present at the Meeting, will have an
opportunity to make a statement to the Meeting if they desire to do so,
and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND, L.L.P.
OTHER MATTERS
All expenses of this solicitation will be borne by the Company.
No person will receive any additional compensation for soliciting
proxies from any shareholder. In addition to use of the mails, proxies
may be solicited directly, or by telephone or other means, by Company
employees. The Company will reimburse brokerage firms, custodians,
nominees, and fiduciaries in accordance with American Stock Exchange
rules for the reasonable expenses of forwarding proxy materials to
beneficial owners
At the date of this Proxy Statement, Management knows of no other
matters that are to be brought before the Meeting. However, if any
matters other than those set forth in the accompanying Notice should
properly come before the Meeting, the persons named in the enclosed
proxy will vote the proxies on such matters in their discretion.
To be eligible for inclusion in the proxy materials for the 1998
Annual Meeting, a shareholder proposal must be received by the Company
in proper written form by January 15, 1998. Any such proposals should
be addressed to the attention of the Board of Directors.
BY ORDER OF THE BOARD OF DIRECTORS
GREGORY S. FRYER, CLERK
[PROXY CARD]
INTELLIGENT CONTROLS, INC.
PROXY
(Solicited by the Board of Directors)
The undersigned appoints Alan Lukas and Kenneth J. Burek, or either of them,
proxies with full power of substitution, to represent and vote all shares of
Common Stock of Intelligent Controls, Inc. held by the undersigned, at the
Annual Meeting of Shareholders to be held June 19, 1997, or any adjournment
thereof.
1. TO FIX THE NUMBER OF DIRECTORS AT FIVE AND TO ELECT THE FOLLOWING
NOMINEES TO THE BOARD OF DIRECTORS:
Alan Lukas, Charlton H. Ames, George E. Hissong,
Paul F. Walsh, and Henry M. Powers
(To withhold authority for one or more nominees, cross out his name
or their names)
2. TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND AS INDEPENDENT
ACCOUNTANTS TO THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, upon such other matters as may properly come
before the Meeting.
This proxy, when properly executed, will be voted in the manner directed
hereby by the undersigned shareholder. If no direction is made, this proxy
will be voted "FOR" the nominated directors and "FOR" proposal 2. The
undersigned hereby revokes any proxy previously given and acknowledges receipt
of the Notice of, and Proxy Statement for, the aforesaid Meeting.
Dated: __________________________________, 1997
_______________________________________________
Signature
_______________________________________________
Signature
Personal representatives, custodians, trustees,
partners, corporate officers, and attorneys-in-
fact should add their titles as such.
PLEASE VOTE AND DATE THIS PROXY, SIGNING IT AS YOUR NAME APPEARS ABOVE AND
RETURN THE PROXY IN THE ENVELOPE PROVIDED.
